-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 QIK5jm4fHgGblO9hk0mSSC2d160Chdp+nImI62u6BvWAUqpE/cu4t129vuBHguzY
 2DJXRAzft94gwGjpC/eorA==

<SEC-DOCUMENT>0001137171-04-001125.txt : 20040820
<SEC-HEADER>0001137171-04-001125.hdr.sgml : 20040820
<ACCEPTANCE-DATETIME>20040820171451
ACCESSION NUMBER:		0001137171-04-001125
CONFORMED SUBMISSION TYPE:	F-10/A
PUBLIC DOCUMENT COUNT:		7
FILED AS OF DATE:		20040820

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PAN AMERICAN SILVER CORP
		CENTRAL INDEX KEY:			0000771992
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		F-10/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-111763
		FILM NUMBER:		04989593

	BUSINESS ADDRESS:	
		STREET 1:		1500-625 HOWE STREET
		CITY:			VANCOUVER BC CANADA
		STATE:			A1
		ZIP:			V6C 2T6

	MAIL ADDRESS:	
		STREET 1:		1500 625 HOWE ST
		CITY:			VANCOUVER BC V6C 2T6
		STATE:			A1
		ZIP:			999999999

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PAN AMERICAN MINERALS CORP
		DATE OF NAME CHANGE:	19950608
</SEC-HEADER>
<DOCUMENT>
<TYPE>F-10/A
<SEQUENCE>1
<FILENAME>document2.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE></TITLE>
<META NAME="date" CONTENT="08/19/2004">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="right">Filed
Pursuant to General Instruction II.L of Form F-10, File No. 333-111763</p>
<p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center"><b>PROSPECTUS
SUPPLEMENT</b></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center"><b>to
the Short Form Base Shelf Prospectus dated January&nbsp;26, 2004</b></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-13.5pt; font-family:Times New Roman" align="justify"><i><u>New
Issue</u></i></p>
<p style="font-family: Times New Roman; text-indent: 0; margin: 0pt" align="justify"><img src="usprospectusa002.jpg" alt="[usprospectusa002.jpg]" align="left" height="41.6" width="39.2"></p>
<p style="line-height: 15pt; font-family: Times New Roman; font-size: 13pt; text-indent: 0; margin-top: 0pt; margin-bottom: 0" align="center">&nbsp;</p>
<p style="line-height: 15pt; font-family: Times New Roman; font-size: 13pt; text-indent: 0; margin-top: 0pt; margin-bottom: 0" align="center">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; font-family:Times New Roman" align="center"><b><font size="5">PAN
AMERICAN SILVER CORP.</font></b></p>
<p style="line-height: 15pt; font-family: Times New Roman; font-size: 13pt; text-indent: 0; margin-top: 0pt; margin-bottom: 0" align="center">&nbsp;</p>
<p style="line-height: 15pt; font-family: Times New Roman; font-size: 13pt; text-indent: 0; margin-top: 0pt; margin-bottom: 0" align="center"><b>Cdn$45,819,960</b></p>
<p style="line-height: 15pt; font-family: Times New Roman; font-size: 13pt; text-indent: 0; margin-top: 0pt; margin-bottom: 10pt" align="center"><b>3,818,330
Common Shares</b></p>
<p style="line-height: 15pt; font-family: Times New Roman; font-size: 13pt; text-indent: 0; margin-top: 0pt; margin-bottom: 10pt" align="center">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify">This
prospectus supplement relates to the issuance and sale (the "Offering") of
up to 3,818,330 common shares (the "Warrant Shares") of Pan American Silver
Corp. (the "Company") to be offered from time to time upon exercise of
3,818,330 common share purchase warrants (the "Warrants") of the Company
described in this prospectus supplement, and such indeterminate number of
additional common shares (the "Additional Shares" and together with the
Warrant Shares, the "Shares") that may be issuable by reason of the
anti-dilution provisions contained in the trust indenture (the "Indenture")
described in this prospectus supplement.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify">Each
Warrant will entitle its holder to purchase one Share at a price of Cdn$12.00 at
any time on or prior to 4:30 p.m. (Pacific Standard Time) on February 20, 2008
(the "Expiry Date"), after which date such Warrant will become null and
void. &nbsp;The Indenture requires the Company to issue to the holders of
Warrants upon the due exercise of the Warrants, that number of Shares to which
such holder of Warrants is entitled.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>No
underwriter has been involved in the preparation of, or has performed any review
of, this prospectus supplement.</b></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify">The
outstanding common shares of the Company are quoted on the Nasdaq National
Market ("Nasdaq") under the symbol "PAAS" and are listed on the Toronto
Stock Exchange (the "TSX") under the symbol "PAA". &nbsp;The closing
price of the Company's common shares on August&nbsp;<font face="Symbol"> 19</font>,
2004 on Nasdaq was US$<font face="Symbol">14.58</font> and on the TSX was Cdn$<font face="Symbol">18.98</font>.
&nbsp;The TSX has approved the listing of the Warrant Shares offered under this
prospectus supplement.</p>
<div align="center">
  <center>
  <table cellspacing="0">
    <tr>
      <td valign="top" width="396"><font size="2">&nbsp;</font></td>
      <td valign="top" width="138">
        <p style="margin-top:0pt; margin-bottom:3pt; padding-left:-18pt; padding-right:-18pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align="center"><b><font size="2">Price
        to<br>
        <u>the Public</u></font></b></p>
      </td>
      <td valign="top" width="138">
        <p style="margin-top:0pt; margin-bottom:3pt; padding-left:-18pt; padding-right:-18pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align="center"><font size="2"><b>Net
        Proceeds to<br>
        <u>the Company</u></b><font FACE="Times New Roman Bold"><u><sup>(1)&nbsp;</sup></u></font></font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="396">
        <p style="margin-top:0pt; margin-bottom:-12pt; padding-right:-18pt; font-family:Times New Roman" align="justify"><font size="2">Per
        Share</font></p>
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:-18pt; text-indent:287.1pt; font-family:Times New Roman" align="justify"><font size="2"><br>
        </font></p>
      </td>
      <td valign="top" width="138">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:2.1pt; padding-right:2.1pt; font-family:Times New Roman" align="center"><font size="2">Cdn$12.00</font></p>
      </td>
      <td valign="top" width="138">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:10.8pt; padding-right:8.1pt; font-family:Times New Roman" align="center"><font size="2">Cdn$12.00</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="396">
        <p style="margin-top:0pt; margin-bottom:-12pt; padding-right:-18pt; font-family:Times New Roman" align="justify"><font size="2">Total</font></p>
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:-18pt; text-indent:287.1pt; font-family:Times New Roman" align="justify"><font size="2"><br>
        </font></p>
      </td>
      <td valign="top" width="138">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:2.1pt; padding-right:2.1pt; font-family:Times New Roman" align="center"><font size="2">Cdn$45,819,960</font></p>
      </td>
      <td valign="top" width="138">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-left:10.8pt; padding-right:8.1pt; font-family:Times New Roman" align="center"><font size="2">Cdn$45,819,960</font></p>
      </td>
    </tr>
  </table>
  </center>
</div>
<u><sup>
<p style="margin:0pt; padding-left:-18pt; padding-right:-18pt; text-indent:126pt; font-family:Times New Roman" align="justify"><br>
</sup></u></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-right:-18pt; text-indent:-18pt; font-family:Times New Roman" align="justify"><sup>(1)</sup></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-right:-18pt; line-height:10pt; font-family:Times New Roman" align="justify">Before
deducting expenses of this Offering, estimated to be US$50,000, which will be
paid from the general funds of the Company. &nbsp;See "Plan of Distribution".</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>This
offering is made by a Canadian issuer that is permitted, under a
multijurisdictional disclosure system adopted by the United States, to prepare
this prospectus supplement and the accompanying prospectus in accordance with
the disclosure requirements of Canada. &nbsp;Prospective investors should be
aware that such requirements are different from those of the United States.
&nbsp;Certain of the financial statements included or incorporated herein have
been prepared in accordance with Canadian generally accepted accounting
principles, and may be subject to Canadian auditing and auditor independence
standards, and thus may not be comparable to financial statements of United
States companies.</b></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>Prospective
investors should be aware that the acquisition of the securities described
herein may have tax consequences both in the United States and in Canada.
&nbsp;Such consequences for investors who are resident in, or citizens of, the
United States may not be described fully herein.</b></p>
<p style="margin:0pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>The
enforcement by investors of civil liabilities under the federal securities laws
may be affected adversely by the fact that the Company is incorporated or
organized under the laws of British Columbia, Canada, that some or all of its
officers and directors may be residents of Canada, that some or all of the
underwriters or experts named in the registration statement may be residents of
Canada and that a substantial portion of the assets of the Company and said
persons may be located outside the United States.</b></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="center"><b>____________</b></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>These
securities have not been approved or disapproved by the Securities and Exchange
Commission or any state securities commission nor has the Securities and
Exchange Commission or any state securities commission passed upon the accuracy
or adequacy of this prospectus supplement or the prospectus to which it relates.
&nbsp;Any representation to the contrary is a criminal offense.</b></p>
<a NAME="FooterAField"></a><a NAME="SuppFooterB1st"></a>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>Certificates
representing the Shares will be delivered to holders who exercise all or a
portion of their Warrants on or prior to 4:30 p.m. (Pacific Standard Time) on
the Expiry Date in accordance with the terms of the Indenture within three
business days of such exercise.</b></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="center">____________</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="center">The
date of this Prospectus Supplement is August 20, 2004.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:6.65pt; font-family:Times New Roman" align="justify"><br>
</p>
<a NAME="FooterAField"></a><a NAME="SuppFooterB1st"></a>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman"><br>
<img border="0" src="toc.gif" width="651" height="418"></p>
<p><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-2</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">This
document is in two parts. &nbsp;The first part is this prospectus supplement,
which describes the terms of the Offering and also adds to and updates
information contained in the accompanying short form base shelf prospectus and
the documents incorporated by reference. &nbsp;The second part is the
accompanying short form base shelf prospectus, which gives more general
information, some of which may not apply to the Offering. &nbsp;This prospectus
supplement is deemed to be incorporated by reference into the accompanying short
form base shelf prospectus of the Company, dated January&nbsp;26, 2004 solely
for the purpose of this Offering.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">You
should rely only on the information contained or incorporated by reference in
this document. &nbsp;The Company has not authorized anyone to provide you with
information that is different. &nbsp;This document may only be used where it is
legal to sell the Shares. &nbsp;The information in this document is only
accurate as of the date of this prospectus supplement, the date of the
accompanying short form base shelf prospectus and the respective dates of all
the documents incorporated by reference herein and therein, regardless of the
time of delivery of this prospectus supplement or any sale of the Shares.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>DOCUMENTS
INCORPORATED BY REFERENCE</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><b>Information
has been incorporated by reference in this prospectus supplement from documents
filed with securities commissions or similar authorities in the Provinces of
British Columbia, Alberta, Manitoba, Ontario and Quebec.</b> &nbsp;Copies of
the documents incorporated by reference in this prospectus supplement may be
obtained on request without charge from the Controller and Corporate Secretary
of the Company at 1500-625 Howe Street, Vancouver, British Columbia,
V6C&nbsp;2T6 (telephone: (604) 684-1175). &nbsp;These documents are also
available through the Internet on the System for Electronic Document Analysis
and Retrieval ("SEDAR"), which can be accessed at www.sedar.com.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
following documents, filed with the securities commissions or similar regulatory
authorities in the Provinces of British Columbia, Alberta, Manitoba, Ontario and
Quebec, are specifically incorporated by reference into and form an integral
part of this prospectus supplement and the accompanying short form base shelf
prospectus:</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(a)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">the
Annual Information Form of the Company, dated May 19, 2004;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(b)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">the
audited consolidated financial statements of the Company and the notes thereto
as at and for the years ended December&nbsp;31, 2003 and 2002, together with the
auditors' report thereon;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(c)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">management's
discussion and analysis of financial condition and results of operations for the
years ended December 31, 2003 and 2002, filed on SEDAR on February 27, 2004;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(d)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">the
information circular of the Company, dated April 6, 2004, in connection with the
Company's May 11, 2004 annual general meeting of members, other than the
sections entitled "Corporate Governance", "Executive Compensation - Compensation Committee",
"Executive Compensation - Report on Executive
Compensation" and "Executive Compensation - Performance Graph";</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(e)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">the
unaudited interim financial statements of the Company and the notes thereto for
the six month periods ended June 30, 2004 and 2003;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(f)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">management's
discussion and analysis of financial condition and results of operations for the
six month periods ended June 30, 2004 and 2003, filed on SEDAR August 9, 2004;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(g)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
material change report of the Company, dated January 8, 2004 relating to the
filing of an unallocated preliminary base shelf prospectus by the Company;</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-3</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; text-indent:-36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(h)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
material change report of the Company, dated February 10, 2004, relating to the
Company signing a binding agreement, subject to regulatory approval and other
conditions, to purchase 92.014% of the voting shares of Compania Minera
Argentum S.A. ("Argentum"), which will acquire, through a split-off process
from Sociedad Minera Corona S.A., the Anticona and Manuelita mining units and
related infrastructure and processing units in Peru;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(i)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
material change report of the Company, dated February 18, 2004, relating to
financial and operational results for the fourth quarter and year ended December
31, 2003;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(j)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
material change report of the Company, dated February 27, 2004, relating to the
offering of 3,333,333 common shares of the Company for aggregate gross proceeds
of $55&nbsp;million;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(k)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
material change report of the Company, dated February 27, 2004, relating to the
intention of the Company to make an offer to encourage early conversion of its
outstanding 5.25% convertible unsecured senior subordinated debentures maturing
on July 31, 2009;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(l)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
technical report dated February 2004, prepared in accordance with NI 43-101 by
Resource Evaluation Inc.;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(m)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
material change report of the Company, dated March 30, 2004, relating to the
offer to encourage conversion by holders of the Company's US$86.25 million
outstanding principal amount of 5.25% convertible debentures;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(n)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
material change report of the Company, dated May 11, 2004, relating to increased
first quarter revenue due to higher realized silver prices and increased
production from the La Colorada mine;</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(o)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">A
material change report of the Company, dated July 23, 2004, relating to $36.7
million cash offer to purchase the voting shares of Argentum; and</p>
<p style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align="justify">(p)</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align="justify">a
material change report of the Company, dated August 9, 2004, relating to
increased second quarter revenue, increased silver production, higher realized
metal prices and the sale of accumulated concentrate inventory from the first
quarter of 2004.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><b>All
annual information forms, material change reports (excluding confidential
reports), unaudited consolidated interim financial statements, interim
management's discussion and analysis of financial condition and results of
operations, and information circulars (excluding information therein permitted
by applicable securities laws to be excluded) which are filed by the Company
with a securities commission or similar authority in Canada after the date of
this prospectus supplement and prior to the termination of the Offering, shall
be deemed to be incorporated by reference into this prospectus supplement.
