UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 40-F

(Check one)

          REGISTRATION  STATEMENT  PURSUANT  TO  SECTION  12 OF  THE  SECURITIES
-----     EXCHANGE ACT OF 1934

                                                              OR

  X       ANNUAL  REPORT  PURSUANT TO SECTION  13(A) OR 15(D) OF THE  SECURITIES
-----     EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2003      Commission file number 0-29382


                          MINEFINDERS CORPORATION LTD.

             (Exact name of Registrant as specified in its charter)

<TABLE>
<CAPTION>
<S>                                      <C>                                       <C>
-------------------------------------- ---------------------------------------- -------------------------------------

           Not Applicable                          Ontario, Canada                         Not Applicable

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

  (Translation of Registrant's name      (Province of other jurisdiction of       (I.R.S. Employer Identification
    into English (if applicable))          incorporation or organization)             Number (if applicable))
-------------------------------------- ---------------------------------------- -------------------------------------
</TABLE>

                                      1000
                                   ---------

    (Primary Standard Industrial Classification Code Number (if applicable))

   2288 - 1177 West Hastings Street Vancouver, British Columbia Canada V6E 2K3
                                 (604) 687-6263
--------------------------------------------------------------------------------
   (Address and telephone number of Registrant's principal executive offices)

     C T Corporation System, 111 - 8th Avenue, New York City New York 10011
                                 (212) 894-8890
--------------------------------------------------------------------------------
 (Name, address (including zip code) and telephone number (including area code)
                   of agent for service in the United States)

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

Title of each class                    Name of each exchange on which registered
Common Shares without par value        American Stock Exchange

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

                                      None
--------------------------------------------------------------------------------
                                (Title of Class)

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

                                      None
--------------------------------------------------------------------------------
                                (Title of Class)

For annual reports, indicate by check mark the information filed with this Form:

 X  Annual information form               X  Audited annual financial statements
---                                      ---


<PAGE>

Indicate the number of  outstanding  shares of each of the  issuer's  classes of
capital  or common  stock as of the close of the  period  covered  by the annual
report.

As at  December  31,  2003,  36,121,841  Common  Shares  without  par value were
outstanding.

Indicate  by check  mark  whether  the  Registrant  by  filing  the  information
contained  in this  Form is  also  thereby  furnishing  the  information  to the
Commission  pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
(the "Exchange Act"). If "Yes" is marked, indicate the filing number assigned to
the Registrant in connection with such Rule.

 Yes: 82-____________                                X      No
                                                    ---

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

 X  Yes                                                     No
---

<PAGE>

Explanatory   Note:   Minefinders   Corporation   Ltd.  (the  "Company"  or  the
"Registrant")  is a Canadian  issuer eligible to file its annual report pursuant
to Section 13 of the  Securities  Exchange  Act of 1934 (the "1934 Act") on Form
40-F.  The Company is a "foreign  private  issuer" as defined in Rule 3b-4 under
the 1934 Act and in Rule 405 under the Securities Act of 1933. Equity securities
of the Company are accordingly exempt from Sections 14(a),  14(b),  14(c), 14(f)
and 16 of the 1934 Act pursuant to Rule 3a12-3.

Some of the statements contained in this report are forward-looking  statements,
such as estimates  and  statements  that  describe the  Company's  future plans,
objectives  or  goals,  including  words  to the  effect  that  the  Company  or
management  expects a stated condition or result to occur. Such  forward-looking
statements are made pursuant to the safe harbour provisions of the United States
Private  Securities   Litigation  Reform  Act  of  1995.  Since  forward-looking
statements  address  future  events and  conditions,  by their very  nature they
involve  inherent risks and  uncertainties.  Actual  results  relating to, among
other things,  reserves,  resources,  results of exploration,  capital costs and
production  costs could differ  materially from those  currently  anticipated in
such  statements  by reason of  factors  such as  changes  in  general  economic
conditions and conditions in the financial markets, changes in demand and prices
for the  minerals  the  Company  is  engaged  in  exploration  for,  litigation,
legislative,   environmental  and  other  judicial,  regulatory,  political  and
competitive  developments  in domestic  and  foreign  areas in which the Company
operates,  technological and operational  difficulties encountered in connection
with the  Company's  mining  activities,  labour  relations  matters  and costs,
changing foreign exchange rates and other matters discussed under  "Management's
Discussion and Analysis of Financial Condition and Results of Operations".  This
list is not  exhaustive  of the  factors  that may affect  any of the  Company's
forward-looking  statements.  These  and  other  factors  should  be  considered
carefully  and  readers  should  not  place  undue  reliance  on  the  Company's
forward-looking  statements.  Further  information  regarding  these  and  other
factors is included in the filings by the  Company  with the U.S.  Securities  &
Exchange Commission and Canadian provincial securities  regulatory  authorities.
Unless  otherwise  indicated,  all dollar  amounts in this  report are  Canadian
dollars.

The exchange rate of Canadian  dollars into United States  dollars,  on December
31, 2003,  based upon the noon buying rate in New York City for cable  transfers
payable in Canadian  dollars as  certified  for customs  purposes by the Federal
Reserve Bank of New York, was U.S.$1.00 = CDN $1.2923.

                         RESOURCE AND RESERVE ESTIMATES

All resource estimates  incorporated by reference in this Registration Statement
have been prepared in accordance with Canadian  National  Instrument  43-101 and
the Canadian Institute of Mining and Metallurgy ("CIM")  Classification  System.
These standards differ  significantly from the requirements of the United States
Securities and Exchange  Commission,  and resource  information  incorporated by
reference  herein may not be comparable to similar  information  concerning U.S.
companies.

For definitions of the terms mineral reserve,  proven mineral reserve,  probable
mineral reserve, mineral resource, measured mineral resource,  indicated mineral
resource and inferred mineral resource under CIM standards, and a summary of the
differences between CIM and U.S. standards,  see the sections entitled "Glossary
and Defined Terms" beginning on page - i - of the Annual  Information Form filed
as Document 1 to this Annual Report.

                               PRINCIPAL DOCUMENTS

The  following  documents  have been filed as part of this Annual Report on Form
40-F, beginning on the following page:

     1.   Renewal Annual Information Form for the fiscal year ended December 31,
          2003;


<PAGE>

     2.   Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations for the fiscal year ended December 31, 2003; and

     3.   Consolidated  Financial  Statements for the fiscal year ended December
          31, 2003.

                  DISCLOSURE REGARDING CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES.

As of the  end of  the  Company's  fiscal  year  ended  December  31,  2003,  an
evaluation  of the  effectiveness  of the  Company's  "disclosure  controls  and
procedures"  (as such term is defined in Rules  13a-15(e)  and  15d-15(e) of the
Securities  Exchange Act of 1934, as amended (the  "Exchange  Act")) was carried
out by the Company's chief executive officer and chief financial officer.  Based
upon that evaluation,  the Company's chief executive officer and chief financial
officer have  concluded  that as of the end of that fiscal year,  the  Company's
disclosure  controls and  procedures  are  effective to ensure that  information
required to be disclosed by the  registrant  in reports that it files or submits
under the Exchange Act is recorded,  processed,  summarized and reported  within
the time periods  specified in  Securities  and  Exchange  Commission  rules and
forms.

It should be noted that while the Company's  chief  executive  officer and chief
financial  officer  believe  that  the  registrant's   disclosure  controls  and
procedures provide a reasonable level of assurance that they are effective, they
do not expect that the Company's  disclosure controls and procedures or internal
control over  financial  reporting  will prevent all errors and fraud. A control
system,  no matter how well conceived or operated,  can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.

During the fiscal year ended  December  31,  2003,  there were no changes in the
Company's  internal  control  over  financial  reporting  that  have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

The  Company's  management,  including  the Chief  Executive  Officer  and Chief
Financial Officer,  does not expect that its disclosure  controls and procedures
or internal  controls and  procedures  will  prevent all error and all fraud.  A
control  system can provide only  reasonable,  not absolute,  assurance that the
objectives of the control system are met. Because of the inherent limitations in
all control systems,  no evaluation of controls can provide  absolute  assurance
that all control issues and instances of fraud,  if any, within the Company have
been detected.  These inherent  limitations include the realities that judgments
in  decision-making  can be faulty,  and that  breakdowns  can occur  because of
simple  error or mistake.  Additionally,  controls  can be  circumvented  by the
individual  acts of some  persons,  by collusion  of two or more  people,  or by
management override of the control. The design of any system of controls also is
based in part upon certain  assumptions  about the  likelihood of future events,
and there can be no  assurance  that any design will  succeed in  achieving  its
stated  goals under all  potential  future  conditions.  Because of the inherent
limitations in a cost-effective  control system,  misstatements  due to error or
fraud may occur and not be detected.

                                 AUDIT COMMITTEE

The Company's  Board of Directors  has a  separately-designated  standing  Audit
Committee for the purpose of overseeing the  accounting and financial  reporting
processes  of  the  Company  and  audits  of  the  Company's   annual  financial
statements. As at the review of the audited consolidated financial statements of
the  Company  for the year ended  December  31,  2003 and as at the date of this
Annual Report, the following  individuals  comprise the entire membership of the
Company's Audit  Committee,  which committee has been  established in accordance
with Section 3(a)(58)(A) of the Exchange Act:


<PAGE>

Robert L. Leclerc - Chairman

James Martin Dawson - Member

H. Leo King - Member

INDEPENDENCE

The Company has adopted the criteria for director independence and unrelatedness
for members of public  company audit  committees  that are  consistent  with the
criteria  prescribed by the Sarbanes-Oxley Act of 2002, Section 10A(m)(3) of the
Exchange Act and Rule  10A-3(b)(1)  promulgated  thereunder.  Each member of the
Company's audit committee satisfies the criteria for director independence.

AUDIT COMMITTEE FINANCIAL EXPERT

The board of  directors  does not have an  "audit  committee  financial  expert"
within the meaning of applicable U.S. securities regulation.  All of the members
of the Audit  Committee are  financially  literate.  Mr.  Leclerc,  as the chief
executive  officer  of a large law firm  (1993 to 1996)  and of a company  whose
shares were listed and traded in the United States and Canada (1997 to 2003) was
ultimately  responsible  for the activity and  authority  conferred on the chief
financial officers who reported to him. This did not, however,  entail an active
role in  supervising  others  engaged in the  preparation,  audit,  analysis  or
evaluation of financial statements.  Mr. Leclerc has no accreditation to perform
such work.  His  experience,  and that of the other audit  committee  members as
directors of publicly traded companies,  is considered by the board of directors
to  facilitate   compliance   with  financial   regulatory   requirements.   The
desirability of adding an audit committee  financial expert will be monitored as
the Company grows and its financial  reporting and internal  control  challenges
increase.

AUDIT COMMITTEE CHARTER

The Company's  Audit  Committee  Charter is attached  hereto as Exhibit 99.1 and
available in print to any shareholder who requests it.

CODE OF ETHICS

The Company  does not have a formal "code of ethics" (as that term is defined in
Form  40-F) at this  time.  The  Company  believes  the  behaviour  required  of
directors and officers,  as set out in the applicable  corporate  legislation in
the  Company's  home  jurisdiction,  adequately  address  any issues  that would
otherwise  be covered in a code.  Additionally,  all  directors,  as well as the
chief financial officer, belong to professional associations that have standards
governing the conduct of their members.  The adoption of a formal code of ethics
will be monitored as the Company grows and its financial  reporting and internal
control challenges  increase.  When it is completed,  the code of ethics will be
available  for  viewing on the  Company's  website at  www.minefinders.com.

All  amendments to the proposed  code, and all waivers of the proposed code with
respect  to any of the  officers  covered  by it,  will  be also  posted  on the
Company's web site,  submitted to the  Securities & Exchange  Commission on Form
6-K and provided in print to any shareholder who requests them.


<PAGE>

PRINCIPAL ACCOUNTANT FEES AND SERVICES

At the annual  meeting held on June 10, 2003,  the  shareholders  appointed  BDO
Dunwoody  LLP,  Chartered  Accountants,  ("BDO"),  to serve  as the  independent
auditors  for the 2003  fiscal  year.  BDO  acted as the  Company's  independent
auditor for the fiscal years ended  December 31, 2003 and 2002.  The table below
sets forth the total amount billed the Company by BDO for services  performed in
the years 2003 and 2002, and breaks down these amounts by category of service in
CDN$:

-------------------- -----------------------------------------------------------
                                             Years ended December 31
-------------------- -----------------------------------------------------------
                                        2003                    2002
-------------------- ------------------------------- ---------------------------

Audit:                                  $73,600                 $ 58,602

Audit Related:                          Nil                     Nil

Tax                                     $5,600                  Nil

All Other Fees                          Nil                     Nil

Total                                   $79,200                 $58,602
-------------------- ------------------------------- ---------------------------

Audit fees for 2002 and 2003 were for  professional  services  rendered  for the
audits of the Company's  consolidated  financial  statements,  meetings with the
Audit  Committee  and  Management in respect of quarterly  filings,  issuance of
consent and comfort  letters in  connection  with  Canadian and US  registration
statements and private offerings.

Audit related fees for 2002 and 2003 were for professional  services rendered in
connection  with  the  audit  of the  Company's  consolidated  annual  financial
statements and consulting on accounting standards and transactions.

PRE-APPROVAL POLICIES AND PROCEDURES.

The Audit Committee nominates and engages the independent  auditors to audit the
financial  statements,  and  approves  all audit,  audit-related  services,  tax
services and other services  provided by BDO. Any services  provided by BDO that
are not specifically included within the scope of the audit must be pre-approved
by the Audit Committee prior to any engagement. The Audit Committee is permitted
to approve  certain  fees for  audit-related  services,  tax  services and other
services  pursuant  to a de  minimus  exception  before  the  completion  of the
engagement.  In 2003, none of the fees paid to BDO were approved pursuant to the
de minimus exception.

OFF-BALANCE SHEET ARRANGEMENTS.

The  Company  does not have any  off-balance  sheet  financing  arrangements  or
relationships with unconsolidated special purpose entities.

<PAGE>

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS.

The  Company  is  committed  to  payments  under an  operating  lease for office
premises  through  to June  2006  of  approximately  $55,000.00  per  year.  The
following  table lists as of December 31, 2003  information  with respect to the
Company's known contractual obligations.

<TABLE>
<CAPTION>
<S>                                                    <C>         <C>           <C>           <C>           <C>
                                                                      Payments due by period
Contractual Obligations                               Total       Less than    1- 3 years    3 - 5 years   More than
                                                                  1 year                                   5 years

Long-Term Debt Obligations(1)                          $450,000    $100,000      $300,000      $50,000        Nil
Capital (Finance) Lease Obligations                      Nil          Nil          Nil           Nil          Nil
Operating Lease Obligations(2)                         $150,000     $28,000      $122,000        Nil          Nil
Contingent Royalty Payments                             Nil(3)        Nil         Nil(3)        Nil(3)        Nil
Other Long-Term Liabilities Reflected on the             Nil          Nil          Nil           Nil          Nil
Company's Balance Sheet under Canadian GAAP

Total                                                  $600,000    $128,000      $422,000      $50,000        Nil
</TABLE>

(1)  Payments in respect of the Dolores  Property,  which the Company expects to
     make; all other property payments are at the discretion of the Company.

(2)  Includes existing leases without extensions.

(3)  Royalty payments on the Dolores Property consisting of net smelter payments
     of 3.25% on gold and 2% on silver.  Net revenues cannot be quantified until
     the project reaches production.

                            AMEX CORPORATE GOVERNANCE

The Company's common shares are listed on The American Stock Exchange  ("AMEX").
Section 110 of the AMEX company guide permits AMEX to consider the laws, customs
and practices of foreign issuers in relaxing certain AMEX listing criteria,  and
to grant exemptions from AMEX listing criteria based on these considerations.  A
company  seeking  relief under these  provisions is required to provide  written
certification from independent local counsel that the non-complying  practice is
not  prohibited by home country law. A description  of the  significant  ways in
which the Company's  governance practices differ from those followed by domestic
companies pursuant to AMEX standards is as follows:

Shareholder Meeting Quorum Requirement:  The AMEX minimum quorum requirement for
a shareholder meeting is one-third of the outstanding shares of common stock. In
addition,  a company listed on AMEX is required to state its quorum  requirement
in its bylaws.  The Company's quorum  requirement is set forth in its By-Laws. A
quorum for a meeting of members of the Company is two persons present in person,
each being a shareholder entitled to vote thereat, or a duly appointed proxy for
an absent shareholder so entitled.

Proxy  Delivery  Requirement:  AMEX  requires  the  solicitation  of proxies and
delivery of proxy  statements for all  shareholder  meetings,  and requires that
these proxies shall be solicited  pursuant to a proxy statement that conforms to
SEC proxy rules.  The Company is a "foreign  private  issuer" as defined in Rule
3b-4  under  the  1934  Act,  and  the  equity  securities  of the  Company  are
accordingly  exempt  from the proxy rules set forth in  Sections  14(a),  14(b),
14(c) and 14(f) of the Securities Exchange Act of 1934, as amended.  The Company
solicits proxies in accordance with applicable rules and regulations in Canada.

The foregoing are consistent with the laws, customs and practices in Canada.

<PAGE>

UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

Undertaking

The  Registrant  undertakes  to  make  available,  in  person  or by  telephone,
representatives  to respond to  inquiries  made by the  Securities  and Exchange
Commission  ("SEC") staff, and to furnish  promptly,  when requested to do so by
the SEC staff,  information  relating to: the securities  registered pursuant to
Form 40-F;  the securities in relation to which the obligation to file an annual
report on Form 40-F arises; or transactions in said securities.

Consent to Service of Process

Consent to Service of Process on Form F-X in  connection  with the Common Shares
has been previously filed with the SEC.

<PAGE>
                                    EXHIBITS

The following exhibits are filed as part of this report:

Exhibit No.      Description

1.               Renewal Annual Information Form for the year ended December 31,
                 2003

2.               The   audited   consolidated   financial   statements   of  the
                 Registrant,  are  exhibits  to and  form a part of this  Annual
                 Report, and include the following:

                 Auditors' Report on Consolidated Financial Statements, dated
                 March 12, 2004;

                 Consolidated Balance Sheets as at December 31, 2003 and 2002;

                 Consolidated Statements of Loss and Deficit for the years ended
                 December 31, 2003, 2002 and 2001;

                 Consolidated Statements of Cash Flows for the years ended
                 December 31, 2003, 2002 and 2001;

                 Consolidated  Statements  of Mineral  Properties  and  Deferred
                 Exploration  Costs for the years ended December 31, 2003,  2002
                 and 2001;

                 Summary of Significant Accounting Policies

                 Notes to Consolidated  Financial  Statements  (which includes a
                 reconciliation to United States generally  accepted  accounting
                 principles).

3.               Management  Discussion and Analysis of Financial Conditions and
                 Results of Operations

4.               Consent of BDO Dunwoody LLP. dated May 14, 2004

5.               Consent of Mark H. Bailey dated May 14, 2004

6.               Consent of Pincock Allen & Holt dated May 14, 2004

7.               Consent of George A. Armbrust dated May 14, 2004

8.               Consent of Robert L. Sandefur dated May 14, 2004

9.               Certification  of  the  Chief  Executive  Officer  Pursuant  to
                 Section 302 of the Sarbanes Oxley Act of 2002 (pursuant to Rule
                 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
                 amended).

10.              Certification  of  the  Chief  Financial  Officer  Pursuant  to
                 Section 302 of the Sarbanes Oxley Act of 2002 (pursuant to Rule
                 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
                 amended).

11.              Certification  of the Chief  Executive  Officer  pursuant  to
                 18  U.S.C.  Section 1350,  as  adopted
                 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

12.              Certification  of the Chief  Financial  Officer  pursuant  to
                 18  U.S.C.  Section 1350,  as  adopted
                 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1             Audit Committee Charter

<PAGE>

                                   Signatures

Pursuant to the requirements of the Exchange Act, the Registrant  certifies that
it meets all of the  requirements  for  filing on Form 40-F and has duly  caused
this annual report to be signed on its behalf by the  undersigned,  thereto duly
authorized.

MINEFINDERS CORPORATION LTD.

               Registrant

By /s/ "Mark H. Bailey"
----------------------------------------
        Mark H. Bailey, CEO and Director

Date: May 14, 2004

<PAGE>

                                    EXHIBIT 1

                          MINEFINDERS CORPORATION LTD.











                         RENEWAL ANNUAL INFORMATION FORM

                      for the year ended December 31, 2003











                                   May 14 2004






<PAGE>




                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                                            <C>
                                                                                                               Page
GLOSSARY AND DEFINED TERMS........................................................................................i

REFERENCE INFORMATION.............................................................................................v

CORPORATE STRUCTURE...............................................................................................1

GENERAL DEVELOPMENT OF THE BUSINESS...............................................................................1

    Significant Acquisitions and Dispositions.....................................................................2

    Background and Trends.........................................................................................2

NARRATIVE DESCRIPTION OF THE BUSINESS.............................................................................3

    Overview......................................................................................................3

    PRINCIPAL PROPERTY - THE DOLORES PROPERTY.....................................................................3

    Description and Location......................................................................................4

    Accessibility, Climate, Local Resources, Infrastructure and Physiography......................................6

    History.......................................................................................................6

    Geology.......................................................................................................7

    Exploration...................................................................................................8

    Drilling......................................................................................................8

    Mineralization...............................................................................................10

    Sampling and Analysis........................................................................................11

    Mineral Resource and Mineral Reserve Estimates...............................................................13

    NORTHERN SONORA PROPERTY.....................................................................................16

    Description and Location.....................................................................................16

    Climate, Accessibility, Local Resource Infrastructure and Physiography.......................................16

    Nature of Transport..........................................................................................17

    Sampling and Integrity of Samples............................................................................17

    La Bolsa Property: Location and Access.......................................................................17

    El Malacate Recon: Description and Location..................................................................20

    OTHER PROPERTIES.............................................................................................22

    La Reserva/El Correo Property................................................................................23

    San Antonio Property.........................................................................................24

    Other Interests In Properties................................................................................24

    NUMBER OF EMPLOYEES..........................................................................................28

    BANKRUPTCY, RECEIVERSHIP OR OTHER SIMILAR PROCEEDINGS........................................................28

    COMPETITION..................................................................................................28

    RISK FACTORS.................................................................................................28

SELECTED CONSOLIDATED FINANCIAL INFORMATION......................................................................32

    Dividend Record and Policy...................................................................................34

MANAGEMENT'S DISCUSSION AND ANALYSIS.............................................................................34

MARKET FOR SECURITIES............................................................................................34

DIRECTORS AND OFFICERS...........................................................................................34

    Shareholdings of Directors and Officers......................................................................35

    Committees of the Board of Directors.........................................................................35

    Corporate Cease Trade Orders or Bankruptcies.................................................................36

    Penalties or Sanctions.......................................................................................36

    Personal Bankruptcies........................................................................................36

    Conflicts of Interest........................................................................................36

ADDITIONAL INFORMATION...........................................................................................37

</TABLE>


<PAGE>


                           GLOSSARY AND DEFINED TERMS

The  following  is a  glossary  of  certain  mining  terms  used in this  Annual
Information Form.

Adit

          A horizontal  passage  from the surface  into the mine,  also called a
          tunnel.

Adularization

          Potassic alteration, introduction or replacement by Adularia.

Anomaly

          A geological  feature  distinguished  by  geophysical  or  geochemical
          means,  which is  different  from the general  surroundings  and is of
          potential economic value.

Breccia

          A coarse-grained clastic rock composed of angular broken fragments.

Cretaceous

          The final period of the  Mesozoic  area (after the Jurassic and before
          the Tertiary period), thought to have covered the span of time between
          65 and 144 million years ago.

Dome

          A circular or elliptical uplift, typically volcanic in origin.

Epithermal

          Hydrothermal  mineral deposit formed within 1 kilometre of the earth's
          surface, in the temperature range of 50-200(degree)C.

g/t or gpt

          Grams per tonne.

Graben

          An elongate downfaulted basin.

Horst

          An elongate block of upfaulted rock.

Hydrothermal

          Processes  associated  with heated or  superheated  water,  especially
          mineralization or alteration.

Igneous Rock

          Rock which formed directly by crystallization from magma.

Interbedded

          Beds laid between or alternating with others of different character.

Intrusive

          The process of, and rock formed by, intrusion.

Jurassic

          The middle  system of the  Mesozoic,  above the Triassic and below the
          Cretaceous,  thought to have  covered the span of time between 200 and
          145 million years ago.

Lithology

          The description of rocks in hard specimen and in outcrop,  relative to
          such  characteristics  as color,  mineralogic  composition,  and grain
          size.

Mesozoic

          The era of geologic  time above the  Paleozoic and below the Cenozoic,
          approximately from 245 to 65 million years ago.

Metamorphic

          Affected by physical,  chemical,  and structural  processes imposed by
          depth in the earth's crust.

Metasediment

          Metamorphic rock of sedimentary origin.

Mineral Reserve, Proven Mineral Reserve, Probable Mineral Reserve

          Means that part of a measured  mineral  resource or indicated  mineral
          resource that can be extracted  legally and at a profit under economic
          conditions that are specified and generally  accepted as reasonable by
          the  mining  industry  and  which  is  demonstrated  by a  preliminary
          feasibility study or feasibility study.

          THE TERMS "MINERAL RESERVE",  "PROVEN MINERAL RESERVE",  AND "PROBABLE
          MINERAL  RESERVE"  USED IN THIS ANNUAL  INFORMATION  FORM ARE CANADIAN
          MINING TERMS AS DEFINED IN ACCORDANCE WITH NATIONAL  INSTRUMENT 43-101
          - STANDARDS OF DISCLOSURE  FOR MINERAL  PROJECTS  UNDER THE GUIDELINES
          SET OUT IN THE CANADIAN INSTITUTE OF MINING,  METALLURGY AND PETROLEUM
          (THE  "CIM")  STANDARDS  ON MINERAL  RESOURCES  AND  MINERAL  RESERVES
          DEFINITIONS  AND  GUIDELINES  ADOPTED BY THE CIM COUNCIL ON AUGUST 20,
          2000. IN THE UNITED STATES,  A MINERAL RESERVE IS DEFINED AS A PART OF
          A MINERAL DEPOSIT WHICH COULD BE ECONOMICALLY AND LEGALLY EXTRACTED OR
          PRODUCED AT THE TIME THE RESERVE DETERMINATION IS MADE.

<PAGE>

          RESERVES  ARE  CATEGORIZED  AS  FOLLOWS  ON THE BASIS OF THE DEGREE OF
          CONFIDENCE IN THE ESTIMATE OF THE QUALITY AND GRADE OF THE DEPOSIT.

          Proven Mineral Reserve means,  in accordance  with CIM Standards,  for
          the  part of a  deposit  which  is  being  mined,  or  which  is being
          developed and for which there is a detailed mining plan, the estimated
          quantity  and  grade or  quality  of that part of a  measured  mineral
          resource  for which the size,  configuration  and grade or quality and
          distribution of values are so well established, and for which economic
          viability   has  been   demonstrated   by  adequate   information   on
          engineering,  operating,  economic and other  relevant  factors,  that
          there is the highest degree of confidence in the estimate.

          THE DEFINITION FOR "PROVEN MINERAL RESERVES" UNDER CANADIAN  STANDARDS
          DIFFERS  FROM THE  STANDARDS  IN THE UNITED  STATES,  WHERE  PROVEN OR
          MEASURED  RESERVES  ARE  DEFINED AS  RESERVES  IN RESPECT OF WHICH (A)
          QUANTITY IS COMPUTED FROM DIMENSIONS  REVEALED IN OUTCROPS,  TRENCHES,
          WORKINGS OR DRILL HOLES;  GRADE AND/OR  QUALITY ARE COMPUTED  FROM THE
          RESULTS  OF  DETAILED  SAMPLING  AND (B)  THE  SITES  FOR  INSPECTION,
          SAMPLING  AND  MEASUREMENT  ARE  SPACED SO  CLOSELY  AND THE  GEOLOGIC
          CHARACTER  IS SO WELL  DEFINED  THAT SIZE,  SHAPE,  DEPTH AND  MINERAL
          CONTENT OF RESERVES ARE WELL ESTABLISHED.

          Probable Mineral Reserve: means, in accordance with CIM Standards, the
          estimated  quantity  and grade or quality of that part of an indicated
          mineral resource for which economic viability has been demonstrated by
          adequate  information on  engineering,  operating,  economic and other
          relevant  factors,  at a confidence level which would serve as a basis
          for decisions on major expenditures.

          THE  DEFINITION  FOR  "PROBABLE   MINERAL   RESERVES"  UNDER  CANADIAN
          STANDARDS  DIFFERS  FROM THE  STANDARDS  IN THE UNITED  STATES,  WHERE
          PROBABLE RESERVES ARE DEFINED AS RESERVES IN RESPECT OF WHICH QUANTITY
          AND GRADE AND/OR QUALITY ARE COMPUTED FROM INFORMATION SIMILAR TO THAT
          USED FOR PROVEN  RESERVES  (UNDER  UNITED STATES  STANDARDS),  BUT THE
          SITES FOR  INSPECTION,  SAMPLING AND  MEASUREMENT ARE FURTHER APART OR
          ARE OTHERWISE  LESS  ADEQUATELY  SPACED,  AND THE DEGREE OF ASSURANCE,
          ALTHOUGH LOWER THAN THAT FOR PROVEN RESERVES, IS HIGH ENOUGH TO ASSUME
          CONTINUITY BETWEEN POINTS OF OBSERVATION.

