The Company is incorporated under the laws of British Columbia and its principal business activities include the acquiring and developing of mineral properties.

The Company is in the process of exploring and developing its mineral properties and has not yet determined whether these properties contain ore reserves that are economically recoverable. The recoverability of the amounts shown for mineral properties and related deferred costs is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development and upon future profitable production.

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles with the assumption that the company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. Continued operations of the Company are dependent on the Company's ability to receive continued financial support, complete public equity financing, or generate profitable operations in the future.

Shallow River Project, Larder Lake Mining Division, Canada

 This property is comprised of four option agreements in which the Company can obtain a 100% interest in mineral properties located in the Shallow River, Larder Lake mining division of Ontario, Canada.

 September 30, 1997 Option Agreement

 The Company earned a 100% interest in 113 units by paying cash of $18,000, issuing 200,000 common shares at an agreed value of $33,875 and by expending $200,000 in exploration work on the property.  As at year end, the Company dropped 39 units.  The Company held 100% interest in the remaining 74 units.

 May 20, 1998 Option Agreement

 This option agreement consists of 20 mineral claims in which the Company has paid cash of $5,000, issued 100,000 common shares at an agreed value of $15,000 and will issue a further 50,000 common shares, subject to filing an acceptable geological report on exploration work completed on these claims to the Canadian Venture Exchange.

 May 21, 1998 Option Agreement

 This option agreement consists of 32 mineral claims, in which the Company has paid cash of $3,000 (by issuing 20,000 common shares), issued 50,000 common shares at an agreed value of $7,500 and will issue a further 50,000 common shares in two allotments of 25,000 shares each, subject to filing an acceptable geological report on exploration work done on the mineral claims to the Canadian Venture Exchange.

 September 1, 1999 Option Agreement

 This option agreement consists of 26 units in which the Company has issued 100,000 common shares at an agreed value of $15,000.  A further 100,000 common shares will be issued as follows:

i)   50,000 common shares subject to Canadian Venture Exchange approval of a geological report on exploration  work completed on these claims on March 30, 2001.

ii) 50,000 common shares after the Company has expended $30,000 in exploration costs by January 31, 2002.

 The optionors will retain a 2% Net Smelter Return ("NSR") royalty, in which the Company can purchase 1% for $1,000,000 at any time prior to commercial production.  In addition, the Company will issue 100,000 common shares to the optionors one day prior to commercial production, subject to further exchange approval.

 El Jazmin, Mexico

 The Company has an option to acquire a 100% interest in the El Jazmin property located in Chihuahua State, Mexico. 

 During the year, the optionor did not transfer the property title to the Company as agreed.  As a result, the Company has opted to terminate the option agreement to acquire an interest in the El Jazmin property.  All acquisition costs and related deferred exploration costs were written off to operations at year end.

 Mann Project, Porcupine Mining Division of Ontario, Canada

 April 10, 2000 Option Agreement 

The Company has an option to acquire up to a 100% interest in the Mann Platinum/Palladium project, Porcupine Mining Division, Ontario.  The option agreement consists of 19 mineral claims in which the Company has paid cash of $20,000, issued 50,000 common shares at an agreed value of $7,500, and will issue a further 100,000 common shares in allotments of 50,000 common shares each, subject to filing an acceptable geological report on exploration work done on the mineral claims to the Canadian Venture Exchange.

The optionor will retain a 3% NSR royalty, in which the Company can purchase 1% for $1,000,000 at any time prior to commercial production.  In addition, the Company will issue 100,000 common shares to the optionor one day prior to commercial production subject to further exchange approval.

On October 31, 2000, the Company optioned out its Mann property to Broadlands Resources Ltd. ("Broadlands").  Under this option agreement, Broadlands may acquire a 50% interest in the Mann property from the Company if the following obligations are fulfilled:

                 i)            pay $3,000 (paid) upon signing the option agreement;

                 ii)            pay $5,000 (paid) and issue 150,000 (issued) common shares of Broadlands;

                 iii)           pay $5,000 on April 30, 2001;

                 iv)            $5,000 on October, 2001;

                 v)             $15,000 on April 30, 2002;

                 vi)            $15,000 on October 30, 2002; and

                 vii)            $20,000 on April 30, 2003. 

The Company is the operator of the Mann project until Broadlands is vested with respect to earning its 50% interest.  Once Broadlands has earned its 50% interest,  the parties will form a management committee represented by a minimum of two individuals from each company and a joint venture agreement will be completed.  In the formal joint venture agreement, Broadlands will be granted by the Company a one time right to earn an additional 25% interest for a payment of $1,200,000 any time up to the first anniversary date of regulatory approval of the joint venture agreement.  The joint venture requires equal participation and should one of the parties fail to participate, that party's interest will be diluted on a standard dilution formula to be incorporated into the joint venture agreement. If either party's working interest in the project is reduced below 10%, then their interest will automatically convert to a 10% net profits interest. 

In addition to the above cash payments, Broadlands has agreed to incur the following exploration expenses:

                 i)     $100,000 in exploration expenses by April 30, 2001completing phase 1 and 2;

                 ii)     $100,000 in exploration expenses by April 30, 2002;

                 iii)     $200,000 in exploration expenses by April 30, 2003; and

                 iv)     $350,000 in exploration expenses or feasibility study by April 30, 2004.

Temagami Diamond Claim Project, Sudbury Mining Division of Ontario, Canada

During the year, the Company entered into a purchase agreement with various individuals to purchase an undivided 100% interest in 783 claim units comprising the Temagami Diamond Claim project, Sudbury Mining Division, Ontario.  The purchase price for the claims is as follows:

            a)  Total cash payment of $190,000 as outlined below:

                 i)     $40,000 on signing of the purchase agreement (paid);

                  ii)     $75,000 thirty (30) days from the signing of the purchase agreement (paid subsequent to year end);and

                  iii)     $75,000 on April 16, 2001 (paid subsequent to year end).

             b)  Total issuances of 180,000 common shares to the vendors to be issued as follows:

                  i)      60,000 common shares upon Exchange approval of the agreement (issued subsequent to year end);

                  ii)     60,000 common shares on April 16, 2001 (issued subsequent to year end);and

                  iii)     60,000 common shares on July 16, 2001.

 The vendors retain a 2.5% NSR.  The Company may at its option purchase 1% of the vendors' NSR for $1,000,000 at any time prior to commercial production of gold, PGE minerals, base metals, diamonds or any other mineral discovered on the claims.  In addition, the Company agreed to issue 150,000 common shares to the vendor one day prior to commercial production subject to regulatory approval.  No work commitments are required under the terms of the purchase agreement.

 Title to mineral properties

 Title to mining properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mining properties.  The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties are in good standing.

7. DEFERRED EXPLORATION COSTS

Included in issued capital stock are 375,000 common shares currently held in escrow as required by the regulatory authorities.

Stock options 

The Company does not have a formal stock option plan in place but follows the Canadian Venture Exchange policy under which it is authorized to grant options to directors and employees to acquire up to 10% of issued and outstanding common stock.  Under the plan, the exercise price of each option equals the market price of the Company's stock as calculated on the date of grant.  The options can be granted for a maximum term of 5 years.