&nbsp;Any document filed by the Company with the United States Securities and
Exchange Commission (the "SEC") or Report of Foreign Private Issuer on
Form&nbsp;6-K furnished to the SEC pursuant to the United States Securities
Exchange Act of 1934, as amended (the "U.S. Exchange Act") after the date of
this prospectus supplement, and prior to the termination of this Offering, shall
also be deemed to be incorporated by reference into this prospectus supplement
if and to the extent provided in such document.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><b>Any
statement contained in this prospectus supplement or in a document incorporated
or deemed to be incorporated by reference in this prospectus supplement shall be
deemed to be modified or superseded, for purposes of this prospectus supplement,
to the extent that a statement contained in this prospectus</b></p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-4</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align="justify"><b>supplement
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this prospectus supplement modifies or supersedes
that statement. &nbsp;Any such modifying or superseding statement need not state
that it has modified or superseded a prior statement or include any other
information set forth in the document that it modifies or supersedes. &nbsp;The
making of a modifying or superseding statement shall not be deemed an admission
for any purposes that the modified or superseded statement, when made,
constituted a misrepresentation, an untrue statement of a material fact or an
omission to state a material fact that is required to be stated or that is
necessary to make a statement not misleading in light of the circumstances in
which it was made. &nbsp;Any statement so modified or superseded shall not be
considered in its unmodified or superseded form to constitute part of this
prospectus supplement, except as so modified or superseded.</b></p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>SPECIAL
NOTE REGARDING FORWARD-LOOKING INFORMATION</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Some
of the statements included or incorporated by reference in this prospectus
supplement constitute "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995. &nbsp;When used
in this prospectus supplement, the words "anticipate", "believe", "estimate", "expect",
"target", "plan", "budget", "may", "schedule"
and similar words or expressions, identify forward-looking statements.
&nbsp;These forward-looking statements relate to, among other things:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    sufficiency of the Company's current working capital or anticipated
    operating cash flow;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company's acquisition of Argentum;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">projected
    capital expenditures, production estimates, cash flow and other projections
    relating to Morococha;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    sufficiency of the mineral reserves or resources at the Morococha, Huaron,
    La Colorada, Quiruvilca, Alamo Dorado or other properties;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company's long range mine plan and development program for Morococha,
    including statements concerning the Company's belief that sustained mining
    will continue beyond the life of the current proven and probable reserves at
    Morococha;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    implementation of the revised mining and processing plan at La Colorada;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">estimated
    production from the Huaron, La Colorada, Quiruvilca, Alamo Dorado or other
    properties;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    estimated cost of or availability of funding for ongoing capital improvement
    programs;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    estimated costs or estimated completion dates of the proposed development or
    expansion of the Morococha, Huaron and Alamo Dorado projects;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">estimated
    exploration expenditures to be incurred on the Company's various silver
    exploration properties;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">compliance
    with environmental standards;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">forecast
    capital or non-operating spending; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">levels
    of silver or other metals production, production costs and metal prices.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">These
statements reflect the Company's current views with respect to future events
and are necessarily based upon a number of assumptions and estimates that are
inherently subject to significant uncertainties and contingencies. &nbsp;Many
factors, both known and unknown, could cause actual results, performance or
achievements to be materially different from the results, performance or
achievements that are or may be expressed or implied by such forward-looking
statements including, without limitation, the factors identified in this
prospectus supplement</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-5</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align="justify">under
the caption "Risk Factors". &nbsp;Investors are cautioned against
attributing undue certainty to forward-looking statements. &nbsp;Although the
Company has attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause results not
to be anticipated, estimated or intended. &nbsp;The Company does not intend, and
does not assume any obligation, to update these forward-looking statements to
reflect changes in assumptions or changes in circumstances or any other events
affecting such statements, other than as required by applicable law.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>CAUTIONARY
NOTE TO UNITED STATES INVESTORS CONCERNING<br>
ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">In
this prospectus supplement, the terms "measured", "indicated" and "inferred
resources" are used. &nbsp;United States investors are advised that while such
terms are recognized and required under Canadian securities rules, the SEC does
not recognize them. &nbsp;"Inferred resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to their economic
and legal feasibility. &nbsp;It cannot be assumed that all or any part of an
inferred resource will ever be upgraded to a higher category. &nbsp;Under
Canadian securities rules, estimates of inferred resources may not form the
basis of feasibility or other economic studies.<b> &nbsp;United States investors
are cautioned not to assume that all or any part of measured or indicated
resources will ever be converted into reserves. &nbsp;United States investors
also are cautioned not to assume that all or any part of an inferred resource
exists, or is economically or legally mineable.</b></p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>CERTAIN
AVAILABLE INFORMATION</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Company has filed with the SEC a registration statement on Form&nbsp;F-10 (the "Registration Statement") under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), with respect to the Shares. &nbsp;This
prospectus supplement, which constitutes a part of that Registration Statement,
does not contain all of the information set forth in such Registration Statement
and its exhibits, to which reference is made for further information. &nbsp;See "Documents Filed as Part of the Registration Statement".</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Company is subject to the informational reporting requirements of the U.S.
Exchange Act, and in accordance therewith files reports and other information
with the SEC. &nbsp;Under a multijurisdictional disclosure system adopted by the
United States, the Company is permitted to prepare such reports and other
information in accordance with the disclosure requirements of Canada, which are
different from those of the United States. &nbsp;As a foreign private issuer,
the Company is exempt from the rules under the U.S. Exchange Act prescribing the
furnishing and content of proxy statements, and its officers, directors and
principal shareholders are exempt from the reporting and short swing profit
recovery rules contained in Section&nbsp;16 of the U.S. Exchange Act.
&nbsp;Under the U.S. Exchange Act, the Company is not required to publish
financial statements as frequently or as promptly as U.S. companies.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Company files annual reports with the SEC on Form&nbsp;40-F, which include:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company's Annual Information Form;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">management's
    discussion and analysis of financial condition and results of operations;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company's consolidated financial statements, which have been prepared in
    accordance with generally accepted accounting principles in Canada ("Canadian
    GAAP") and reconciled to U.S. GAAP; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">other
    information specified by the Form&nbsp;40-F.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; font-family:Times New Roman" align="justify">The
Company also furnishes the following types of information to the SEC under cover
of Form&nbsp;6-K.</p>
<br>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-6</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">material
    information the Company otherwise makes publicly available in reports that
    it files with securities regulatory authorities in Canada;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">material
    information that the Company files with, and which is made public by, the
    TSX; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">material
    information that the Company distributes to its shareholders in Canada.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Investors
may read and copy any document the Company files with, or furnishes to, the SEC
at the SEC's public reference room at Room&nbsp;1024, 450 Fifth Street, N.W.
Room 1024, Washington, D.C. 20549. &nbsp;Copies of the material can also be
obtained from the SEC's public reference room in Washington, D.C. by paying a
fee. &nbsp;Please call the SEC at 1-800 SEC 0330 for further information on the
public reference room. &nbsp;The SEC also maintains a website (www.sec.gov) that
makes available reports and other information that the Company files or
furnishes electronically with it.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>RECENT
DEVELOPMENTS</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b>Debt
Reduction</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">In
May 2004, Pan American prepaid the $9.5 million La Colorada construction loan
from International Finance Corporation. &nbsp;The early repayment of this loan,
combined with the $3.1 million prepayment of principal and accrued interest
under the Huaron project loan in April, will effectively eliminate Pan American's
bank debt and will save approximately $500,000 in annual net interest.</p>
<p style="margin:0pt; font-family:Times New Roman"><b>Morococha Acquisition</b></p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; text-indent:35pt; font-family:Times New Roman">In July
2004, Pan American launched a $36.7 million cash offer to purchase the voting
shares of Argentum, which owns the Morococha silver mine. &nbsp;Pan American
also acquired 100% of Compania Minera Natividad, for $1.5 million, which holds
mineral concessions adjacent to the Morococha mine.</p>
<p style="margin:0pt; text-indent:35pt; font-family:Times New Roman"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b>Conversion
of Debentures</b></p>
<p style="margin:0pt; text-indent:35pt; font-family:Times New Roman" align="justify">In
May 2004, Pan American closed a conversion offering to holders of its US$86.25
million outstanding principal amount of 5.25% of convertible unsecured senior
subordinated debentures (the "Debentures"). &nbsp;Pursuant to the
transaction, US$85,431,000 principal amount of outstanding Debentures were
converted, resulting in an issuance of 9,135,043 common shares in the capital of
Pan American and a cash payment of US$11.21 million to holders of Debentures.
&nbsp;Of the total number of shares issued upon conversion of the Debentures,
208,084 common shares were issued as a reduction in the conversion price of the
Debentures.</p>
<p style="margin:0pt; text-indent:35pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>PLAN
OF DISTRIBUTION</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Company will issue the Shares from time to time upon exercise of the Warrants.
&nbsp;The Company will receive from the holders of the Warrants the exercise
price of the Warrants upon exercise. &nbsp;See "Use of Proceeds."</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>USE
OF PROCEEDS</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Company will realize proceeds from the exercise of the Warrants only if and to
the extent any of the Warrants are exercised. &nbsp;If all the Warrants are
exercised, the Company will realize proceeds in the amount of Cdn$45,819,960
based on an exercise price of Cdn$12.00 per share. &nbsp;The proceeds from the
exercise of the Warrants will be used for working capital and general corporate
expenses.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>DESCRIPTION
OF COMMON SHARES</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Company is authorized to issue 100,000,000 common shares, without par value, of
which&nbsp; <font face="Symbol">66,658,380</font> are issued and outstanding as
at the date of this prospectus supplement. &nbsp;There are options outstanding
to purchase up to <font face="Symbol">1,746,010</font> common shares at prices
ranging from $3.51 to $9.26.&nbsp;</p>
<p><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-7</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
&nbsp;There are $<font face="Symbol">819,000</font> principal amount of
Debentures outstanding. &nbsp;Pursuant to the terms of the Debentures, each
$1,000 principal amount of Debentures is convertible into 104.4932 common shares
(subject to adjustment in certain events), representing a conversion price of
$9.57.
<p style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Holders
of common shares are entitled to one vote per common share at all meetings of
shareholders, to receive dividends as and when declared by the directors of the
Company and to receive a <i>pro rata</i> share of the assets of the Company
available for distribution to the shareholders in the event of the liquidation,
dissolution or winding-up of the Company. &nbsp;There are no pre-emptive,
conversion, purchase or redemption rights attached to the common shares of the
Company. &nbsp;There are no sinking fund provisions in relation to the common
shares of the Company. &nbsp;All common shares, when issued, are and will be
issued as fully paid and non-assessable shares without liability for further
calls or to assessment by the Company.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>DESCRIPTION
OF THE WARRANTS</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">On
February 20, 2003, the Company issued 3,818,330 Warrants to shareholders of
Corner Bay Silver Inc. ("Corner Bay") in connection with the Company's
acquisition of Corner Bay pursuant to a court-approved plan of arrangement under
the <i>Canada Business Corporations Act</i>. &nbsp;Of these Warrants, <font face="Symbol">3,814,663</font>
remain outstanding as at the date of this prospectus supplement. &nbsp;The
Warrants were issued in registered form under an Indenture dated February 20,
2003, between the Company and Computershare Trust Company of Canada, as the
Warrant trustee (the "Trustee"). &nbsp;The Warrants were issued in reliance
on exemptions from the registration and prospectus requirements under applicable
Canadian securities legislation and on the exemption from registration provided
by Section (3)(a)(10) of the U.S. Securities Act. &nbsp;However, since the
common shares issuable upon exercise of the Warrants were not covered by the
exemption provided by Section 3(a)(10) of the U.S. Securities Act, the Indenture
provided that the Warrants could not be exercised by any U.S. person or by any
person within the United States (as those terms are defined in Regulation S
under the U.S. Securities Act) or for the account or benefit of any U.S. person
or any person within the United States unless and until the distribution of the
Shares issuable upon exercise of the Warrants was registered under the U.S.
Securities Act. &nbsp;The Company agreed to use commercially reasonable efforts
to register the distribution of the Shares upon exercise of the Warrants in the
United States and file a registration statement in the required form with the
U.S. Securities and Exchange Commission, of which this prospectus supplement is
a part, for this purpose. &nbsp;The Trustee will promptly give notice to all
holders of the Warrants upon the effectiveness of the registration statement.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Each
Warrant entitles the holder to purchase one Share at an exercise price of
Cdn$12.00 per share. &nbsp;The exercise price and the number of Shares issuable
upon exercise are both subject to adjustment as more fully described below.