Mineral  Resource,  Measured  Mineral  Resource,   Indicated  Mineral  Resource,
Inferred Mineral Resource

          Under CIM Standards, 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 a grade or
          quality that it has reasonable prospects for economic extraction.  The
          location,  quantity, grade, geological  characteristics and continuity
          of a  Mineral  Resource  are  known,  estimated  or  interpreted  from
          specific geological evidence and knowledge.

          THE TERMS "MINERAL RESOURCE", "MEASURED MINERAL RESOURCE",  "INDICATED
          MINERAL RESOURCE", AND "INFERRED MINERAL RESOURCE" USED IN THIS ANNUAL
          INFORMATION  FORM ARE CANADIAN  MINING TERMS AS DEFINED IN  ACCORDANCE
          WITH NATIONAL  INSTRUMENT 43-101 - STANDARDS OF DISCLOSURE FOR MINERAL
          PROJECTS UNDER THE  GUIDELINES SET OUT IN THE CIM STANDARDS.  THEY ARE
          NOT DEFINED TERMS UNDER UNITED STATES  STANDARDS AND MAY

<PAGE>

          NOT  GENERALLY  BE USED IN  DOCUMENTS  FILED  WITH THE  UNITED  STATES
          SECURITIES  AND  EXCHANGE  COMMISSION  BY  U.S.  COMPANIES.  AS  SUCH,
          INFORMATION CONTAINED IN THIS ANNUAL REPORT CONCERNING DESCRIPTIONS OF
          MINERALIZATION AND RESOURCES MAY NOT BE COMPARABLE TO INFORMATION MADE
          PUBLIC BY U.S.  COMPANIES  SUBJECT  TO THE  REPORTING  AND  DISCLOSURE
          REQUIREMENTS OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

          A mineral resource  estimate is based on information on the geology of
          the  deposit  and  the  continuity  of   mineralization.   Assumptions
          concerning economic and operating  conditions including cut-off grades
          and economic  mining widths,  based on factors typical for the type of
          deposit,  may be used if these  factors  have  not  been  specifically
          established  for  the  deposit  at the  time of the  mineral  resource
          estimate.

          A  mineral  resource  is  categorised  on the  basis of the  degree of
          confidence  in the  estimate of  quantity  and grade or quality of the
          deposit, as follows:

          Inferred Mineral  Resource:  Under CIM Standards,  an Inferred Mineral
          Resource is that part of a Mineral  Resource  for which  quantity  and
          grade or quality can be estimated on the basis of geological  evidence
          and  limited  sampling  and  reasonably  assumed,  but  not  verified,
          geological  and grade  continuity.  The  estimate  is based on limited
          information and sampling gathered through appropriate  techniques from
          locations such as outcrops, trenches, pits, workings and drill holes.

          Indicated Mineral Resource:  Under CIM Standards, an Indicated Mineral
          Resource is that part of a Mineral Resource for which quantity,  grade
          or  quality,  densities,  shape and  physical  characteristics  can be
          estimated  with  a  level  of  confidence   sufficient  to  allow  the
          appropriate  application  of  technical  and economic  parameters,  to
          support mine planning and evaluation of the economic  viability of the
          deposit.  The estimate is based on detailed  and reliable  exploration
          and testing information  gathered through appropriate  techniques from
          locations such as outcrops,  trenches,  pits, workings and drill holes
          that are spaced closely enough for geological and grade  continuity to
          be reasonably assumed.

          Measured  Mineral  Resource:  Under CIM Standards,  a Measured Mineral
          Resource is that part of a Mineral Resource for which quantity,  grade
          or quality,  densities,  shape,  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 estimate 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 and grade continuity.

Mineralization

          A mineralized  body which has been  intersected by sufficient  closely
          spaced drill holes and/or sampling to support  sufficient  tonnage and
          average grade of metal(s) to warrant  further  exploration-development
          work.  This  mineralized  body  does  not  qualify  as a  commercially
          mineable  ore  body,  as  prescribed  under  Securities  and  Exchange
          Commission  standards,  until  a  final  and  comprehensive  economic,
          technical and legal  feasibility  study based upon the test results is
          concluded and supports Proven/Probable Reserves.

<PAGE>

Mineralized Deposit

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

opt

          Ounces per ton.

Ore

          Naturally occurring material from which minerals of economic value can
          be extracted.

Paleozoic

          The era of geologic  time from 570 to 245 million  years ago, from the
          end of the Precambrian to the beginning of the Mesozoic.

Placer

          A surficial  mineral  deposit  formed by mechanical  concentration  of
          mineral particles from weathered debris.

Porphyry

          An igneous rock  characterized  by visible  crystals in a fine-grained
          matrix.

Resistivity

          A geophysical  technique  which  measures the  electrical  resistivity
          between a set of spaced electrodes to generate a profile of subsurface
          geology.

Sedimentary Rock

          Rock formed by the process of erosion and deposition.

Sericitization

          A  hydrothermal  or  metamorphic   alteration  process  involving  the
          introduction of, or replacement by, sericite muscovite.

Silicification

          Alteration  process  involving the introduction of, or replacement by,
          silica,  generally resulting in the formation of fine-grained  quartz,
          chalcedony,  or  opal,  which  may fill  pores  and  replace  existing
          minerals.

Stockwork

          A  three-dimensional  network of closely  spaced  planar to  irregular
          veinlets.  Tertiary  The  first  period  of the  Cenozoic,  after  the
          Cretaceous and before the Quatenary, thought to begin about 65 million
          years ago.

Tuff

          Consolidated  or cemented  volcanic ash.  Sometimes  used as a general
          term for all consolidated pyroclastic rocks.

Volcaniclastic

          Refers to  fragments  derived  from  volcanic  sources  (which  may be
          transported some distance from their place of origin.)

                    NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual  Information Form ("AIF") and the documents  incorporated  herein by
reference,  contain forward-looking  statements. Such forward-looking statements
include,  but  are  not  limited  to,  statements  about  mineral  reserves  and
resources, in that they constitute estimates,  based on certain assumptions,  of
mineralization  that may be  encountered  if a  deposit  were to be  mined.  Any
statements  that express or involve  discussions  with  respect to  predictions,
expectations,  plans, projections,  objectives,  assumptions or future events or
performance (often, but not always,  using words or phrases such as "expects" or
"does not  expect",  "is  expected",  "anticipates"  or "does  not  anticipate",
"plans",  "estimates" or "intends",  or stating that certain actions,  events or
results "may",  "could",  "would" or "will" be taken,  occur or be achieved) are
not statements of historical fact and may be "forward-looking statements".

Forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking  statements.  Although  the  Company has  attempted  to identify
factors that could cause actual actions,  events or results to differ materially
from those described in forward-looking  statements,  there may be other factors
that cause  actions,  events or results not to be as  anticipated,  estimated or
intended.  There can be no assurance that forward-looking  statements will prove
to be accurate, as actual results and future events could differ materially from
those  anticipated  in such  statements.  Accordingly,  readers should not place
undue reliance on forward-looking statements.

SOME OF THE IMPORTANT RISKS AND UNCERTAINTIES THAT COULD AFFECT  FORWARD-LOOKING
STATEMENTS  ARE DESCRIBED  FURTHER IN THIS DOCUMENT  UNDER  HEADINGS  "NARRATIVE
DESCRIPTION OF THE  BUSINESS",  "RISK  FACTORS" AND  "MANAGEMENT  DISCUSSION AND
ANALYSIS".  SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES

<PAGE>

MATERIALIZE,  OR SHOULD UNDERLYING  ASSUMPTIONS PROVE INCORRECT,  ACTUAL RESULTS
MAY VARY MATERIALLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED OR EXPECTED. THE
COMPANY DOES NOT INTEND TO UPDATE THESE  FORWARD-LOOKING  STATEMENTS.  INVESTORS
ARE CAUTIONED AGAINST ATTRIBUTING UNDUE CERTAINTY TO FORWARD-LOOKING STATEMENTS.

               CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION

This AIF contains references to both US dollars and Canadian dollars. All dollar
amounts  referenced,  unless  otherwise  indicated,  are  expressed  in Canadian
dollars and US dollars are referred to as "US dollars" or "US$".

The annual high, low, average and end of period exchange rates for the US dollar
in terms of Canadian dollars for each of the periods indicated, such rates being
the rates in New York City for cable transfers payable in Canadian  dollars,  as
certified for customs  purposes by the Federal Reserve Bank of New York, were as
follows:

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

                                                Corporation's Fiscal Year Ended December 31

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

                            2003                2002               2001                2000               1999
--------------------- ------------------ ------------------- ------------------ ------------------- ------------------

High                       $1.2923            $1.5190             $1.4995            $1.4505             $1.4440

Low                        $1.5750            $1.6049             $1.5925            $1.5335             $1.5095

Average                    $1.3916            $1.5702             $1.5519            $1.4870             $1.4827

Period End                 $1.2923            $1.5800             $1.5925            $1.4995             $1.4440
--------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>

On May 7, 2004,  the  exchange  rate of  Canadian  dollars  into  United  States
dollars,  based upon the noon buying  rate in New York City for cable  transfers
payable in Canadian  dollars as  certified  for customs  purposes by the Federal
Reserve Bank of New York, was U.S. $1.00 equals CDN$1.3858.

INCORPORATION OF FINANCIAL STATEMENTS AND MD&A

Incorporated by reference into this AIF are the audited  consolidated  financial
statements of the Company,  which include its balance  sheets as at December 31,
2003 and 2002 and the  consolidated  statements of loss and deficit,  cash flows
and mineral  properties  and deferred  exploration  costs of the Company for the
years ended  December  31,  2003,  2002 and 2001,  together  with the summary of
significant  accounting  policies and notes  thereon,  included in the Company's
2003 Annual Report.  Also incorporated by reference in this AIF is the Company's
management's  discussion and analysis  ("MD&A") set out on pages 6 through 10 of
the  Company's  2003 Annual  Report.  All financial  information  in this AIF is
prepared in accordance with Canadian  generally accepted  accounting  principles
("GAAP"). Differences between Canadian and US GAAP pertaining to the Company are
described in Note 9 to our 2003 consolidated financial statements.

                              REFERENCE INFORMATION

Unless otherwise noted or the context otherwise indicates,  "Corporation" refers
to Minefinders Corporation Ltd. alone, and "the Company",  "we", "us", "our" and
"our company" refers to Minefinders Corporation Ltd. and its subsidiaries.

Unless otherwise  noted,  the information  contained in this AIF is given at the
date of this AIF.

<PAGE>
                               CORPORATE STRUCTURE

The Company was incorporated by articles of incorporation  under the laws of the
Province  of Ontario on  February  4, 1975,  under the name  "Twentieth  Century
Explorations  Inc.".  On May  10,  1979,  the  Company  changed  its  name  from
"Twentieth Century Explorations Inc." to " Minefinders Corporation Ltd.".

The Company's head and principal  office is located at 2288 - 1177 West Hastings
Street,  Vancouver,  British Columbia,  Canada V6E 2K3. The Company's registered
and  records  office is located at Suite 1100 - 200 King Street  West,  Toronto,
Ontario M5H 3T4.  The Company  also  maintains  an  exploration  office in Reno,
Nevada, United States of America.

The  following  table sets  forth the name of each  material  subsidiary  of the
Company,  the  jurisdiction  of its  incorporation  and the  direct or  indirect
percentage ownership by the Company of such subsidiary.

                        Principal Operating Subsidiaries

<TABLE>
<CAPTION>
<S>                                                                   <C>                          <C>
Name                                                                 Place of                   Percentage
                                                                   Incorporation                Ownership

------------------------------------------------------------- ------------------------ -----------------------------
Minera Minefinders S.A. de C.V.                                       Mexico                       100%
Compania Minera Dolores S.A de C.V.                                   Mexico                       100%
Minefinders (U.S.A.) Inc.                                             Nevada                       100%
Servicios Mineros Sierra S.A. de C.V. (1)                             Mexico                       100%
------------------------------------------------------------- ------------------------ -----------------------------
</TABLE>

(1)  This company is inactive at this time, and was  incorporated  subsequent to
     the Company's 2003 fiscal year end.

The Company's operations in Mexico are conducted through Minera Minefinders S.A.
de C.V.  ("Minera")  Compania Minera Dolores S.A. de C.V. ("Minera Dolores") and
Servicios Mineros Sierra S.A. de C.V.  ("Servicios") and in the U.S.A.,  through
Minefinders (U.S.A.) Inc.

The Company is a reporting issuer in British  Columbia,  Alberta,  Saskatchewan,
Manitoba,  Ontario  and Quebec and the  Company's  common  shares are listed for
trading on the Toronto Stock Exchange  ("TSX") under the symbol "MFL" and on the
American Stock Exchange ("AMEX") under the symbol "MFN".

                       GENERAL DEVELOPMENT OF THE BUSINESS

The Company is in the business of  exploration  and  development of precious and
base metal properties. Interests in these properties are currently held directly
and indirectly and through leases, options and working interests.  The Company's
properties  are  primarily  located  in  Mexico  and the  U.S.A.  The  Company's
principal  mineral  property  interests  are the  Dolores  Property  located  in
Chihuahua,  Mexico (the "Dolores  Property")  and the Northern  Sonora  Property
located in Sonora,  Mexico (the  "Northern  Sonora  Properties").  The  Northern
Sonora Properties include the La Bolsa gold deposit,  Real Viejo silver prospect
and  the  Planchas  de  Plata  silver  prospect,   each  at  various  levels  of
exploration.  The Company's other mineral property  interests include the Clear,
Dottie and Gutsy/Buckskin Mountain Properties in Nevada, the Oro Blanco Property
in Arizona and the San Antonio Property in Zacatecas,  Mexico.  The Company also
has mineral property interests in Quebec,  Canada, but has no active exploration
projects in Canada.

Exploration and Development

In June of 2002, the Company initiated a 30,000 metre drilling program, designed
to bring the Dolores  property  to final  feasibility  and lead to a  production
decision.  This  drilling  program  was  expanded in 2003 to 75,000  metres,  to
include condemnation and geotechnical  drilling. At the earliest,  production is
not  anticipated  to  commence on the Dolores  deposit  until early 2006.  Since
initiating  drilling in 1996  through the period ended  December  31, 2003,  the
Company has completed a total of 291 diamond core holes, totalling 82,300 metres
and 220 reverse circulation ("RC") drill holes totalling more than 42,100 metres
of drilling on the Dolores deposit, bringing the total drilling

<PAGE>

completed on the Dolores  Property  through  December  2003 to more than 124,000
metres. The Company selected independent engineering firms to provide an updated
resource  model and final  feasibility  study in 2004.  Drilling  will  continue
through the first half of 2004.  Other  activities  over the past three years on
the  Dolores  Property  have  included  geological  mapping and  sampling,  road
construction,  re-assaying  9,000 drill  intercepts for silver using  multi-acid
digestion,  completing  in August  2002 an  independent  audit of the  measured,
indicated and inferred  resource  contained in the Dolores main zone deposit and
initiating  additional   metallurgical  studies.   Exploration  activities  will
continue  on the  Company's  other  properties  over  the  next 12  months  with
additional  drilling  planned for the Northern Sonora  Properties and the Nevada
properties in 2004.

Financing

In January  2001,  the  Company  completed  private  placements  financing  (the
"January 2001  Financing") of 1,599,643  units for gross proceeds of $1,477,180.
Each unit consisted of one common share and one warrant  entitling the holder to
purchase  one  common  share at  $1.00  and  $1.15  for a two  year  period.  In
connection  with this private  placement,  50,000  common shares were issued and
approximately $56,000 was paid as a finder's fee.

During the remainder of 2001, the Company completed private  placements to issue
a further  1,402,080  units  for total  proceeds  of  $1,612,392  with each unit
consisting  of one common  share and one-half of a warrant.  Each whole  warrant
entitled the holder to purchase one common share at $1.40 per share for a period
of two  years.  Related  issuance  costs  totalled  $122,485  in respect of this
financing.

In April 2002, the Company completed a brokered private  placement  financing of
4,400,000  common shares at $2.30 per share for total  proceeds of  $10,120,000.
Related  share  issue  costs  of  $745,593  were  incurred  in  respect  of this
financing.

On February 7, 2003, the Company  completed a brokered  placement  consisting of
2,587,500  common shares (the "February 2003  Financing") at $7.00 per share for
gross  proceeds  of  $18,112,500.  The shares  issued  under the  February  2003
Financing were qualified by way of short form  prospectus.  The final short form
prospectus  of the  Company  in  respect  of the  February  2003  Financing  was
receipted by the British Columbia, Alberta,  Saskatchewan,  Manitoba and Ontario
Securities Commissions on January 31, 2003.

On December 8, 2003, the Company  completed a brokered  placement  consisting of
4,000,000  common shares (the "December 2003 Financing") at $11.00 per share for
gross  proceeds  of  $44,000,000.  The shares  issued  under the  December  2003
Financing were qualified by way of short form  prospectus.  The final short form
prospectus  of the  Company  in  respect  of the  December  2003  Financing  was
receipted by the British Columbia, Alberta,  Saskatchewan,  Manitoba and Ontario
Securities Commissions on December 5, 2003.

Significant Acquisitions and Dispositions

There were no  significant  acquisitions  or  dispositions  made by the  Company
during its most  recently  completed  financial  year.  The Company did however,
acquire  through  staking,  one  concession in Sonora  Mexico,  called the Anita
Claim,  which  covered  the ground  (500  hectares)  comprising  the  historical
Planchas de Plata silver district,  and the El Malacate property was written off
at year end 2003.

Background and Trends

As the  Company  is a  mineral  exploration  and  development  company  with  no
producing properties, the information required by this sub-item is inapplicable.
The Company's  management  believes that gold and silver prices will continue to
firm up over the next  several  years  and that the  Company  will  continue  to
benefit from rising precious metal prices.

For further  information on the Company's material mineral  properties,  see the
"Property"  discussions  in Item 4  commencing  on page 3 of this  AIF.  See the
"Selected  Consolidated  Financial  Information"  in  Item  5 of  this  AIF  for
information  on  significant  transactions  affecting  the  development  of  the
Company's business in the last three years.


<PAGE>

                      NARRATIVE DESCRIPTION OF THE BUSINESS

Overview

The information  provided hereunder has been prepared by Mark H. Bailey,  M.Sc.,
P.Geo.,  President & CEO of the Company,  who is a "qualified person" as defined
in National  Instrument  43-101 - Standards of Disclosure  for Mineral  Projects
("NI 43-101").

The Company is a mining  exploration  and  development  company.  The  Company's
principal properties are the Dolores Property and the Northern Sonora Properties
(which  include  the La Bolsa  deposit,  the Real  Viejo  silver  prospect,  the
Planchas de Plata prospect,  and the La Dura prospect).  All of these properties
are without a known body of commercial  ore. The  Company's  activities on these
properties to date have been exploratory in nature. There is no surface plant or
equipment on any of these properties.

Since  November  1995,  the  Company  has been  actively  working on the Dolores
Property  completing  aerial  photos and  topography,  satellite  imagery,  road
construction and infrastructure development,  surface mapping, surface sampling,
underground sampling,  geophysics,  diamond core and RC drilling,  metallurgical
studies,  environmental  base line studies,  initial resource modelling and mine
engineering,  environmental  impact study and  feasibility  study.  Results from
these  efforts have led to the discovery of a major  epithermal  gold and silver
deposit   containing  an  initial  estimated  measured  and  indicated  resource
(reported in NR June 5, 2003, calculated using a 0.3 g/t gold-equivalent  cutoff
grade) of 84.8 million  tonnes  containing  2.33 million  ounces of gold and 116
million ounces of silver. An additional inferred resource of 39.5 million tonnes
was calculated, containing 1.1 million ounces of gold and 39.7 million ounces of
silver.  An updated resource model,  incorporating all drilling through February
2004, will be reported when completed.

A  feasibility  study for the open-pit  minable  portion of the Dolores gold and
silver  deposit was  initiated  in 2003 and is expected to be  completed  during
2004.  A positive  feasibility  study will  advance the deposit to a  production
decision in late 2004 or early 2005.

The La Bolsa  mineralized  system on the Northern Sonora Property was discovered
and staked in 1994 and a first phase exploration  drilling program was completed
in 1996.  A second  program  was  completed  in 1998  producing  an  independent
mineralized  deposit  estimate of up to 208,000 ounces gold and 2 million ounces
of silver.  Exploration  work was  suspended in 1998 pending an increase in gold
prices or a substantial cash influx. Exploration activities including geological
mapping and sampling and drilling  continued on the El Malacate project covering
a portion of the Northern  Sonora  Property  with the  completion of nine widely
spaced  drill holes during 2002.  Follow-up  work on the El Malacate  project in
2003 failed to enhance the  prospect and it was written down at the end of 2003.
Work on the other northern  Sonora mineral claims from 1996 through 2003 has led
to the  discovery  of  additional  gold-silver  mineralized  systems and several
porphyry copper related base metal systems. Exploration drilling re-commenced on
the La Bolsa  property in the fall of 2003 with the  completion of 20 additional
core holes by the end of 2003. Additional drilling,  planned for 2004, commenced
in  February  on the La Bolsa  property  and the  nearby La Dura and Real  Viejo
prospects.

The Company also has  interests in a number of  secondary  properties.  Detailed
mapping and sampling  conducted  over the past five years has defined  anomalous
gold zones on the San Antonio  Property in Zacatecas,  Mexico,  where an initial
drilling  program is proposed to confirm and test the down dip extension of this
gold   mineralization.   In   addition,   the  Company  has   interests  in  the
Gutsy/Buckskin Mountain Properties,  Nevada, U.S.A., the Clear Property, Nevada,
U.S.A., the Dottie Property,  Nevada, U.S.A., the Oro Blanco Property,  Arizona,
U.S.A. and the Dubuisson  Property,  Val d'Or, Quebec. The Company's interest in
the Dubuisson Property consists only of a 2% net royalty interest.

                    PRINCIPAL PROPERTY - THE DOLORES PROPERTY

For a full report on the Company's principal property, the Dolores Property, see
the report  prepared for the Company by Pincock  Allen & Holt (the "PAH Report")
entitled  "Audit of  Resources  at the Dolores  Gold-Silver  Project  Chihuahua,
Mexico",  dated December 2, 2002,  which has been previously filed on SEDAR. The
PAH Report was  authored by George  Armbrust  and Robert  Sandefur  who are both
"independent  qualified  persons"  as defined  in NI  43-101.  The PAH Report is
incorporated herein by reference and a brief summary of the information provided
in the PAH Report is provided below.

<PAGE>

The Company's  current  primary  focus is on the Dolores  Property in respect of
which a drilling and feasibility  study is underway.  The Dolores  Property is a
structurally-controlled,  gold-silver  deposit  located  within  a  sequence  of
volcanic  rocks.  Gold and silver  mineralization  identified at surface  occurs
within a zone over 4,000  metres  long and 1,000  metres in width at  elevations
that range from 1,400 metres to 1,700 metres above sea level. Mineralization has
also been  investigated  to the depth of drilling at 1,150  metres  elevation or
over 550 metres of vertical extent

Description and Location

The Dolores Project is located in the Sierra Madre  Occidental Range of northern
Mexico at  geographic  coordinates  29 degrees  north  latitude,  108 degrees 32
minutes west  longitude,  in the westernmost  part of the State of Chihuahua.  A
property  location  map is shown in Figure 1 and a land  status  map is shown in
Figure 2. The project area is  approximately  250 kilometres west of the city of
Chihuahua.

The Company,  through its 100% owned Mexican subsidiary,  Minera Dolores,  has a
controlling  interest  in the Dolores  mineral  concessions  and surface  rights
covering  the  project  area.  The  Company   executed  a  Mining   Exploration,
Exploitation  and Unilateral  Promise of Sale Agreement with Liebano Saenz Ortiz
("Saenz"),  the owner of seven  exploitation  concessions  comprising a total of
1,920 hectares covering the core of the Dolores Mining District.  This agreement
was subsequently assigned to Minera Dolores.  Minera can earn a 100% interest in
these  concessions  by paying a total of US$1.5  million in cash payments at the
rate of US$25,000 each calendar quarter.  Through December 2003, the Company has
paid a total of US$1,067,000. A Net Smelter Return ("NSR") royalty of 2% on gold
and  silver is payable to Saenz upon  commercial  production  and an  additional
1.25% NSR on gold only is payable  to  another  party.  Two  peripheral  mineral
concessions  (Silvia and Dolores) were staked by the Company  bringing the total
area of concessions to 27,700 hectares.

                  [GRAPHIC MAP OF PROPERTY LOCATIONS OMITTED]
                          Figure 1: Property Locations

<PAGE>

The Dolores Property consists of the nine concessions described in the following
table,  comprising a total of 27,700  hectares.  All  environmental  permits are
current and in order and allow the Company to conduct exploration of the Dolores
Property  through  to the actual  permitting  for a mine site.  In  addition  to
permits  allowing the Company to construct all access and drill roads  necessary
to complete the development  drilling now underway,  the Company has permits for
the use of a nearby  landing  strip.  The  Company has also  negotiated  surface
rights agreements with the Ejido Huizopa and certain  individual  members of the
Ejido for access and right to conduct all exploration activities on the property
up to and  including  all mining  operations  that may occur on these lands as a
result of these exploration activities.

The  following  table lists  pertinent  information  with respect to the Dolores
Property Mining Concessions.

                    Dolores Property Exploitation Concessions
<TABLE>
<CAPTION>
<S>                                           <C>                       <C>                 <C>
-------------------------------------- ---------------------- ------------------------- ------------------------------
           Concession Name                   Title No.            Area (hectares)                Expiry Date

-------------------------------------- ---------------------- ------------------------- ------------------------------
    Silvia                                    217587                    2,866               August 20, 2052
    Real Cananea                              184981                      394               December 12, 2039
    Real Cananea Uno                          184982                      180               December 12, 2039
    San Judas Tadeo                           184983                      150               December 12, 2039
    Alma Maria                                191728                        6               December 18, 2041
    Ampliacion Real Cananea                   184984                      350               December 12, 2039
    Ampliacion Real Cananea Uno               184985                      360               December 12, 2039
    Ampliacion Real Cananea Dos               184986                      480               December 12, 2039
    Dolores                                   221593                   22,914               March 3, 2054
    Total Area                                                         27,700
-------------------------------------- ---------------------- ------------------------- ------------------------------
</TABLE>

All nine  concessions  have been granted  exploitation  status,  the most recent
being the Dolores  concession.  Taxes are due every six  months,  in January and
July,  on all  concessions.  Taxes paid in January 2004  totalled  526,260 Pesos
(approximately  US$48,000).  Annual  assessment work is required for exploration
concessions and work  expenditures to date, which can be carried  forward,  will
cover the concessions for the next five years.

Gold and silver mineralization, identified at surface, occurs within a zone over
4,000 metres long and 1,000 metres in width and has been intersected in drilling
to depths of over 550 metres below the highest topographical elevation. Historic
underground  mining was carried out along  three main,  sub-parallel  structures
that occur  both  within and beyond  the  resource  study  area.  Figure 2 below
illustrates the location of the known  mineralized  zones,  the mineral resource
area and concession boundaries.
<PAGE>

 [GRAPHIC OF DOLORES PROPERTY MINERAL CONCESSIONS AND MINERALIZED AREAS OMITTED]

      Figure 2: Dolores Property Mineral Concessions and Mineralized Areas

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The project area is  approximately  250 kilometres west of the city of Chihuahua
and is accessed from the town of Madera (pop.  +/- 35,000).  Madera is linked by
paved highway and railway with the rest of Mexico and the United States.  The 87
kilometre,  3.5 hour trip to Dolores  from  Madera by  vehicle  is mostly  along
narrow,  winding and rough gravel logging roads.  During the feasibility study a
new route was identified,  which will provide  superior access to Dolores with a
minimum  amount of  construction.  The new route takes off from the main highway
between Chihuahua and Hermosillo and will require  approximately 6 kilometres of
new road to connect up with an existing 85 kilometre  road and the  upgrading of
the entire length to provide a seven-meter wide primary mine haulage road.

The  climate in the area is  semi-arid  with  average  annual  precipitation  of
approximately  25 cm.  Most of the  precipitation  falls  during  the wet season
lasting from July to mid September.  Temperatures range from -10 degrees Celsius
in winter  to 45  degrees  Celsius  in  summer.  Exploration  can be  undertaken
throughout the year.

The  local  economy  is  supported  mainly  by  cattle  ranching,   logging  and
subsistence  level farming.  Unskilled  labour is available at several  villages
within the area.  Water for drilling is available from a local  reservoir,  from
flooded historic  underground mine workings and the nearby Rio Tutuaca.  Surface
rights to all known mineralization, areas suitable for potential waste disposal,
tailings,  storage, heap leach pads and plant sites are held by the Company. The
project area is currently serviced by narrow, winding, rough roads. A network of
roads to provide access for drilling has been established on the property.  Most
modern services are available at Madera.

Site topography is  characterized  by moderately  rugged terrain with elevations
ranging from 1,200 metres above sea level, at the Rio Tutuaca,  to 2,000 metres,
at the Mesa Aterrizaje.

The mountaintops are covered with pine, while vegetation in the valleys consists
mainly of thorny  shrubs and cactus.  Active,  intermittent  stream  erosion has
resulted in the formation of deep V-shaped valleys throughout the area.

History

Mining activity in the area of the Dolores  Property is believed to have started
with placer  mining circa 1860.  In 1898,  organized  lode mining is reported to
have begun in the area.  By 1915, a power line had been  installed  from Madera,
and processing was  accomplished  by pulverizing  the ores in 25 stamp mills and
recovering  gold and  silver in a cyanide  leach and zinc  precipitate  circuit.
Records from 1922 through 1929 indicate  that the property was producing  nearly
50,000  tonnes per year until the mill was  destroyed  in a fire in early  1929.
Only sporadic high-grade  production occurred during 1929 to 1931, and there are
no records of any production since that time.

<PAGE>

The  Company  began  acquiring  a land  position  in the  district  in 1993  and
initiated a preliminary  surface  exploration program to evaluate the district's
mineral potential. Between 1996 and 2001, the Company completed more than 61,000
metres of drilling,  including  approximately 136 core holes totalling  32,048.8
metres  and  approximately  155 RC holes  totalling  29,392.2  metres.  Detailed
geologic  mapping  of  approximately   six  square   kilometres  and  widespread
reconnaissance  mapping and  sampling  covering 12 square  kilometres  have been
combined with ore microscopy,  metallurgical  study,  petrographic  analysis and
geochemical studies to form the data base. Geophysical surveys, including 14,900
line metres of induced polarization,  resistivity, and magnetic surveys, as well
as base-line  environmental  studies,  were also  completed  during this period.
Since  beginning the final phase  drilling  program in July of 2002, the Company
has completed an  additional  61,404  metres  (50,750  meters of core and 11,250
meters of RC) of a planned 70,000 - 75,000 metre drilling program for 2002-2004.
Total  drilling at Dolores  through  December 2003 now stands at 510 drill holes
totalling more than 115,000  metres.  Drilling  re-commenced in February of 2004
and will  continue  through  most of the  year  with  delineation,  exploration,
condemnation, and geotechnical holes planned.

The  following  table shows the  historical  production  of the  Dolores  Mining
District for the years 1922 to 1931. The accuracy of this information is unknown
to the Company.

              Recorded Production from the Dolores Mining District
<TABLE>
<CAPTION>
<S>    <C>       <C>           <C>       <C>       <C>     <C>        <C>        <C>         <C>       <C>
     --------- ------------ ----------------- ------------------- ------------------------ --------------------
       Year    Tons Mined    Average Grade      Average Grade            Contained              Contained
                                (gm/ton)           (oz/ton)              Kilograms              Kilograms
                              Au       Ag        Au        Ag        Au           Ag          Au        Ag
       1922      63,494       *6.1      *635       0.18    18.52     *388.5     *40,313.8    12,492  1,296,088
       1923      65,885        6.8       559       0.20    16.30      451.0      36,862.0    14,500  1,185,113
       1924      54,005       *8.4      *527       0.24    15.37     *451.0     *28,471.3    14,501    915,351
       1925      51,261       *9.6      *505       0.28    14.73     *492.7     *25,862.1    15,841    831,466
       1926      48,523       12.7       548       0.37    15.98      606.0      25,718.0    19,483    826,834
       1927      42,082       12.5       554       0.36    16.16   ***526.0   ***23,313.4    16,912    749,526
       1928      38,146       12.5       400       0.37    11.67      478.0      15,250.0    15,368    490,288
     Mill burned in early 1929, subsequent higher grade ore shipped off property for milling (?)
       1929       1,306       24.6       872       0.72    25.43          32.0    1,140.0     1,029     36,651
       1930       3,686     **30.7  **1671.5       0.90    48.75         118.0    6,153.0     3,794    197,819
       1931       3,384     **27.6  **1458.2       0.81    42.53        **93.4  ***4,934.5    3,004    158,646
     Total/ weighted average

                 371,771       9.8       563      0.286    16.26       3,636.7  208,018.1   116,921  6,687,782
     --------- ------------ ------- --------- ---------- -------- ------------- ---------- --------- ----------
</TABLE>

              *        Back calculated  from production  using 96% recovery from
                       Au and 87% recovery of Ag
                       (Average  recoveries  listed in annual reports)
              **       Weighted average from several ore shipments
              ***      Calculated from Tons Mined and Average Grade

         Sources:      Anuario de Estaddistica  Minero,  1922,  1923,  1926,
                       1927, 1928, 1929 and 1930, 1931, Annual Reports


Geology

The Dolores deposit is a  structurally-controlled,  gold-silver deposit, located
within a sequence of volcanic rocks composed  primarily of andesite flows,  flow
breccias,  and tuffs, which are overlain by latite  volcaniclastic  breccias.  A
variety of  intrusive  bodies are coeval with the  volcanic  sequence,  the most
common  being  dikes of  latite  composition  which  generally  strike  in a NNW
direction.

The  dominant  structural  features  are  regional,  sub-parallel,  NNW-trending
faults, which dip steeply to the west. Continued  down-to-the-west offset within
this  structural  set is believed to have caused the  development of a series of
dilational  conjugate  faults  between the  primarily  parallel to  sub-parallel
faults.   These  faults  are  believed  to  have  been  influential  during  the
mineralizing  event  and  locally  may  help  to  explain  the  geometry  of the
mineralization.

Gold and silver  mineralization  identified at surface occurs within a zone over
4,000 metres long and 1,000 metres in width at elevations  that range from 1,400
metres  to  1,700  metres  above  sea  level.   Mineralization   has  also  been
investigated  to the depth of drilling  at 1,150  metres  elevation  or over 550
metres of vertical extent.

<PAGE>

Precious  metal  mineralization  has been  encountered  from the  surface to the
deepest drilling completed to date, exceeding 550 metres and over wide intervals
(30 to 100 metres). Within this broad zone of mineralization, relatively narrow,
2 to 20 metre wide intense  stockwork or mineralized  breccia zones,  that often
occur along, but not confined to, intrusive contacts contain bonanza grades that
may range from 10 to over 200 grams per tonne gold and 300 to over 13,000  grams
per tonne silver.

For more  details on the geology on the Dolores  Property,  see section 3 of the
PAH Report, which is incorporated herein by reference.

Exploration

The  Company  acquired  its right to explore  the  Dolores  Property in 1993 and
initiated a preliminary  surface  exploration program to evaluate the district's
mineral potential.  Between 1993 and August 1994, several  reconnaissance visits
by Company  personnel  and various  consultants  resulted in the  collection  of
several hundred rock chip samples,  including  surface grab and channel samples.
Since November 1995,  the Company has actively  worked on the Dolores  Property,
resulting in the discovery of a significant gold and silver deposit.

Exploration  efforts have included  reconnaissance and detailed surface mapping,
channel sampling on surface and in accessible old underground workings totalling
more than 16,000 rock chip assays, extensive metallurgical studies, initial mine
planning  and  engineering  studies,   environmental  base  line  studies,  road
up-grading and construction,  airphoto and topographical maps and a total of 510
holes for more than 115,000 metres, as of the end of fiscal year 2003.

Work on the property was carried out by professional  geologists employed by the
Company and a number of independent  consulting  geologists  and engineers.  The
principal outside  independent  consultants over the last 7 years include: H. J.
Choates and W.E. Brereton,  of MPH Consulting Limited;  McClelland Labs of Reno,
Nevada; Golder and Associates,  Tucson,  Arizona;  Mine Development  Associates,
Reno, Nevada; MRDI Canada; SRK Canada; J. Nilsson, P. Eng; Pincock Allen & Holt,
Denver, Colorado; Hazen Research, Inc, Golden Colorado, Roscoe Postle Associates
Inc, Vancouver,  B.C. and M3 Engineering & Technology Corp. Tucson,  Arizona and
SGS Lakefield Research Ltd, Denver, Colorado.

Drilling

Since the start of the first phase of drilling in August 1996 more than  124,000
metres of drilling in 510 holes have been completed to date. Diamond drill holes
amounting  to more than 82,300  metres in 291 holes and 220 reverse  circulation
drill holes for 42,100  metres  constitute  the drilling  database with drilling
continuing at the time of this AIF.

Of the total holes drilled, more than 440 holes were drilled within the resource
area and will be used in the new resource  calculation.  Two holes were lost and
six additional holes were water well and water test wells. Fifty-four holes were
drilled to test targets  peripheral to the resource area;  three were drilled on
the La Bohemia target,  18 tested the East Dike target,  13 tested the Norte and
north end of the East Dike target,  16 were drilled on the Sur Zone and one hole
was drilled on the La Central target.

Reverse  circulation holes were sampled at 1.52 metre intervals and diamond core
holes were typically  split at 2 metre assay  intervals.  One-half of the sample
was sent to the lab for assay and  one-half  was  placed in  storage  for future
reference.

A first phase of diamond  drilling was carried out by the Company between August
and December 1996,  with 6,609 metres of HQ/NQ core recovered in 30 holes.  Most
of the drill holes encountered  significant gold and silver  mineralization over
substantial  widths along a 1,000 metre strike length within the Chabacan target
area.  A second  phase of drilling  commenced  in January 1997 and ended in June
1997. At the end of this program, 45 diamond drill holes totalling 10,115 metres
had been  completed  since initial  drilling  started in August 1996. The second
phase  drilling  tested a 2,000 metre strike  length south of the Chabacan  main
zone.  One of the better drill holes in this  program,  D97-36,  intersected  96
metres averaging 2.00 g/t gold and 32.2 g/t silver.

<PAGE>

A third phase drill  program was  initially  carried out under the  direction of
Echo Bay Mines Ltd.  ("Echo Bay") staff and later managed by Company  personnel.
The drill program  consisted of infill drilling to confirm the existing resource
and  step-out  drilling to expand the resource to include the Hondo and Chabacan
target areas.

All of the  infill  holes  drilled  during  this phase  intersected  potentially
economic grade gold and silver  mineralization  and confirmed  continuity of the
main zone deposit over a strike length of 2,000  metres.  All holes were drilled
at  angles  of -450 to -750 and  directed  to test  the  down-dip  extension  of
outcropping surface gold and silver  mineralization to depths of 550 metres (see
Figure 3).

           [GRAPHIC OF COMPOSITE SECTION THROUGH CENTRAL BRECCIA PIPE
                    IN DOLORES GOLD & SILVER DEPOSIT OMITTED]

Figure 3. Composite section through central breccia pipe in Dolores
gold & Silver Deposit

<PAGE>

In August  1997,  an  independent  resource  was  calculated  by Humbolt  Mining
Services,  based on 107 drill holes. A drill indicated and inferred resource was
estimated at 27.84  million tons with an average grade of 0.038 oz/ton (1.3 g/t)
gold and 1.38 oz/ton (47.3 g/t) silver at a 0.015 oz/ton gold cut-off.

In October  1997,  the  Company  reacquired  Echo Bay's  interest in the Dolores
Property and continued with the phase-one  feasibility  study  initiated by Echo
Bay that included  column leach testing,  environmental  base line studies and a
preliminary geotechnical study.

In June 1998, MRDI Canada provided an updated resource  calculation as part of a
pre-feasibility  scoping  study.  The  calculation  was based on 160 drill holes
totalling 35,000 metres of drilling over 1,800 metres of strike length.  Using a
0.5 g/t cut-off  and  uncapped  gold  equivalent,  the  following  resource  was
calculated.

                        Indicated          23,912,000 tonnes of 1.45 g/t Au Eq.
                        Inferred           30,385,000 tonnes of 1.245 g/t Au Eq.
                        ------------------ -------------------------------------
                        Total              54,297,000 tonnes of 1.338 g/t Au Eq.

In September 1998,  additional infill drilling was completed on the main zone at
25 metre centres along the 1,800 metre strike length.  Incorporating  the latest
drill results,  an updated resource  calculation by MRDI Canada was completed in
November 1998,  with indicated and inferred  resources for the main zone deposit
totalling 61 million  tonnes grading 1.42 g/t  gold-equivalent.  All gold values
were capped at 4.0 g/t and silver values were capped at 220 g/t. A cut-off grade
of 0.5 g/t  gold-equivalent  was used.  The data provided to MRDI Canada for the
resource   study   included  238  drill  holes  (127   diamond   drill  and  111
reverse-circulation  drill  holes)  totalling  52,898  metres.  The drill  holes
extended over 2,800 metres of strike length and 1,000 metres across strike.

From  January  to March  2000,  a  program  of  infill  drilling  confirmed  the
continuity of high-grade gold and silver mineralization  occurring within feeder
structures  surrounded  by a broad  zone  of  disseminated  mineralization.  The
high-grade  feeder structures extend for over 4,000 metres along strike and have
been  drill-tested to depths of up to 300 metres.  Some of the best results from
the 2000 drill  program came from hole  D00-R140  drilled on section  2175.  The
drill hole  averaged  1.24g/t  gold and 61.7g/t  silver over 236 metres.  A 15.2
metre section within this zone averaged 11.52g/t gold and 707.7g/t silver.

In August of 2002,  Pincock Allen & Holt completed an  independent  audit of the
resource data-base (compiled through April 2002) and the measured, indicated and
inferred  resources  previously  reported  for the Dolores  deposit.  This audit
resulted in the  resource  table  reproduced  below  under the section  "Mineral
Resource and Mineral Reserve Estimates".

Since June of 2002, a drilling  program,  consisting of approximately  70,000 to
75,000 metres of infill,  stepout,  condemnation and  geotechnical  drilling has
been underway. This drilling program is designed to bring the main zone resource
to a final feasibility and to expand the mineralized  potential of the district.
Results from this program are being  incorporated  into revised  resource models
and mine planning, and incorporated into an independently engineered feasibility
study

Mineralization

Gold and silver  mineralization  identified at surface occurs within a zone over
4,000 metres long and 1,000 metres in width at elevations  that range from 1,400
metres  to  1,700  metres  above  sea  level.   Mineralization   has  also  been
investigated  to the depth of drilling  at 1,100  metres  elevation  or over 550
metres of vertical extent.

Precious metal values are contained within native gold, native silver, electrum,
silver sulfides and silver  sulfosalts.  Feeders also contain quartz,  sericite,
pyrite (locally oxidized to limonite), with lesser amounts of epidote, chlorite,
calcite, fluorite, galena, sphalerite, and occasional chalcopyrite.
<PAGE>

At intermediate  levels in the system,  mineralized  feeders widen into breccias
containing  druzy cavities,  comb  structures,  crustifications  and symmetrical
banding in silica veins and veinlets.  Strong hydrothermal brecciation is common
and frequently  overprints areas of original  tectonic breccia and/or fractures.
Pervasive  silicification  of the country  rock and  multiphase  veining in both
breccias and stockwork  zones show strong  correlation  with high grade gold and
silver mineralization,  with lower grade material occurring between the feeders.
Mineralization  at this  level also  occurs  within  localized  zones of intense
propylitic  alteration that may occur adjacent to the most strongly  mineralized
areas within the deposit.

The upper extent of  widespread  mineralization  is generally  confined to a few
tens of metres  above the contact of the latitic  volcaniclastic  tuffs with the
underlying  intermediate andesitic volcanics.  It is likely that high porosities
and  permeabilities  resulted in dispersal and lateral migration of hydrothermal
fluids  at  the  volcaniclastic   contact  with  concomitant  cooling  generally
restricting  ascension of hydrothermal fluids.  Alteration extends laterally for
several  hundred  metres along and above the contact in a generally  silicified,
broken,  brecciated,  and variably argillized  subhorizontal layer. This altered
layer contains anomalous mercury,  arsenic,  and antimony throughout its extent.
Ore grades of  mineralization  locally  persist  beyond  tens of metres into the
overlying tuff units but are restricted to narrower zones of fracturing.  In the
highest exposures of the central dome area, low-grade  mineralization from 40 to
100 parts per billion  (ppb) gold is known to occur within  small  discontinuous
pods of chalcedonic to opalescent vein material.

The episodic nature and variable intensity of mineralizing activity has commonly
resulted in overprinting of several features,  including the formation of quartz
stockworks  along  intrusive  contacts,   flooding  of  tectonic  breccias  with
hydrothermal   silica,   silicification   and  dissemination  of  mineralization
peripheral to structures,  re-brecciation  and precipitation of stockwork quartz
in  several  phases,  and  hydrothermal  brecciation  that  overprints  original
tectonic  features.  A relatively large  breccia-pipe like body has been defined
over a 400 metre length  (20-60  metres wide) from the surface to depth  greater
than 500 metres,  which contains  consistent  higher-grades  of  mineralization,
indicating a primary mineralizing conduit.  Oxidation throughout the area of the
deposit  is  highly  variable.  Oxidation  has  been  observed  to the  depth of
drilling,  particularly  within the larger fracture zones, yet sulfides are also
known to occur at surface in various localities of the property. The majority of
the deposit can be classified as mixed oxide/sulfide with smaller percentages of
totally  oxidized  material  occurring along  structures and near surface,  with
progressively increased sulfide content found at depth.

Sampling and Analysis

Rock Chip Sampling and Soil Sampling

Since 1993,  in excess of 13,800 rock chip  samples have been taken across zones
of  mineralization  at the Dolores  Property.  Continuous rock chip samples were
collected  over five metre sample  lengths (84% of total  samples)  along sample
lines laid out perpendicular to the 330 degree strike of the altered, silicified
and mineralized rock exposures.

Each sample site was flagged and marked with an aluminium tag. Soil samples were
taken along those portions of the lines covered by overburden.  A total of 1,800
soil samples were  collected  and analyzed.  A surveyed  baseline and grid lines
spaced at 50 metre  intervals were  established for control of the rock chip and
soil sampling.  The area covered by the sampling program was  approximately  six
square kilometres.

All samples  were  collected  from the Dolores  site by ALS Chemex  Laboratories
("Chemex"),  Bondar-Clegg  or  Inspectorate  personnel  and  taken  to a  sample
preparation  lab either at  Chihuahua,  Hemosillo or Durango.  Following  sample
preparation pulps are flown either to Vancouver, Canada or Reno Nevada for final
analysis.

The soil  samples  were dried and sieved to -80 mesh.  The -80 mesh  portion was
sent to the Chemex lab in Vancouver,  British Columbia.  A 30 gram subsample was
then  analyzed for gold by  fire-assay  with an atomic  absorption  (AA) finish.
Silver values were obtained by aqua-regia digestion followed by AA analysis.

For rock chip  samples,  a 30 gram  sub-sample  for gold  analyses  was used for
fire-assay  with an AA finish.  Silver  analyses were obtained by AA (background
corrected)  assay  following  aqua-regia  digestion.  One  kilogram  pulps  were
prepared,  instead  of the  normal  0.2 kg  pulps,  after  comparative  analyses
indicated the large sample size ensured greater sample assay consistency.


<PAGE>

The  rock  chip and soil  sampling  programs  were  supervised  by  experienced,
professional  geologists.  The samples taken are  considered to be of acceptable
quality and  representative of the  mineralization  exposed at the sample sites.
The sample  results  are  considered  to be  reliable  since all  analyses  were
performed at well known reputable  laboratories with quality control  procedures
in place.

Core Sampling and Reverse-Circulation Sampling

All core was carefully logged in a thorough manner by experienced,  professional
geologists in keeping with  industry  standards  and  mineralized  sections were
photographed before sampling.  The mineralized sections were marked for sampling
according  to changes in rock type,  changes in  character  and  quantity of the
mineralization and at structural contacts.  As a result, core sample lengths are
variable.  Where  there  are  no  lithological  or  structural  changes,  sample
intervals  are  typically two metres in length.  All  mineralized  core was then
split by  core-splitter  with  one-half  of the core  placed in plastic or cloth
sample  bags along with a sample tag  number and  securely  fastened.  The other
one-half  was  replaced  in the  core  trays  and  stored  in core  racks on the
property.

Reverse circulation holes were sampled at 1.52 metre intervals.  One-half of the
samples,  weighing from 12 to 16 kg, were sent for assay and the other  one-half
was  placed in  storage  at the site for future  reference.  Core  samples  from
drilling  programs  carried out by the Company  were sent to the same Chemex lab
that was used to process  rock chip samples and the same  preparation,  assaying
and quality control procedures were applied.

Quality Control

Quality  control of assay data at the Dolores  Property  was  ensured  through a
monitoring  program (set up by an independent  geochemist,  Dr. Lovestrom,) that
included use of prepared gold-silver  standards,  blank samples, check analyses,
duplicate  analyses by alternate labs, and metallic screen analyses.  A total of
more  than one out of every ten  samples  were a part of the  quality  assurance
database and all geochemical  analyses are performed at ALS Chemex  Laboratories
and  Inspectorate,   well  known,  industry-standard  geochemical  laboratories.
Quality  assurance was provided by check assays processed at Bondar-Clegg  labs,
Vancouver, B.C. and/or between the two other labs listed above.

2001 Dolores Silver Reanalysis Program

During the summer of 2001, the Company discovered that silver grades for certain
samples  from  the  Dolores  Property  were  underestimated  by  the  aqua-regia
digestion assay techniques which had been used. It is considered likely that the
under-reporting of grade is related to the presence of silver halide minerals in
Dolores ores, possibly as a result of secondary enrichment of silver.

Selection of Samples

After initial check assays showed a significant  increase in silver grades using
multi-acid  digestion  techniques,  an extensive silver  reanalysis  program was
undertaken  by the Company.  Approximately  8,880 samples were  reanalyzed.  The
samples  selected for reanalysis were primarily  consistent runs of greater than
10 g/t  silver,  or  runs  which  had  greater  than  5 g/t  silver  along  with
significant amounts of gold.

Chain of Custody and Sampling issues

Splits were pulled from pulp material previously prepared by Chemex in Chihuahua
and  Hermosillo.  About 35% of the  material  was stored at  Chemex's  Chihuahua
facility,  with the remainder being stored at Minefinders'  Chihuahua warehouse.
All sample  retrieval  and  preparation  was  carried  out by Chemex  personnel.
Approximately  400 drill samples and 100  underground  samples were not found at
either location, and are not incorporated in the data set.

Samples which had  previously  been  fire-assayed  were included in segments for
rerun.  It was not expected  that there would be a  significant  change in these
results,  but they  serve as an  excellent  check  on the  multi-acid  digestion
technique.  Samples which  returned a below  detection  limit result (<1 g/t Ag)
with  multi-acid  digestion  are ignored,  because the  aqua-regia  technique is
considered more accurate at these grades.


<PAGE>

Results

For  the  drill  samples  submitted,  there  is a  significant  increase  in the
contained silver results using multi-acid digestion for oxidized material,  with
a more moderate increase for material  categorized as mixed or sulfide. The most
dramatic  increases in silver grade were found in various  peripheral zones that
surround the main deposit,  but the improvement in silver grades  throughout the
resource will increase the overall resource.  The samples analyzed by fire-assay
show excellent agreement with the multi-acid results,  which provides confidence
in the multi-acid  technique for Dolores ores. See "Mineral Resource and Mineral
Reserve Estimates" below.

Mineral Resource and Mineral Reserve Estimates

On August  19,  2002,  PAH  presented  its  initial  report  entitled  "Audit of
Resources at the Dolores Gold-Silver Project,  Chihuahua,  Mexico". This initial
report was subsequently re-written to comply with the requirements of NI 43-101.
This AIF  incorporates by reference the PAH Report dated December 2, 2002. There
are no mineral  reserve  estimates at this stage.  The  measured,  indicated and
inferred resources for the Dolores Property, at cut-off grades of 0.3, 0.5, 0.6,
0.7,  1.0, 1.5, 2.0 and 3.0 gpt Au Eq are taken from the PAH Report and shown in
the following  table.  This  resource  estimation  is based on  construction  of
geological  and computer block models,  and  variographic  analysis.  The Metric
System is used in this analysis. Tonnes are stated as metric tonnes of 1,000 kg.
Gold and silver grades are reported in grams per tonne (gpt).  All resources are
calculated in accordance with NI 43-101.

                   Measured, Indicated and Inferred Resources
<TABLE>
<CAPTION>
<S> <C>          <C>          <C>          <C>           <C>         <C>              <C>          <C>
-----------------------------------------------------------------------------------------------------------------
Dolores Project, PAH (audited) Measured  Resource

-----------------------------------------------------------------------------------------------------------------
  Cutoff        TONNES         GOLD         GOLD         SILVER        SILVER      Aueq grade        Aueq
 gpt Aueq      (1000's)       gpt Au       Ounces        gpt Ag        Ounces       gpt Aueq        Ounces
-----------------------------------------------------------------------------------------------------------------
    3.0          2,960        3.743        356,300       183.5       17,467,200       6.802        647,400
    2.0          5,337        2.706        464,400       135.6       23,269,600       4.966        852,200
    1.5          7,986        2.138        549,000       109.0       27,973,500       3.954       1,015,200
    1.0         12,147        1.649        643,900        85.0       33,191,400       3.066       1,197,100
    0.7         16,415        1.344        709,500        69.8       36,859,600       2.508       1,323,900
    0.6         18,614        1.230        736,100        64.0       38,298,300       2.297       1,374,500
    0.5         21,487        1.107        764,500        57.8       39,960,100       2.071       1,430,500
    0.3         29,980        0.857        826,300        45.0       43,384,100       1.607       1,549,400
-----------------------------------------------------------------------------------------------------------------
 Dolores Project, PAH (audited)  Indicated  Resource

-----------------------------------------------------------------------------------------------------------------
  Cutoff        TONNES         GOLD         GOLD         SILVER        SILVER      Aueq grade        Aueq
 gpt Aueq      (1000's)       gpt Au       Ounces        gpt Ag        Ounces       gpt Aueq        Ounces
-----------------------------------------------------------------------------------------------------------------
    3.0          3,897        3.202        401,200       196.9       24,669,300       6.484        812,300
    2.0          7,512        2.277        549,800       144.3       34,838,100       4.681       1,130,400
    1.5         11,043        1.853        657,800       116.8       41,455,500       3.799       1,348,700
    1.0         15,994        1.481        761,300        94.1       48,405,500       3.050       1,568,100
    0.7         21,189        1.227        835,600        78.2       53,303,100       2.531       1,723,900
    0.6         24,363        1.113        872,000        70.9       55,509,000       2.294       1,797,100
    0.5         28,598        0.993        912,700        63.1       58,041,100       2.045       1,880,100
    0.3         41,524        0.750       1,001,900       47.7       63,645,700       1.545       2,062,700
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

<PAGE>

 Dolores Project, PAH (audited) Measured + Indicated Resource

-----------------------------------------------------------------------------------------------------------------
  Cutoff        TONNES         GOLD         GOLD         SILVER        SILVER      Aueq grade        Aueq
 gpt Aueq      (1000's)       gpt Au       Ounces        gpt Ag        Ounces       gpt Aueq        Ounces
-----------------------------------------------------------------------------------------------------------------
    3.0          6,857        3.436        757,400       191.1       42,136,400       6.622       1,459,700
    2.0         12,849        2.455       1,014,200      140.7       58,107,600       4.799       1,982,600
    1.5         19,029        1.973       1,206,800      113.5       69,429,000       3.864       2,364,000
    1.0         28,141        1.553       1,405,200       90.2       81,596,900       3.056       2,765,200
    0.7         37,604        1.278       1,545,100       74.6       90,162,700       2.521       3,047,800
    0.6         42,977        1.164       1,608,100       67.9       93,807,200       2.296       3,171,600
    0.5         50,085        1.042       1,677,300       60.9       98,001,100       2.056       3,310,600
    0.3         71,504        0.795       1,828,200       46.6      107,029,800       1.571       3,612,000
-----------------------------------------------------------------------------------------------------------------
 Dolores Project, Inferred Resource

-----------------------------------------------------------------------------------------------------------------
  Cutoff        TONNES         GOLD         GOLD         SILVER        SILVER      Aueq grade        Aueq
 gpt Aueq      (1000's)       gpt Au       Ounces        gpt Ag        Ounces       gpt Aueq        Ounces
-----------------------------------------------------------------------------------------------------------------
    3.0          2,986        3.546        340,400       185.9       17,845,400       6.644        637,800
    2.0          5,939        2.421        462,200       136.2       26,004,100       4.691        895,600
    1.5          9,114        1.934        566,700       107.5       31,505,600       3.726       1,091,800
    1.0         12,707        1.581        646,000        88.8       36,288,200       3.062       1,250,800
    0.7         18,416        1.225        725,400        70.4       41,695,900       2.399       1,420,400
    0.6         22,457        1.070        772,300        61.6       44,464,600       2.096       1,513,400
    0.5         28,051        0.919        828,400        52.8       47,661,100       1.799       1,622,800
    0.3         44,017        0.668        945,800        38.1       53,980,700       1.304       1,845,500
-----------------------------------------------------------------------------------------------------------------
</TABLE>

* Note:  this  geological  resource has been  estimated in  accordance  with the
Canadian Institute of Mining and Metallurgy guidelines, which are different from
the  guidelines  set  forth in Guide 7 under  Item 802 of  Regulation  S-K.  See
"Glossary."

The  resources in the preceding  table do not account for the material  mined in
the past.  Historic production from the project area is reported as 371,771 tons
(337,233  tonnes) at an average  grade of 0.286 opt (9.8 gpt) gold and 16.26 opt
(563 gpt) silver. Of this total, the Company estimates that about 80 % is within
the area where resources have been estimated.  PAH, in the PAH Report, concludes
that 270,000  tonnes  should be  subtracted  from the  resource  estimate at the
average grade of the current resource estimate.


<PAGE>

The  following  table sets out the proposed  2004  exploration  and  development
budget on the Dolores property.