&nbsp;The Warrants are exercisable at any time prior to 4:30 p.m. (Pacific
Standard Time) on February 20, 2008, after which the Warrants will expire and
become null and void. &nbsp;Under the Indenture, the Company is entitled to
purchase in the market, by private contract or otherwise, all or any of the
Warrants then outstanding, and any Warrants so purchased will be cancelled.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Indenture provides for adjustment in the number of common shares issuable upon
the exercise of the Warrants, including:</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-8</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    issuance of common shares or securities exchangeable for or convertible into
    common shares to all or substantially all the holders of the common shares
    as a stock dividend or other distribution (other than a dividend paid in the
    ordinary course, as defined in the Indenture, or a distribution of common
    shares upon the exercise of the Warrants or common share purchase warrants
    held by International Finance Corporation or Coeur d'Alene Mines Corp. or
    pursuant to the exercise of directors', officers' or employees' or
    service providers' stock options granted by the Company);</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    subdivision, redivision or change of the common shares into a greater number
    of shares;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">reduction,
    combination or consolidation of the common shares into a lesser number of
    shares;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    issuance to all or substantially all of the holders of common shares of
    rights, options or warrants under which such holders are entitled, during a
    period expiring not more than 45 days after the record date for such
    issuance, to subscribe for or purchase common shares, or securities
    exchangeable for or convertible into common shares, at a price per share to
    the holder (or at an exchange or conversion price per share at the date of
    issue of such securities to the holder in the case of securities
    exchangeable for or convertible into common shares) of less than 95% of the
    current market price, as defined in the Indenture, for the common shares on
    such record date; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    issuance or distribution to all or substantially all of the holders of the
    common shares of shares of any class other than the common shares, evidences
    of indebtedness or any property or other assets.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Indenture also provides for adjustment in the class or number of securities
issuable upon the exercise of the Warrants or exercise price per security in the
event of the following additional events:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">reclassifications
    of the common shares;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">consolidations,
    amalgamations, plans of arrangement or mergers of Pan American with or into
    another corporation or other entity (other than consolidations,
    amalgamations, plans of arrangement or mergers which do not result in any
    reclassification of the common shares or a change of the common shares into
    other shares); or</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    transfer (other than to one of the Company's subsidiaries) of Pan American's
    undertakings or assets as an entirety or substantially as an entirety to
    another corporation or other entity.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">No
adjustment in the exercise price or the number of common shares purchasable upon
the exercise of the Warrants will be required to be made unless the cumulative
effect of the adjustment or adjustments would change the exercise price by at
least 1% or the number of common shares purchasable upon exercise by at least
one one-hundredth of a share.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Indenture also provides that, during the period in which the Warrants are
exercisable, the Company will give public notice of specified events, including
events that would result in an adjustment to the exercise price for the Warrants
or the number of common shares issuable upon exercise of the Warrants, at least
21 days prior to the record date or effective date, as the case may be, of the
event.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">No
fractional common shares will be issuable upon the exercise of any Warrants, and
no cash or other consideration will be paid in lieu of fractional shares.
&nbsp;Holders of Warrants will not have any voting or pre-emptive rights or any
other rights which a holder of common shares would have.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-9</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">From
time to time, the Company and the Warrant trustee, without the consent of the
holders of Warrants, may amend or supplement the Warrant Indenture for certain
purposes, including curing defects or inconsistencies or making any change that
does not adversely affect the rights of any holder. Any amendment or supplement
to the Indenture that adversely affects the interests of the holders of the
Warrants may only be made by extraordinary resolution, which is defined in the
Indenture as a resolution either (1) passed at a meeting of the holders of
Warrants at which there are holders of Warrants present in person or represented
by proxy representing at least 25% of the aggregate number of securities which
may be acquired upon the exercise of all the then outstanding Warrants and
passed by the affirmative vote of holders of Warrants representing not less than
66 2/3% of the aggregate number of securities which may be acquired upon the
exercise of all the then outstanding Warrants represented at the meeting and
voted on the poll upon such resolution or (2) adopted by instruments in writing
signed by the holders of Warrants representing not less than 66 2/3% of the
aggregate number of securities which may be acquired upon the exercise of all
the then outstanding Warrants.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>CERTAIN
INCOME TAX CONSIDERATIONS</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><i>The
following summaries are of a general nature only and are not intended to be, nor
should they be construed to be, legal or tax advice to any particular holder of
Warrants or Shares. &nbsp;Accordingly, holders should consult their own tax
advisors for advice with respect to the income tax consequences to them of
acquiring, holding and disposing of Shares and Warrants having regard to their
own particular circumstances.</i></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b>Canadian
Federal Income Tax Considerations</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
following discussion summarizes the principal Canadian federal income tax
considerations under the <i>Income Tax Act </i>(Canada) (the "Tax Act")
generally applicable to holders of the Warrants who, for purposes of the Tax Act
and at all relevant times, are neither resident or deemed to be resident in
Canada, who hold Warrants and common shares as capital property for purposes of
the Tax Act, who deal at arm's length and are not affiliated with the Company
and to whom any common shares and Warrants will not, constitute "taxable
Canadian property" (as defined in the Tax Act). &nbsp;Warrants and common
shares will generally be considered to be capital property to a shareholder
unless he holds the Warrants or common shares in the course of carrying on a
business of trading or dealing in securities or otherwise as part of a business
of buying or selling securities or the shareholder acquired the Warrants or
common shares in an adventure in the nature of trade.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Generally,
a shareholder's shares in a corporation will not constitute taxable Canadian
property to the shareholder at a particular time if, at that time, the shares
are listed on a prescribed stock exchange (which currently includes the Toronto
Stock Exchange), the shareholder does not use or hold, and is not deemed to use
or hold, the shares in connection with carrying on a business in Canada and none
of the shareholder, persons with whom the shareholder does not deal at arm's
length or the shareholder and such persons together has owned (or had interest
in or option in respect of), at any time during the immediately preceding 60
months, 25% or more of the issued shares of any class or series of the capital
stock of the corporation. &nbsp;A shareholder's common shares or Warrants can
be deemed to be "taxable Canadian property" in certain circumstances set out
in the Tax Act. &nbsp;</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">This
summary is based upon the current provisions of the Tax Act and the related
regulations, all specific proposals to amend the Tax Act and the regulations
publicly announced by or on behalf of the Minister of Finance (Canada) prior to
the date of this prospectus supplement (the "Tax Proposals") and our
understanding of the current administrative practices of the Canada Revenue
Agency ("CRA"). &nbsp;We cannot assure you that the Tax Proposals will be
enacted as proposed, if at all.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">These
summaries are not exhaustive of all possible Canadian federal income tax
considerations and, except for the Tax Proposals do not take into account or
anticipate any changes in law, whether by legislative, governmental or judicial
decision or action, or any changes in the administrative practices of the CRA,
nor do they take into account the tax legislation of any province, territory or
foreign jurisdiction. &nbsp;Provisions of provincial income tax legislation vary
from province to province in Canada and in some cases differ from federal income
tax legislation. &nbsp;Special rules, which are not discussed in this summary,
may apply to a non-resident that is an insurer carrying on business in Canada
and elsewhere.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-10</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Exercise
of a Warrant</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">In
a case where a shareholder acquires a common share through the exercise of a
Warrant, the shareholder will be deemed not to have disposed of any property and
will be deemed to have acquired the common share at a cost equal to the
aggregate of the adjusted cost base of the Warrant and the consideration paid
for the common share under the terms of the Warrant.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
cost of any common shares acquired by a shareholder through the exercise of
Warrants will generally be averaged with the adjusted cost base of all other
common shares held by the shareholder as capital property immediately prior to
the acquisition for the purpose of determining thereafter the adjusted cost base
of each common share held by the shareholder.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Disposition
of Common Shares</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">A
shareholder will not be subject to tax under the Tax Act on any capital gain
realized on the sale or other disposition of a common share.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Dividends
on Shares of Participating Corporations</i></b></p>
<p style="margin-top:0pt; margin-bottom:11pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Dividends
paid or deemed to be paid on common shares are subject to non-resident
withholding tax under the Tax Act at the rate of 25%, although this rate may be
reduced under the provisions of an applicable tax treaty. &nbsp;Under the
Canada-United States Income Tax Convention (the "Convention"), the rate is
generally reduced to 15% in respect of dividends paid to a person (an individual
or a corporation that owns less than ten per cent of the voting stock of the
corporation) who is the beneficial owner of the dividends and who is resident in
the United States for purposes of the Convention.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b>United
States Federal Income Tax Considerations</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
following is a general summary of the principal United States federal income tax
consequences applicable to holders of Warrants or common shares who are
&quot;United States persons&quot; within the meaning of the Internal Revenue
Code of 1986, as amended (the &quot;Code&quot;) (&quot;U.S. Holders&quot;).
&nbsp;The summary is applicable only to U.S. Holders who hold Warrants or common
shares as &quot;capital assets&quot; within the meaning of the Code, and does
not deal with special situations, such as those of dealers in securities or
currencies, financial institutions, tax-exempt entities, life insurance
companies, persons holding common shares as part of a hedging, integration,
conversion or constructive sale transaction or a straddle, persons owning (or
who are deemed to own for United States federal income tax purposes) 10% or more
of the Company's voting stock, traders who elect to mark-to-market their
securities, or persons whose functional currency is not the United States
dollar. &nbsp;This summary also does not address the tax treatment of U.S.
Holders that hold Warrants or common shares through a partnership or other
pass-through entity. &nbsp;This summary does not address aspects of U.S.
taxation other than U.S. federal income taxation, nor does it address any
aspects of state, local or foreign tax law. &nbsp;For purposes of this summary,
a "United States person" is:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">a
    citizen or individual resident of the United States;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">a
    corporation or other entity taxable as a corporation created or organized
    under the laws of the United States or any &nbsp;political subdivision of
    the United States;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">an
    estate the income of which is subject to United States income tax regardless
    of its source; or</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">any
    trust if a court within the United States is able to exercise primary
    supervision over the administration of the trust, and one or more United
    States persons have the authority to control all substantial decisions of
    the trust.</font></li>
</ul>
<p><br>
<br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-11</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">This
discussion is based on the Code and the related United States Treasury
Regulations, and judicial and administrative interpretations of the Code and
related regulations, all as of the date of this prospectus supplement and all of
which are subject to change, possibly with retroactive effect. &nbsp;We have not
requested any ruling from the United States Internal Revenue Service (the "IRS")
with respect to the statements made and the conclusions reached in this summary.
&nbsp;We cannot assure you that the IRS will agree with these statements and
conclusions, or will not take, or a court will not adopt, a position contrary to
any position taken in this summary.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Warrants</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Upon
the exercise of a Warrant, a U.S. Holder will not recognize gain or loss
pursuant to the exercise equal to the U.S. Holder's adjusted tax basis in the
exercised Warrant plus the exercise price of &nbsp;the Warrant. &nbsp;The
holding period of common shares so acquired will begin on the day of the
exercise of the Warrant.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
sale of a Warrant will generally result in the recognition of capital gain or
loss to the U.S. Holder in an amount equal to the difference between the amount
realized and the U.S. Holder's adjusted tax basis in the Warrant.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">If
a Warrant expires unexercised, a U.S. Holder will recognize a capital loss equal
to the U.S. Holder's adjusted tax basis in the Warrant.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Common
Shares</i></b></p>
<p style="margin:0pt; text-indent:35pt; font-family:Times New Roman" align="justify">Provided
the Company is not a passive foreign investment company, as described below,
distributions made to a U.S. Holder of common shares will be treated as taxable
dividends to the extent the distributions are paid out of current or accumulated
earnings and profits, as determined under United States federal income tax
principles. &nbsp;Provided that the Company is not a passive foreign investment
company, as described below, Management of the Company believes that it is a
&quot;qualified foreign corporation&quot; within the meaning of the Code, and
therefore, dividends paid by the Company will be eligible for a maximum rate of
tax of 15% for dividends received before January 1, 2009, provided certain
conditions are satisfied. &nbsp;To the extent that a distribution made to a U.S.
Holder exceeds the Company's current or accumulated earnings and profits, the
distribution will be treated first as a tax free return of capital up to the
U.S. Holder's adjusted tax basis in the common shares with respect to which
the distribution is made, and then as a gain from the sale or exchange of the
common shares, with the tax consequences described below.</p>
<p style="margin:0pt; text-indent:35pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">A
U.S. Holder must include in income the U.S. dollar value (on the date of receipt
based on the exchange rate on such date) of any distributions that are treated
as dividends (including any Canadian taxes withheld therefrom), as described
above. &nbsp;Dividends received from the Company generally will constitute
foreign source "passive income" for purposes of the United States foreign
tax credit, which could reduce the amount of foreign taxes that can be claimed
by a U.S. Holder. &nbsp;The Code applies various limitations on the amount of
foreign taxes that may be claimed as a credit by U.S. taxpayers. &nbsp;Because
of the complexity of those limitations, U.S. Holders should consult their own
tax advisors with respect to the amount of foreign taxes that can be claimed as
a credit. &nbsp;Dividends paid by the Company will not generally be eligible for
the "dividends received" deduction.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Provided
the Company is not a passive foreign investment company, as described below, a
U.S. Holder will generally recognize gain or loss on the sale of common shares
in an amount equal to the difference between the amount realized and the U.S.
Holder's adjusted tax basis in the common shares sold. &nbsp;This gain or loss
will be long term capital gain or loss if the U.S. Holder's holding period in
the common shares sold is greater than one year.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Conversion
of Canadian Dollars</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
tax basis of Canadian dollars received by a U.S. Holder will generally equal the
U.S. dollar equivalent of the Canadian dollars at the exchange rate on the date
the Canadian dollars are received. &nbsp;Upon any subsequent exchange of
Canadian dollars for U.S. dollars, a U.S. Holder will generally recognize
foreign currency gain or loss, which is treated as ordinary income or loss,
equal to the difference between the U.S. Holder's tax basis for the Canadian
dollars and the amount of U.S. dollars received.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-12</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Passive
Foreign Investment Company Status</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:12.95pt; font-family:Times New Roman" align="justify">Special
United States federal income tax rules apply to United States persons owning
shares of a passive foreign investment company (a &quot;PFIC&quot;).
&nbsp;Management of the Company does not believe that the Company has been, or
currently is, a PFIC, and Management of the Company does not anticipate the
Company becoming a PFIC in the foreseeable future. &nbsp;However, because the
determination of whether the Company will be a PFIC in the future depends on the
assets, income and business operations of the Company at that time, there can be
no assurance that the Company will not become a PFIC at some future time as a
result of changes in assets, income or business operations.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:12.95pt; font-family:Times New Roman" align="justify">A
non-United States corporation generally will be classified as a PFIC for United
States federal income tax purposes in any taxable year in which, after applying
relevant look-through rules with respect to the income and assets of
subsidiaries, either at least 75% of its gross income is "passive income",
or on average at least 50% of the gross value of its assets is attributable to
assets that produce passive income or are held for the production of passive
income. &nbsp;For this purpose, passive income generally includes, among other
things, dividends, interest, certain rents and royalties and gains from the
disposition of passive assets. &nbsp;In general, &quot;passive income&quot; also
includes the excess of gains over losses from certain commodities transactions,
including transactions involving certain precious metals. &nbsp;However, gains
and losses from commodities transactions generally are excluded from the
definition of passive income if (x) such gains or losses are derived by the
corporation in the active conduct of a commodity business, and (y)
&quot;substantially all&quot; of such corporation's business is as an active
producer, processor, merchant or handler of commodities of like kind. &nbsp;</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:12.95pt; font-family:Times New Roman" align="justify">If
the Company is classified as a PFIC for any taxable year during which a U.S.