<TABLE>
<CAPTION>
<S>                                                                                         <C>
-----------------------------------------------------------------------------------------------------------------------
Dolores 2004 Budget

-----------------------------------------------------------------------------------------------------------------------
Infill Drilling

Total # of holes planned (core)                                                             25
Total # of holes planned (RVC)                                                              10
Total meters planned core:                                                               10000
Total meters planned RVC:                                                                 2000

Exploration Drilling

Total # of holes planned (core)                                                             25
Total # of holes planned (RVC)                                                              15
Total meters planned core:                                                               10000
Total meters planned RVC:                                                                 5000

Condemnation Drilling

Total # of holes planned (core)                                                             30
Total # of holes planned (RVC)                                                              20
Total meters planned  (core)                                                              5000
Total meters planned (RVC)                                                                2000
Total hours of drill road & pad construction :                                             360
</TABLE>
<TABLE>
<CAPTION>
<S>                                                                                                  <C>    <C>
                                                                                              Unit Cost  Total Cost


All inclusive infill core drill costs (per meter - Includes assays and drill supplies)               $110   $1,100,000
All inclusive Exploration core drill costs (per meter)                                               $110   $1,100,000
All inclusive Condemnation core drill costs (per meter)                                              $100     $500,000
All inclusive infill RVC drill costs (per meter - Includes assays and drill supplies)                 $60     $120,000
All inclusive exploration RVC drill costs (per meter)                                                 $60     $300,000
All inclusive condemnation RVC drill costs (per meter)                                                $50     $100,000
Drill pad and road construction & maint.                                                              $75      $27,000
Engineering and Metallurgical studies                                                  Days   Daily Rate
                                                                                       ----   ----------
Metallurgical (Lakefield and McClelland) man-days                                          145     $1,200     $174,000
Engineering  M3  (Lead firm) man-days                                                      525     $1,300     $682,500
Independent Mining Engineers (IMC) man-days                                                 90     $1,000      $90,000
Golder & Associates geotech  man-days                                                      100     $1,100     $110,000
Roscoe Postle  man days                                                                     75     $1,000      $75,000
Road construction New North-south access road(2 cats + gradder) days                       180     $2,750     $495,000
New road materials (culverts, etc)                                                                             $45,000
Field Geologists (Man-days)                                                               1000       $400     $400,000
Geologist - geologic compilation  (Man-days)                                               100       $350      $35,000
Tech (Man-days)                                                                            400       $150      $60,000
Dolores casual work force (man days)                                                      2400        $15      $36,000
Camp Supplies/Travel averaged over year                                                    300       $250      $75,000
-----------------------------------------------------------------------------------------------------------------------
                                                                               Subtotal                     $5,524,500
                                                                            Contingency               10%     $552,450
-----------------------------------------------------------------------------------------------------------------------
                    Estimated Budget for Dolores Project Exploration & Feasibility 2004                     $6,076,950
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                            NORTHERN SONORA PROPERTY

The information provided hereunder has been prepared by or under the supervision
of Mark H.  Bailey,  M.Sc.,  P.Geo.,  President  of the Company and a "qualified
person"  as  defined  in NI  43-101.  The  properties  described  below  are not
considered  material  to the  Company  due  to the  current  book  value  of the
properties. The Company does, however, consider these properties to be worthy of
future  exploration  expenditures and has been conducting,  and will continue to
conduct, exploration work on each of the following properties.

Description and Location

The Northern  Sonora  Property is located in the northern  part of Sonora State,
Mexico. The Northern Sonora Property consists of the ten exploration concessions
described below, comprising a total of approximately 15,145 hectares.

                      Northern Sonora Property Concessions
<TABLE>
<CAPTION>
<S>                                     <C>                        <C>                    <C>
 -------------------------------------------------------------------------------------------------------------------
        Concession Name               Title No.              Area (hectares)                 Expiry Date

 -------------------------------------------------------------------------------------------------------------------
      Abe                               216305                     996                    April 29, 2052
      Oro Fino                          215622                     649                    March 3, 2052
      La Pistola                        220056                   1,698                    June 3, 2053
      La Gloria                         221626                   1,087                    March 3, 2054
      Los Adobes                        218455                   6,173                    November 3, 2052
      El Ruido                          218448                   3,788                    November 3, 2052
      El Callejon                       211609                      14                    June 15, 2006
      El Callejon 2                     211623                      20                    June 22, 2006
      El Manzanal                       213593                     220                    May 16, 2007
      Anita                             221743                     500                    March 18 2010
 -------------------------------------------------------------------------------------------------------------------
      Total Area                                                15,145
</TABLE>

Approximately  five areas of mineralization  in separate  geographic zones occur
within the Northern Sonora Property:  1) the La Bolsa Property, in the northwest
corner of the  Northern  Sonora  concession  block;  2) the El Malacate  Caldera
related gold  mineralized  area,  in the central part of the  concession  block,
(written off on Dec. 31 2003); 3) the La Dura and Real Viejo silver prospects in
the central portion of the  concessions;  4) the Planchas de Plata (Anita claim)
silver  prospect  located to the southeast of the main  concessions  and 5) base
metal mineralization  related to porphyry systems, in the eastern portion of the
concession block, including the El Fierro and La Recompensa mineralized systems.

The Company has obtained all required permits to conduct exploration drilling on
the La  Bolsa,  La Dura,  and  Real  Viejo  projects  through  the next  several
exploration  programs.  The  Northern  Sonora  Property  is not  subject  to any
environmental liabilities.

Climate, Accessibility, Local Resource Infrastructure and Physiography

The  climate  in  the  area  is  high  desert,  semi-arid  with  average  annual
precipitation of approximately 20 cm. Most of the precipitation falls during the
wet season lasting from July to mid September. Temperatures range from 5 degrees
Celsius in winter to 48 degrees Celsius in summer. Exploration can be undertaken
throughout the year.

The local economy is supported mainly by cattle  ranching,  with the nearby city
of Nogales,  Mexico  (population  exceeding 1  million),  providing  most of the
economy for the region.  Skilled and unskilled  labour is  abundantly  available
from  nearby  Nogales.  Water for  drilling  is  available  from  local  sources
including  ponds and water  wells.

<PAGE>

Surface rights to all known mineralization  areas,  suitable for potential waste
disposal,  tailings,  storage,  heap leach  pads and plant  sites are held under
agreements by the Company.

Site  topography  is  characterized  by low to  moderately  rugged  terrain with
elevations ranging from 1,000 to 1,800 metres above sea level.

                 [GRAPHIC OF NORTHERN SONORA PROPERTIES OMITTED]

                      Figure 4: Northern Sonora Properties

Nature of Transport

The project  area is serviced by narrow,  winding,  dirt roads from  Nogales.  A
network of roads to provide access for drilling has been  established on several
of the more advanced  prospects located on the Northern Sonora Property.  Modern
services  are  available  at  Nogales,  within  30  kilometres  of  most  of the
prospects.

Sampling and Integrity of Samples

 The Company has taken more than 5,500  surface  samples  over the project  area
since  1994,  drilled  109 holes at La Bolsa and 33 holes  within  six  separate
target areas at El Malacate,  and  completed  extensive  geological  mapping and
airborne  geophysical surveys over the entire claim block, to year end 2003. All
assays were  completed by either  Bonder-Clegg,  ALS Chemex or BSE  Inspectorate
analytical  services  under the same quality  assurance as those for the Dolores
Property.


<PAGE>

La Bolsa Property: Location and Access

The La Bolsa  Property is located on the Abe  concession in the northern part of
Sonora State,  Mexico,  approximately  30 kilometres west of the Mexican city of
Nogales, and 97 kilometres SSW of Tucson, Arizona. The property is best accessed
from Tucson,  Arizona by taking Highway I-19  approximately 110 kilometres south
to Nogales.  Access to the property  from Nogales is by four wheel drive vehicle
by a combination of paved and dirt roads.

History of Property

There is no  known  written  information  pertaining  to the La  Bolsa  Property
although historic pits, shafts,  adits and exploratory trenches occur within the
property.  The greatest  concentration  of these are found on top of, and on the
east flank of the main mineralized hill where an access tunnel,  several shafts,
and over half a dozen  surface  pits were dug to exploit high grade (to 0.48 opt
gold and 8.3 opt silver) carbonate-rich breccias and veining.

Ownership

The La Bolsa  Property  was staked on behalf of Minera by a  registered  mineral
surveyor and Minera is the registered owner of all the exploration  concessions.
Other than as imposed under  Mexican  mining law, the property is not subject to
any underlying royalties or title encumbrances.

Although  the Company is the  registered  owner of the mineral  rights to the La
Bolsa  Property,  the surface  rights to much of the Abe Concession are owned by
Roberto Pierson Suarez  ("Pierson").  Terms for an exploration and  exploitation
surface rights  agreement with Pierson (the "Pierson  Agreement")  were accepted
during the third quarter of 1997,  and a final  agreement was executed and filed
with the appropriate Mexican authorities on October 13, 1997.

The Pierson  Agreement has a term of 20 years and is renewable for an additional
20 years.  Under the  agreement,  the Company is to pay  Pierson  annual rent of
US$20,000,  increasing by 10% per year,  and an additional  annual fee of US$200
for each  Pierson-owned  hectare that the Company actually  encumbers as part of
its mining  operations for activities such as building  roads.  The Company paid
the annual rent and  disturbance  fee during the period  from 1999 to 2003.  The
Company  will  continue to hold this  property  and advance it to a  feasibility
study as market  conditions allow. In addition,  the Pierson Agreement  provides
that the Company is to pay Pierson a one-time  fee of  US$500,000  for each mine
that the Company puts into production on a Pierson-owned property.

Geology and Mineralization

The geological  setting of the La Bolsa Property  consists of Tertiary  volcanic
and  sedimentary  units  shown to  overlie or intrude  Cretaceous  and  Jurassic
sedimentary and volcanic rocks consisting of interbedded  siltstone,  sandstone,
conglomerate, limestone, and rhyolite flows and tuffs.

Several Tertiary volcanic and volcaniclastic  rock types have been identified on
the property. Volcaniclastic and tuff beds are correlated to the lowermost units
of the Tertiary  Montana Peak  Formation  in the Oro Blanco  Mining  District of
Arizona, located to the immediate north.

The La Bolsa Property  contains an inferred resource of 8.3 million tons grading
0.025  oz/t  gold  and  0.254  opt  silver.  Mineralization  and  alteration  is
characterized by intense  silicification,  sericitization  and quartz-calcite or
quartz-adularia  stockwork  veining  and  brecciation  hosted by  volcaniclastic
sediments and  intermediate  volcanic  flows intruded by felsic dikes and plugs.
Quartz-calcite  veins up to 4.56  metres in width have been noted at the surface
although  most of the  quartz-veining  occurs as  stockworks.  Pink  replacement
textures  have been  described as potassic  alteration or  adularization  but no
pattern has been  defined.  The presence of pyrite is  suggested  by  iron-oxide
pseudomorphs  and hematite and limonite  along  fractures.  Carbonate  veins and
breccia zones are found throughout the mineralized La Bolsa Property.


<PAGE>

Exploration Activity

The La Bolsa  mineralized  system was  discovered  and staked in 1994 by Company
personnel  while  exploring  the Hill of Gold  prospect in the Oro Blanco Mining
District (Arizona) adjacent to the international boundary.  Further prospecting,
mapping and rock  geochemical  sampling  (1,200  samples)  outlined a coincident
gold-silver  anomaly which  extends for about 800 metres and averages  about 120
metres in width. Approximately 994 metres of surface trench rock sampling by the
Company  produced  significant  values,  including 125 metres averaging 1.10 g/t
gold in Trench  95-1 and 152 metres  averaging  1.10 g/t gold along  sample line
1000S.  During  late 1995 and early  1996,  42 reverse  circulation  drill holes
totalling  4,835 metres and 7 HQ/NQ diamond drill holes  totalling  614.5 metres
were completed.

In  mid-1996,  the  Company  retained  Mine  Development  Associates  ("MDA") to
undertake  an  independent  preliminary  resource  estimate  for  the  La  Bolsa
Property,  and Hazen Research Inc. ("Hazen") to conduct preliminary  bottle-roll
cyanide  leach  metallurgical  test  work on  mineralized  drill  cuttings.  MDA
reported gold mineralized  material of 122,600  equivalent  ounces of gold (i.e.
4,087,000 tons at .030 opt using .01 cut-off)  including  modest silver credits.
Hazen  reported that the results from eight samples  leached over a period of 72
hours had recoveries  ranging from 57% to 95%,  while four samples  (including a
split of the 57%/72 hr. sample) leached for 96 hours had extraction rates in the
80.6% to 86.0% range.  Silver  recoveries  were reported to be relatively  high,
with low  reagent  consumption,  suggesting  amenability  of the samples to heap
leach extraction techniques.

The Company  completed the first phase  exploration  drilling  program on the La
Bolsa Property in 1996 with the resultant discovery and independent  mineralized
deposit  estimation of up to 122,000 ounces gold equivalent.  Mineralization  is
open down dip to the east and along  strike both north and south with  excellent
potential to expand this resource. The Company received ecological permitting to
drill an additional  150 holes on this  property.  Access road  preparation  and
drill pad  construction  commenced  upon approval of the permit.  A second phase
drilling  program  began in May 1998 and was  completed in August 1998.  Results
from this drilling  included 26  mineralized  holes from the 28 holes drilled to
extend the La Bolsa Property.  A revised resource estimate  utilizing  polygonal
methods  tabulated 8.3 million tons,  grading .025 opt gold and .254 opt silver,
containing  208,000  ounces gold and 2.1  million  ounces  silver,  at a .01 opt
cut-off grade.  Mineralization remains open to the south and east and additional
drilling will be required to advance the present deposit to a reserve.

Work Program

The work proposal for the La Bolsa Property calls for detailed ground geophysics
in the deposit area to continue  tracing the known  mineralization  along strike
and to depth.  Continued surface sampling,  a 50 hole drilling program including
diamond and reverse  circulation  drilling,  bulk density  tests,  metallurgical
testwork,  engineering  studies,  and economic studies were all proposed for the
property.  Allowance was made for geological  mapping of the property as well as
for prospecting and geochemical sampling of potential target areas.

Detailed  exploration  is required at the La Bolsa Property to bring the project
to the  pre-feasibility  stage.  This will  entail  infill,  diamond and reverse
circulation  drilling,  and  surface  channel  sampling to enable  upgrading  of
resources to the measured or indicated  category for  pre-feasibility  purposes.
Systematic check assays,  bulk density testing,  geostatistical  analysis of the
assay database,  preliminary mining studies, ongoing metallurgical testwork, and
economic  evaluations  will  be  required  and  have  been  provided  for in the
proposal.

Additional  work on the resource area was suspended  over the last several years
pending an increase in gold prices or a substantial cash influx.  As a result in
the recent increase in gold prices and the Company's  financing  activities,  an
exploration  program was carried out in 2003 to advance the La Bolsa property to
a feasibility study. The drilling program completed in 2003 included drilling of
23 coreholes  for 2,085  metres,  and 11 RC holes for  1,838meters.  Exploration
continues on the La Bolsa property in 2004 with  additional  step-out and infill
drilling,  metallurgical  test work and  scoping-prefeasibility  study. The 2004
budget for La Bolsa is presented below.


<PAGE>

The  following  table sets out the proposed  2004  exploration  and  development
budget on the La Bolsa property.

<TABLE>
<CAPTION>
<S>                                                                            <C>     <C>
------------------------------------------------------------------------------------------------
La Bolsa Project 2004 Budget

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

Drilling

Total # of holes planned (core)                                          20
Total # of holes planned (RVC)                                           35
Total meters planned core:                                            3500
Total meters planned RVC:                                             2000
Total # of days for completion:                                         180
Total hours road construction (includes 15 hrs of main road cleanup):   110

                                                                           Unit Cost Total Cost

All  inclusive  drill  costs (per  meter -  Includes  assays and drill
supplies)                                                                        $100  $350,000
All  inclusive  drill  costs (per  meter -  Includes  assays and drill
supplies)                                                                         $50  $100,000
Engineering and Metallurgical studies                                          $1,000  $180,000
Road construction (per hour)                                                      $65    $7,150
Field Geologists (2 - per day)                                                   $700  $126,000
Geologist - geologic compilation  (per day)                                      $350   $31,500
Tech (per day)                                                                   $100   $18,000
Samplers (2 - per day)                                                            $40    $7,200
Camp supplies/Travel (per day)                                                   $150   $27,000
------------------------------------------------------------------------------------------------
                                                              Subtotal                 $846,850
                                                           Contingency            10%   $84,685
------------------------------------------------------------------------------------------------
                                                Total cost for project                 $931,535

------------------------------------------------------------------------------------------------
</TABLE>

Northern Sonora Projects: Description and Location

Following  the initial  success on the La Bolsa  discovery,  the Company  staked
eight  additional  concessions  expanding  the Northern  Sonora  Property to its
present size. Work on these additional  concessions  during the period from 1996
through  2001  included  regional  and  detailed  geologic  mapping,   extensive
geochemical  sampling  programs,   and  an  airborne  geophysical  survey.  This
comprehensive  exploration  effort resulted in the discovery of eight additional
gold-silver  mineralized  systems and two  porphyry  copper  related  base metal
systems.

The El Malacate  Property  located in the central portion of the Northern Sonora
Property was explored  from 2001 through the end of 2003 and written off at year
end 2003.

History of Property

Portions  of the  Los  Adobes  and  El  Ruido  concessions  have  been  outlined
(approximately 35 square  kilometres) and were incorporated into a joint venture
agreement with Placer Exploration Mexico Ltd. ("Placer"), a subsidiary of Placer
Dome Exploration Inc. ("Placer Dome"), dated December 21, 2001. This area, which
comprises six separate target areas, is referred to as the El Malacate Property.
No evidence of any historical activity is apparent and the six target areas were
discovered  by Company  geologists  over the past  several  years.  During 2002,
Placer Dome  reimbursed  $521,043  (US$327,714)  to the Company for  exploration
activities  in 2002,  including  completion  of 1,500 meters of drilling in nine
widely  spaced RC drill holes.  Subsequent to  completing  the initial  drilling
program,  Placer  notified  the  Company  that  it was  terminating  the  option
agreement.  Consequently,  the property has reverted to the Company.  Additional
drilling of 24 holes in 2003 (19 RC holes totalling 3010 meters and 5 core holes
totalling 670 meters)  included  drilling in additional areas untested by Placer
Dome, failed to enhance the mineralization  encountered in previous drilling and
the prospect was written off at year end.

Ownership


<PAGE>

The  concessions  were staked on behalf of, and are 100%  controlled  by Minera.
Surface rights to the area belong to various ranchers. An agreement (the "Milner
Agreement")  was signed in May 2000 with Fred Milner  ("Milner"),  covering  the
area of his Los Adobes Ranch that encompasses 7,492 hectares and includes the El
Malacate,  La Matanza,  La Dura, La Verde, El Tapon, and Picacho Alto prospects.
The agreement  provides for surface  rights for  exploration,  development,  and
mining  within  his  property,  in return for an annual  payment  of  US$10,000,
compensation  of  US$350,000  for the first  mine to go into  production  on his
property  and  US$250,000  for any other  mines that go into  production  on his
property. A second surface rights agreement was completed for the remaining area
encompassing  the El  Malacate  Property.  This  agreement,  referred  to as the
Maldanado  property  agreement,  is similar to the  Milner  Agreement,  with the
initial  annual rental  payment of $5,000 having been made in 2001, but with the
exception that there is no lump sum payment for the construction of a mine.

Geology and Mineralization

The  geologic  setting of the  Northern  Sonora  Property  consists  of Tertiary
intermediate   to  felsic  flows  and  tuffs  overlying  a  diverse  package  of
conglomerate,   sandstone,   siltstone,   and  thinly  layered  limestones  with
interspersed  intermediate volcanic flows and tuffs. The entire area is believed
underlain by Mesozoic  metavolcanic  and  metasedimentary  units. The structural
regime is dominated by an older series of northeast trending structures cut by a
later series of northwest  trending horsts and grabens.  Gold  mineralization is
localized at the edges of several  circular  features,  which are interpreted as
related to Tertiary volcanism. There is an earlier mineralizing event, primarily
containing  silver with accessory base metals and gold,  which is emplaced along
the older set of northeast trending structures.

Mineralized  systems include the El Malacate gold system,  and the La Dura, Real
Viejo, Santa Juliana, La Verde, El Tapon, and Picacho Alto and Planchas de Plata
prospects  which are  dominantly  silver-lead-zinc  +/-gold  systems.  These are
confined  to  ENE  trending   structural  zones  occurring  within  Jurassic  to
Cretaceous felsic volcanics. These systems vary in size from 500 to 2,000 metres
strike  length and veins within them contain  silver  grades up to 1,865.2 grams
per tonne (54.4 opt).

The  Alcaparroso,  Agua Caliente,  El Fiero and La Recompensa  targets are large
porphyry related base-metal (Cu-Mo-Zn-Pb) targets located within the eastern and
southern  portions  of the  claim  block.  Alteration  at each of these  systems
includes  square  kilometres  comprised  of strong iron  oxides,  sericitic  and
argillic alteration,  and scattered quartz tourmaline  stockworks in Jurassic to
Cretaceous  felsic  volcanics.  Intruding  the  project  area  are a  series  of
rhyolite,  granodiorite,  and diorite dikes and plugs. Approximately 190 samples
have been collected yielding values up to 38,000 ppm Cu, 370 ppm Mo, 400 ppm Pb,
and 500 ppm Zn.

Exploration Activity

Between  April and October  1996,  the Company  contracted  Altar  Resources (an
independent   consulting   firm  located  in  Tucson,   Arizona)  to  produce  a
reconnaissance  geological  map of the  Northern  Sonora  Property and to sample
possible  mineralized areas. The area examined covered  approximately 110 square
kilometres,  and 126 rock samples were collected.  Six of the samples  contained
between 1.0 and 7.0 g/t gold,  while 76 samples (60% of total) were anomalous in
one or more elements.

Additional  geological mapping and geochemical  sampling has been completed over
an area  exceeding 150 square  kilometres to the east of the La Bolsa  Property.
Eight major areas of anomalous gold mineralization were identified and are being
evaluated  through  comprehensive  exploration  programs.  Exploration  is being
expanded to include  completion of  additional  drilling  programs  leading to a
pre-feasibility decision.

Results  from  a  helicopter-borne  magnetic,  radiometric  and  electromagnetic
survey, including colour aerial photography,  covering more than 90,000 hectares
of the combined La Reserva/El Correo, Northern Sonora and Oro Blanco Properties,
were  evaluated  during  1998.  The  purpose of this  survey was to assist  with
mapping lithology,  structure,  alteration and potential  mineralized zones. The
Company  also  evaluated  the  results of a detailed  ground  geophysics  study,
including magnetic and VLF electromagnetic  surveys, and an induced polarization
/ resistivity survey for the combined purposes of drill target definition and as
an orientation survey for the La Bolsa and La Reserva/El Correo Properties.


<PAGE>

Work  in  2003  included  drilling  of 24  additional  holes  (19 RC and 5 core,
totalling  3680 meters) within the El Malacate  project area.  This drilling did
not significantly  enhance the  mineralization  encountered in previous drilling
and the prospect was written off at year end. At the La Dura silver prospect the
Company  completed 5 RC holes  totalling 640 meters and  additional  drilling is
planned for 2004.  Additional  drilling  completed in 2003  included 3 RC holes,
totalling 288 meters on the Agua Caliente  gold-copper  prospect and 3 RC holes,
totalling 640 meters on the Alcaparrosa  porphyry copper prospect.  Results from
these programs are still being evaluated.

Nearby historic mining activity, with the most extensive workings found in areas
of previous silver mining include those at La Dura Mine, Real Viejo Mine,  Santa
Juliana Mine,  and La Recompensa  Mine.  Hundreds of smaller  workings have also
been  encountered  throughout  the  property.  There are no historic  records in
regard to these  workings and only the La  Recompensa  Mine has been recorded on
existing maps.

Work Program

The  information in the following  table is a summary of the estimated costs for
the  proposed  work  program  for the La Dura and Real Viejo  prospects  for the
period January through December 31, 2004:

<TABLE>
<CAPTION>
<S>                                                                                <C>       <C>
--------------------------------------------------------------------------------------------------------
Real Viejo/ La Dura Project 2004 budgets

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

Drilling

Total # of holes planned (Core & RVC)                                        30
Total meters planned:                                                        3500
Total # of days for completion:                                              65
Total hours road construction:                                               90

                                                                                   Unit Cost Total Cost

All inclusive drill costs (per meter - Includes assays and drill supplies)         $80       $280,000
Assays (rock-chip and soil ~ 600)                                                  $20       $12,000
Road construction (per hour)                                                       $65       $5,850
Field Geologists (2 - per day)                                                     $700      $45,500
Geologist - geologic compilation  (per day)                                        $350      $11,375
Tech (per day)                                                                     $100      $6,500
Samplers (2 - per day)                                                             $40       $2,600

Camp supplies/Travel (per day)                                                     $150      $9,750
--------------------------------------------------------------------------------------------------------
Subtotal                                                                                     $373,575
Contingency                                                                        10%       $37,358
--------------------------------------------------------------------------------------------------------
Estimated Budget for 2004 Real Viejo/La Dura projects                                        $410,933
--------------------------------------------------------------------------------------------------------
</TABLE>

The proposed 2004  exploration  budget is presented below for the newly acquired
Anita Claim (Planchas De Plata silver district, located adjacent to the Northern
Sonora Property.

<TABLE>
<CAPTION>
<S>                                                                                <C>       <C>
-----------------------------------------------------------------------------------------------
Planchas De Plata Project (Anita Claim) 2004 budget

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

Drilling

Total # of holes planned (Core):                                       10
Total # of holes planned (RVC):                                        20
Total meters planned (Core):                                          150
Total meters planned (RVC):                                          2500
Total # of days for completion:                                       100
Total hours road construction (Includes 30 hrs main road cleanup):    100


<PAGE>

                                                                         Unit Cost Total Cost


Core drill costs ( includes drill supplies)                                     $90    $13,500
RC drill costs ( includes drill supplies)                                       $40   $100,000
Assays rock chip and soil ~ 1000                                                $20    $20,000
Road construction (per hour)                                                    $65     $6,500
Field Geologists (2 - per day)                                                 $700    $70,000
Geologist - geologic compilation  (per day)                                    $350    $17,500
Tech (per day)                                                                 $100    $10,000
Samplers (2 - per day)                                                          $40     $4,000

Camp supplies/Travel (per day)                                                 $150    $15,000
-----------------------------------------------------------------------------------------------
                                                          Subtotal                    $256,500
                                                       Contingency              10%    $25,650
-----------------------------------------------------------------------------------------------
               Estimated Budget for 2004 Planchas de Plata project                    $282,150
-----------------------------------------------------------------------------------------------
</TABLE>

                                OTHER PROPERTIES

The Company has  interests in other mineral  properties in Mexico  covering more
than 24,000  hectares.  The  following  summaries  briefly  describe  two of the
Company's  Mexican  properties  in  which  the  Company  has  an  interest.  The
properties  described  below  have  not  been  advanced  sufficiently  to have a
material impact on the Company's portfolio of properties.

La Reserva/El Correo Property

The La  Reserva/El  Correo  Property  forms a  contiguous  block of  claims  and
comprises  the  southern  half of the Northern  Sonora  Property in the state of
Sonora, Mexico. The claims are centred at approximate coordinates 30 degrees, 50
minutes  north  latitude,  111  degrees,  10  minutes  west  longitude,  located
immediately  south of the United States border.  The centre of the property lies
about 25 kilometres  southwest of the border city of Nogales and 120  kilometres
SSW of Tucson,  Arizona.  The property is accessible by four wheel drive vehicle
from Nogales by proceeding south on Highway 15 for 15 kilometres,  then west for
about 8  kilometres  along a partly paved two lane road and then by a network of
good to very rough gravel roads to various locations in the sector.  The city of
Nogales has all modern conveniences and a potential work force.  Exploration and
mining equipment and supplies can be imported to Nogales from nearby Tucson.


<PAGE>

The La Reserva/El Correo Property  consists of the five exploration  concessions
(recently reduced in area) described below in the following table,  comprising a
total of approximately 5,335 hectares:

                    La Reserva/El Correo Property Concessions
<TABLE>
<CAPTION>
<S>                                         <C>                           <C>                 <C>
 -------------------------------------------------------------------------------------------------------------------
         Concession Name                  Title No.               Area (hectares)              Expiry Date

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

 Alcaparroso*                               221169                        608                 December 2, 2053
 Tio Flaco*                                 221168                        708                 December 2, 2053
 Agua Caliente*                             221170                        495                 December 2, 2053
 El Correo                                  217446                      2,718                 July 15, 2052
 Cadena de Oro                              205198                        366                 July 7, 2003
 El Durazno                                 212967                        440                 February 19, 2007
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 Total Area                                                             5,335
</TABLE>

* Exploitation titles replacing Exploration title 202980 La Reserva Fraccion 1.

San Antonio Property

The San Antonio  Property is located  some 120 km SSE of the city of  Zacatecas,
Mexico, in the municipality of Villa Hidalgo,  Zacatecas. The project lies close
(12 km northwest) to the historic  mining  district of Pinos,  that from 1894 to
1934  produced  approximately  200,000 oz gold and 5 M oz silver  from veins and
mantos within Cretaceous limestone sequences.

The San  Antonio  Property  consists  of eight  concessions  totalling  some 817
hectares.  The La Laguna  concession was bid on and awarded to Minera during the
course of the year 2000. The concessions are detailed in the following table:

                        San Antonio Property Concessions
<TABLE>
<CAPTION>
<S>                                         <C>                           <C>                 <C>
 -------------------------------------------------------------------------------------------------------------------
         Concession Name                  Title No.               Area (hectares)              Expiry Date

 -------------------------------------------------------------------------------------------------------------------
 Gran Maria 1                               208071                    251.36                August 25, 2004
 Gran Maria 1 Fraccion I                    208072                     32.30                August 25, 2004
 Gran Maria Fraccion III                    208073                     17.83                August 25, 2004
 Gran Maria 2                               208181                     44.35                August 31, 2004
 Gran Maria 5                               207501                     48.24                June 24, 2004
 Gran Maria 6                               210695                    108.00                November 17, 2005
 La Laguna                                  213046                    314.79                March 1, 2007
 La Laguna Fraccion A                       213046                      0.34                March 1, 2007
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 Total Area                                                           817.21
</TABLE>

Other Interests In Properties

The  Company  also has  interests  in the  Gutsy/Buckskin  Mountain  Properties,
Nevada, U.S.A., the Clear Property, Nevada, U.S.A., the Dottie Property, Nevada,
U.S.A., the Oro Blanco Property, Arizona, U.S.A. and the Dubuisson Property, Val
d'Or,  Quebec. The Company's interest in the Dubuisson Property consists only of
a 2% net royalty interest.


<PAGE>

Gutsy/Buckskin Mountain Properties, Nevada, U.S.A.

The  Gutsy/Buckskin   Mountain  Properties  consist  of  82  claims  located  29
kilometres  south of the town of Carlin in sections 8, 16, 18, 4, 20, T32N,  and
R53E of Elko  County,  Nevada,  approximately  9,000 feet  northwest  of Newmont
Mining  Corporation's Rain gold mine. Access to the property is by a combination
of paved and gravel roads. The Gutsy Property consists of 62 mining claims which
were optioned by the Company under the NMP/Hecla  Agreement described above. The
Buckskin  Mountain  Property consists of 20 mining claims which were the subject
of an option  agreement dated November 15, 1994 (the "Bailey  Associates  Option
Agreement") between the Company and Bailey and Associates,  a company controlled
by Mark Bailey, the President and Chief Executive Officer of the Company. Bailey
and Associates has transferred  title of the Buckskin  Mountain  Property to the
Company pursuant to the Bailey Associates  Option Agreement,  and the Company is
required  to pay the annual  claim  maintenance  fees to keep the claims in good
standing.

The   properties   lie  within  the  Carlin  gold  belt.   Exploration   on  the
Gutsy/Buckskin Mountain Properties has included geological mapping,  geochemical
sampling  and one reverse  circulation  drill hole by a previous  owner in 1985.
Exploration  by Santa Fe Pacific  Gold  Corporation  ("Santa  Fe") has  included
additional mapping, sampling, geophysical surveys and the drilling of three deep
reverse circulation holes.

Results from  geological  mapping and geochemical  sampling on these  properties
have defined and  prioritized  several drill targets.  The Company  continues to
seek a partner to advance  this  project,  and will drill test these  targets in
2003, with or without a partner.

Gold mineralization  within the Carlin trend is sediment hosted and structurally
controlled.  Mineralization  in the  nearby  Rain  mine  is  hosted  by  clastic
sedimentary  rocks of the  Mississippian  age  lower  Webb  Formation,  near the
unconformable contact with the underlying Devonian age Devils Gate Limestone.  A
major northwest-striking structural zone controls the location of mineralization
within these overlap assemblage rocks of the Antler Sequence. The Gutsy prospect
lies  along the trend  between  the Rain  deposit  and the other  main  deposits
defining the Carlin trend.

The proposed 2004 exploration budget for 2004 for the Gutsy/Buckskin Property is
presented below.

<TABLE>
<CAPTION>
<S>                                                                                <C>     <C>
--------------------------------------------------------------------------------------------------
Gutsy Project

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

Drilling

Total # of holes planned (Core):                                           3
Total meters planned:                                                   2000
Total # of days for completion:                                           30
Total hours road construction:                                            30
                                                                            Unit Cost Total Cost


All  inclusive  drill  costs (per  meter -  Includes  assays and drill
supplies)                                                                         $125   $250,000
Road construction (per hour)                                                       $90     $2,700
Field Geologist (per day)                                                         $400    $12,000
Geologist - geologic compilation (per day)                                        $350    $10,500
Lodging/Food/Travel (per day)                                                     $120     $3,600
--------------------------------------------------------------------------------------------------
                                                              Subtotal                   $278,800
                                                           Contingency             10%    $27,880
--------------------------------------------------------------------------------------------------
                               Estimated Budget for 2004 Gutsy project                   $306,680
--------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

Clear Property, Nevada, U.S.A.

The Clear  Property  consists  of three  groups  of  unpatented  mining  claims,
totalling 94 claims located in Pershing County,  Nevada.  Access to the property
is by an  upgraded  paved  and  gravel  road  approximately  14  miles  south of
Winnemucca,  Nevada.  Of the claims,  17 are  optioned by the Company  under the
NMP/Hecla  Agreement,  40 were staked by the Company and 37 were acquired by the
Company  from  Cominco.  In addition,  in 1998 the Company  entered into a lease
agreement to acquire  mineral rights  situated near the Clear property by making
annual  advance  minimum  royalty  payments  over  15  years  and  by  incurring
exploration  expenditures  of US $150,000 by April 1, 2001.  As at December  31,
2003,  annual royalty  payments of US$105,000 had been paid. The Company has the
right to terminate  the lease  agreement  on thirty days  written  notice to the
owner.

Previous  exploration  work on the Clear Property has delineated a small reserve
of 20,000  tons with an  average  grade of .189 opt  gold.  Geological  mapping,
geochemical  sampling and drilling  programs were completed  between the periods
1986 through 1990.  During 1996 a mapping,  sampling and geophysical  survey was
completed by Cominco Ltd. of the claims previously held by it.

The claim block is underlain by Cambrian  Harmony  Formation,  Ordovician  Valmy
Formation in thrust contact and over limited exposures of Pennsylvanian Havallah
Formation and Cretaceous  diorite and felsic  intrusives.  The main mineralizing
controls on the  property  are a series of N30E  trending  thrust  sheets and NW
trending range front normal faults. Extensive jasperoid with gold mineralization
has been the focus of previous exploration efforts.

The Clear  Property  represents  a partially  explored  prospect  with  strongly
mineralized but narrow gold values.  Further geologic,  geochemical and drilling
is recommended to complete evaluation of this property.  Results from geological
mapping and geochemical sampling on this property, as well as from a geophysical
survey,  have  defined and  prioritized  drill  targets.  The Company  commenced
drilling on this property in November 1997. Results  identified  widespread gold
mineralization,  including 30 metres averaging .86g/t,  and 7.6 metres averaging
1.9g/t gold.  The Company  expended the required  $100,000 and received title to
the Clear Property from Hecla.

The proposed 2004 exploration budget for the Clear Property is presented below.

<TABLE>
<CAPTION>
<S>                                                                                <C>     <C>
--------------------------------------------------------------------------------------------------
Clear Project 2004 budget

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

Drilling

Total # of holes planned (RVC):                                           15
Total meters planned:                                                   2000
Total # of holes planned (core)                                            5
total meters core planned                                                875
Total # of days for completion:                                           30
Total hours road construction:                                            30
                                                                            Unit Cost Total Cost


All  inclusive  drill  costs (per  meter -  Includes  assays and drill
supplies)                                                                          $45    $90,000
All  inclusive  drill  costs (per  meter -  Includes  assays and drill
supplies)                                                                         $100    $87,500
Road construction (per hour)                                                       $90     $2,700
Field Geologist (per day)                                                         $400    $12,000
Geologist - geologic compilation (per day)                                        $350    $10,500
Lodging/Food/Travel (per day)                                                     $120     $3,600
--------------------------------------------------------------------------------------------------
                                                              Subtotal                   $206,300
                                                           Contingency             10%    $20,630
--------------------------------------------------------------------------------------------------
                               Estimated Budget for 2004 Clear project                   $226,930
--------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

Dottie Property, Nevada, U.S.A.

The Dottie claim block is located at the south end of the Bull Run  Mountains of
Elko County.  Access from Elko is along State  Highway 225 for 28 miles to State
Highway 226, then approximately 30 miles to the Spanish (Ellison) Ranch turnoff.
A gravel road passes through the ranch compound and continues some four miles to
the claims.  The Property  consists of 24 mining  claims and was optioned by the
Company under the NMP/Hecla Agreement.

In 1998,  the  Company  entered  into an  agreement  to acquire  mineral  rights
adjacent to the Dottie property by making annual minimum advance  payments of US
$10,000  beginning  September 1, 2000.  The vendor  retains a 2% NSR on minerals
produced from the 25 claims covered by the agreement.  The Company has the right
to terminate the agreement at any time provided that if termination occurs after
July 15 of any year,  the Company is obliged to pay any State and  Federal  fees
due by August 31 of that year.

The Dottie  Property was  discovered in 1982 and  throughout  the 1980s mapping,
sampling and drilling work was undertaken on the property. The property covers a
series of  Oligocene to Miocene  lithic  tuffs,  volcaniclastics,  ash flows and
andesite  flows  capped  by  siliceous  sinter.   Previous  drill  results  have
discovered gold anomalous sinters and high angle silicified zones.

The initial  drilling  program on this property was  completed  during the first
quarter of 1998. Results from first phase drilling intercepted favorable geology
and structures with anomalous gold values.  The Company expended the required US
$100,000 and has applied for title from Hecla.  Results from geological  mapping
and  geochemical  sampling on this property have defined and  prioritized  drill
targets.

The Company has prepared an exploration  budget for 2004 for the Dottie property
in Nevada.  The Dottie property was written off as of year end December 31, 2003
due to lack of activity on the  project  for the past three  years.  The Company
will drill test the target prior to the annual rental  payments due by September
1, 2004.

                Proposed 2004 exploration budget Dottie property
<TABLE>
<CAPTION>
<S>                                                                                <C>     <C>
--------------------------------------------------------------------------------------------------
Dottie Project

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

Drilling

Total # of holes planned (Core):                                           4
Total meters planned:                                                   1500
Total # of days for completion:                                           30
Total hours road construction:                                            20
                                                                            Unit Cost Total Cost


All  inclusive  drill  costs (per  meter -  Includes  assays and drill
supplies)                                                                         $100   $150,000
Road construction (per hour)                                                       $90     $1,800
Field Geologist (per day)                                                         $400    $12,000
Geologist - geologic compilation (per day)                                        $350    $10,500
Lodging/Food/Travel (per day)                                                     $120     $3,600
--------------------------------------------------------------------------------------------------
                                                              Subtotal                   $177,900
                                                           Contingency             10%    $17,790
--------------------------------------------------------------------------------------------------
                              Estimated Budget for 2004 Dottie project                   $195,690
--------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                               NUMBER OF EMPLOYEES

As at December 31, 2003, the Company had a total of 20 employees and consultants
working for the Company.  None of the Company's  employees  belong to a union or
are subject to a  collective  agreement.  The  Company  considers  its  employee
relations to be good.

              BANKRUPTCY, RECEIVERSHIP OR OTHER SIMILAR PROCEEDINGS

There have been no bankruptcy, receivership or other similar proceedings against
the Company or any of its subsidiaries  within the three most recently completed
financial years or the current financial year.

                                   COMPETITION

The Company  competes with other mining companies for the acquisition of mineral
claims,  permits,  concessions  and other  mineral  interests as well as for the
recruitment  and  retention  of  qualified   employees.   There  is  significant
competition for the limited number of gold acquisition  opportunities  and, as a
result,  the Company may be unable to acquire  attractive gold mining properties
on terms it considers acceptable.

                                  RISK FACTORS

The Company's  securities should be considered a highly  speculative  investment
and investors should carefully  consider the following  information  about these
risks, together with other information contained herein. If any of the following
risks  actually  occur,  our  business,  results  of  operations  and  financial
condition could suffer significantly.

Risks of Exploration and Development

All of the  properties in which the Company has an interest or the right to earn
an interest,  except for the Dubuisson  Property,  which has been disposed of by
the Company save for a 2% NSR on the property (see "Narrative Description of the
Business -  Overview"),  are in the  exploration  stages  only and are without a
known body of  commercial  ore.  As an  exploration  company,  the Company has a
history of losses.  The level of  profitability  of the Company in future  years
will depend to a great  degree on precious and base metal prices and whether any
of the Company's  exploration  stage  properties can be brought into production.
The  exploration for and development of mineral  deposits  involves  significant
risks, which even a combination of careful evaluation,  experience and knowledge
may not eliminate.

Development  of  the  Company's  properties  will  only  follow  upon  obtaining
satisfactory results. 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  exploration  and
development  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.

Substantial expenditures are required to establish reserves through drilling, to
develop  processes to extract the resources and, in the case of new  properties,
to develop the extraction and processing  facilities and  infrastructure  at any
site chosen for extraction.  Although  substantial  benefits may be derived from
the discovery of a major deposit,  no assurance can be given that resources will
be discovered in sufficient  quantities to justify commercial operations or that
the funds required for development can be obtained on a timely basis.

It is impossible to ensure that the current and future exploration  programs and
or  feasibility  studies  on the  Company's  existing  mineral  properties  will
establish  reserves.  Whether  an  ore  body  or  a  tailings  deposit  will  be
commercially  viable  depends on a number of  factors,  some of which  are:  the
particular  attributes  of the  deposit,  such as size,  grade and  proximity to
infrastructure;  metal  prices,  which cannot be  predicted  and which have been
highly  volatile  in the past;  mining,  processing  and  transportation  costs;
perceived  levels of political risk and the willingness of lenders and investors
to provide project financing; and governmental regulations,  including,  without
limitation,  regulations relating to prices, taxes, royalties, land tenure, land
use,  importing  and  exporting  materials,   foreign  exchange,   environmental
protection and reclamation and closure obligations.  The effect of these factors
cannot be accurately predicted, but the combination of these factors may cause a
mineral  deposit  that  has  been  mined  profitably

<PAGE>

in the  past,  to become  unprofitable.  The  Company  is  subject  to the risks
normally  encountered  in the mining  industry,  such as  unusual or  unexpected
geological  formations as well as political and economic risks  associated  with
developing  nations.  The Company may be subject to liability  for  pollution or
against  other  hazards  against  which it cannot insure or against which it may
elect not to insure.

The development of mineral properties is affected by many factors, some of which
are: the cost of  operations;  variations in the grade of ore;  fluctuations  in
metal  markets;  costs of extraction and  processing  equipment;  and government
regulations,  including without limitation,  regulations  relating to royalties,
allowable production,  importing and exporting of minerals, foreign exchange and
environmental  protection.  Depending on the price of minerals,  the Company may
determine  that  it is  impractical  to  commence  or,  if  commenced,  continue
commercial production.

Operating Hazards and Risks

Mineral exploration  involves many risks which even a combination of experience,
knowledge  and careful  evaluation  may not be able to overcome.  Operations  in
which the Company has a direct or indirect  interest  will be subject to all the
hazards and risks normally incidental to exploration, development and production
of resources,  any of which could result in work  stoppages,  damage to property
and possible environmental damage. The Company currently maintains the following
insurance coverage against operating hazards: (a) foreign liability coverage for
Minera,    and   Minera   Dolores   in   the   amount   of   US$2,000,000    per
occurrence/US$8,000,000 aggregate (deductible of $2,500 per occurrence); and (b)
commercial  package  insurance  including  US$2,000,000   comprehensive  general
liability  insurance for the Company's  Canadian and U.S.  operations  (US$2,500
deductible and subject to a health hazard exclusion and a pollution  exclusion),
and US$97,500 (US$1,000  deductible) insurance for the Company's office contents
located at its Reno, Nevada office.  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.

Fluctuating Prices

The  Company's  revenues,  if any, are expected to be in large part derived from
the extraction and sale of precious and base metals such as gold and silver. The
price of those commodities has fluctuated widely,  particularly in recent years,
and is affected by  numerous  factors  beyond the  Company's  control  including
international,   economic  and  political  trends,  expectations  of  inflation,
currency exchange  fluctuations,  interest rates, global or regional consumptive
patterns,  speculative activities and increased production due to new extraction
developments and improved extraction and production methods. The effect of these
factors on the price of base and precious metals, and,  therefore,  the economic
viability of any of the Company's  exploration  projects,  cannot  accurately be
predicted.

Environmental Factors

All phases of the Company's  operations are subject to environmental  regulation
in the various jurisdictions in which it operates.  Environmental legislation is
evolving in a manner  which will require  stricter  standards  and  enforcement,
increased fines and penalties for non-compliance,  more stringent  environmental
assessments of proposed projects and a heightened  degree of responsibility  for
companies and their  officers,  directors and  employees.  There is no assurance
that changes in environmental  regulation, if any, will not adversely affect the
Company's operations.

Competition

The resource  industry is intensely  competitive  in all of its phases,  and the
Company competes with many companies  possessing greater financial resources and
technical  facilities than it.  Competition could adversely affect the Company's
ability to acquire suitable producing properties or prospects for exploration in
the future.

Potential Defects in Title to Properties

In those  jurisdictions  where the Company has property  interests,  the Company
makes a search of mining records in accordance with mining industry practices to
confirm that it has acquired  satisfactory  title to its properties but does not
obtain title insurance with respect to such properties.  The possibility  exists
that title to one or more of its

<PAGE>

properties,  particularly  title to undeveloped  properties,  might be defective
because  of errors or  omissions  in the chain of title,  including  defects  in
conveyances and defects in locating or maintaining such claims,  or concessions.
The ownership and validity of unpatented mining claims and concessions are often
uncertain  and may be  contested.  The Company is not aware of challenges to the
location or area of any of its mining  concessions and unpatented mining claims.
There  is,  however,  no  guarantee  that  title  to the  Company's  claims  and
concessions will not be challenged or impugned in the future.

Political and Economic Instability

Most of the Company's  exploration  and development  activities  occur in Mexico
and, as such,  the Company  may be  affected by possible  political  or economic
instability  in this  country.  The  risks  include,  but are  not  limited  to,
terrorism, military repression,  extreme fluctuations in currency exchange rates
and high rates of  inflation.  Changes in  resource  development  or  investment
policies or shifts in political  attitude in Mexico,  or in the U.S.A. or Canada
(where the Company has secondary  property  interests) may adversely  affect the
Company's business.  Operations may be affected in varying degrees by government
regulations with respect to restrictions on production,  price controls,  export
controls,  income  taxes,  expropriation  of  property,  maintenance  of claims,
environmental legislation,  land use, land claims of local people, water use and
mine safety. The effect of these factors cannot be accurately predicted.

Financing Risks

The  Company's  current  operations,  other  than the  royalty  interest  in the
Dubuisson Property,  have not generated any cash flow. Any work on the Company's
principal  properties may require  additional equity  financing.  If the Company
seeks additional equity financing, the issuance of additional shares will dilute
the interests of the Company's  current  shareholders.  Although the Company has
successfully  raised funds in recent years through share and warrant  issuances,
there is no  assurance  that  additional  funding will be available to allow the
Company to fulfil its obligations on existing exploration properties. 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.

No Known Reserves; Uncertainty of Mineral Resource Estimates

The Company has no mineral producing properties at this time. Only those mineral
deposits that the Company can economically and legally extract or produce, based
on a comprehensive  evaluation of cost, grade,  recovery and other factors,  are
considered  "resources" or "reserves." The Company has not defined or delineated
any  proven  or  probable  reserves  on  any  of its  properties.  Although  the
mineralized material and mineralized deposit 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 no  assurance  can be given that any  particular  level of  recovery of
gold,  silver  or  other  minerals  from  mineralized  material  will in fact be
realized  or that an  identified  mineralized  deposit  will ever  qualify  as a
commercially mineable (or viable) reserve.

Although  the Company has  assessed  the mineral  resource  estimates  presented
herein and believes that the methods used to estimate such mineral resources are
appropriate, such figures are estimates. As well, estimates of mineral resources
are  inherently  imprecise and depend to some extent on  statistical  inferences
drawn  from  limited  drilling,  which may  prove  unreliable.  Furthermore,  no
assurances can be given that the indicated level of recovery of minerals will be
realized.  Fluctuations in the market prices of minerals may render reserves and
deposits  containing  relatively  lower  grades  of  mineralization  uneconomic.
Moreover,  short-term  operating factors relating to mineral resources,  such as
the need for orderly  development  of the deposits or the  processing  of new or
different  grades,  may  cause  mining  operations  to be  unprofitable  in  any
particular period. Material changes in mineralized material,  grades or recovery
rates may affect the economic viability of projects.


<PAGE>

Conflicts of Interest

Certain  officers and directors of the Company may be or become  associated with
other natural resource  companies that acquire interests in mineral  properties.
Mark H.  Bailey,  President,  Chief  Executive  Officer  and a  director  of the
Company, is President of Mark H. Bailey & Associates LLC ("Bailey  Associates"),
Consulting  Geologists,  located  in Reno,  Nevada  and is a  director  of other
publicly listed natural resource  companies.  Bailey Associates'  clients do not
directly  compete  with the Company for  properties,  financing,  equipment,  or
personnel. Any conflicts which may arise will be dealt with as disclosed below.

Tench C. Page, Vice President,  Exploration,  of the Company,  is a principal of
Sierra  Timber and Gold  Corp.  ("Sierra  Timber"),  a  provider  of  geological
consulting  services,  located in Reno,  Nevada.  Sierra Timber's clients do not
directly  compete  with the Company for  properties,  financing,  equipment,  or
personnel. There are currently no conflicts of interest between Mr. Page serving
as Vice  President,  Exploration,  of the  Company  while  continuing  to act as
principal of Sierra Timber.  Any conflicts which may arise will be dealt with as
disclosed below.

Paul C.  MacNeill,  Corporate  Secretary  and a director  of the  Company,  is a
securities  lawyer,  with other  clients  involved  in mineral  exploration  and
development,  and is a director  and officer of other  publicly  listed  natural
resource  companies.  Mr.  MacNeill is also the  President  of P.  MacNeill  Law
Corporation,  which  provides  legal  services  to  the  Company.  None  of  Mr.
MacNeill's exploration and development clients compete directly with the Company
for  properties,  financing,  equipment,  or personnel.  Any conflicts which may
arise will be dealt with as disclosed below.

Such  associations may give rise to conflicts of interest from time to time. The
directors  of the Company are  required by law to act honestly and in good faith
with a view to the best  interest of the Company  and to disclose  any  interest
which they may have in any project or opportunity of the Company.  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.  In
determining  whether  or not the  Company  will  participate  in any  project or
opportunity,  the director will  primarily  consider the degree of risk to which
the Company may be exposed and its financial position at that time.

Dependence on Key Management Employees

The nature of the Company's  business,  its ability to continue its  exploration
and  development  activities  and to thereby  develop a competitive  edge in its
marketplace  depends,  in large part,  on its  ability to attract  and  maintain
qualified key management  personnel.  Competition for such personnel is intense,
and there can be no  assurance  that the  Company  will be able to  attract  and
retain such personnel.  The Company's  development to date has depended,  and in
the future  will  continue  to  depend,  on the  efforts  of its key  management
figures,  such as Mark H.  Bailey.  Loss of Mark H. Bailey could have a material
adverse  effect on the  Company.  The Company  does not  maintain  key-man  life
insurance on any of its key management employees.

Dependence on Consultants and Engineers

The Company has relied and may continue to rely upon consultants,  engineers and
others  for  exploration  expertise  and  intends  to  rely on  consultants  for
development,  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 site chosen for exploration. No
assurance  can be  given  that  minerals  will be  extracted  or  discovered  in
sufficient  quantities to justify  commercial  operations or that funds required
for development can be obtained on a timely basis.

Compliance with Environmental and Government Regulation

Operations of the Company require permits from various foreign,  federal, state,
provincial and local  governmental  authorities  and may be governed by laws and
regulations  governing  prospecting,  development,  mining production,  exports,
taxes, labour standards,  occupational health, waste disposal, toxic substances,
land use,  environmental  protection,  mine safety and other matters.  Companies
engaged  in the  development  and  operation  of mines  and  related  facilities
generally  experience  increased  costs as a result of the need to  comply  with
applicable laws,

<PAGE>

regulations and permits. Permits and studies may be necessary prior to operation
of the  exploration  properties in which the Company has interests and there can
be no  guarantee  that  the  Company  will be able to  obtain  or  maintain  all
necessary permits that may be required to commence  construction or operation of
mining  facilities at these  properties  on terms which enable  operations to be
conducted  at  economically  justifiable  costs.  To the  best of the  Company's
knowledge,  the Company is in  compliance  with all  material  current  laws and
regulations which currently apply to its activities.  There can be no assurance,
however,  that  all  permits  which  the  Company  may  require  for its  future
operations  will be  obtainable  on  reasonable  terms  or that  such  laws  and
regulations  would not have an adverse  effect on any mining  project  which the
Company might undertake.

Failure to comply with applicable laws, regulations and permitting  requirements
may  result  in  enforcement  actions  thereunder,  including  orders  issued by
regulatory or judicial  authorities  causing operations to cease or be curtailed
and may include corrective measures requiring capital expenditures, installation
of  additional  equipment  or  remedial  actions.  Violators  may be required to
compensate  those suffering loss or damage by reason of their mining  activities
and may be fined if convicted of an offence under such legislation.

Amendments to current laws,  regulations,  and permits governing  operations and
activities of mining  companies or more stringent  implementation  thereof could
require increases in capital expenditures, production costs, reduction in levels
of production of future mining  operations,  or require delays in development or
abandonment of new mining properties.

The  Company's  mining  operations  may be subject to foreign,  federal,  state,
provincial  and local  laws and  regulations  governing  the  protection  of the
environment,  including laws and regulations  relating to air and water quality,
mine reclamation, waste disposal, and the protection of endangered or threatened
species.  The Company's  mining  activities may be subject to foreign,  federal,
state,  provincial and local laws and  regulations for protection of surface and
ground water.

If the Company  undertakes new mining  activities in other provinces,  states or
foreign countries, or significantly expands its existing mining operations,  the
Company may be required to obtain  pre-construction  environmental  and land use
review and to comply with permitting, control and mitigation requirements of the
jurisdiction  in which such  operations are to be located.  Compliance  with new
requirements could impose costs on the Company in the future, the materiality of
which cannot reasonably be predicted at this time.

Dilution

The Company has a number of  outstanding  stock  options.  If and when these are
exercised,  the issued and outstanding  capital of the Company may be increased,
thus diluting shareholder interests in the Company.

                   SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following table sets forth and summarizes certain of the Company's financial
information on a consolidated basis for the last three fiscal years, prepared in
accordance with Canadian generally  accepted  accounting  principles  ("Canadian
GAAP"). Canadian GAAP, as applied to the Company, materially differs from United
States generally accepted accounting  principles ("U.S.  GAAP"), as set forth in
Note 9 to the Consolidated  Financial Statements of the Company.  This financial
information is derived from, should be read in conjunction with and is qualified
in its entirety by reference to the Company's consolidated financial statements,
including the notes thereto, and Management's Discussion and Analysis of Results
of Operations  and Financial  Condition.  The Company's  Consolidated  Financial
Statements  for the  years  ended  December  31,  2003,  2002 and 2001 have been
audited by BDO Dunwoody LLP.


<PAGE>

                   Selected Consolidated Financial Information
<TABLE>
<CAPTION>
<S>                                                               <C>                   <C>                    <C>
--------------------------------------------------- -------------------- --------------------- ---------------------
All in  Canadian $ in  thousands  except  Loss per  As of Dec. 31, 2003   As of Dec. 31, 2002   As of Dec. 31, 2001
Share and Common Shares issued                       and the 12 Months     and the 12 Months     and the 12 Months
                                                         Then Ended           Then Ended            Then Ended

--------------------------------------------------- -------------------- --------------------- ---------------------
Operating Revenues                                                --                    --                    --
Working Capital                                                58,315                 8,641                   422
Interest Income                                                   557                   182                    17
Loss from Operations                                          (4,888)               (2,886)               (1,302)
Net Loss                                                      (4,757)               (2,754)               (1,282)
Loss per Share - Basic and Diluted                             (0.15)                (0.11)                (0.07)
Total Assets                                                  104,248                45,900                30,835
Net Assets                                                    103,214                45,004                30,720
Total Liabilities                                               1,034                   896                   115
Share Capital                                                 117,381                56,793                42,013
Common Shares Issued                                       36,121,841            28,411,737            20,233,250
Dividends Declared                                                --                    --                    --
--------------------------------------------------- -------------------- --------------------- ---------------------
</TABLE>

The following table sets forth and summarizes  selected  consolidated  financial
information of the Company for the last eight  financial  quarters,  prepared in
accordance  with  Canadian  GAAP.  Canadian  GAAP,  as applied  to the  Company,
materially  differs from U.S.  GAAP, as set forth in Note 9 to the  Consolidated
Financial Statements of the Company. This financial information is derived from,
should be read in conjunction with and is qualified in its entirety by reference
to the  respective  quarterly  and  annual  consolidated  financial  statements,
including the notes thereto, and Management's Discussion and Analysis of Results
of  Operations  and  Financial  Condition  pertaining  to  the  eight  financial
quarters.