Holder holds common shares, such U.S. Holder generally would be taxed at
ordinary income tax rates on any gain realized on the sale or exchange of the
common shares and would also be subject to a special interest charge with
respect to any such gain and certain dividends received. &nbsp;Rather than being
subject to this tax regime, a U.S. Holder of common shares may:</p>
<ul>
  <li>
    <p style="margin:0pt; padding-left:72.95pt; text-indent:-0.95pt; line-height:12.95pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">make
    a "qualified electing fund" election, as defined in the Code, to be
    taxed currently on its pro rata portion of our &nbsp;income and gain,
    whether or not such income or gain is distributed in the form of dividends
    or otherwise, or</font><br>
  </li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:72.95pt; text-indent:-0.95pt; line-height:12.95pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">make
    a "mark-to-market" election and thereby agree, for the year of the
    election and each subsequent tax year, to recognize ordinary gain or, to the
    extent of prior ordinary gain, ordinary</font> <font FACE="Times New Roman">loss
    based on the increase or decrease in market value for such taxable year.
    &nbsp;The U.S. Holder's basis in its common shares would be adjusted to
    reflect any such income or loss amounts.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">In
order for a U.S. Holder of common shares to be able to make a "qualified
electing fund" election, the Company would have to provide certain information
regarding such U.S. Holder's pro rata share of our ordinary earnings and net
capital gain. &nbsp;In the event the Company becomes a PFIC, currently does not
intend to provide U.S. Holders with such information.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Backup
Withholding Tax</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">United
States backup withholding tax and information reporting requirements generally
apply to certain payments to certain non-corporate U.S. Holders.
&nbsp;Information reporting generally will apply to payments of distributions
on, and to proceeds from the sale or disposition of, the common shares by a
payor within the United States to a U.S. Holder, unless such U.S. Holder is an
exempt recipient, including a corporation, or provides an appropriate
certification.</p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:72.95pt; text-indent:-0.95pt; line-height:12.95pt; font-family:Symbol" align="justify"><br>
</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-13</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="text-indent: 36pt; line-height: 13pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0" align="justify">A
pay or within the United States will be required to withhold tax (currently at a
rate of 28%) from any payments of distributions on, or proceeds from the sale or
disposition of, the common shares within the United States to a U.S. Holder
(unless such U.S. Holder is an exempt recipient) that fails to furnish a correct
taxpayer identification number on United States Internal Revenue Service Form
W-9 or otherwise fails to comply with, or establish an exemption from, such
backup withholding tax requirements. &nbsp;A U.S. Holder will be allowed a
refund or a credit equal to any amounts withheld under the United States backup
withholding tax rules against such U.S. Holder's United States federal income
tax liability, provided the U.S. Holder furnishes the required information to
the United States Internal Revenue Service.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>CHANGES
TO CONSOLIDATED CAPITALIZATION</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Since
December 31, 2003, the following changes have occurred to the share and loan
capital of the Company, on a consolidated basis:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company issued 3,333,333 common shares of the Company in connection with a
    $55 million financing that closed on March 12, 2004;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company issued 623,695 common shares of the Company pursuant to the exercise
    of stock options;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company issued 539,834 common shares of the Company pursuant to the exercise
    of warrants (including the warrants);</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company issued 16,624 common shares of the Company in connection with 2003
    bonuses and additional compensation to certain officers and employees;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company issued 9,135,043 common shares of the Company in connection with the
    conversion of $85,431,000 principal amount of Debentures;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company reduced its $3,520,834 loan on the Huaron property from Banco de
    Credito del Peru by $3,520,834 to $NIL. &nbsp;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    Company reduced its $9.5 million loan on the La Colorada property from
    International Finance Corporation by $9.5 million to $NIL. &nbsp;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">Pan
    American has sold forward 15,250 tonnes of zinc according to the following
    schedule:</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify">&nbsp;</p>
<div align="center">
  <center>
  <table cellspacing="0">
    <tr>
      <td valign="bottom" width="162">
        <p style="margin-top:0pt; margin-bottom:2.25pt; padding-bottom:3pt; line-height:11pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align="center"><b><font size="2">Month</font></b></p>
      </td>
      <td valign="bottom" width="144">
        <p style="margin-top:0pt; margin-bottom:2.25pt; padding-bottom:3pt; line-height:11pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align="center"><b><font size="2">Total
        Quantity<br>
        (tonnes)</font></b></p>
      </td>
      <td valign="bottom" width="150">
        <p style="margin-top:0pt; margin-bottom:2.25pt; padding-bottom:3pt; line-height:11pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align="center"><b><font size="2">Contract
        Price<br>
        (US$/tonne)</font></b></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">August,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">1,055</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,013.65</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">September,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">1,055</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,013.65</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">October,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">1,035</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,013.14</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">November,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">970</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,010.55</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">December,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">935</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,009.48</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">January,
        2005</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">4,100</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,061.10</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">February,
        2005</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">500</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,050.00</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">March,
        2005</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">500</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,050.00</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">April,
        2005</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">4,100</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,083.60</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">May,
        2005</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">500</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$1,050.00</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">June,
        2005</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;500</font></u></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><u><font size="2">$1,050.00</font></u></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">TOTAL:</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><u><font size="2">15,250</font></u></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><u><font size="2">$1,049.49</font></u></p>
      </td>
    </tr>
  </table>
  </center>
</div>
<p><br>
<br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-14</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:5pt; margin-bottom:10pt; padding-left:54.7pt; line-height:13pt; font-family:Times New Roman">These
sales were designated as a hedge. &nbsp;The difference between the average
monthly London zinc cash settlement price and the forward sales price will be
credited or charged to Pan American's revenue during the August 2004 through
June 2005 period.</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">Pan
    American has sold forward 7,365 tonnes of lead according to the following
    schedule:</font></li>
</ul>
<div align="center">
  <center>
  <table cellspacing="0">
    <tr>
      <td valign="bottom" width="162">
        <p style="margin-top:0pt; margin-bottom:2.25pt; padding-bottom:3pt; line-height:11pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align="center"><b><font size="2">Month</font></b></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.25pt; padding-bottom:3pt; line-height:11pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align="center"><b><font size="2">Total
        Quantity<br>
        (tonnes)</font></b></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.25pt; padding-bottom:3pt; line-height:11pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align="center"><b><font size="2">Contract
        Price<br>
        (US$/tonne)</font></b></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">August,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">680</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$725.00</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">September,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">365</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$565.96</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">October,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">640</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$725.00</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">November,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">355</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$558.38</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">December,
        2004</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">325</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$419.50</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">January,
        2005</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><font size="2">2,500</font></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><font size="2">$734.80</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">April,
        2005</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><u><font size="2">2,500</font></u></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><u><font size="2">$761.25</font></u></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="162">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman"><font size="2">TOTAL:</font></p>
      </td>
      <td valign="top" width="144">
        <p style="margin-top:0pt; margin-bottom:2.5pt; padding-right:39.6pt; font-family:Times New Roman" align="right"><u><font size="2">7,365</font></u></p>
      </td>
      <td valign="top" width="150">
        <p style="margin-top:0pt; margin-bottom:2.5pt; font-family:Times New Roman" align="center"><u><font size="2">$711.24</font></u></p>
      </td>
    </tr>
  </table>
  </center>
</div>
<p style="margin-top:4.15pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman" align="justify">These
sales were designated as a hedge. &nbsp;The difference between the average
monthly London lead cash settlement price and the forward sales price will be
credited or charged to Pan American's revenue during the August 2004 through
April 2005 period.</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">The
    Company currently has no outstanding forward sales contracts in respect of
    its silver production other than short term (less than 60 days) price
    fixings relating to silver that has been produced but has yet to be priced
    under concentrate agreements. &nbsp;The Company does not intend to commit
    any of its future silver production into any forward sales or option
    contracts.</font></li>
</ul>
<p style="margin-top:4.15pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align="justify">&nbsp;</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>RISK
FACTORS</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><i>Prospective
investors should carefully consider the following risks, as well as the other
information contained in this prospectus supplement and the documents
incorporated by reference herein before investing in the Shares. &nbsp;If any of
the following risks actually occurs, the Company's business could be harmed.
&nbsp;The risks and uncertainties described below are not the only ones the
Company faces. &nbsp;Additional risks and uncertainties, including those of
which the Company is currently unaware or that the Company deems immaterial, may
also adversely affect the Company's business.</i></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b>Risks
Relating to the Acquisition of Argentum and the Morococha Property</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">There
are a number of specific risks associated with the Company's acquisition of
Argentum and the Morococha property.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
current proven and probable reserves on the Morococha property only provide for
a three year mine life. &nbsp;The estimated cash flow over this three year mine
life does not provide a payback for the Company's costs to acquire Argentum.
&nbsp;For Pan American to recover these costs, inferred resources on the
Morococha property must be converted to mineable reserves. &nbsp;Although Pan
American expects the Morococha mine to continue operations for at least 15 years
as reserve definition programs are carried out, there is no certainty that
inferred resources will be converted to mineable reserves or that the Company's
investment costs for the Morococha property will ever be paid back.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-15</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:4.15pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Morococha mine is currently dependent on the Manuelita zone for 50% of its
monthly production. &nbsp;This zone will be exhausted in two to three years and
in order to maintain the mine's operating cost profile, a replacement for the
Manuelita's zone must be found. &nbsp;While Pan American expects to find a
replacement for the Manuelita's zone over the course of upgrading the inferred
mineral resources to proven and probable mineral reserves in accordance with its
long range mine plan and development program, there can be no assurance that
such a replacement zone will be found or that Pan American's production
estimates will be met after the third year of the mine plan.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
equipment on site at the Morococha property, particularly the Amistad plant, is
old and may require higher capital investment than Pan American has estimated.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Argentum
does not own, and the Company will not acquire, any surface lands in the areas
that overlie its mining concessions. &nbsp;These surface lands belong to
Centromin. &nbsp;Although the use by SMC and its predecessors of Centromin's
surface lands for mining and processing operations has been exercised for
decades with Centromin's acknowledgement, there is no assurance that Centromin
will continue to allow unimpeded use of these surface lands by the Morococha
operations. &nbsp;In particular, the development of the adjacent Toromocha
disseminated copper system into a mine may interfere with operations on
Morococha property. &nbsp;In such an event, Pan American could be required to
incur potentially significant costs and expense to acquire surface rights for
its Morococha operations and could be required to cease certain Morococha
operations altogether if such surface rights cannot be obtained for reasonable
consideration.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">There
is a degree of uncertainty attributable to the calculation of mineral reserves
and mineral resources and corresponding grades being mined or dedicated to
future production. &nbsp;At the Morococha property, Pan American has observed
several inconsistent or inappropriate pre-laboratory sample preparation
procedures. &nbsp;In addition, no QA/QC program was ever established for the
analysis of mine samples at either of SMC's laboratories on the Morococha
property. &nbsp;These flaws in sample preparation procedures and lack of QA/QC
data makes it difficult to assess the performance and reliability of either
laboratory, the data from which is critical in calculating mineral reserves and
mineral resources and corresponding grades. &nbsp;Accordingly, there may be a
greater degree of uncertainty associated with the calculation of mineral
reserves and mineral resources and the grades thereof at the Morococha property
than would be the case if North American standards of pre-laboratory sample
preparation and QA/QC were observed.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Responsibility
for construction of a water treatment plant for the Kingsmill Tunnel and
tailings mitigation program at Huascacocha Lake has been apportioned by WMC in
environmental studies among the Morococha mine and mining companies operating
neighbouring projects, including Centromin, Soc. Minera Austria Duvaz, Soc.