                   Selected Consolidated Financial Information
<TABLE>
<CAPTION>
<S>                   <C>         <C>          <C>         <C>           <C>          <C>         <C>             <C>
------------------------------------------------------------------------------------------------------------------------
 All in Canadian    December    September    June 30,    March 31,    December    September     June 30,    March 31,
 $ in 1,000's       31, 2003    30, 2003       2003        2003       31, 2002     30, 2002       2002         2002
 except Loss per
 Share and Common
 Shares Issued
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Operating                  -           -            -           -            -            -            -            -
    Revenues
Working capital       58,315      20,026       21,740      24,251        8,641        9,051       10,516          804
Interest Income          127         131          198         101           46           89           46            1
Loss from            (1,895)     (1,340)        (652)     (1,001)      (1,313)        (433)        (820)        (320)
    Operations

Net Loss             (2,211)       (991)        (480)     (1,075)      (1,285)        (302)        (836)        (331)
Loss per Share -      (0.06)      (0.03)       (0.02)      (0.04)       (0.05)       (0.01)       (0.04)       (0.02)
    Basic and
    Diluted

Total Assets         104,248      64,528       62,347      62,138       45,900       43,780       42,723       31,670
Net Assets           103,214      63,536       61,090      61,326       45,004       42,874       42,317       31,410
Total Liabilities      1,034         992        1,257         812          896          906          406          260
Share Capital        117,381      75,492       74,434      74,190       56,793       54,710       53,851       43,034
Common Shares     36,121,841   31,901,841  31,318,662   31,217,432  28,411,737   26,985,149   26,299,740   20,931,305
    Issued

Dividends                  -           -            -           -            -            -            -            -
Declared
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

Dividend Record and Policy

We have not paid any dividends since incorporation. We intend to retain earnings
to finance the growth and  development  of our business and do not intend to pay
dividends on our common shares in the immediate future. The payment of dividends
in  future  will  depend,   among  other  factors,  on  our  earnings,   capital
requirements, and operating and financial condition.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

Reference is made to the section entitled "Management's  Discussion and Analysis
of  Operating  Results"  set out at pages 6 to 10 of the  Company's  2003 Annual
Report,  which has been previously  SEDAR-filed and is incorporated by reference
in this AIF.

                              MARKET FOR SECURITIES

The  Company's  common shares are listed and posted for trading on the TSX under
the stock symbol "MFL", and on the AMEX under the symbol "MFN".

                             DIRECTORS AND OFFICERS

The following  table sets forth the name,  municipality  of residence,  position
held with the Company,  office,  principal occupation and number of shares owned
by each of the directors and executive officers of the Company. The statement as
to the Common Shares beneficially owned,  directly or indirectly,  or over which
control or  direction  is  exercised by the  directors  and  executive  officers
hereinafter  named is in each instance based upon  information  furnished by the
person  concerned  and is as at May 3,  2004.  Each  director  is elected by the
shareholders  at the annual  general  meeting and holds  office  until our first
annual general meeting  following the director's  election or appointment.  Each
officer holds office at the pleasure of our board of directors.

                             Directors and Officers
<TABLE>
<CAPTION>
<S>                             <C>                          <C>                                    <C>
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                                                                            Number of Common Shares
                                                                                              Beneficially Owned,

                                                                                           Directly or Indirectly or

   Name and Municipality of          Position with the                                       Over Which Control or
          Residence                       Company               Principal Occupation        Direction is Exercised
------------------------------- ---------------------------- ---------------------------- ----------------------------
Mark H. Bailey                  President, Chief Executive   President and Chief                    425,700
Bellingham, Washington,         Officer and Director         Executive Officer of the
U.S.A.                                                       Company
------------------------------- ---------------------------- ---------------------------- ----------------------------
Paul C. MacNeill                Director and Corporate       Barrister and Solicitor                396,100
West Vancouver, British         Secretary
Columbia
------------------------------- ---------------------------- ---------------------------- ----------------------------
James M. Dawson(1)              Director                     President, Dawson                      15,000
Richmond, British Columbia                                   Geological Consulting
                                                             Ltd., a geological
                                                             consulting company
------------------------------- ---------------------------- ---------------------------- ----------------------------
H. Leo King(1)                  Director                     President, International               10,000
Vancouver, British Columbia                                  Barytex Resources Ltd., a
                                                             mining company
------------------------------- ---------------------------- ---------------------------- ----------------------------

<PAGE>

------------------------------- ---------------------------- ---------------------------- ----------------------------
                                                                                            Number of Common Shares
                                                                                              Beneficially Owned,

                                                                                           Directly or Indirectly or

   Name and Municipality of          Position with the                                       Over Which Control or
          Residence                       Company               Principal Occupation        Direction is Exercised
------------------------------- ---------------------------- ---------------------------- ----------------------------
Robert L. Leclerc(1)            Director                     Business Consultant                    140,000
Henderson, Nevada U.S.A.
------------------------------- ---------------------------- ---------------------------- ----------------------------
Tench C. Page                   Vice-President, Exploration  Vice-President,                        382,000
Reno, Nevada                                                 Exploration of the Company

U.S.A.

------------------------------- ---------------------------- ---------------------------- ----------------------------
Jon Morda                       Chief Financial Officer      Chief Financial Officer of               400
Toronto, Ontario                                             the Company
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

(1) Member of the Audit Committee.

Each of the foregoing  individuals has been engaged in the principal  occupation
set forth  opposite his or her name during the past five years except for:  Paul
C. MacNeill who,  prior to November  2002,  was a partner with the Vancouver law
firm of Campney & Murphy,  Barristers &  Solicitors;  H. Leo King who,  prior to
2001, was the General Manager for International Barytex Resources Ltd., a mining
company;  Robert L. Leclerc who, prior to February 2003 was the Chairman and CEO
of Echo Bay Mines Ltd., a mining company;  and Jon N. Morda,  who prior to April
2002,  was  the   Vice-President   and  Chief  Financial   Officer  of  Geomaque
Explorations Ltd., a mining company.

Shareholdings of Directors and Officers

To the best of our knowledge as at May 3, 2004, our directors and officers, as a
group,  beneficially  owned,  directly or indirectly,  or exercised control over
1,369,200  common shares (not including common shares issuable upon the exercise
of stock options) representing 3.75% of our then outstanding common shares.

Committees of the Board of Directors

The Company's  board of directors  has only one  committee - an Audit  Committee
(currently comprised of directors Robert L. Leclerc,  James Martin Dawson and H.
Leo King).  The members of the Audit  Committee  do not have any fixed terms for
holding  their  positions  and are  appointed  and replaced from time to time by
resolution of the directors.  Their appointments are not subject to any specific
terms of reference.

The Audit Committee meets with the President and Chief Executive Officer and the
Chief Financial  Officer of the Company and the  independent  auditors to review
and inquire into matters affecting financial  reporting,  the system of internal
accounting and financial  controls as well as audit  procedures and audit plans.
The Audit Committee also recommends to the Board of Directors the auditors to be
appointed.  In addition,  this Committee reviews and recommends to the Board for
approval  the  annual  financial  statements,   the  Management  Discussion  and
Analysis, and undertakes other activities required by regulatory authorities.

<PAGE>

Corporate Cease Trade Orders or Bankruptcies

To the best of the Company's  knowledge,  no director or officer of the Company,
or  shareholder  holding a  sufficient  number of  securities  of the Company to
affect materially the control of the Company,  or within the 10 years before the
date of this AIF, has been a director or officer of any other issuer that, while
that  person was acting in that  capacity,  was the  subject of a cease trade or
similar order, or an order that denied the other issuer access to any exemptions
under Canadian securities legislation,  for a period of more than 30 consecutive
days, or 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,  manager or trustee
appointed to hold its assets.

Penalties or Sanctions

To the best  knowledge  of the Company,  no  penalties  or  sanctions  have been
imposed on a  director  or officer of the  issuer,  or a  shareholder  holding a
sufficient number of securities of the Company to affect control of the Company,
in relation  to  Canadian  securities  legislation  or by a Canadian  securities
regulatory  authority,  or by a court or  regulatory  body that would  likely be
considered important to a reasonable investor in making an investment decision.

Personal Bankruptcies

To the best knowledge of the Company,  no director or officer of the Company, or
a  shareholder  holding a  sufficient  number of  securities  of the  Company to
materially  affect the control of the Company,  or a personal holding company of
any such persons,  has,  within the 10 years before the date of this AIF, become
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 the assets of the director or officer.

Conflicts of Interest

To the best knowledge of the Company,  no director or officer of the Company, or
a  shareholder  holding a  sufficient  number of  securities  of the  Company to
materially  affect the control of the Company,  or a personal holding company of
any such persons,  has,  within the 10 years before the date of this AIF, become
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 the assets of the director or officer.

To the best of the  Company's  knowledge,  and other than as  disclosed  herein,
there  are no known  existing  or  potential  conflicts  of  interest  among the
Company, its directors,  officers or other members of management of the Company,
except that certain of the directors,  officers, and other members of management
serve as  directors,  officers,  promoters  and members of  management  of other
public  companies and therefore it is possible that a conflict may arise between
their duties as a director,  officer, or member of management of the Company and
their duties as a director,  officer,  promoter or member of  management of such
other companies.

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


<PAGE>

                             ADDITIONAL INFORMATION

When the securities of the Company are in the course of a distribution  pursuant
to a preliminary  short form prospectus,  or a short form prospectus,  copies of
the  following  documents  may be  obtained  upon  request  from  our  Corporate
Secretary, Paul C. MacNeill:

(1)      the  Company's  AIF,  together  with one copy of any  document,  or the
         pertinent pages of any document, incorporated by reference in the AIF;

(2)      the  comparative  financial  statements  of the  Company  for our  most
         recently completed  financial year for which financial  statements have
         been filed together with the accompanying auditor's report and one copy
         of the most recent  interim  financial  statements  of the Company that
         have  been  filed,  if any,  for any  period  after the end of its most
         recently completed financial year;

(3)      one copy of the Company's  Management  Proxy Circular in respect of our
         most recent annual meeting of  shareholders  that involved the election
         of directors or one copy of any annual filing prepared  instead of that
         information circular, as appropriate; and

(4)      one copy of any other documents that are incorporated by reference into
         the preliminary  short form prospectus or the short form prospectus and
         are not required to be provided under paragraphs (1), (2) or (3) above.

At any other time,  one copy of any documents  referred to at paragraphs  (1) to
(4) above,  provided  that the Company  may require the payment of a  reasonable
charge if the  request  is made by a person  or  company  who is not a  security
holder of the Company.

Additional  information  including  directors'  and officers'  remuneration  and
indebtedness,   principal  holders  of  our  securities,   options  to  purchase
securities and interests of insiders in material transactions, if applicable, is
contained in the  Company's  Management  Proxy  Circular for the annual  general
meeting  to be  held on June  10,  2004.  Additional  financial  information  is
provided in the Company's comparative financial statements and notes thereto for
the year ended December 31, 2003.

<PAGE>


                                    EXHIBIT 2

                                  Minefinders Corporation Ltd.
                                  (An Exploration Stage Company)
                                  Consolidated Financial Statements
                                  (Expressed in thousands of Canadian Dollars)
                                  For the years ended December 31, 2003 and 2002

<PAGE>

                                  Minefinders Corporation Ltd.
                                  (An Exploration Stage Company)
                                  Consolidated Financial Statements
                                  (Expressed in thousands of Canadian Dollars)
                                  For the years ended December 31, 2003 and 2002




                                                                        Contents


Auditors' Report                                                        2

Consolidated Financial Statements

    Balance Sheets                                                      3

    Statements of Loss and Deficit                                      4

    Statements of Cash Flows                                            5

    Statements of Mineral Properties and Deferred Exploration Costs     6

    Summary of Significant Accounting Policies                          7 - 10

    Notes to the Financial Statements                                   11 - 22

<PAGE>
                                                                Auditors' Report


To the Shareholders of
Minefinders Corporation Ltd.


We have audited the Consolidated Balance Sheets of Minefinders  Corporation Ltd.
(an  Exploration  Stage  Company)  as at  December  31,  2003  and  2002 and the
Consolidated  Statements of Loss and Deficit,  Cash Flows and Mineral Properties
and Deferred  Exploration  Costs for each of the years in the three-year  period
ended December 31, 2003. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with Canadian and United States  generally
accepted auditing standards. Those standards require that we plan and perform an
audit to obtain reasonable  assurance whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.

In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2003
and 2002 and the  results of its  operations  and its cash flows for each of the
years in the  three-year  period  ended  December  31, 2003 in  accordance  with
Canadian generally accepted accounting principles.


/s/ "BDO DunWoody LLP"

Chartered Accountants

Vancouver, Canada
March 12, 2004

<PAGE>


                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                                     Consolidated Balance Sheets
                                    (Expressed in thousands of Canadian Dollars)
<TABLE>
<CAPTION>
<S>                                                                                     <C>              <C>
December 31                                                                           2003           2002
------------------------------------------------------------------------------------------------------------------


Assets

Current

    Cash and cash equivalents (Note 2)                                    $         59,221  $         9,372
    Receivables                                                                         36               36
    Prepaid expenses                                                                    92              129
------------------------------------------------------------------------------------------------------------------
                                                                                    59,349            9,537


Mineral properties and deferred exploration

  costs (Note 3)                                                                    44,754           36,232
Equipment (Note 4)                                                                     145              131
------------------------------------------------------------------------------------------------------------------

                                                                          $        104,248  $        45,900
------------------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Liabilities

Current
    Accounts payable and accrued liabilities                               $        1,034    $          896
------------------------------------------------------------------------------------------------------------------

Shareholders' equity
    Capital stock (Note 5)                                                         117,381            56,793
    Contributed surplus (Note 8)                                                     4,637             2,258
    Deficit accumulated in the exploration stage                                  (18,804)          (14,047)
------------------------------------------------------------------------------------------------------------------
                                                                                   103,214           45,004
------------------------------------------------------------------------------------------------------------------
                                                                           $       104,248   $       45,900
------------------------------------------------------------------------------------------------------------------
</TABLE>


Approved by the Board of Directors:


/s/ "H. Leo King"                                   Director
-----------------------------------------------



/s/ "Paul C. MacNeill"                              Director
-----------------------------------------------

The  accompanying  summary of significant  accounting  policies and notes are an
integral part of these consolidated financial statements.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                     Consolidated Statements of Loss and Deficit
             (Expressed in thousands of Canadian Dollars, except per share data)

<TABLE>
<CAPTION>
<S>                                                                   <C>                <C>              <C>
For the years ended December 31                                      2003           2002                2001
------------------------------------------------------------------------------------------------------------------


Administrative costs
    Accounting and auditing                            $             200  $            127  $            76
    Amortization                                                      16                 5                1
    Consulting (Note 8)                                            1,105               815              178
    Corporate relations                                              745               409               61
    Legal                                                            420               310              180
    Office services and expenses                                     424               245              165
    Shareholder reports and filing fees                              413                93               89
    Travel                                                            86               116               50
------------------------------------------------------------------------------------------------------------------
                                                                   3,409             2,120              800

Other operating items
    Write-off of mineral properties and deferred
      exploration costs                                            1,479               766              502
------------------------------------------------------------------------------------------------------------------
Loss from operations                                             (4,888)           (2,886)          (1,302)

Investment and other items
    Foreign exchange (loss) gain                                   (425)             (53)                 2
    (Loss) gain on sale of assets                                    (1)                3                 -
    Interest income                                                  557              182                17
------------------------------------------------------------------------------------------------------------------
Net loss for the year                                            (4,757)           (2,754)          (1,283)

Deficit accumulated in the exploration stage,
  beginning of year                                             (14,047)          (11,293)         (10,010)
------------------------------------------------------------------------------------------------------------------
Deficit accumulated in the exploration stage,
  end of year                                          $        (18,804)  $       (14,047)  $      (11,293)
------------------------------------------------------------------------------------------------------------------

Loss per share - basic and diluted                     $          (0.15)  $         (0.11)  $        (0.07)
------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding                           31,491,892       25,280,665         19,129,452
------------------------------------------------------------------------------------------------------------------
</TABLE>

The  accompanying  summary of significant  accounting  policies and notes are an
integral part of these consolidated financial statements.

<PAGE>





                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                           Consolidated Statements of Cash Flows
                                    (Expressed in thousands of Canadian Dollars)

<TABLE>
<CAPTION>
<S>                                                                   <C>                <C>              <C>
For the years ended December 31                                   2003              2002                2001
------------------------------------------------------------------------------------------------------------------

Cash flows from operating activities
    Net loss for the year                                      $(4,757)        $  (2,754)        $  (1,283)
    Items not involving cash
        Amortization                                                  16                 5                1
        Loss (gain) on sale of asset                                   1               (3)                -
        Write-off of mineral properties and
          deferred exploration costs                               1,479               766              502
        Stock option compensation                                    851               573                -

    Net change in non-cash working
      capital balances

       Receivables                                                     -              (15)               (3)
       Prepaid expenses                                               37              (88)              (37)
       Accounts payable and accrued liabilities                      138              126              (109)
------------------------------------------------------------------------------------------------------------------
                                                                  (2,235)          (1,390)             (929)
------------------------------------------------------------------------------------------------------------------

  Cash flows from investing activities

    Mineral properties and exploration costs                      (8,386)          (4,393)

    (1,523)
    Purchase of equipment                                           (118)            (106)              (1)
    Proceeds from disposal of capital assets                           -                7             -
------------------------------------------------------------------------------------------------------------------

                                                                  (8,504)           (4,492)          (1,524)
------------------------------------------------------------------------------------------------------------------

  Cash flows from financing activities
     Net proceeds on issuance of common shares

       and subscriptions received                                 60,588            14,779            1,964
------------------------------------------------------------------------------------------------------------------


Increase (decrease) in cash                                       49,849             8,897              (489)

Cash and cash equivalents, beginning of year                       9,372               475               964
------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year                 $          59,221  $         9,372   $            475
------------------------------------------------------------------------------------------------------------------
Supplemental Information

     Interest and taxes paid                           $               -  $              -  $              -

     Non-cash investing and financing activities:
      Amortization of equipment included in
        deferred exploration costs                     $              87  $             41  $             23
      Stock option compensation (Note 8)               $           2,379  $          2,258  $              -
      Issuance of common shares for share
        issuance costs                                 $               -  $              -  $             50
------------------------------------------------------------------------------------------------------------------
</TABLE>

The  accompanying  summary of significant  accounting  policies and notes are an
integral part of these consolidated financial statements.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                   Consolidated Statements of Mineral Properties
                                                  and Deferred Exploration Costs
                                    (Expressed in thousands of Canadian Dollars)

<TABLE>
<CAPTION>
<S>                                                                   <C>              <C>               <C>
For the years ended December 31                                    2003             2002                2001
------------------------------------------------------------------------------------------------------------------


Mineral properties                                     $              182  $           203  $           195
------------------------------------------------------------------------------------------------------------------
Deferred exploration costs

    Assaying                                                          888              370               97
    Amortization                                                       87               41               23
    Communication and delivery                                        140               64               59
    Drilling and trenching                                          3,716            2,267                -
    Environmental                                                      31                1               13
    Geophysical surveying and mapping                                  85               66               13
    Legal:  mineral properties                                         42               28                9
    Licenses and recording fees                                       540              613              453
    Metallurgical                                                     201                4                -
    Engineering/feasibility study                                     278               21                4
    Road building                                                     161               55                12
    Supplies                                                          201              133               40
     Taxes                                                            379              388              112
    Technical and professional services                             1,351            1,217              582
    Other non-cash professional services (Note 8)                   1,528            1,685                -
    Travel                                                            191              140               46
------------------------------------------------------------------------------------------------------------------
                                                                    9,819            7,093            1,463
------------------------------------------------------------------------------------------------------------------

Gross mineral properties and deferred exploration
  costs                                                            10,001            7,296            1,658

Less: costs paid by joint venturer                                      -            (521)                -
------------------------------------------------------------------------------------------------------------------
Mineral properties and deferred exploration

 costs during the year                                             10,001            6,775            1,658

Balance, beginning of year                                         36,232           30,223           29,067


Less:      Write-off of mineral properties

           and deferred exploration costs (Note 3)                (1,479)            (766)             (502)
------------------------------------------------------------------------------------------------------------------
Balance, end of year (Note 3)                                       $ 44,754         $  36,232         $ 30,223
------------------------------------------------------------------------------------------------------------------
</TABLE>

The  accompanying  summary of significant  accounting  policies and notes are an
integral part of these consolidated financial statements.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                      Summary of Significant Accounting Policies
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)


December 31, 2003 and 2002
--------------------------------------------------------------------------------

Basis of Consolidation

     These  consolidated  financial  statements are prepared in accordance  with
     Canadian generally accepted accounting  principles and include the accounts
     of the Company and its wholly-owned  subsidiaries,  Minera Minefinders S.A.
     de  C.V.  and  Compania  Minera  Dolores  S.A.  de  C.V.  (in  Mexico)  and
     Minefinders  (U.S.A.)  Inc.  (in  the  United  States).  All  inter-company
     transactions and balances are eliminated on consolidation.

Mineral Properties

     The  Company  is in  the  exploration  stage  in  respect  of  its  mineral
     properties.  Acquisition,  exploration  and  development  costs relating to
     mineral  properties are deferred until such time as mineral  properties are
     brought into  commercial  production,  at which time they will be amortized
     over the estimated life of the property on a unit of production basis using
     proven  and  probable  reserves.  Revenue  incidental  to  exploration  and
     development  activities,   including  the  proceeds  on  sales  of  partial
     properties,  is credited  against the cost of properties.  Aggregate  costs
     related to abandoned  properties  are charged to  operations at the time of
     any  abandonment  or when  there is a  long-term  expectation  that the net
     carrying  amount  of  these  capitalized  exploration  costs  will  not  be
     recovered.  During the year ended December 31, 2003, the Company  wrote-off
     $1,479  (2002 - $766;  2001 - $502)  of  mineral  properties  and  deferred
     exploration  costs related to inactive  properties and abandoned  claims in
     the United States and Mexico.

     Where the Company has entered into option agreements for the acquisition of
     an interest in mineral  properties  which  provides for periodic  payments,
     amounts  unpaid are not  recorded  as a  liability  since they are  payable
     entirely at the Company's option.

Equipment

     Equipment   is   carried   at  cost.   Amortization   is   provided   on  a
     declining-balance  basis at the rate of 30% per annum for  vehicles and 20%
     per annum for other  equipment.  An impairment  loss is recognized when the
     carrying amount of the equipment exceeds the net future cash flows relating
     to the  equipment.  No  impairment  writedown of equipment  was  recognized
     during the years covered by these consolidated financial statements.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                      Summary of Significant Accounting Policies
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)


December 31, 2003 and 2002
--------------------------------------------------------------------------------

Foreign Exchange Translation

     The  Company's  functional  currency is the  Canadian  dollar.  The Company
     conducts a majority of its  business  in Mexico and the U.S.A.  through its
     subsidiaries  in United States dollars and Mexican Pesos.  The Company uses
     the temporal  method of currency  translation for translating the Company's
     foreign  operations  into  Canadian  dollars.  Under this method,  monetary
     assets and liabilities  have been converted at the exchange rate prevailing
     at the balance sheet date. Income and expenses are translated at historical
     rates.  Non-monetary  assets,  liabilities  and  equity are  translated  at
     historical rates.  Gains and losses on foreign exchange are included in the
     Statements of Loss and Deficit for the year.

     Exchange rates between the U.S.  dollar,  the Mexican peso and the Canadian
     dollar  for  the  periods  reported  on  in  these  consolidated  financial
     statements are as follows:

                           2003              2002                2001
--------------------------------------------------------------------------------

US Dollar
Year end                   0.7713         0.6370              0.6285
Average                    0.7135         0.6343              0.6456

Mexican Peso
Year end                    8.696             6.135            5,744
Average                     7.686             6.596            6.018

Loss Per Share

     The Company  follows the  "Treasury  Stock  Method" to  calculate  loss per
     common  share.  Under this method,  the basic loss per share is  calculated
     based on the weighted average aggregate number of common shares outstanding
     during each period. The diluted loss per share assumes that the outstanding
     stock  options  and  share  purchase  warrants  had been  exercised  at the
     beginning of the period. The adoption of this policy had no material effect
     on prior year figures.

     Common  equivalent  shares  (consisting  of shares  issuable on exercise of
     stock options and warrants)  totaling  2,950,000 (2002 - 3,232,604;  2001 -
     5,191,091)  were not included in the  computation of diluted loss per share
     because the effect was anti-dilutive.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                      Summary of Significant Accounting Policies
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)


December 31, 2003 and 2002
--------------------------------------------------------------------------------

Financial Instruments

     The Company's  financial  assets and  liabilities  consist of cash and cash
     equivalents,  receivables  and  accounts  payable and accrued  liabilities.
     Except as otherwise  noted, it is management's  opinion that the Company is
     not exposed to  significant  interest or credit  risks  arising  from these
     financial  instruments.  The  fair  values  of  the  financial  instruments
     approximate their carrying values due to the short-term maturities of these
     instruments.

     Financial  assets and liabilities  denominated in currencies other than the
     Canadian dollar are as follows:

                           2003                        2002
----------------------------------------------------------------------
                 Financial      Financial     Financial     Financial
                    Assets    Liabilities        Assets   Liabilities
----------------------------------------------------------------------

US dollar     $      2,073  $        705  $      1,428  $        691
Mexican peso           935            67           270            84
----------------------------------------------------------------------

              $      3,008  $        772  $      1,698  $        775
----------------------------------------------------------------------


Cash and Cash Equivalents

     Cash  and  cash  equivalents  consist  of cash  and  redeemable  short-term
     deposits.

Estimates and Assumptions

     The  preparation  of  financial  statements  in  conformity  with  Canadian
     generally  accepted  accounting  principles  requires  management  to  make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements  and the  reported  amounts of  revenues  and
     expenses  during the  reporting  period.  Actual  results could differ from
     those estimates.

Segmented Information

     The  Company  has  determined  that  it  has  one  business  segment,   the
     exploration   and  development  of  mineral   properties.   Information  by
     geographical area is as disclosed in Notes 3 and 4.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                      Summary of Significant Accounting Policies
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)


December 31, 2003 and 2002
--------------------------------------------------------------------------------

Stock Options

     The Company  follows the  recommendations  of CICA  Handbook  Section 3870,
     "Stock-based  compensation and other  stock-based  payments".  The standard
     requires  either the  recognition  of  compensation  expense  for grants of
     stock,  stock options and other equity  instruments to employees,  based on
     the fair value of the instrument at the grant date, or  alternatively,  the
     disclosure  of pro forma net earnings  and  earnings per share data,  as if
     stock-based  compensation had been recognized in earnings.  The Company has
     chosen not to use the fair value method to account for stock-based employee
     compensation  plans,  but to  disclose  pro forma  information  for options
     granted to employees after January 1, 2002 as in Note 8. Consequently,  the
     Company  records  no  compensation  expense  when  options  are  granted to
     employees.


     The Company  adopted the fair value method of  accounting  for  stock-based
     compensation  awards granted to  non-employees.  Accordingly,  compensation
     expense calculated using a Black-Scholes option pricing model is charged to
     the  Consolidated  Statements of Loss and Deficit or capitalized in Mineral
     Properties and Deferred  Exploration Costs,  depending on the nature of the
     award.


Income Taxes

     Future  income  taxes  relate to the expected  future tax  consequences  of
     differences  between the carrying  amount of balance  sheet items and their
     corresponding  tax  values.  Future tax assets are  recognized  only to the
     extent that, in the opinion of management,  it is more likely than not that
     the net future income tax assets will be realized. Future income tax assets
     and  liabilities  are  adjusted  for the effects of changes in tax laws and
     rates on the date of enactment or substantive enactment.


Reclassifications

     Certain prior year figures have been reclassified to conform to the current
     year's presentation  including the  reclassification of Mexican value added
     taxes ("IVA")  recoverable from Accounts  Receivable to Mineral  Properties
     and Deferred  Exploration  Costs. IVA recoverable from 2002 and prior years
     reclassified in 2002 totalled $500. Additionally,  the Company has included
     short  term  deposits  of $7,140 at  December  31,  2002 with cash and cash
     equivalents.

     The  effect  of both of  these  reclassifications  has  been  retroactively
     reflected in the Consolidated Statements of Cash Flows.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

1.   Nature of Business

     The  Company  was  organized  on  February  4,  1975  under the laws of the
     Province  of Ontario  and is  engaged  in the  business  of  exploring  for
     precious and base metal properties in North America and Mexico. At December
     31, 2003 and 2002, the Company was considered an exploration stage company.

     These  accompanying  financial  statements  have been  prepared  on a going
     concern  basis,  which  contemplates  the  realization  of  assets  and the
     satisfaction  of  liabilities  and  commitments  in the  normal  course  of
     business. The Company has not yet determined whether its properties contain
     mineral reserves that are economically  recoverable.  The recoverability of
     the amount shown for mineral  properties and deferred  exploration costs is
     dependent upon the continuing  financial  support of  shareholders or other
     investors and obtaining  long term  financing to complete  exploration  and
     development,   the   existence  of   economically   recoverable   reserves,
     confirmation of the Company's interest in the underlying mineral claims and
     upon future profitable production.

     The  Company  expects to  complete  the  feasibility  study on its  Dolores
     mineral  property  in Mexico in 2004.  Future  development  of the  Dolores
     deposit will depend upon obtaining  adequate  financing and the appropriate
     environmental and operating permits.  Upon receipt of necessary permits and
     funding,  the Company  expects to direct its efforts  toward  equipment and
     material procurement,  project management and construction. The feasibility
     study is considering  various mining and recovery processes and the Company
     is not yet able to forecast project capital or operating costs for Dolores.

2.   Cash and Cash Equivalents

     The balance consists of cash and the principal and accrued interest of term
     deposits  maturing at various  dates from  February 6, 2004 to December 12,
     2004, unless redeemed earlier at the Company's  option.  Interest income is
     earned at a weighted average rate of prime less 2.46%.