Minera Buquiococha and Minera Centrominas. &nbsp;In the event that one or more
of these companies defaults on its funding obligation for the Kingsmill water
treatment plant or the Huascacocha Lake tailings mitigation program, Pan
American's proportionate share of the costs of such environmental projects
could increase and reduce cash flow from Morococha operations.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Company's acquisition of an interest in Argentum is subject to Pan American
successfully undertaking an OPA for not less than 92.014% of the voting shares
of Argentum through the Lima Stock Exchange. &nbsp;Although the Company has
signed a binding agreement with a number of individuals to purchase 92.014% of
the voting shares of Argentum, there is no assurance that the Company will close
the acquisition until the end of the OPA, which is open until late August 2004.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-16</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b>Risks
Relating to the Company's Business</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Metal
Price Fluctuations</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
majority of the Company's revenue is derived from the sale of silver, zinc,
lead and copper and therefore fluctuations in the price of these commodities
represent one of the most significant factors affecting its operations and
profitability. &nbsp;The price of silver and other metals are affected by
numerous factors beyond the Company's control, including:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">levels
    of supply and demand;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">global
    or regional consumptive patterns;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">sales
    by government holders;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">metal
    stock levels maintained by producers and others;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">increased
    production due to new mine developments and improved mining and production
    methods;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">speculative
    activities;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">inventory
    carrying costs;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">availability
    and costs of metal substitutes;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">international
    economic and political conditions.</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">interest
    rates;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">currency
    values; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">inflation.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Declining
market prices for these metals could materially adversely affect the Company's
operations and profitability.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Foreign
Operations</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
majority of the Company's current operations are conducted by its subsidiaries
outside of Canada in Peru, Mexico, Bolivia and Argentina, and all of the Company's
current production and revenue is derived from its operations in Peru and
Mexico. &nbsp;As Pan American's business is carried on in a number of foreign
countries it is exposed to a number of risks and uncertainties, including:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">terrorism
    and hostage taking;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">military
    repression;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">expropriation
    or nationalization without adequate compensation;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">difficulties
    enforcing judgments obtained in Canadian or United States courts against
    assets located outside of those jurisdictions;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">labor
    unrest;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">high
    rates of inflation;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">extreme
    fluctuations in currency exchange rates; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">volatile
    local political and economic developments.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Local
opposition to mine development projects has arisen in Peru in the past, and such
opposition has at times been violent. In particular, in February of 2001, the
exploration premises of a Canadian mineral exploration company, Manhattan
Minerals Inc., at Tambo Grande in Northern Peru, were stormed by approximately
5,000 people, who burned machinery and injured approximately 30 people. Although
Pan American's operations in Peru are located in communities that have been
supportive of mining for decades and no discernable local opposition has arisen
to the Company's projects, there can be no assurance that such local
opposition will not arise in the future. If the Company were to experience
resistance or unrest in connection with its foreign operations, an adverse
effect on the Company's operations or profitability could result.</p>
<br>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-17</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Governmental
Regulation</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Pan
American's operations and exploration and development activities are subject
to extensive Canadian, United States, Peruvian, Mexican, Bolivian, Argentinian
and other foreign federal, state, provincial, territorial and local laws and
regulations governing various matters, including:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">environmental
    protection;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">management
    and use of toxic substances and explosives;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">management
    of natural resources;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">exploration,
    development of mines, production, and post-closure reclamation;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">exports;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">price
    controls;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">taxation;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">labor
    standards and occupational health and safety, including mine safety; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">historic
    and cultural preservation.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
costs associated with compliance with these laws and regulations are substantial
and possible future laws and regulations, or more stringent enforcement of
current laws and regulations by governmental authorities, could cause additional
expense, capital expenditures, restrictions on or suspensions of Pan American's
operations and delays in the development of its properties. &nbsp;Moreover,
these laws and regulations may allow governmental authorities and private
parties to bring lawsuits based upon damages to property and injury to persons
resulting from the environmental, health and safety impacts of our past and
current operations, and could lead to the imposition of substantial fines,
penalties or other civil or criminal sanctions.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Renewal
of Government Permits</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">In
the ordinary course of business, Pan American is required to obtain and renew
governmental permits for the operation and expansion of existing operations or
for the commencement of new operations. &nbsp;Obtaining or renewing the
necessary governmental permits is a complex and time-consuming process involving
numerous jurisdictions and often involving public hearings and costly
undertakings on Pan American's part. &nbsp;The duration and success of Pan
American's efforts to obtain and renew permits are contingent upon many
variables not within its control including the interpretation of applicable
requirements implemented by the permitting authority. &nbsp;Pan American may not
be able to obtain or renew permits that are necessary to its operations, or the
cost to obtain or renew permits may exceed what it expects. &nbsp;Any unexpected
delays or costs associated with the permitting process could delay the
development or impede the operation of a mine, which could adversely affect Pan
American's operations and profitability.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-18</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Compliance
With Local Laws and Standards</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">In
some of the countries in which Pan American operates, failure to comply strictly
with applicable laws, regulations and local practices relating to mineral right
applications and tenure could result in loss, reduction or expropriation of
entitlements, or the imposition of additional local or foreign parties as joint
venture partners with carried or other interests. &nbsp;Any such loss, reduction
or imposition of partners could have a materially adverse effect on Pan American's
operations or business.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Operating
Hazards and Risks</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
operation and development of a mine or mineral property involves many risks
which even a combination of experience, knowledge and careful evaluation may not
be able to overcome. &nbsp;These risks include:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">environmental
    hazards;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">industrial
    accidents and explosions;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    encountering of unusual or unexpected geological formations;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">ground
    fall and cave-ins;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">flooding;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">earthquakes;
    and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">periodic
    interruptions due to inclement or hazardous weather conditions. &nbsp;</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align="justify">These
occurrences could result in:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">environmental
    damage and liabilities;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">work
    stoppages and delayed production;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">increased
    production costs;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">damage
    to, or destruction of, mineral properties or production facilities;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">personal
    injury or death;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">asset
    write downs;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">monetary
    losses; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">other
    liabilities. &nbsp;</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Liabilities
that Pan American incurs may exceed the policy limits of its insurance coverage
or may not be insurable, in which event Pan American could incur significant
costs that could adversely affect its business, operations or profitability.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Exploration
and Development Risks</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
long-term operation of Pan American's business and its profitability is
dependent, in part, on the cost and success of its exploration and development
programs. Mineral exploration and development involve a high degree of risk and
few properties that are explored are ultimately developed into producing mines.
There is no assurance that Pan American's mineral exploration and development
programs will result in any discoveries of bodies of commercial mineralization.
There is also no assurance that even if commercial quantities of mineralization
are discovered that a mineral property will be brought into commercial
production. Development of Pan American's mineral properties will follow only
upon obtaining satisfactory exploration results. Discovery of mineral deposits
is dependent upon a number of factors, not the least of which is the technical
skill of the exploration personnel involved. The commercial viability of a
mineral deposit once discovered is also dependent upon a number of factors, some
of which are the particular attributes of the deposit (such as size, grade and
proximity to infrastructure), metal prices and government regulations, including
regulations relating to royalties, allowable production, importing and exporting
of minerals and environmental protection. Most of the above factors are beyond
the control of Pan American. As a result, there can be no assurance that Pan
American's acquisition, exploration and development programs will yield new
reserves to replace or expand current reserves. Unsuccessful exploration or
development programs could have a material adverse impact on Pan American's
operations and profitability.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-19</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Uncertainty
in the Calculation of Mineral Reserves, Resources and Silver and Base Metal
Recovery</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">There
is a degree of uncertainty attributable to the calculation of mineral reserves
and mineral resources and corresponding grades being mined or dedicated to
future production. Until mineral reserves or mineral resources are actually
mined and processed the quantity of mineral and reserve grades must be
considered as estimates only. In addition, the quantity of mineral reserves and
mineral resources may vary depending on, among other things, metal prices. Any
material change in quantity of mineral reserves, mineral resources, grade or
stripping ratio may affect the economic viability of Pan American's
properties. In addition, there can be no assurance that silver recoveries or
other metal recoveries in small scale laboratory tests will be duplicated in
larger scale tests under on-site conditions or during production.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Infrastructure</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Mining,
processing, development and exploration activities depend, to one degree or
another, on adequate infrastructure. &nbsp;Reliable roads, bridges, power
sources and water supply are important determinants, which affect capital and
operating costs. Unusual or infrequent weather phenomena, sabotage, government
or other interference in the maintenance or provision of such infrastructure
could adversely affect Pan American's operations and profitability.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Smelter
Supply Arrangements</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
zinc, lead and copper concentrates produced by Pan American are sold through
long-term supply arrangements to metal traders or integrated mining and smelting
companies. Should any of these counterparties not honour supply arrangements, or
should any of them become insolvent, Pan American may be forced to sell its
concentrates in the spot market or it may not have a market for its concentrates
and therefore its future operating results may be materially adversely affected.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Environmental
Hazards</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">All
phases of Pan American's operations are subject to environmental regulation in
the various jurisdictions in which it operates. Environmental legislation in all
of the jurisdictions in which Pan American operates is evolving in a manner
which will require stricter standards and will be subject to increased
enforcement, 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.
Changes in environmental regulation, if any, may adversely affect Pan American's
operations and profitability. In addition, environmental hazards may exist on
Pan American's properties which are currently unknown to Pan American.
&nbsp;Pan American may be liable for losses associated with such hazards, or may
be forced to undertake extensive remedial cleanup action or to pay for
governmental remedial cleanup actions, even in cases where such hazards have
been caused by previous or existing owners or operators of the property, or by
the past or present owners of adjacent properties or natural conditions. The
costs of such cleanup actions may have a material adverse effect on Pan American's
operations and profitability.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-20</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Reclamation
Obligations</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Reclamation
requirements vary depending on the location of the property and the managing
governmental agency, but they are similar in that they aim to minimize long-term
effects of exploration and mining disturbance by requiring the operating company
to control possible deleterious effluents and to re-establish to some degree
pre-disturbance land forms and vegetation. &nbsp;Pan American is actively
providing for or has carried out any requested reclamation activities on its
properties. &nbsp;Any significant environmental issues that may arise, however,
could lead to increased reclamation expenditures and have a materially adverse
impact on Pan American's financial resources.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Peruvian
Mine Closure Law</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">On
October 14, 2003, the Peruvian government published Law 28090 "Mine Closure
Law" which establishes provisions relating to mine closure plans. &nbsp;For
existing mining operations the law provides that a mine closure plan must be
submitted for certification to the Peruvian Ministry of Energy and Mines within
six months of the law entering into force. &nbsp;No enabling regulations were
published with the law. &nbsp;Therefore, the effect of the law on Pan American's
Peruvian mining and exploration activities cannot yet be determined.</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
law provides that a mine operator must grant an environmental warranty for the
estimated costs associated with its mine closure plan. &nbsp;The law does not
establish when such warranties must be in place and does not specify the form of
the required warranty. &nbsp;However, the law indicates that a warranty may take
the form of insurance, cash collateral, a trust agreement or other forms, as
permitted by the Civil Code of Peru. &nbsp;Pan American's Huaron and
Quiruvilca mines and, when acquired, the Morococha mine will submit closure
plans as required by the law, but until these plans have been certified and the
nature and form of whatever environmental warranty is required have been
determined, the impact of this law on Pan American's Peruvian mining and
exploration activities cannot be determined.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Hedging
Activities</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">From
time to time, the Company engages in hedging activities in connection with base
metals, such as forward sales contracts, to minimize the effect of declines in
metal prices on our operating results. &nbsp;While these hedging activities may
protect the Company against low metal prices, they may also limit the price the
Company can receive on hedged products. &nbsp;As a result, the Company may be
prevented from realizing possible revenues in the event that the market price of
a metal exceeds the price stated in forward sale or option contracts. &nbsp;As
of June 1, 2004, the Company's zinc forward contract position had a positive
value of approximately $837,000 and its lead forward contract position as at
June 1, 2004 had a negative value of approximately $1.056 million. &nbsp;In
addition, the Company may experience losses if a counterparty fails to purchase
under a contract when the contract price exceeds the spot price of a commodity.
&nbsp;The Company's current policy is to not hedge the price of silver and
therefore it is fully exposed to declines in the price of silver.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Employee
Relations</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Certain
of Pan American's employees and the employees of Peruvian mining contractors
indirectly employed by Pan American are represented by unions. &nbsp;Pan
American has experienced labour strikes and work stoppages in the past.
&nbsp;There can be no assurance that Pan American will not experience future
labour strikes or work stoppages.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Title
to Assets</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
validity of mining or exploration titles or claims, which constitute most of Pan
American's property holdings, can be uncertain and may be contested. Pan
American has used its best efforts to investigate its title or claims to its
various properties and, to the best of its knowledge, those titles or claims are
in good standing. However no assurance can be given that applicable governments
will not revoke or significantly alter the conditions of the applicable
exploration and mining titles or claims and that such exploration and mining
titles or claims will not be challenged or impugned by third parties. Pan
American operates in countries with developing mining laws and changes in such
laws could materially affect Pan American's rights to its various properties
or interests therein.</p>
<br>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-21</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Although
Pan American has received title opinions for those properties in which it has a
material interest there is no guarantee that title to such properties will not
be challenged or impugned. Pan American has not conducted surveys of all the
claims in which it holds direct or indirect interests and therefore, the precise
area and location of such claims may be in doubt. Pan American's properties
may be subject to prior unregistered liens, agreements or transfers, native land
claims or undetected title defects.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Acquisitions</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">An
element of the Company's business strategy is to make selected acquisitions.
&nbsp;For example, the Company completed the acquisition of Corner Bay Silver
Inc. in February 2003 and entered into an agreement to acquire Argentum in
January 2004. &nbsp;The Company expects to continue to evaluate acquisition
opportunities on a regular basis and intends to pursue those opportunities that
it believes are in its long-term best interests. &nbsp;The success of the
Company's acquisitions will depend upon its ability to effectively manage the
operations of entities it acquires and to realize other anticipated benefits.
&nbsp;The process of managing acquired businesses may involve unforeseen
difficulties and may require a disproportionate amount of management resources.
&nbsp;There can be no assurance that the Company will be able to successfully
manage the operations of businesses it acquires or that the anticipated benefits
of its acquisitions will be realized.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Competition
for New Properties</i></b><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Mines
have limited lives and as a result, Pan American continually seeks to replace
and expand its reserves through the acquisition of new properties. &nbsp;In
addition, there is a limited supply of desirable mineral lands available in
areas where Pan American would consider conducting exploration and/or production
activities. &nbsp;Because Pan American faces strong competition for new
properties from other mining companies, some of which have greater financial
resources than it does, Pan American may be unable to acquire attractive new
mining properties on terms that it considers acceptable.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>United
States Mining Legislation</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">There
is a movement in the United States Congress to reform the current mining laws.