3.   Mineral Properties and Deferred Exploration Costs

<TABLE>
<CAPTION>
<S>                                 <C>                <C>                <C>               <C>
                                                                 Deferred
                                        Mineral                 Exploration
                                       Properties                   Costs            2003            2002
                                    ---------------------------------------------------------------------
      Mexico

         Dolores Property           $        10,766    $           26,051 $         36,817  $        29,184
         Northern Sonora                        273                 4,042            4,315            3,166
         La Reserva/El Correo                    78                 2,042            2,120            1,978
         Other                                   77                   444              521              791
                                    ------------------------------------------------------------------------
                                             11,194                32,579           43,773           35,119

      United States                             324                   657              981            1,113
                                    -----------------------------------------------------------------------

                                    $     11,518       $          33,236  $         44,754  $        36,232
                                    -----------------------------------------------------------------------
</TABLE>

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

3.   Mineral Properties and Deferred Exploration Costs - Continued

     For the year ended  December 31, 2003, the Company wrote off $1,479 (2002 -
     $766;  2001 -  $502)  allocated  as  follows:  in  respect  of  its  Nevada
     properties - $295; in respect of its Northern  Sonora  properties - $46; in
     respect of its other  properties - $1,138,  of which $859 related to its El
     Malacate property.  For the year ended December 31, 2002, the Company wrote
     down its Oro  Blanco  property  in the  amount of $608.  For the year ended
     December 31, 2001, the Company  wrote-off 20% of the cost of mineral claims
     and  25% of  deferred  exploration  costs  totaling  $333 in  respect  of a
     reduction in the claim area on all US projects  except the Clear  property.
     Amounts  written off in respect of general  exploration  costs totaled $158
     and $169 during the year ended December 31, 2002 and 2001, respectively.

     Mineral  properties and related deferred  exploration  costs consist of the
     following:

     Mexican Properties

     Dolores Property

     The Dolores  property  consists of nine claims  totaling 27,700 hectares in
     the Madera Mining  District,  in the state of Chihuahua.  The Company has a
     100% interest in two claims totaling 25,780 hectares and can acquire a 100%
     interest in the  remaining  seven  claims by  bringing  the  property  into
     production  or by making  further  payments of US$450  payable in quarterly
     instalments  of US$25.  The  property  is also  subject to  underlying  net
     smelter return ("NSR") royalties totaling 3.25% on gold and 2% on silver.

     Northern Sonora Properties

     The Company  has a 100%  interest  in the  mineral  rights on the  Northern
     Sonora Properties, which consist of nine claims totaling 16,591 hectares in
     the State of Sonora.  The Company is required to make annual rent  payments
     to the landowners of  approximately  US$25,  which have been paid for 2003,
     2002 and 2001.  Should a mine be put in  production  on the  properties,  a
     one-time payment of US$500 is due to one landowner. Another landowner is to
     be paid US$350 for the first mine put into  production  on his property and
     US$250 is to be paid for any additional mines put into production.

     On December 21, 2001,  the Company  entered into a letter of agreement with
     Placer Dome Exploration Inc.  ("Placer") to further explore and develop the
     El Malacate project in Northern Sonora. Under the agreement, Placer had the
     right to earn a 51%  beneficial  interest in the property  over a four-year
     period for cash  payments  and  exploration  expenditures.  Placer held the
     right to  terminate  the  agreement  at any time after the first US$250 was
     spent.  Placer reimbursed costs in the amount of $521 in 2002 (2001 - $Nil)
     to the  Company  pursuant  to the joint  venture  agreement.  In June 2002,
     Placer terminated the agreement without earning an interest in the project.
     In 2003 the El Malacate project was written off.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

3.   Mineral Properties and Deferred Exploration Costs - Continued

     La Reserva/El Correo

     In 2001, the Company acquired mining rights on the property from the owner.
     As a result,  as of March 2001,  the Company holds the title to these three
     claims in the La Reserva/El  Correo  property and three  additional  claims
     staked  by the  Company,  for a total  of  23,561  hectares.  The  original
     agreement  signed  in 1996 for the La  Reserva/El  Correo  Concessions  was
     accordingly terminated.

     In 1998, the Company entered into surface rights agreements whereby it made
     annual  payments  to certain  landowners  for access to the  property  that
     formed part of the La Reserva/El  Correo Property,  to conduct  exploration
     and mining  activities.  The  agreements can be terminated at the option of
     the Company upon 30 days notice to the landowners. As of December 31, 2003,
     the Company is current with its surface rights payments.

     Other Properties

     The Company has title to eight additional claims in Zacatecas, Mexico.

     United States Properties

     Nevada Properties

     The Company holds a 100% interest in the Clear, Dottie and Gutsy properties
     (subject to NSR royalties of 3%).

     The Washiki  claim group and Cleo claims near the Clear  property  are 100%
     owned by the Company with no royalties attached.  In addition,  in 1998 the
     Company  entered into a lease  agreement to acquire mineral rights situated
     near the Clear property by making annual advance minimum  royalty  payments
     over 15 years and by incurring exploration  expenditures of US$150 by April
     2001. At December 31, 2003, the Company is current with its advance royalty
     payments.  The Company has the right to  terminate  the lease  agreement on
     thirty days written notice to the owner.

     The Company has also  acquired  the  Buckskin  Mountain  property by making
     certain payments totaling US$100 to a company controlled by an arm's length
     consultant who,  subsequent to the agreement date, became a director of the
     Company.  In 2000,  the Company paid the final  installment to the director
     under the agreement.


     The Company wrote off the Dottie property in 2003 in the amount of $295.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

4.   Equipment

<TABLE>
<CAPTION>
<S>                       <C>          <C>          <C>              <C>            <C>        <C>
                                                         2003                                       2002
                        ------------------------------------------------------------------------------------
                                        Accumulated     Net Book                  Accumulated      Net Book
                               Cost    Amortization       Value          Cost    Amortization         Value
                        ------------------------------------------------------------------------------------
        Exploration

          equipment       $       45   $         32 $         13     $     43       $      29  $         14
        Office furniture
          and equipment          235            155           80          120              77            43
        Vehicles                 280            228           52          280             206            74
                        ------------------------------------------------------------------------------------
                          $      560   $        415  $       145     $    443            $312  $        131
                        ------------------------------------------------------------------------------------
</TABLE>


     The Company's equipment is segmented by geographical area as follows:


                                                  2003              2002
                                           -------------------------------------

      Mexico                                    $   36          $    44
      United States                                 45               55
      Canada                                        64               32
                                           -------------------------------------
                                                $  145          $   131
                                           -------------------------------------
<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

5.   Capital Stock

     Authorized
         Unlimited common shares, no par value
     Issued
         Common shares


<TABLE>
<CAPTION>
<S>                                                                                <C>                       <C>
                                                                                     Issued               Amount
                                                                         ----------------------------------------

Balance, January, 2001                                                         17,031,527               $ 38,930

Issued during the year:
For cash

  Private placements (net of issue costs of $179)                                3,051,723                 2,911
  Exercise of warrants                                                             150,000                   173

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

Balance, December 31, 2001                                                     20,233,250                 42,014
For cash
  Private placement in April (net of issue costs of $746)                        4,400,000                 9,374
  Exercise of stock options                                                      1,778,000                 3,083
  Exercise of warrants                                                           2,000,487                 2,322
                                                                         ----------------------------------------

Balance, December 31, 2002                                                     28,411,737                 56,793

Private placement in February (net of issue costs of $1,185)                     2,587,500                16,927
Private placement in December (net of issue costs of $2,524)                     4,000,000                41,476
Exercise of warrants                                                               353,104                   494
Exercise of stock options                                                          769,500                 1,691

                                                                         ----------------------------------------
Balance, December 31, 2003                                                     36,121,841              $ 117,381
                                                                         ----------------------------------------
</TABLE>

     (a)  In January 2001,  the Company  completed  private  placements to issue
          1,599,643 units for total proceeds of $1,477 with each unit consisting
          of one common share and one warrant  entitling  the holder to purchase
          one  common  share at $1.00  and  $1.15  for a two-  year  period.  In
          connection  with this private  placement,  50,000  common  shares were
          issued and $56 was paid in cash as a finder's fee.  These finders fees
          were  recorded  as a  reduction  to the gross  proceeds on the private
          placement.

          During the remainder of 2001, the Company completed private placements
          to issue a further  1,402,080  units for total proceeds of $1,612 with
          each unit  consisting  of one common  share and one-half of a warrant.
          Each whole warrant entitles the holder to purchase one common share at
          $1.40 per share for a period of two  years.  Issuance  costs  totaling
          $123 relating to the private  placement were charged as a reduction to
          the gross proceeds on the private placement.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

5.   Capital Stock - Continued

     (b)  Stock Options

          In 2003,  the  shareholders  approved a stock  option  plan ("the 2003
          Plan") for directors, officers, employees and certain consultants. The
          number of shares made available for purchase pursuant to options under
          the 2003  Plan  are not to  exceed  1,110,138.  650,000  options  were
          granted  pursuant to the 2003 Plan in 2003, and an additional  200,000
          granted  pursuant to a former plan. The total options  remaining to be
          granted  pursuant to all approved  stock option plans is 460,986.  The
          term of options granted under the 2003 Plan cannot exceed 5 years. The
          vesting of each option is determined by the Board of Directors and the
          exercise price is at the fair market value of the Company's  shares at
          the date of grant.

          The following table summarized the changes in stock options during the
          years:

                                                                     Weighted
                                                   Number             Average
                                                   of Options     Exercise Price
                                                --------------------------------

         Outstanding at January 1, 2001            2,407,500         $    1.54
           Granted                                   430,000              1.50
                                                --------------------------------
         Outstanding at December 31, 2001          2,837,500              1.53
           Granted                                 1,820,000              5.10
           Exercised                              (1,778,000)             1.73
                                                --------------------------------
         Outstanding at December 31, 2002          2,879,500              3.66
           Granted                                   850,000             10.50
           Cancelled                                 (10,000)             6.15
           Exercised                                (769,500)             2.20
                                                --------------------------------
         Outstanding at December 31, 2003          2,950,000         $    6.01
                                                --------------------------------


          All  options  granted  and  outstanding  during  the years  were fully
          exercisable on the various grant dates except:  50,000 options granted
          in 2001 with an  exercise  price of $1.50 per  share  which  vested on
          January 6, 2002;  20,000 options with an exercise price of $6.15 which
          vested in 5,000  option  increments  over a one year  period (of which
          10,000 were cancelled  during the year); and 50,000 options granted on
          July 1, 2003 at $8.08 which vested 25,000 immediately and 25,000 after
          six months.  The fair value of options  granted  during 2003 was $3.75
          (2002 - $1.88) per option.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

5.   Capital Stock - Continued

          At December 31, 2003, the following stock options were outstanding:

                   Number          Exercise Price            Expiry Date
       -------------------------------------------------------------------------

                  285,000              $ 1.10                June 19, 2005
                   40,000              $ 1.05                December 7, 2005
                  230,000              $ 1.50                November 7, 2006
                  595,000              $ 3.30                April 17, 2007
                  950,000              $ 6.45                November 23, 2007
                   50,000              $ 8.08                July 1, 2008
                  800,000              $ 10.65               September 26, 2008
       -------------------------------------------------------------------------
              2,950,000
       -------------------


          Subsequent to December 31, 2003,  205,000  options were exercised at a
          weighted average price of $3.60 for gross proceeds of $738.


     (c)  The following table  summarizes  whole warrant  activities  during the
          year:


                                                   Number       Weighted Average
                                                   of Warrants    Exercise Price
                                                 -------------------------------

         Outstanding at January 1, 2001            1,315,408      $  1.20
           Issued                                  2,300,683         1.18
           Exercised                                (150,000)        1.15
           Expired                                (1,112,500)        1.50
                                                 -------------------------------
         Outstanding at December 31, 2001          2,353,591         1.20
           Exercised                              (2,000,487)        1.16
                                                 -------------------------------
         Outstanding at December 31, 2002            353,104         1.40
           Exercised                                (353,104)        1.40
                                                 -------------------------------
         Outstanding at December 31, 2003                  -       $    -
                                                 -------------------------------
<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

6.   Related Party Transactions

     Related party  transactions not disclosed  elsewhere in these  consolidated
     financial statements were as follows:

     a.   The Company was charged for administrative and geological  services by
          two officers as follows:



                           Year                    Amount
                           ------------------------------------------

                           2003                     $     379
                           2002                     $     378
                           2001                     $     323



     (b)  Legal  services  are  provided  by a law  firm  in  which  one  of the
          directors of the Company is a partner.  The cost of these services was
          as follows:

                           Year                     Amount
                           -----------------------------------------

                           2003                     $     253
                           2002                     $     350
                           2001                     $     140

     Transactions  with related  parties were in the normal course of operations
     and were  measured  at the  exchange  value  (the  amount of  consideration
     established and agreed to by the related parties).

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

7.   Income Taxes

     The tax effects of temporary  differences  that give rise to the  Company's
     deferred tax assets are as follows:

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

                                                                                    2003               2002
                                                                           ----------------------------------
      Tax loss carryforwards                                               $         6,800     $       5,914
      Equipment                                                                          9                 9
      Mineral properties and deferred exploration costs                            (2,500)           (1,956)
      Undeducted financing costs                                                     1,249               293
      Valuation allowance                                                          (5,558)            (4,260)
                                                                           ----------------------------------
                                                                           $             -     $           -
                                                                           ----------------------------------
</TABLE>


     The provision for income taxes differs from the amount  estimated using the
     Canadian federal and provincial statutory income tax rates as follows:

<TABLE>
<CAPTION>
<S>                                                                     <C>             <C>              <C>
                                                                      2003           2002               2001
                                                            ------------------------------------------------
      Benefit at Canadian statutory rates                   $       (1,694)  $     (1,033)     $       (572)
      Effect of difference in foreign tax rates                         26              32               67
      Non-deductible expenses                                            3             143              183
      Undeducted stock option compensation                             847             850                -
      Effect of tax rate changes on future income taxes                126             568                -
      Increase (decrease) in valuation allowance                       692           (560)              322
                                                            -----------------------------------------------
                                                            $            -   $           -     $          -
                                                            ------------------------------------------------
</TABLE>


     The  Company  evaluates  its  valuation  allowance  requirements  based  on
     projected future operations.  When  circumstances  change and this causes a
     change in management's  judgment about the  recoverability  of deferred tax
     assets,  the impact of the change on the  valuation  allowance  (except for
     those  relating to  undeducted  financing  costs) is  reflected  in current
     income.  If  and  when  the  valuation  allowance  relating  to  undeducted
     financing costs is reversed,  the Company will recognize this benefit as an
     increase in capital stock.


     The  Company  has  approximately  $26,789  (2002 - $18,800)  of  undeducted
     exploration and development costs which are available for deduction against
     future income for tax purposes.  In addition,  the Company has  non-capital
     losses of  approximately  $18,100  (2002 -  $16,100)  expiring  in  various
     amounts from 2004 to 2010 and  allowable  capital  losses of  approximately
     $216 (2002 - $216).

     The tax benefit of net operating  losses carried forward and the associated
     valuation  allowance  was  reduced by $350  representing  the tax effect of
     losses which expired in 2003.

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

8.   Stock-Based Compensation

     The Company  accounts for all stock-based  compensation  issued on or after
     January 1, 2002 to  non-employees.  On July 1, 2003,  the  Company  granted
     50,000 stock options (of which 25,000 vest  immediately,  and 25,000 vested
     six  months  from the grant  date)  with an  exercise  price of  $8.08.  On
     September  26, 2003 the  Company  granted  800,000  stock  options  with an
     exercise price of $10.65.

     On April 17, 2002 and July 15,  2002,  the Company  granted  780,000  stock
     options with an exercise  price of $3.30 and 20,000  stock  options with an
     exercise   price  of  $6.15,   respectively,   to  directors   and  certain
     consultants.  On  December  23, 2002 the Company  granted  1,020,000  stock
     options at an option price of $6.45 to directors  and certain  consultants.
     Compensation expense to non-employees is determined using the Black-Scholes
     option  pricing model.  Weighted  average  assumptions  used in calculating
     compensation  expense in respect of options  granted to consultants  are as
     follows:

                                                                 2003       2002
                                                              ------------------
         Risk-free rate                                           5%         5%
         Dividend yield                                          nil        nil
         Volatility factor of the expected market price
           of the Company's common shares                        50%        60%
         Weighted average expected life of the options (months)  30         30

     For the year ended  December 31,  2003,  the  compensation  costs for stock
     options  granted to  non-employees  which were  expensed  were $851 (2002 -
     $573) and $1,528 (2002 - $1,685) was capitalized to mineral  properties and
     deferred  exploration costs. The combined amount $2,379 (2002 - $2,258) was
     credited to contributed surplus.

     The  following is the pro-forma net loss of the Company with the fair value
     applied to options  granted to  employees  (using the same  assumptions  as
     above for non-employees) during the year:

                                                          2003          2002
                                                --------------------------------

         Net loss for the year                           $ (4,757)      $(2,754)

         Compensation expense relating to
          the fair value of employee stock
          options                                            (746)       (1,168)
                                                --------------------------------
         Pro forma net loss for the year                 $ (5,503)      $(3,922)
                                                --------------------------------

         Net loss per common share - basic
           and diluted
            - as reported                                $  (0.15)       $(0.11)
                                                --------------------------------
            - pro forma                                 $   (0.17)       $(0.16)
                                                --------------------------------
<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------


9.   United States Generally Accepted Accounting Principles

     The consolidated  financial statements of the Company have been prepared in
     accordance  with  Canadian   generally   accepted   accounting   principles
     ("Canadian  GAAP").  These  principles  differ in some respects from United
     States generally accepted accounting  principles ("US GAAP"). The effect of
     such differences on the Company's  consolidated financial statements is set
     out below:

     (a)  Mineral Exploration Expenditures

          Under   Canadian  GAAP   expenditures   on  specific   properties  are
          capitalized  until  such  time as  either  economically  unrecoverable
          reserves are  established or the properties are sold or abandoned.  US
          GAAP requires that mineral  exploration  expenditures  (excluding  IVA
          recoverable  of $379,  $388 and $112 included in deferred  exploration
          costs under  Canadian  GAAP) be charged to the  Statement  of Loss and
          Deficit in the period incurred.  Accordingly, for US GAAP, all mineral
          exploration  expenditures  incurred to date (exclusive of taxes) would
          be charged to the Statement of Loss and Deficit.

     (b)  Stock option compensation

          Under   Canadian   GAAP,   the  Company  has  elected  not  to  record
          compensation  costs for stock options  granted to  employees,  but the
          effect  would  be  required  to be  disclosed  in the  notes  relating
          thereto.  Compensation  expenses are  calculated  using the fair value
          method for stock-based  compensation  awards granted to  non-employees
          after  January  1,  2002.  The   compensation   costs  are  recognized
          prospectively in the financial statements.

          Under US GAAP, the Company applies Accounting Principles Board Opinion
          ("APB")  No.  25,  "Accounting  for Stock  Issued to  Employees",  and
          related  Interpretation  No. 44 in  accounting  for all stock  options
          granted to employees and directors. Under APB 25, compensation expense
          is only  recognized  for stock options  granted with  exercise  prices
          below the market price of the underlying  common shares on the date of
          grant.  Stock  options that have been  modified to reduce the exercise
          price are accounted for as variable.


          Statement  of  Financial   Accounting   Standard   ("SFAS")  No.  123,
          "Accounting  for  Stock-Based  Compensation",  requires the Company to
          record  compensation  to  "non-employees"  using the fair value  based
          method  prescribed  therein  similar to accounting  principles  now in
          effect  in  Canadian  GAAP.  Compensation  expense  under  US  GAAP to
          non-employees  is determined  using the  Black-Scholes  option pricing
          model.  For the year ended  December  31, 2003,  compensation  expense
          incurred  under SFAS No. 123 and not  recognized  in Canadian GAAP was
          $Nil (2002 - $Nil; 2001 - $134;). Weighted average assumptions used in
          calculating  compensation  expense in  respect  of options  granted to
          consultants in 2001 were as follows:

<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

9.   United States Generally Accepted Accounting Principles - Continued

<TABLE>
<CAPTION>
<S>                                                                                                     <C>
                                                                                                     2001
                                                                                                    ------

       Risk-free interest rate                                                               2.65 to 3.12%
       Dividend yield                                                                                 Nil%
       Volatility factor of the expected market price of the Company's
         common shares                                                                                 80%
       Weighted-average expected life of the options (months)                                           31
</TABLE>



     The  impact of the above on the  consolidated  financial  statements  is as
     follows:

<TABLE>
<CAPTION>
<S>                                                    <C>                 <C>              <C>
                                                                 2003              2002                 2001
                                                       ------------------------------------------------------

      Net loss per Canadian GAAP                       $        (4,757)    $        (2,754) $        (1,283)

      Adjustments related to:
         Mineral exploration expenses (a)                       (8,143)             (5,621)          (1,044)
         Stock option compensation (b)                                -                  -             (134)
                                                       ------------------------------------------------------
      Net loss per US GAAP                             $       (12,900)    $        (8,375) $        (2,461)
                                                       ------------------------------------------------------

      Loss per share per US GAAP
         Basic and diluted                             $         (0.41)    $        (0.33)  $         (0.13)
                                                       ------------------------------------------------------


      Shareholders' equity per Canadian GAAP           $    103,214        $       45,004   $        30,721

      Adjustments related to:
         Mineral exploration expenses (a)                      (43,875)            (35,732)         (30,111)
                                                       ------------------------------------------------------
      Shareholders' equity per US GAAP                 $        59,339     $        9,272   $           610
                                                       ------------------------------------------------------
</TABLE>



<PAGE>

                                                    Minefinders Corporation Ltd.
                                                  (An Exploration Stage Company)
                                  Notes to the Consolidated Financial Statements
                   (Expressed in thousands of Canadian Dollars, except number of
                                                      shares and per share data)

December 31, 2003 and 2002
--------------------------------------------------------------------------------

9.   United States Generally Accepted Accounting Principles - Continued

     (c)  New Accounting Pronouncements

          In January 2003, the US Financial  Accounting Standards Board ("FASB")
          issued  Interpretation  ("FIN")  No. 46,  "Consolidation  of  Variable
          Interest   Entities,   an  Interpretation  of  ARB  51."  The  primary
          objectives of FIN No. 46 are to provide guidance on the identification
          of entities  for which  control is achieved  through  means other than
          voting  rights  (variable  interest  entities  or  "VIEs")  and how to
          determine when and which business  enterprise  should  consolidate the
          VIE. This new model for  consolidation  applies to an entity for which
          either:  (1) the equity investors do not have a controlling  financial
          interest;  or (2) the equity  investment  at risk is  insufficient  to
          finance  that  entity's   activities   without  receiving   additional
          subordinated  financial support from other parties.  In addition,  FIN
          No.  46  requires  that  both the  primary  beneficiary  and all other
          enterprises  with  a  significant  variable  interest  in a  VIE  make
          additional  disclosures.  As amended in December  2003,  the effective
          dates of FIN No. 46 for all non small business issuers are as follows:
          (a) for  interests in  special-purpose  entities:  periods ended after
          December 15, 2003;  and (b) for all VIEs  created  before  January 31,
          2003:  periods ending after December 15, 2004 (c) for all VIEs created
          after January 31, 2003, FIN 46 is applicable immediately. The December
          2003 amendment of FIN No. 46 also includes transition  provisions that
          govern how an SBI which previously  adopted the  pronouncement  (as it
          was originally issued) must account for consolidated VIEs.

          The  implementation  of this new  standard  is not  expected to have a
          material effect on the Company's consolidated financial statements.

          On May 15, 2003,  the Financial  Accounting  Standards  Board ("FASB")
          issued Statement of Financial  Accounting  Standard  ("SFAS") No. 150,
          "Accounting for Certain Financial  Instruments with Characteristics of
          both Liabilities and Equity".  SFAS No. 150 changes the accounting for
          certain financial instruments that, under previous guidance,  could be
          classified as equity or  "mezzanine"  equity,  by now requiring  those
          instruments  to be  classified  as  liabilities  (or  assets  in  some
          circumstances) in the statement of financial position.  Further,  SFAS
          No. 150 requires  disclosure  regarding the terms of those instruments
          and  settlement  alternatives.   SFAS  No.  150  affects  an  entity's
          classification   of  the  following   freestanding   instruments:   a)
          mandatorily   redeemable   instruments  b)  financial  instruments  to
          repurchase an entity's own equity instruments c) financial instruments
          embodying  obligations  that the issuer must or could choose to settle
          by issuing a variable number of its shares or other equity instruments
          based solely on (i) a fixed monetary amount known at inception or (ii)
          something other than changes in its own equity instruments d) SFAS No.
          150 does not apply to features embedded in a financial instrument that
          is not a derivative in its  entirety.  The guidance in SFAS No. 150 is
          generally  effective  for all  financial  instruments  entered into or
          modified  after  May  31,  2003,  and is  otherwise  effective  at the
          beginning of the first interim period beginning after June 15, 2003.

          The implementation of this new standard did not have a material effect
          on the Company's consolidated financial statements.

<PAGE>

                                    EXHIBIT 3

MANAGEMENT DISCUSSION AND ANALYSIS

The following  discussion  and analysis is for the year ended  December 31, 2003
compared  with the years ended  December 31, 2002 and December 31, 2001.  Unless
otherwise stated,  information is current to March 31, 2004. All amounts in this
discussion are stated in Canadian dollars.

Introduction

This discussion and analysis of the operating results and financial  position of
Minefinders  Corporation Ltd (the "Company")  should be read in conjunction with
the attached Consolidated  Financial Statements of the Company and related Notes
(the  "Financial  Statements"),  which have been  prepared  in  accordance  with
Canadian  generally  accepted  accounting  principles  ("GAAP")  (see Summary of
Significant  Accounting  Polices  and  Note  1  to  the  consolidated  financial
statements).   These  principles   differ  in  certain  material  respects  from
accounting  principles  generally  accepted in the United  States  ("US  GAAP").
Differences  between GAAP and US GAAP applicable to the Company are described in
Note 9 to the Financial  Statements.  This  discussion  and analysis may contain
forward-looking statements about the Company's future prospects, and the Company
provides no assurance that actual results will meet  management's  expectations.
For a thorough discussion and analysis of the risks and uncertainties  affecting
the Company we refer you to the Company's Annual Information Form.

The Company is engaged in the exploration and development of mineral properties,
primarily in Mexico and the United States,  and measures its success through the
expansion of its mineral  resources at a reasonable  finding cost and  obtaining
external funding for exploration and development of its mineral properties.  All
of the Company's mineral  properties are in the exploration  stage. As it has no
current revenue, the Company continues to generate recurring negative cash flows
from  operations  and  losses.  Despite  the loss for the year from  operations,
management believes it has been successful in outlining a valuable and expanding
resource at its main  project,  Dolores.  The Company  noted in a press  release
issued  June 5, 2003 that its new  resource  model  demonstrates  an increase in
contained  gold  of 34%  in the  measured  resource  category  and of 27% in the
combined measured and indicated resource category.  During the fiscal year ended
December  31,  2003,  the Company was also  successful  in raising more than $60
million in new equity funding to support an anticipated  production  decision on
the  Dolores  project,  following  what the Company  expects  will be a positive
feasibility study. Management believes that these are significant milestones for
the Company as it advances its Dolores  project to the mine  development  stage.
The Company also broadened its exploration activities to include new drilling at
its La Bolsa property and in Northern Sonora,  and staked  additional  claims in
nearby areas considered to be highly prospective.

The  Company  believes  it  will  require   additional   financing  to  complete
development  of  Dolores.  The  availability  of equity  funding to the  Company
depends upon investor interest in the gold and silver sectors in general, and in


<PAGE>

the Company's  ability to demonstrate that it has a growing and economic mineral
resource at Dolores.  The gold market  continued to strengthen  through 2002 and
2003, creating opportunities to obtain funding to advance the Company's resource
properties.  The price of gold improved from $278 per ounce in December 2001, to
$347 per ounce in December  2002,  to $417 in December  2003 and reached $428 on
March 31, 2004.  The Company  believes that the gold price has benefited  from a
weakening  of the  United  States  dollar  against  other  major  currencies,  a
reduction  in  hedging of future  production  by major  gold  producers,  and an
increase in positions  held by  speculators.  The price of silver also  improved
from $4.66 per ounce in January  2003,  to $5.96 in December  2003,  and reached
$7.93 on March 31, 2004.  The market  price for the  Company's  securities  also
increased  during these  periods as a result of commodity  price  increases  and
successful expansion of its in situ gold and silver resources,  despite the fact
it has no  production or operating  income.  It is not possible to forecast gold
and silver price trends,  their impact on the  feasibility  study on the Dolores
project, or future results from operations.

Operating Activities

The  Company  recorded a net loss for 2003 of $4.8  million  ($0.15 per  share),
compared  with $2.8  million in 2002 ($0.11 per share) and $1.3  million in 2001
($0.07 per share).  Net losses were affected by higher  administration  costs in
2003 and a write-off of mineral  properties and related  exploration  costs, and
were partly offset by higher interest income earned on cash balances.