While it is not expected that any reform legislation will pass the United States
Congress in the current session, it is not unlikely that some changes to U.S.
mining laws will occur in the future. These changes may include the payment of
royalties to the government, increased holding fees and restrictions or
prohibitions on patenting mining claims. In addition, prospective legislation
could be expected to include various environmental and land use requirements,
which may restrict, or in some cases, prevent mining operations. Although none
of the mineralization on the properties on which Pan American holds direct or
indirect interests are within unpatented claims, Pan American's interest in
unpatented claims on federal land could have an overall impact on the value of
its properties in the United States.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Foreign
Exchange Rate Fluctuations</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Fluctuations
in currency exchange rates, particularly the weakening or strengthening of the
U.S. dollar (being the currency in which Pan American's products are sold)
against the Canadian dollar (used to pay corporate head office costs), the
Peruvian sole and the Mexican peso (being the currencies in which a significant
portion of Pan American's operating costs are incurred), could have a
significant effect on Pan American's results of operations. &nbsp;Pan American
does not engage in currency hedging transactions.</p>
<p><br>
<br>
<br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-22</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><br>
&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b>Risks
Relating to This Offering</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Common
Share Price Volatility</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
trading price of the Company's common shares has been and may continue to be
subject to large fluctuations. &nbsp;The price of the Company's common shares
may increase or decrease in response to a number of events and factors,
including:</p>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">trends
    in the silver mining industry and the markets in which the Company operates;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">changes
    in the market price of the commodities the Company sells;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">current
    events affecting the economic situation in Canada and the United States;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">changes
    in financial estimates and recommendations by securities analysts;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">acquisitions
    and financings by the Company;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">quarterly
    variations in the Company's operating results;</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">the
    operating and share price performance of other companies that investors may
    deem comparable; and</font></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Symbol" align="justify"><font FACE="Times New Roman">purchase
    or sales of blocks of the Company's common shares.</font></li>
</ul>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">This
volatility may adversely affect the prices of the Company's common shares
regardless of the Company's operating performance.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman"><b><i>Enforcing
Civil Liabilities in the United States</i></b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
Company is organized under the laws of the Province of British Columbia, and its
principal executive office is located in British Columbia. &nbsp;Many of the
Company's directors, controlling persons, officers and the experts named in
this prospectus supplement are residents of Canada and a substantial portion of
their assets and a majority of the Company's assets are located outside the
United States. &nbsp;As a result, it may be difficult for United States
investors to effect service of process within the United States upon the
directors, controlling persons, officers and the experts who are not residents
of the United States or to enforce against them judgments of United States
courts based upon civil liability under the federal securities laws of the
United States. &nbsp;There is doubt as to the enforceability in Canada against
the Company or against any of its directors, controlling persons, officers or
experts who are not residents of the United States, of original actions or
actions for enforcement of judgments of United States courts of liabilities
based solely upon the federal securities laws of the United States.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>LEGAL
MATTERS</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">Certain
legal matters relating to the Shares offered pursuant to this prospectus
supplement will be passed upon for the Company by Borden Ladner Gervais LLP and
Skadden, Arps, Slate, Meagher &amp; Flom LLP. &nbsp;As of the date of this
prospectus supplement, the partners and associates of Borden Ladner Gervais LLP,
collectively, beneficially own less than 1% of the outstanding common shares of
the Company.</p>
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>DOCUMENTS
FILED AS PART OF THE REGISTRATION STATEMENT</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
following documents have been filed with the SEC as part of the Registration
Statement of which this prospectus supplement forms a part: the documents
referred to under the heading "Documents Incorporated by Reference", the
consent of Deloitte &amp; Touche LLP, the consent of PricewaterhouseCoopers LLP,
the consent of Donald&nbsp;F.&nbsp;Earnest, P. Geol., President of Resource
Evaluation Inc., the consent of Borden Ladner Gervais LLP and the Power of
Attorney.</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-23</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<br>
<br>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>TRUSTEE</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align="justify">The
trustee under the Indenture is Computershare Trust Company of Canada through its
principal offices in Vancouver and Toronto.</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<br>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-24</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin-top:5pt; margin-bottom:10pt; font-family:Times New Roman" align="center"><b>INDEX
TO FINANCIAL STATEMENTS</b></p>
<div align="center">
  <center>
  <table cellspacing="0">
    <tr>
      <td valign="top" width="524"><font size="2">&nbsp;</font></td>
      <td valign="top" width="89.2">
        <p style="margin-top:0pt; margin-bottom:4.5pt; line-height:13pt; font-family:Times New Roman; font-size:9pt" align="center"><b><u><font size="2">Page</font></u></b></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="524">
        <p style="margin-top:0pt; margin-bottom:-15pt; line-height:15pt; font-family:Times New Roman"><font size="2"><b>Unaudited
        Pro Forma Consolidated Statement of Operations of Pan American Silver
        Corp.</b>.</font></p>
        <p style="margin-top:0pt; margin-bottom:5pt; text-indent:375pt; line-height:13pt; font-family:Times New Roman"><font size="2"><br>
        </font></p>
      </td>
      <td valign="top" width="89.2">
        <p style="margin-top:0pt; margin-bottom:5pt; line-height:13pt; font-family:Times New Roman" align="center"><font size="2">F-2</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="524">
        <p style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><font size="2">Compilation
        Report</font></p>
        <p style="margin:0pt; text-indent:375pt; font-family:Times New Roman"><font size="2"><br>
        </font></p>
      </td>
      <td valign="top" width="89.2">
        <p style="margin-top:0pt; margin-bottom:5pt; line-height:13pt; font-family:Times New Roman" align="center"><font size="2">F-3</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="524">
        <p style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><font size="2">Pro
        Forma Consolidated Statement of Operations for the year ended December
        31, 2003 (unaudited)</font></p>
        <p style="margin:0pt; text-indent:432pt; font-family:Times New Roman"><font size="2"><br>
        </font></p>
      </td>
      <td valign="top" width="89.2">
        <p style="margin-top:0pt; margin-bottom:5pt; line-height:13pt; font-family:Times New Roman" align="center"><font size="2">F-4</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="524">
        <p style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><font size="2">Notes
        to the Pro Forma Consolidated Statement of Operations</font></p>
        <p style="margin:0pt; text-indent:375pt; font-family:Times New Roman"><font size="2"><br>
        </font></p>
      </td>
      <td valign="top" width="89.2">
        <p style="margin-top:0pt; margin-bottom:5pt; line-height:13pt; font-family:Times New Roman" align="center"><font size="2">F-5</font></p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="524"><font size="2">&nbsp;</font></td>
      <td valign="top" width="89.2"><font size="2">&nbsp;</font></td>
    </tr>
  </table>
  </center>
</div>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-F-1</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><i>Unaudited Pro Forma
Statement of Operations of</i></p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt"><b><i>PAN
AMERICAN SILVER CORP.</i></b></p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="center">S-F-2</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<br>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="center"><b>COMPILATION
REPORT</b></p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">To the
Directors of</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">Pan American
Silver Corp.</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">We have read
the accompanying unaudited pro forma statement of operations of Pan American
Silver Corp. (the "Company") for the year ended December 31, 2003 and have
performed the following procedures.</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Times New Roman" align="justify">1.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">Compared
the figures in the columns captioned "Pan American Silver Corp." to the
audited financial statements of the Company for the year ended December 31, 2003
and found them to be in agreement.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Times New Roman" align="justify">2.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">Made
enquiries of certain officials of the Company who have responsibility for
financial and accounting matters about:</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-18pt; font-family:Times New Roman" align="justify">a)</p>
<p style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align="justify">the
basis for determination of the pro forma adjustments; and</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-18pt; font-family:Times New Roman" align="justify">b)</p>
<p style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align="justify">whether
the pro forma financial statements comply as to form in all material respects
with the applicable securities acts and the related regulations.</p>
<p style="margin:0pt; padding-left:16.5pt; font-family:Times New Roman" align="justify">The
officials:</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-18pt; font-family:Times New Roman" align="justify">a)</p>
<p style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align="justify">described
to us the basis for determination of the pro forma adjustments; and</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-18pt; font-family:Times New Roman" align="justify">b)</p>
<p style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align="justify">stated
that the pro forma statements comply as to form in all material respects with
the written requirements of the applicable securities acts and the related
regulations. &nbsp;</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Times New Roman" align="justify">3.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">Read
the notes to the pro forma statements, and found them to be consistent with the
basis described to us for determination of the pro forma adjustments.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Times New Roman" align="justify">4.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">Recalculated
the application of the pro forma adjustments to the aggregate of the amount in
the column captioned Pan American Silver Corp. for the year ended December 31,
2003, and found the amounts in the column captioned "Pro Forma Pan American
Silver Corp." to be arithmetically correct.</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">A pro forma
financial statement is based on management's assumptions and adjustments which
are inherently subjective. &nbsp;The foregoing procedures are substantially less
than either an audit or a review, the objective of which is the expression of
assurance with respect to management's assumptions, the pro forma adjustments,
and the application of the adjustments to the historical financial information.
&nbsp;Accordingly, we express no such assurance. &nbsp;The foregoing procedures
would not necessarily reveal matters of significance to the pro forma financial
statements, and we therefore make no representation about the sufficiency of the
procedures for the purposes of a reader of such statements.</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">(signed) <small>DELOITTE
&amp; TOUCHE<big> LLP</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">Chartered
Accountants</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">Vancouver,
Canada</p>
</big></small>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><big><small>August
2</small></big><big><small>0, 2004</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><b>Comments
to Readers in the United States of America</b></p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">Under
Canadian securities regulations, when pro forma financial statements are
included in a prospectus, an auditors</small></big><small><big>'</big></small><big><small> compilation report on the financial
statements is required to be included in the prospectus. &nbsp;Under applicable
securities regulations in the United States of America, such compilation reports
would not be included in such a prospectus.</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman">(signed) <small>DELOITTE
&amp; TOUCHE<big> LLP</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">Chartered
Accountants</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">Vancouver,
Canada</p>
</big></small></small>
</big>
<p style="margin:0pt; font-family:Times New Roman"><font size="2">August 20,
2004</font></p>
<big><small><small><big>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<br>
</big></small></small></big>
<p style="margin:0pt; font-family:Times New Roman" align="center"><font size="2">S-F-3</font></p>
<small><big><small><big>
<p><br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman; font-size:9pt"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="center"><b>PAN
AMERICAN SILVER CORP.</b></p>
<p style="margin:0pt; font-family:Times New Roman" align="center"><b>PRO FORMA
CONSOLIDATED STATEMENT OF OPERATIONS</b></p>
<p style="margin:0pt; font-family:Times New Roman" align="center"><b>For the
year ended December 31, 2003</b></p>
<p style="margin:0pt; font-family:Times New Roman" align="center">(Unaudited)</p>
<p style="margin:0pt; font-family:Times New Roman" align="center">(Expressed in
Thousands of United States Dollars)</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<div align="center">
  <center>
  <table width="100%" border="0" cellspacing="0" cellpadding="0">
    <tr>
      <td width="42%">&nbsp;</td>
      <td width="1%">&nbsp;</td>
      <td width="15%">&nbsp;</td>
      <td width="9%">&nbsp;</td>
      <td width="15%">&nbsp;</td>
      <td align="center" colspan="2" width="16%"><b><font size="2" face="serif">Pro
        Forma</font></b></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;</td>
      <td align="center" colspan="2" width="16%"><b><font size="2" face="serif">Pan
        American</font></b></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%"><b><font size="2" face="serif">Pro forma</font></b></td>
      <td align="center" colspan="2" width="16%"><b><font size="2" face="serif">Pan
        American</font></b></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;</td>
      <td align="center" colspan="2" width="16%"><b><font size="2" face="serif">Silver
        Corp.</font></b></td>
      <td width="9%" align="center"><b><font size="2" face="serif">Note 4</font></b></td>
      <td align="center" width="15%"><b><font size="2" face="serif">adjustment</font></b></td>
      <td align="center" colspan="2" width="16%"><b><font size="2" face="serif">Silver
        Corp.</font></b></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td colspan="2">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td colspan="2">
        <hr noshade size="1">
      </td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">REVENUE</font></td>
      <td align="center" width="1%"><font size="2" face="serif">$</font></td>
      <td align="center" width="15%"><font size="2" face="serif">45,122</font></td>
      <td width="9%">&nbsp;</td>
      <td width="15%"><font size="2" face="serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        -</font></td>
      <td align="center" width="1%"><font size="2" face="serif">$</font></td>
      <td align="center" width="15%"><font size="2" face="serif">45,122</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">EXPENSES</font></td>
      <td width="1%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="9%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="1%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;&nbsp;&nbsp;<font size="2" face="serif">Operating</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">39,778</font></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%">-</td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">39,778</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;&nbsp;&nbsp;<font size="2" face="serif">General and
        administration</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">2,732</font></td>
      <td width="9%" align="center"><font size="2" face="serif">a)</font></td>
      <td align="center" width="15%"><font size="2" face="serif">297</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">3,029</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;&nbsp;&nbsp;<font size="2" face="serif">Stock-based
        compensation</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">2,893</font></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%">-</td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">2,893</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;&nbsp;&nbsp;<font size="2" face="serif">Depreciation
        and amortization</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">3,325</font></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%">-</td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">3,325</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;&nbsp;&nbsp;<font size="2" face="serif">Reclamation</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">303</font></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%">-</td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">303</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;&nbsp;&nbsp;<font size="2" face="serif">Exploration</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">2,543</font></td>
      <td width="9%" align="center"><font size="2" face="serif">b)</font></td>
      <td align="center" width="15%"><font size="2" face="serif">343</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">2,886</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;&nbsp;&nbsp;<font size="2" face="serif">Interest and
        financing costs</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">1,156</font></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%">-</td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">1,156</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;</td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">52,730</font></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">640</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">53,370</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">LOSS FROM OPERATIONS</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">(7,608)</font></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">(640)</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">(8,248)</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">INTEREST INCOME</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">403</font></td>
      <td width="9%" align="center">&nbsp;</td>
      <td align="center" width="15%">-</td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">403</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">OTHER INCOME</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">411</font></td>
      <td width="9%" align="center"><font size="2" face="serif">a)</font></td>
      <td align="center" width="15%"><font size="2" face="serif">12</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">423</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">NET LOSS FOR THE YEAR</font></td>
      <td align="center" width="1%"><font size="2" face="serif">$</font></td>
      <td align="center" width="15%"><font size="2" face="serif">(6,794)</font></td>
      <td width="9%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">(628)</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">(7,434)</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">LOSS PER SHARE</font></td>
      <td width="1%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="9%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="1%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%">&nbsp;&nbsp;&nbsp;<font size="2" face="serif">Basic and
        fully diluted</font></td>
      <td align="center" width="1%"><font size="2" face="serif">$</font></td>
      <td align="center" width="15%"><font size="2" face="serif">(0.20)</font></td>
      <td width="9%">&nbsp;</td>
      <td align="center" width="15%">-</td>
      <td align="center" width="1%"><font size="2" face="serif">$</font></td>
      <td align="center" width="15%"><font size="2" face="serif">(0.21)</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td>&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
      <td align="center">&nbsp;</td>
      <td>&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">WEIGHTED-AVERAGE</font></td>
      <td width="1%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="9%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="1%">&nbsp;</td>
      <td width="15%" align="center">&nbsp;</td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td width="42%"><font size="2" face="serif">SHARES OUTSTANDING</font></td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">51,058,212</font></td>
      <td width="9%">&nbsp;</td>
      <td align="center" width="15%">-</td>
      <td width="1%">&nbsp;</td>
      <td align="center" width="15%"><font size="2" face="serif">52,125,252</font></td>
      <td width="2%">&nbsp;</td>
    </tr>
    <tr>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>
        <hr noshade size="1">
      </td>
      <td align="center">
        <hr noshade size="1">
      </td>
      <td>&nbsp;</td>
    </tr>
  </table>
  </center>
</div>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<br>
<br>
<br>
<br>
<p style="margin:0pt; font-family:Times New Roman" align="center"><font size="2">S-F-</font></big></small></big></small><font size="2"><big><big><small><small>4</small></small></big></big></font></p>
<small>
<big><small>
<big>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; font-family:Times New Roman"><b>PAN AMERICAN SILVER CORP.</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>Notes to the Pro Forma
Consolidated Statement of Operations</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>For the year ended
December 31, 2003</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>(Unaudited)</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>(Expressed in United
States Dollars)</b></p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<br>
<br>
<br>
<p style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align="justify"><b>1.</b></p>
<p style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>BASIS
OF PRESENTATION</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">The
unaudited pro forma consolidated statement of operations of Pan American Silver
Corp. (</big></small></big></small><big><big><small><small>"</small></small></big></big><small><big><small><big>Pan American</big></small></big></small><big><big><small><small>"</small></small></big></big><big><small><big><small>) </small></big></small><big><small><small>for the year
ended</small></small></big></big><small><small><big><big>&nbsp;</big></big></small></small><small><big><small><big>
December 31, 2003 has been prepared by management after giving effect to the
acquisition by Pan American of Corner Bay Silver Inc. (</big></small></big></small><big><big><small><small>"</small></small></big></big><big><small><big><small>Corner Bay</small></big></small></big><small><small><big><big>"</big></big></small></small><small><big><small><big>).</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">The
pro forma statement of operations combines the audited statements of operations
of Pan American for the year ended December 31, 2003 with the results of
operations of Corner Bay for the 50 day period ended February 20, 2003.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">It
is management</big></small></big></small><big><big><small><small>'</small></small></big></big><big><small><big><small>s opinion that the pro forma consolidated statement of
operations includes all adjustments necessary for the fair presentation of the
transactions described in Note 3 in accordance with Canadian generally accepted
accounting principles applied on a basis consistent with Pan American</small></big></small></big><small><small><big><big>'</big></big></small></small><big><small><big><small>s
accounting policies. &nbsp;The pro forma consolidated statement of operations is
not intended to reflect the results of operations of Pan American which would
have actually resulted had the proposed transactions been effected on the dates
indicated. &nbsp;Further, the pro forma financial information is not necessarily
indicative of the results of operations that may be obtained in the future.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align="justify"><b>2.</b></p>
<p style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">The
unaudited pro forma consolidated statement of operations has been compiled using
the significant accounting policies as set out in the audited financial
statements of Pan American for the year ended December 31, 2003. &nbsp;The
significant accounting policies of Corner Bay conform in all material respects
to those of Pan American, except as described in and adjusted for in Note 4.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align="justify"><b>3.</b></p>
<p style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>BUSINESS
COMBINATION</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><i>Acquisition
of Corner Bay</i></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">On
February 20, 2003, Pan American completed its proposed merger with Corner Bay.