Administration costs increased from $2.1 million in 2002 to $3.4 million in 2003
(2001 - $0.8 million) due to several factors.  Corporate relations  expenditures
increased  to $0.7  million in 2003 from $0.4  million  in 2002 to  broaden  the
Company's  outreach to new investors,  which included a significant new investor
base in the United  States as a  consequence  of listing on the  American  Stock
Exchange  ("AMEX") in January 2003. The Company also incurred higher  accounting
and legal  costs,  increasing  on a  combined  basis to $0.6  million  from $0.4
million in 2002 to comply with increased  regulatory  requirements in the United
States and to a lesser extent, in Canada. Consulting fees increased, mainly as a
result of non-cash  compensation  expenses of $0.9  million in 2003 (2002 - $0.6
million)  recorded as a  consequence  of the Company  adopting a new  accounting
policy in 2002 relating to stock-based compensation.  Effective January 1, 2002,
GAAP requires that the Company record as a  compensation  expense the determined
fair  value of stock  options  issued to  non-employees  during  the term of the
options, with a corresponding credit to its contributed surplus account. No cash
is  exchanged  at the time of the grant.  The Company  receives  the full option
price at such  time,  if any,  that the stock  option is  exercised.  In valuing
options,  management used the Black-Scholes option pricing model, which required
it to make certain subjective  assumptions as to future interest rates and stock
price volatility (see Note 8 to the Financial Statements).  While management has
used its best efforts to assess these future values,  the determined  fair value
of options is highly  subjective  and  meaningful  only if the  valuation  input
factors are realized.


<PAGE>

Interest income  increased to $0.6 million in 2003 (2002 - $0.2 million;  2001 -
$0.02 million) due to a higher treasury balance throughout most of 2003 compared
with 2002, and offset by a decline in interest rates.  Cash and cash equivalents
were $59.2  million at  December  31,  2003  compared  with $9.4  million a year
earlier.  Interest  income  in 2002 was  higher  than in  2001,  due to a higher
treasury balance.

Summary of Quarterly Results

Net loss by quarter
(000's)
                           Qu-1        Qu-2       Qu-3        Qu-4          Year
--------------------------------------------------------------------------------
2003
Net loss excluding
write-down                $1,040       $453       $945        $ 840       $3,278
Write-down of mineral
properties                    35         27         46        1,371        1,479

--------------------------------------------------------------------------------
Net loss                  $1,075       $480       $991       $2,211       $4,757

--------------------------------------------------------------------------------
2002
Net loss excluding
write-down                  $281       $697       $147        $ 863       $1,988
Write-down of mineral
properties                    50        139        155          422          766

--------------------------------------------------------------------------------
Net loss                   $331        $836       $302       $1,285       $2,754

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

As the Company is still in the  exploration  stage,  variances in its  quarterly
losses are not  affected by sales or  production-related  factors.  Variances by
quarter reflect overall corporate  activity and are also caused by factors which
are not recurring  each  quarter.  Non-cash  compensation  in the amount of $0.3
million,  reflecting  the  value  of the  grant  of  stock  options  to  certain
personnel,  was  recorded in the second  quarter of 2002 and $0.9 million in the
third  quarter of 2003.  The first  quarter of 2003 was  adversely  affected  by
additional  legal and  associated  reporting  costs  relating  to the  Company's
registration  with  the SEC and  listing  on the  AMEX.  Fluctuation  in loss by
quarter is also affected by significant  property  write-downs  recorded in that
period (2003 Qu4 - $1.4 million; 2002 Qu4 - $0.4 million).

Financial and Other Instruments

The  Company's  financial  assets  and  liabilities  consist  of cash  and  cash
equivalents,  receivables and accounts payable and accrued liabilities,  some of
which are denominated in United States dollars or Mexican pesos.  These accounts
are  recorded at their fair market  value.  The Company is at risk to  financial
gain or loss as a result of foreign  exchange  movements  against  the  Canadian
dollar.  In 2003, the Company  recorded a loss of $0.4 million,  while in 2002 a
loss of $0.05  million was  recorded.  The loss  increased  in 2003  because net
financial  assets  denominated in foreign  currencies were greater in

<PAGE>

2003 ($2.2  million)  than in 2002 ($0.9  million) and during 2003 the US dollar
decreased 19% and the Mexican peso  decreased  29% against the Canadian  dollar.
The Company  minimizes  its foreign  exchange  risk by  maintaining  low account
balances in these foreign currencies,  to the extent possible.  The Company does
not have major commitments to acquire assets in foreign currencies at this time,
but historically  has incurred the majority of its exploration  costs in foreign
currencies.  In  the  future,  the  Company  expects  that  certain  significant
expenditures  in  developing  a mine at Dolores will be also be  denominated  in
these foreign  currencies.  Once mine  development  costs are known and purchase
commitments made, the Company may acquire foreign currencies directly or through
derivative  positions,  to lock-in these costs in Canadian funds, if it believes
it is prudent to do so.

The Company has placed its cash and cash  equivalents  in liquid  renewable bank
instruments  which  provide a fixed  rate of  interest  during  the  term.  When
renewing an instrument  that has matured,  the posted bank rate may be higher or
lower than that currently  received by the Company,  which affects the amount of
interest income received.

Investment in Mineral Exploration and Development

Net  expenditures on mineral  properties  increased during 2003 to $10.0 million
from $6.8  million in 2002 and $1.7  million  in 2001.  The  increased  activity
reflects the Company's  access to additional  funding from investors after 2001,
due to the  improvement  in silver and gold prices.  The Company has focused its
activities on the Dolores  project,  an  advanced-stage  exploration  project in
northern  Mexico,  conducting  extensive  drilling on the main zone and adjacent
structures  in order to  determine  the size  and  grade of the  deposit  and to
conduct a feasibility  study  demonstrating its economic  potential.  An updated
resource model was provided by the Company during the year. Using a cutoff grade
of 0.3 grams of gold per tonne, the total measured and indicated resource, as at
June 5, 2003,  amounted to 84.8 million tonnes containing 2.33 million ounces of
gold and 116.2 million  ounces of silver.  Resource  estimates  were prepared in
compliance with the requirements set out in National  Instrument  43-101,  which
may  differ  in  material  respects  from  requirements  by  the  United  States
Securities and Exchange  Commission.  The feasibility  study will determine what
portion  of this  resource  can be  economically  mined.  A total of 110  holes,
totaling  59,384  meters of  drilling,  were  completed in the most recent drill
program at Dolores,  which began in June,  2002.  Expenditures  on drilling  and
trenching increased from $2.3 million in 2002 to $3.7 million in 2003, with most
of the work conducted at Dolores.  Assaying of drill core and cuttings cost $0.9
million,  compared  with  $0.4  million  in  2002.  Technical  and  professional
services, for engineering work, metallurgical testing, reserve computation, mine
planning,  geological staffing and related work amounted to $1.4 million in 2003
(2002:  $1.2 million;  2001:  $0.6  million).  The increase in  engineering  and
feasibility  study  costs  to $0.3  million  in  2003  was  attributable  to the
commencement of feasibility  study work in February,  2003. Other non-cash costs
(2003 - $1.5  million;  2002 - $1.7  million)  relate to the  valuation of stock
option awards,  mainly to geological  consulting  staff,  whose  compensation is
capitalized to the related mineral property being explored.


<PAGE>

The Dolores  feasibility  study is expected to be completed in the first half of
2004.  Future  development  of the Dolores  deposit  will depend upon  obtaining
adequate  financing and the  appropriate  environmental  and operating  permits.
Assuming these permits and funding are obtained,  the Company  expects to direct
its efforts toward equipment and material  procurement,  project  management and
construction.  The feasibility study is considering  various mining and recovery
processes  and the  Company  is not yet  able to  forecast  project  capital  or
operating costs for Dolores.

The Company  also  conducted  extensive  drilling and field work on its Northern
Sonora  projects in 2003 at a cost of $1.1  million.  Results of a 20-hole drill
program at La Bolsa included  higher grade  mineralization  than generally found
within  the  known  resource.  Drill  results  on other  targets  produced  some
encouraging results and follow-up work is planned for 2004.

Management has conducted an extensive  review of its mineral  property  carrying
values.  Certain  projects  had not been  advanced  for several  years,  in part
because  funding was  difficult  to obtain in prior  years,  and in part because
other  projects  were  allocated  priority.  The Company is  assessing  its land
package in  Northern  Sonora  with a view to  reducing  acreage  as it  converts
exploration  land to exploitation  status,  while  maintaining  higher-potential
prospects.  As a result of its  review,  the  Company  wrote off the  balance of
mineral property and deferred  exploration  costs relating to its Dottie project
in Nevada ($0.2 million) and its El Malacate project in Northern Sonora,  Mexico
($0.9 million), which significantly contributed to an overall write-down of $1.5
million in 2003 compared with $0.8 million in 2002 (2001 - $0.5 million).

As the  Company  does not yet have any  resource  properties  that  qualify  for
capitalization  under US GAAP, the primary  difference  between GAAP and US GAAP
for the Company is to increase the net loss and deficit for 2003,  2002 and 2001
by the  amounts of the  exploration  expenditures  capitalized  less  write-offs
recognized  under GAAP,  in each of those  years.  Adjustments  for  stock-based
compensation also affected the US GAAP reconciliation for 2001. For the purposes
of US GAAP,  these  expenses  have been  charged  to the  Statement  of Loss and
Deficit in the period incurred (see Note 9 to the Financial Statements).

Capital Resources and Liquidity

The Company's financial condition improved significantly in 2003. As at December
31, 2003, the Company had working capital of $58.3 million, an increase of $49.7
million from December 31, 2002. The most significant  component of the change in
working  capital was the increase in cash and cash  equivalents by $49.8 million
over 2002 ($9.4  million).  Payables  also  increased  from 2002 in  response to
increased exploration activities.

The increase in cash and cash equivalents resulted primarily from funds received
from a brokered placement of 2.6 million shares for net proceeds (after costs of
$1.2  million) of $16.9 million and a second  brokered  placement of 4.0 million
shares for net  proceeds  (after  costs of $2.5  million) of $41.5

<PAGE>

million.  In addition,  the Company  received  $1.7 million upon the exercise of
769,500  stock  options,  and $0.5 million  upon the  exercise of 353,104  share
purchase  warrants.  In 2002,  the Company  received  $9.4  million from private
placements  of 4.4 million  shares,  $3.1 million from the exercise of 1,778,000
options and $2.3 million from the exercise of 2,000,487 share purchase warrants.

Cash used in operating  activities  increased  from $0.9 million in 2001 to $1.4
million in 2002 to $2.2  million in 2003  primarily  due to  increased  costs of
administration associated with increased exploration and financing activity. The
costs associated with mineral exploration and equipment additions also increased
in the  period  from 2001 to 2003 due to a better  treasury  position  providing
capital to conduct planned exploration.

The  Company  is  adequately  funded to carry out  further  development  work at
Dolores in anticipation of a positive result from its feasibility study. Current
work  plans are  incorporated  into a $7 to 10  million  budget  for  additional
drilling,  engineering and construction,  and environmental studies. The Company
currently has no significant contractual obligations relating to Dolores at this
time,  apart from property  payments,  except in relation to contingent  royalty
payments once production  commences (see table below).  With continued  interest
from  new  investors  and  lending  institutions,  the  Company  believes  it is
well-positioned   to  secure  the  remaining   capital   required  to  undertake
construction  of the  Dolores  project.  The  Company  will seek to secure  debt
financing for part of the Dolores  construction  costs, if it can be obtained on
reasonable  cost  and  terms.  While  equity  markets  remain  positive  to gold
developers,  the Company is not assured that equity funding will be available at
terms suitable to the Company.

The Company plans to expand its exploration and development programs for 2004 on
project  other than  Dolores,  with  renewed  drilling  at its  Northern  Sonora
properties  and  conduct  initial and  follow-up  drilling at some of its Nevada
properties.  Expenditures on Northern Sonora are budgeted at $1.7 million,  with
$0.9 million  budgeted on La Bolsa for drilling  and  assaying,  along with some
metallurgical  work. Drilling is also planned for the Real Viejo/La Dura Project
in 2004.  Two of the  Company's  properties  in  Nevada,  the  Clear  and  Gutsy
prospects,  are  expected  to be  drill-tested  in the first half of 2004,  with
initial programs  expecting to cost less than $500,000.  Program results will be
evaluated,  with  follow-up  work and  expenditures  to be based on the  initial
results.

<PAGE>

A  summary  of the  Company's  contractual  obligations  and  commitments  as at
December 31, 2003 is as follows:

Commitments Table (payments due by period)
(000's)
                                               1 to 3            4 to 5
                                                years            years
                                          ----------------- ----------------

Property payments (a)                           $ 300            $ 150
Operating lease payments (b)                      150                -
Contingent royalty payments (c)
                                          ----------------- ----------------
                                                $ 450           $  150
                                          ----------------- ----------------

a)   Payments in respect of the Dolores  property,  which the Company expects to
     make; all other property payments are at the discretion of the Company;
b)   Includes existing leases without extensions;
c)   royalty payments on the Dolores property consisting of net smelter payments
     of 3.25% on gold and 2% on silver net revenues  cannot be quantified  until
     the project reaches production

Critical Accounting Estimates

The  preparation  of financial  statements in conformity  with GAAP requires the
Company to select from possible alternative accounting  principles,  and to make
estimates and  assumptions  that  determine  the reported  amounts of assets and
liabilities at the balance sheet date and reported costs and expenditures during
the  reporting  period.   Estimates  and  assumptions  may  be  revised  as  new
information  is obtained,  and are subject to change.  The Company's  accounting
policies and estimates used in the  preparation of the Financial  Statements are
considered  appropriate in the  circumstances,  but are subject to judgments and
uncertainties inherent in the financial reporting process.

The  Company  follows   accounting   guidelines  in  determining  the  value  of
stock-based  compensation,  as disclosed in Note 8 to the Financial  Statements.
Unlike other figures in the accounts,  this is a calculated  amount not based on
historical cost, but on subjective  assumptions  introduced to an option pricing
model,  in  particular:  (1) an estimate  for the average  future hold period of
issued stock options  before  exercise,  expiry or  cancellation  and (2) future
volatility  of the  company's  share price in the  expected  hold period  (using
historical  volatility as a reference).  The resulting  value  calculated is not
necessarily  the value which the holder of the option could  receive in an arm's
length  transaction,  given that there is no market for the options and they are
not transferable.

Property  acquisition costs and related direct exploration costs may be deferred
until the  properties  are placed into  production,  sold,  abandoned or written
down,  where  appropriate.  The  Company's  accounting  policy is to  capitalize
exploration  costs on a project by project basis  consistent  with Canadian GAAP
and  applicable   guidelines.   The  policy  is  consistent  with  other  junior
exploration  companies which have not established mineral reserves  objectively.
An alternative  policy would be to expense these costs until sufficient work has

<PAGE>

been done to  determine  that there is a  probability  a mineral  reserve can be
established; or alternatively, to expense such costs until a mineral reserve has
been objectively  established (which is the procedure prescribed under US GAAP).
Management is of the view that its current policy is appropriate for the Company
at this time. Based on annual impairment reviews made by management,  or earlier
if circumstances  warrant,  in the event that the long-term  expectation is that
the net  carrying  amount of these  capitalized  exploration  costs  will not be
recovered,  then  the  carrying  amount  is  written  down  accordingly  and the
writedown  charged to  operations.  A writedown  may be warranted in  situations
where a property is to be sold or abandoned; or exploration activity ceases on a
property due to unsatisfactory results or insufficient available funding.

Changes in Accounting Policy

Although no new  accounting  policies were adopted in 2003,  beginning  with the
first  quarter of 2004,  the  Company  will  determine  the value of stock based
compensation  to employees,  and record such  compensation  in its accounts,  in
accordance with the transitional  provisions of Canadian  Institute of Chartered
Accountants' Handbook Section 3870, on a retroactive basis with a restatement of
prior periods.

Off-Balance Sheet Arrangements

The  Company  has no  off-balance  sheet  arrangements  except  for  contractual
obligations tabled above.

Related Party Transactions

Three  individuals,  each an officer or an officer and a director of the Company
supply  administrative/geological  services and legal services to the Company at
arm's length rates under existing renewable contracts.  Details of these related
party   transactions,   including  the  purpose  and  recorded  amounts  of  the
transactions are identified in Note 6 to the Financial Statements.

Outstanding Share Data

The Company has one class of common  shares.  As at March 31,  2004,  there were
36,401,841 common shares outstanding.

In 2003,  the Company's  shareholders  adopted its 2003 stock option plan. As at
March 31, 2004,  there were 2,720,000  stock options  outstanding,  all of which
have vested.

Risk and Uncertainties

Except for  historical  information  contained in this  discussion and analysis,
disclosure  statements contained herein are  forward-looking,  as defined in the
United States Private Securities Litigation Reform Act of 1995.  Forward-looking
statements  are subject to risks and  uncertainties,  which  could cause  actual
results  to differ  materially  from those in such  forward-looking

<PAGE>

statements.  Forward looking statements are made based on management's  beliefs,
estimates and opinions on the date the statements  are made and the  Corporation
undertakes no obligation to update forward-looking  statements if these beliefs,
estimates  and opinions or other  circumstances  should  change.  Investors  are
cautioned against attributing undue certainty to forward-looking statements.

The Company is a mineral exploration and development company and is exposed to a
number of risks and uncertainties that are common to other companies in the same
business;  some of these risks have been discussed elsewhere in this report. The
Company's  financial success is subject to, among other things,  fluctuations in
gold and  silver  metal  prices  which may affect  current  or future  operating
results and may affect the economic value of its mineral resources.  The Company
is exposed to currency  fluctuations  against the Mexican peso and United States
dollar that could affect capital and operating  costs, but may chose to mitigate
the risk through forward purchase of these  currencies.  The Company must comply
with  environmental  regulations  governing  air  and  water  quality  and  land
disturbance and provide for mine  reclamation  and closure costs.  The Company's
ability to obtain  financing to explore for mineral deposits and to continue and
complete the development of those  properties it has classified as assets is not
assured; nor is there assurance that the expenditure of funds will result in the
discovery of an economic mineral deposit.  Should one or more of these risks and
uncertainties  materialize,  or should  underlying  assumptions prove incorrect,
actual  results may vary  materially  from those  described  in  forward-looking
statements.

The Company  has not  completed a  feasibility  study on any of its  deposits to
determine if it hosts a mineral resource that can be economically  developed and
profitably mined.

Note to U.S. Investors

While the terms "mineral  resource,"  "measured  mineral  resource,"  "indicated
mineral  resource," and "inferred  mineral resource" are recognized and required
by Canadian  regulations,  they are not defined  terms  under  standards  in the
United  States.  As  such,  information  contained  in  this  report  concerning
descriptions of mineralization and resources under Canadian standards may not be
comparable to similar  information made public by U.S.  companies subject to the
reporting and disclosure requirements of the Securities and Exchange Commission.
"Indicated mineral resource" and "inferred mineral resource" have a great amount
of  uncertainty  as to  their  existence  and a great  uncertainty  as to  their
economic and legal feasibility. It can not be assumed that all or any part of an
"indicated  mineral  resource"  or  "inferred  mineral  resource"  will  ever be
upgraded to a higher  category.  Investors  are cautioned not to assume that any
part or all of mineral  deposits in these categories will ever be converted into
reserves.

<PAGE>

                                    EXHIBIT 4

                                   CONSENT OF

                        INDEPENDENT CHARTERED ACCOUNTANT

Minefinders Corporation Ltd.

Vancouver, Canada

We consent to the  inclusion  in this Annual  Report on Form 40-F of our reports
dated March 12,  2004,  relating to the  consolidated  financial  statements  of
Minefinders Corporation Ltd. for the year ended December 31, 2003.

We also consent to the incorporation by reference in the previously filed (March
18, 2003 and December 17, 2003) open  registration  statements  on Form S-8 (SEC
Nos.  333-103893 and 333-111255) of Minefinders  Corporation Ltd. of our reports
dated March 12,  2004,  relating to the  consolidated  financial  statements  of
Minefinders  Corporation  Ltd.  appearing in the Company's Annual Report on Form
40-F for the year ended December 31, 2003.

BDO Dunwoody LLP

BDO DUNWOODY LLP

Chartered Accountants

Vancouver, Canada
May 14, 2004


<PAGE>


                                    EXHIBIT 5

                            CONSENT OF MARK H. BAILEY

I hereby  consent to the  references  to my name as a  qualified  person and the
information  that is expertised by me in connection  with the  disclosure on the
Company's  mineral  properties in the Company's Annual Report on Form 40-F to be
filed with the United States Securities and Exchange  Commission pursuant to the
Securities  Exchange Act of 1934, as amended,  and the reports  incorporated  by
reference into the Company's  previously filed  registration  statements on Form
S-8 (SEC Nos. 333-103893 and 333-111255).

/s/" Mark H. Bailey"
--------------------
Mark H. Bailey

Vancouver, British Columbia, Canada
May 14, 2004

<PAGE>
                                    EXHIBIT 6

                         CONSENT OF PINCOCK ALLEN & HOLT

We refer to our report auditing the resources at the Dolores Gold-Silver Project
Chihuahua, Mexico, dated December 2, 2002, (the "Report").

We hereby  consent to the filing,  use, and  incorporation  by reference of, the
Report and the references to our name in the Minefinders Corporation Ltd. Annual
Report on Form 40-F to be filed with the United States  Securities  and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.

Sincerely,

Pincock Allen & Holt

/s/"Mark G. Stevens"
----------------------
    Mark G. Stevens

Lakewood, Colorado, USA

May 14, 2004.

<PAGE>
                                    EXHIBIT 7

                          CONSENT OF GEORGE A. ARMBRUST

I refer to the report  prepared by Pincock Allen & Holt which was prepared under
my direct  supervision,  regarding  the audit of the  resources  at the  Dolores
Gold-Silver Project Chihuahua, Mexico, dated December 2, 2002, (the "Report").

I consent to the filing,  use and  incorporation by reference of, the Report and
the references to my name in the Minefinders  Corporation  Ltd. Annual Report on
Form 40-F under the heading "Mineral Resource and Mineral Reserve  Estimates" in
the  Minefinders  Corporation  Ltd. Annual  Information  Form for the year ended
December  31, 2003,  which is included as an exhibit in the Annual  Report to be
filed with the United States Securities and Exchange  Commission pursuant to the
Securities Exchange Act of 1934, as amended.

/s/"George A. Armbrust"
-----------------------
George A. Armbrust

Lakewood, Colorado, USA

May 14, 2004.


<PAGE>

                                    EXHIBIT 8

                          CONSENT OF ROBERT L. SANDEFUR

I refer to the report  prepared by Pincock Allen & Holt which was prepared under
my direct  supervision,  regarding  the audit of the  resources  at the  Dolores
Gold-Silver Project Chihuahua, Mexico, dated December 2, 2002, (the "Report").

I consent to the filing,  use and  incorporation by reference of, the Report and
the references to my name in the Minefinders  Corporation  Ltd. Annual Report on
Form 40-F under the heading "Mineral Resource and Mineral Reserve  Estimates" in
the  Minefinders  Corporation  Ltd. Annual  Information  Form for the year ended
December  31, 2003,  which is included as an exhibit in the Annual  Report to be
filed with the United States Securities and Exchange  Commission pursuant to the
Securities Exchange Act of 1934, as amended.

/s/"Robert L. Sandefur"
-----------------------
Robert L. Sandefur

Lakewood, Colorado, USA

May 14, 2004.


<PAGE>

                                    EXHIBIT 9

                                  CERTIFICATION

I, Mark H. Bailey, President, Chief Executive Officer and Director certify that:

1.   I have reviewed this annual report on Form 40-F of Minefinders  Corporation
     Ltd. (the "Registrant");

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 Registrant as of, and for, the periods presented in this report;

4.   The  Registrant's  other  certifying  officer  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)  Evaluated the  effectiveness of the Registrant'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

     (c)  Disclosed  in this  report  any  change in the  Registrant'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 Registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the Registrant's auditors and the audit committee of the Registrant'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  Registrant'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  Registrant's  internal
          control over financial reporting.

Date:    May 14, 2004
       ----------------

                                          /s/ " Mark H. Bailey"
                                          --------------------------------------
                                          Mark H. Bailey

                                          President, Chief Executive Officer and
                                          Director


<PAGE>


                                   EXHIBIT 10

                                  CERTIFICATION

I, Jon N. Morda, Chief Financial Officer certify that:

1.   I have reviewed this annual report on Form 40-F of Minefinders  Corporation
     Ltd. (the "Registrant");

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 Registrant as of, and for, the periods presented in this report;

4.   The  Registrant's  other  certifying  officer  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)  Evaluated the  effectiveness of the Registrant'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

     (c)  Disclosed  in this  report  any  change in the  Registrant'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 Registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the Registrant's auditors and the audit committee of the Registrant'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  Registrant'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  Registrant's  internal
          control over financial reporting.

Date:    May 14, 2004
        --------------

                                                         /s/ "Jon N. Morda"
                                                         -----------------------
                                                         Jon N. Morda
                                                         Chief Financial Officer


<PAGE>

                                   EXHIBIT 11

                                  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),  I, Mark H.
Bailey,   President,   Chief  Executive  Officer  and  Director  of  Minefinders
Corporation Ltd. (the "Company") hereby certify, to my knowledge, that:

The  Company's  Annual  Report on Form 40-F for the year ended  December 31 2003
(the "Report") fully complies with the requirements of section 13(a) or 15(d) of
the  Securities  Exchange  Act of 1934 and  information  contained in the Report
fairly presents,  in all material respects,  the financial condition and results
of the operations of the Company.

/s/ "Mark H. Bailey"
--------------------------
Name:      Mark H. Bailey
Title:     President, Chief Executive Officer and Director

Dated:    May 14, 2004
         -------------

The foregoing certification is being furnished solely pursuant to section 906 of
the  Sarbanes-Oxley Act of 2002 (subsection (a) and (b) of section 1350, chapter
63 of title 18, United States Code) and is not being filed as part of the Report
or as a separate disclosure document.


<PAGE>



                                   EXHIBIT 12

                                  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),  I, Jon N.
Morda,  Chief Financial Officer of Minefinders  Corporation Ltd. (the "Company")
hereby certify, to my knowledge, that:

The  Company's  Annual  Report on Form 40-F for the year ended  December 31 2003
(the "Report") fully complies with the requirements of section 13(a) or 15(d) of
the  Securities  Exchange  Act of 1934 and  information  contained in the Report
fairly presents,  in all material respects,  the financial condition and results
of the operations of the Company.

/s/ "Jon N. Morda"
------------------
Name:      Jon N. Morda
Title:     Chief Financial Officer

Dated:    May 14, 2004
        ---------------

The foregoing certification is being furnished solely pursuant to section 906 of
the  Sarbanes-Oxley Act of 2002 (subsection (a) and (b) of section 1350, chapter
63 of title 18, United States Code) and is not being filed as part of the Report
or as a separate disclosure document.


<PAGE>


                                  EXHIBIT 99.1

                          MINEFINDERS CORPORATION LTD.

                         CHARTER OF THE AUDIT COMMITTEE

                  The number of members of the Committee will be at least three,
none  of  whom  are  officers  or  employees  of the  Corporation  or any of its
affiliates  or  subsidiaries  and all of whom  are,  in the view of the Board of
Directors of the Corporation, free of any relationship that would interfere with
the exercise of independent  judgement.  Qualification for committee  membership
shall, in addition, comply with applicable securities regulatory requirements.

                           The Committee shall:

(a)      recommend  annually  to  the  Board  the  independent  auditors  to  be
         appointed by the shareholders of the Corporation;

(b)      review with the  independent  auditors the annual audit plan including,
         but not  limited  to,  the scope of the work to be  carried  out by the
         independent  auditors,  any significant  problems that the auditors are
         able  to  foresee,  the  impact  on the  financial  statements  and the
         Corporation of any new or proposed changes in accounting principles;

(c)      review the  annual  financial  statements,  including  notes,  with the
         independent auditors and recommend them to the Board for approval prior
         to  release  to  the  public  or  filing  with  securities   regulatory
         authorities;

(d)      review the quarterly financial statements with the independent auditors
         prior to  release to the public or filing  with  securities  regulatory
         authorities;

(e)      report   immediately   to  the   Board  any   instances   of  fraud  or
         misappropriation of assets that come to the attention of the Committee;

(f)      receive  from  the  independent  auditors  a formal  written  statement
         delineating all relationships between the auditors and the Corporation,
         consistent with applicable accounting standards, and actively engage in
         a  dialogue   with  the  auditors   with   respect  to  any   disclosed
         relationships or services that may have an impact on their  objectivity
         and independence;

(g)      take,  or  recommend  that the full Board take,  appropriate  action to
         oversee the independence of the auditors;

(h)      as to  management  of the  Corporation  generally:  (i) ensure  that an
         adequate  internal  control  structure  and  procedures  for  financial
         reporting are established and maintained;  (ii) periodically assess the
         effectiveness  of such  structures  and  procedures,  as well as secure
         appropriate  reports or attestations  from the independent  auditors in
         respect  thereof;  and (iii)  review  budgets and  periodically  assess
         actual spending compared with budgeted amounts; and

(i)      undertake  and  perform  such other  duties as may be  required  of the
         Committee by applicable law or regulation.

         In performing its functions and duties:

(aa)     the Committee  shall meet at least  quarterly  with  management and the
         independent  auditors to discuss the  accounts,  records and  financial
         position of the Corporation;

(bb)     the members of the  Committee  may inspect all the books and records of
         the Corporation; and

(cc)     the  Committee  may,  in  its  discretion  and at  the  expense  of the
         Corporation, engage financial and other advisors.

<PAGE>

                  The Committee is responsible  for the duties set forth in this
charter  but is not  responsible  for either the  preparation  of the  financial
statements  or the  auditing of the  financial  statements.  Management  has the
responsibility  for  preparing  the  financial  statements  and the  independent
auditors  have the  responsibility  for auditing the financial  statements.  The
review of the  financial  statements by the Committee is not of the same quality
as the audit performed by the independent auditors.

                  This  charter  was  adopted  by  the  Board  of  Directors  of
Minefinders Corporation Ltd. on April 1, 2003