&nbsp;Under the terms of the acquisition common shares of Corner Bay were,
directly or indirectly, exchanged for common shares of Pan American and warrants
to purchase Pan American common shares, on the basis of one Pan American common
share for every 2.60 Corner Bay shares and one Pan American warrant for every
5.20 Corner Bay common shares. &nbsp;Pan American also agreed to issue 553,846
stock options to replace 960,000 fully vested stock options currently held by
Corner Bay employees and directors.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">Each
whole Pan American warrant will allow the holder to purchase a Pan American
common share for a price of Cdn.$12 for a five-year period ended February 20,
2008.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">Pan
American issued 7,636,659 common shares to the shareholders of Corner Bay, and
3,818,330 warrants to purchase common shares valued at $54,203,000 and
$8,889,000, respectively. &nbsp;The value of the stock options granted was
determined to be $1,136,000.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
</small></big></small></big>
<p style="margin:0pt; font-family:Times New Roman" align="center"><font size="2">S-F-5</font></p>
<p style="margin:0pt; font-family:Times New Roman">&nbsp;</p>
<small><big><small><big>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; font-family:Times New Roman"><b>PAN AMERICAN SILVER CORP.</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>Notes to the Pro Forma
Consolidated Statement of Operations</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>For the year ended
December 31, 2003</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>(Unaudited)</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>(Expressed in United
States Dollars)</b></p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<br>
<br>
<br>
<p style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align="justify"><b>3.</b></p>
<p style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align="justify"><b>BUSINESS
COMBINATION (Continued)</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">The
business combination has been accounted for as an acquisition by Pan American of
Corner Bay and the purchase method of accounting has been applied. &nbsp;The
consideration given has been allocated to the fair value of net assets acquired
as follows:</p>
</big></small></big></small>
<div align="center">
  <center>
  <table cellspacing="0">
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="288"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align="right"><font size="2">As
        at</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="288"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align="right"><font size="2">February
        20,</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="288"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align="right"><font size="2">2003</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="368" colspan="6">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Fair
        value of net assets acquired</font></p>
      </td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="352" colspan="5">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Current
        assets</font></p>
      </td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;$
        &nbsp;&nbsp;&nbsp;2,512,000</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="352" colspan="5">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Plant
        and equipment</font></p>
      </td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">2,500,000</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="352" colspan="5">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Mineral
        properties</font></p>
      </td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;79,008,000</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="352" colspan="5">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Other
        assets</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29,000</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="288"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;&nbsp;84,049,000</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="48" colspan="3">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Less:</font></p>
      </td>
      <td valign="bottom" width="304" colspan="2">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Current
        liabilities</font></p>
      </td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(104,000)</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="304" colspan="2">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Provision
        for future income tax liability</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;(19,035,000)</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="288">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><b><font size="2">&nbsp;</font></b></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;$
        &nbsp;64,910,000</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="288"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
    </tr>
    <tr>
      <td valign="bottom" width="368" colspan="6">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Consideration
        given by Pan American</font></p>
      </td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="352" colspan="5">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Issue
        of 7,636,659 common shares</font></p>
      </td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;$
        &nbsp;54,203,000</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="352" colspan="5">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Issue
        of 3,818,329 share purchase warrants</font></p>
      </td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,889,000</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="352" colspan="5">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Issue
        of 553,846 replacement stock options</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,136,000</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="288"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;64,228,000</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="48" colspan="3">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Add:</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="304" colspan="2">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Costs
        of acquisition</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;682,000</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="288">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="16">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="89.333">
        <p style="margin:0pt; font-family:Times New Roman" align="right"><font size="2">&nbsp;$
        &nbsp;64,910,000</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="288"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="16"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="89.333"><font size="2">&nbsp;</font></td>
    </tr>
  </table>
  </center>
</div>
<small><big><small><big>
<p style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align="justify">The
purchase consideration of $64,228,000 for 100% of Corner Bay exceeds the
carrying value of the net assets at February 20, 2003 by $54,108,000 which has
been applied to increase the carrying value of mineral properties. &nbsp;The
resulting future income tax liability of $19,035,000 has also been applied to
increase the carrying value of mineral properties.</p>
<p style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36.8pt; text-indent:-36.8pt; font-family:Times New Roman" align="justify"><b>4.</b></p>
<p style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align="justify"><b>PRO
FORMA ADJUSTMENTS</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">The
pro forma consolidated statement of operations for the year ended December 31,
2003 has been adjusted as follows:</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:71.3pt; text-indent:-34.5pt; font-family:Times New Roman" align="justify">(a)</p>
<p style="margin:0pt; padding-left:71.3pt; font-family:Times New Roman" align="justify">record
general and administration expenses of Corner Bay for the 50 day period ended
February&nbsp;20, 2004; and</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align="justify">(</big></small></big></small><big><big><small><small>b</small></small></big></big><big><small><big><small>)</p>
<p style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align="justify">write
off deferred exploration expenditures in Corner Bay to comply with Pan American</small></big></small></big><small><small><big><big>'</big></big></small></small><big><small><big><small>s
accounting policy.</p>
<p style="margin:0pt; padding-left:106.5pt; text-indent:-34.5pt; font-family:Times New Roman Bold" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:106.5pt; text-indent:-34.5pt; font-family:Times New Roman Bold" align="justify"><br>
</p>
</small>
</big></small>
</big>
<p style="margin:0pt; font-family:Times New Roman" align="center"><font size="2">S-F-6</font></p>
<big>
<small><big>
<small>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; font-family:Times New Roman"><b>PAN AMERICAN SILVER CORP.</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>Notes to the Pro Forma
Consolidated Statement of Operations</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>For the year ended
December 31, 2003</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>(Unaudited)</b></p>
<p style="margin:0pt; font-family:Times New Roman"><b>(Expressed in United
States Dollars)</b></p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<br>
<br>
<br>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:34.5pt; text-indent:-34.5pt; font-family:Times New Roman Bold" align="justify"><b>5.</b></p>
<p style="margin:0pt; padding-left:34.5pt; font-family:Times New Roman Bold" align="justify"><b>DIFFERENCES
BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">The
pro forma consolidated statement of operations is prepared in accordance with
accounting principles generally accepted in Canada (</small></big></small></big><small><small><big><big>"</big></big></small></small><big><small><big><small>Canadian GAAP</small></big></small></big><small><small><big><big>"</big></big></small></small><big><small><big><small>) which
differ in certain respects with accounting principles generally accepted in the
United States (</small></big></small></big><big><big><small><small>"</small></small></big></big><big><small><big><small>US GAAP</small></big></small></big><small><small><big><big>"</big></big></small></small><small><big><small><big>).</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify">Material
differences between Canadian and US GAAP and their effect on the pro forma
consolidated statement of operations are summarized below and more fully
discussed in Note&nbsp;18 of the Company</big></small></big></small><big><big><small><small>'</small></small></big></big><small><big><small><big>s 2003 annual audited consolidated
financial statements.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><b>Pro
Forma Consolidated Statement of Operations</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
</big></small></big></small>
<div align="center">
  <center>
  <table cellspacing="0">
    <tr>
      <td valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Pro
        forma loss for the year under Canadian GAAP</font></p>
      </td>
      <td valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;$
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7,434)</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Unrealized
        loss on short-term investments</font></p>
      </td>
      <td valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Amortization
        of mineral property</font></p>
      </td>
      <td valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,700)</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">SFAS
        150 adjustments</font></p>
      </td>
      <td valign="bottom" width="127.667"><font size="2">&nbsp;</font></td>
    </tr>
    <tr>
      <td valign="bottom" width="452">
        <p style="margin:0pt; text-indent:10pt; font-family:Times New Roman"><font size="2">Interest
        expense</font></p>
      </td>
      <td valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,887)</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="452">
        <p style="margin:0pt; text-indent:10pt; font-family:Times New Roman"><font size="2">Interest
        accretion</font></p>
      </td>
      <td valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;595</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="452">
        <p style="margin:0pt; text-indent:10pt; font-family:Times New Roman"><font size="2">Amortization
        of debt issue costs</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(454)</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="452"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10,800)</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Future
        income tax provision</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;595</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Pro
        forma net loss under US GAAP</font></p>
      </td>
      <td valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10,205)</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Unrealized
        loss on available-for-sale securities</font></p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(80)</font></p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Comprehensive
        pro forma net loss under US GAAP</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;$
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10,285)</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="452"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="127.667"><font size="2">&nbsp;</font></td>
    </tr>
    <tr>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="452">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">Basic
        pro forma loss per share under US GAAP</font></p>
      </td>
      <td style="border-bottom:1pt solid #000000" valign="bottom" width="127.667">
        <p style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;$
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.20)</font></p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="452"><font size="2">&nbsp;</font></td>
      <td valign="bottom" width="127.667"><font size="2">&nbsp;</font></td>
    </tr>
  </table>
  </center>
</div>
<small><big><small><big>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
</big></small></big></small>
<p style="margin:0pt; font-family:Times New Roman" align="center"><font size="2">S-F-7</font></p>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:-18pt; padding-right:-18pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify><U><font size="2">PROSPECTUS</font></U></P>
<P style="margin-top:0pt; margin-bottom:16.5pt; padding-left:-18pt; padding-right:-18pt; text-indent:504pt; font-family:Times New Roman; font-size:11pt" align=justify><font size="2"><BR></font></P>
<TABLE cellspacing=0><TR><TD valign=top width=64><P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><img src="document2002.jpg" alt="[document2002.jpg]" align=middle height=41.6 width=39.2></font></P>
</TD><TD valign=top width=549.2><P style="margin-top:0pt; margin-bottom:6.5pt; line-height:18pt; font-family:Times New Roman; font-size:16pt" align=center><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin-top:0pt; margin-bottom:3.5pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B><font size="2">Cdn$45,819,960</font></B></P>
<P style="margin-top:0pt; margin-bottom:12pt; line-height:15pt; font-family:Times New Roman; font-size:13pt" align=center><B><font size="2">Common Shares</font></B></P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:-18pt; padding-right:-18pt; text-indent:54pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Pan American Silver Corp. (the
"Company") may offer for sale, from time to time, common shares ("Shares") &nbsp;of the Company having an aggregate offering price of up to Cdn$45,819,960 (or its equivalent in United States dollars or any other currency or currency unit used to denominate the Shares) during the 25-month period that this short form base shelf prospectus (the
"Prospectus"), including any amendments hereto, remains valid.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The specific variable terms of any offering of the Shares, will be set forth in a prospectus supplement (a
"Prospectus Supplement") including, the number of Shares offered, the offering price and any other specific terms.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">All shelf information permitted under applicable laws to be omitted from this Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with this Prospectus. &nbsp;Each Prospectus Supplement will be incorporated by reference into this Prospectus for the purposes of securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Shares to which the Prospectus Supplement pertains.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company may offer and sell Shares to or through underwriters or dealers, directly to one or more purchasers, or through agents designated from time to time. &nbsp;The Prospectus Supplement relating to a particular offering of Shares will identify any underwriter, dealer or agent engaged in connection with the offering and sale of Shares and will set forth the plan of distribution for such Shares, including the proceeds to the Company and any fees, discounts, concessions or any other compensation payable to any underwriters, dealers or agents, and any other material terms of the plan of distribution.</font></P>
<P style="margin:0pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The outstanding common shares of the Company are listed on the Toronto Stock Exchange (the
"TSX") under the symbol "PAA" and quoted on the Nasdaq National Market ("NASDAQ") under the symbol
"PAAS". &nbsp;The closing price of the Company's common shares on January 23, 2004 on the TSX was Cdn$19.45 and on NASDAQ was US$14.82.</font></P>
<P style="text-indent: 0; line-height: 13pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 5pt; padding-left: -18pt; padding-right: -18pt" align=center><font size="2">_______________________</font></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">This offering is made by a Canadian issuer that is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this prospectus supplement and the accompanying prospectus in accordance with the disclosure requirements of Canada. &nbsp;Prospective investors &nbsp;should be aware that such requirements are different from those of the United States. &nbsp;Certain of the financial statements included or incorporated herein have been prepared in accordance with Canadian generally accepted accounting principles, and may be subject to Canadian auditing and auditor independence standards, and thus may not be comparable to financial statements of United States companies.</font></B></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">Prospective investors should be aware that the acquisition of the securities described herein may have tax consequences both in the United States and in Canada. &nbsp;Such consequences for investors who are resident in, or citizens of, the United States may not be described fully herein.</font></B></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">The enforcement by investors of civil liabilities under the federal securities laws may be affected adversely by the fact that the Company is incorporated or organized under the laws of British Columbia, Canada, that some or all of its officers and directors may be residents of Canada, that some or all of the underwriters or experts named in the registration statement may be residents of Canada and that a substantial portion of the assets of the Company and said persons may be located outside the United States.</font></B></P>
<P style="margin:0pt; padding-left:-18pt; padding-right:-18pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><B>These securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission</B>
<B>passed upon the accuracy or adequacy of this prospectus supplement or the prospectus to which it relates. &nbsp;Any representation to the contrary is a criminal offense.</B></font></P>
<P style="text-indent: 0; line-height: 13pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 3.35pt; padding-left: -18pt; padding-right: -18pt" align=center><font size="2">_______________________</font></P>
<P style="text-indent: 0; line-height: 13pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 3.65pt; padding-left: -18pt; padding-right: -18pt" align=center><font size="2">The date of this Prospectus is January 26, 2004</font></P>
<font size="2">
<BR>
<BR>
<BR>
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<img border="0" src="toc2.gif" width="651" height="459"></font>
<p><font size="2">
<BR>
</font></p>
<p align="center">
<font size="2">
<BR>
2
<BR>
</font>
</p>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
<BR>
<BR>
</font>
<P style="margin-top:10pt; margin-bottom:10pt; font-family:Times New Roman Bold" align=center><B><font size="2">DOCUMENTS INCORPORATED BY REFERENCE</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><B>Information has been incorporated by reference in this Prospectus from documents filed with securities commissions or similar authorities in the Provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec.</B> &nbsp;Copies of the documents incorporated by reference in this Prospectus may be obtained on request without charge from the Controller and Corporate Secretary of the Company at 1500-625 Howe Street, Vancouver, British Columbia, V6C&nbsp;2T6 (telephone: (604) 684-1175). &nbsp;These documents are also available through the Internet on the System for Electronic Document Analysis and Retrieval ("SEDAR"), which can be accessed at www.sedar.com.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The following documents, filed with the securities commissions or similar regulatory authorities in the Provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec, are specifically incorporated by reference into and form an integral part of this Prospectus:</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(a)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">the Annual Information Form of the Company, dated May&nbsp;20, 2003;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(b)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">the audited consolidated financial statements of the Company and the notes thereon as at and for the years ended December&nbsp;31, 2001 and 2002, together with the auditors' report thereon as set out in the Company's annual report as well as the reconciliation of such financial statements to United States generally accepted accounting principles ("U.S. GAAP") in accordance with Item 18 of Form 20-F, filed on SEDAR on July 3, 2003;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(c)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">the unaudited consolidated financial statements of the Company and the notes thereto for the three-month and nine-month periods ended September 30, 2003, together with management's discussion and analysis of financial condition and results of operations in respect of such financial statements as well as the reconciliation of such financial statements to U.S. GAAP in accordance with Item 18 of Form 20-F;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(d)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">management's discussion and analysis of financial condition and results of operations for the financial year ended December 31, 2002 as set out in the Company's annual report;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(e)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">the information circular of the Company, dated April 9, 2003, in connection with the Company's May 12, 2003 annual general meeting of members, other than the sections entitled
"Corporate Governance", "Executive Compensation - Compensation Committee", "Executive Compensation
- - Report on Executive Compensation" and "Executive Compensation - Performance Graph";</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(f)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated February&nbsp;27, 2003, relating to the completion of its acquisition of Corner Bay Silver Inc. ("Corner Bay");</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(g)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated February&nbsp;27, 2003, relating to consolidated production figures from 2002;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(h)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated March 13, 2003, relating to financial and operational results for the fourth quarter and year ended December 31, 2002;</font> </P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(i)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated May 22, 2003, relating to financial and operational results for the first quarter of 2003;</font> </P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(j)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated July&nbsp;7, 2003, relating to the filing of an unallocated preliminary base shelf prospectus by the Company;</font></P>
<p align="center">
<font size="2">
<BR>
<BR>
3
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; text-indent:-36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(k)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated July 22, 2003, relating to an offering (the
"Debenture Offering") of US$75 million aggregate principal amount of 5.25% convertible unsecured senior subordinated debentures (the
"Debentures") due July 31, 2009;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(l)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated July 30, 2003, relating to the closing of the US$75 million Debenture Offering;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(m)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated August 7, 2003, relating to the exercise of an over-allotment option in respect of an additional US$11.25 million of Debentures pursuant to the terms of the Debenture Offering;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(n)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated August 22, 2003, relating to financial and operational results for the second quarter of 2003;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(o)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated September 22, 2003, relating to recent developments at the Company's operations and feasibility-stage projects;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(p)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated October 23, 2003, relating to the buy-back of an existing 3% net smelter royalty on the Company's Huaron silver mine in Peru from a group of Peruvian companies for US$2.5 million;</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(q)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated October 31, 2003, relating to an agreement to sell the Company's 50% interest in the Tres Cruces gold project in Peru to New Oroperu Resources Inc.;</font> </P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(r)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company, dated November 12, 2003, relating to financial and operational results for the third quarter of 2003; and</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(s)</font></P>
<P style="margin-top:0pt; margin-bottom:12pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">a material change report of the Company dated January 8, 2004 relating to the filing of an unallocated preliminary base shelf prospectus by the Company.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Any documents of the types referred to above, including any material change reports (excluding confidential material change reports), interim unaudited consolidated financial statements of the Company (including management's discussion and analysis of financial condition and results of operations in the quarterly reports for such periods), annual audited consolidated financial statements of the Company, including the auditors' report thereon and the notes to such financial statements, any exhibits to interim or annual consolidated financial statements and information circulars (excluding the sections entitled
"Corporate Governance", "Executive Compensation - Compensation Committee", "Executive Compensation - Report of the Compensation Committee" and
"Executive Compensation - Performance Graph" or similar sections permitted to be excluded under National Instrument 44-101 - Short Form Prospectus Distributions), filed by the Company with a securities commission or similar authority in Canada after the date of this Prospectus and prior to the termination of the offering under any Prospectus Supplement shall be deemed to be incorporated by reference into this Prospectus. &nbsp;Any document filed by the Company with the United States Securities and Exchange Commission (the
"SEC") or Report of Foreign Private Issuer on Form 6-K furnished to the SEC pursuant to the United States Securities Exchange Act of 1934, as amended (the
"U.S. Exchange Act"), after the date of this Prospectus shall also be deemed to be incorporated by reference into this Prospectus if and to the extent provided in such document.</font></P>
<p align="center">
<font size="2">
<BR>
<BR>
4
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference in this Prospectus shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this Prospectus modifies or supersedes that statement. &nbsp;The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. &nbsp;The making of a modifying or superseding statement is not to be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of material fact or an omi
ssion to state a material fact that is required to be stated or is necessary to make a statement not misleading in light of the circumstances in which it was made. &nbsp;Any statement so modified or superseded shall not constitute a part of this Prospectus, except as so modified or superseded.</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">A Prospectus Supplement containing the specific terms of an offering of Shares and other information in relation to such offering will be delivered to purchasers of such Shares together with this Prospectus and will be deemed to be incorporated by reference into this Prospectus as of the date of such Prospectus Supplement solely for the purposes of the offering of Shares covered by that Prospectus Supplement.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Upon a new annual information form and the related annual financial statements being filed by the Company with, and where required, accepted by, the applicable securities regulatory authorities during the currency of this Prospectus, the previous annual information form, the previous annual financial statements and all interim financial statements, material change reports and information circulars and all Prospectus Supplements filed prior to the commencement of the Company's financial year in which the new annual information form was filed shall be deemed no longer to be incorporated into this Prospectus for purposes of future offers and sales of Shares hereunder.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Some of the statements included or incorporated by reference in this Prospectus constitute
"forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. &nbsp;When used in this Prospectus, the words
"anticipate", "believe", "estimate", "expect", "target", "plan", "budget", "may",
"schedule" and similar words or expressions, identify forward-looking statements. &nbsp;These forward-looking statements relate to, among other things:</font></P>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the sufficiency of the Company's current working capital or anticipated operating cash flow;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the sufficiency of the mineral reserves or resources at Huaron, La Colorada, Quiruvilca, Alamo Dorado or other properties;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">estimated production from the Huaron, La Colorada, Quiruvilca, Alamo Dorado or other properties;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the estimated cost of or availability of funding for ongoing capital improvement programs;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the estimated costs or estimated completion dates of the proposed development of the Huaron and Alamo Dorado projects;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">estimated exploration expenditures to be incurred on the Company's various silver exploration properties;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">compliance with environmental standards;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">forecast capital or non-operating spending; and</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">levels of silver or other metals production, production costs and metal prices.</FONT></li>
</ul>
<p align="left"><font size="2">These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies. &nbsp;Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements</font>
<p align="center">&nbsp;</p>
<p align="center">
<font size="2">
<BR>
5
<BR>
</font>
</p>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">&nbsp;including, without limitation, the factors identified in the Company's Annual Information Form, dated May 20, 2003, under the caption &quot;Trends and Uncertainties&quot;. &nbsp;Investors are cautioned against attributing undue certainty to forward-looking statements. &nbsp;Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be anticipated, estimated or intended. &nbsp;The Company does not intend, and does not assume any obligation, to update these forward-looking statements to reflect changes in assumptions or changes in circumstances or any other events affecting such statements, other than as required by applicable law.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">CERTAIN AVAILABLE INFORMATION</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company has filed with the SEC a registration statement on Form F-10 (the
"Registration Statement") under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act"), with respect to the Shares. &nbsp;This Prospectus, which constitutes a part of that Registration Statement, does not contain all of the information set forth in such Registration Statement and its exhibits, to which reference is made for further information. &nbsp;See
"Documents Filed as Part of the Registration Statement".</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company is subject to the informational reporting requirements of the U.S. Exchange Act, and in accordance therewith files reports and other information with the SEC. Under a multijurisdictional disclosure system adopted by the United States, the Company is permitted to prepare such reports and other information in accordance with the disclosure requirements of Canada, which are different from those of the United States. &nbsp;As a foreign private issuer, the Company is exempt from the rules under the U.S. Exchange Act prescribing the furnishing and content of proxy statements, and its officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery rules contained in Section 16 of the U.S. Exchange Act. &nbsp;Under the U.S. Exchange Act, the Company is not required to publish financial statements as frequently or as prompt
ly as U.S. companies.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company files annual reports with the SEC on Form 40-F, which includes:</font></P>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the Company's Annual Information Form;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">management's discussion and analysis of financial condition and results of operations;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the Company's consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in Canada ("Canadian GAAP") and reconciled to U.S. GAAP; and</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">other information specified by the Form 40-F.</FONT></li>
</ul>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company also furnishes the following types of information to the SEC under cover of Form&nbsp;6-K:</font></P>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">material information the Company otherwise makes publicly available in reports that it files with securities regulatory authorities in Canada;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:5pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">material information that the Company files with, and which is made public by, the TSX; and</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">material information that the Company distributes to its shareholders in Canada.</FONT></li>
</ul>
<font size="2">
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Investors may read and copy any document the Company files with, or furnishes to, the SEC at the SEC's public reference room at Room 1024, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. &nbsp;Copies of the material can also be obtained from the SEC's public reference room in Washington, D.C. by paying a fee. &nbsp;Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. &nbsp;The SEC also maintains a website
(www.sec.gov) that makes available reports and other information that the Company files or furnishes electronically with it.</font></P>
<p align="center">
<font size="2">
<BR>
6
<BR>
</font>
</p>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:5pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">PRESENTATION OF FINANCIAL INFORMATION AND EXCHANGE RATE DATA</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company presents its consolidated financial statements in United States dollars. &nbsp;All references in this prospectus to
"dollars", "$" or "US$" are to United States dollars and all references to "Cdn$" are to Canadian dollars, unless otherwise noted. &nbsp;Except as otherwise indicated, all financial statements and financial data contained in, or incorporated by reference into, this Prospectus have been prepared in accordance with Canadian GAAP, which differ in certain significant respects from U.S. GAAP. &nbsp;For a description of the material differences between Canadian GAAP and U.S. GAAP see note 16 to the Company's audited consolidated financial statements for the years ended December 31, 2002 and 2001, note 8 to the Company's unaudited interim consolidated financial statements for the nine months ended September 30, 2003, each incorporated by reference into this Prospectus, and note 15 to the audited consolidated financial statements of Corner Bay Silver Inc., for the years ended June 30, 2002 and 2001 included in this Prospectus.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The following table sets forth, for each period indicated, the exchange rates of the Canadian dollar to the United States dollar for the end of each period indicated and the high, low and average exchange rates for each of such periods (such rates, which are expressed in Canadian dollars are based on the noon buying rates for United States dollars reported by the Bank of Canada).</font> </P>
<div align="center">
  <center>
<TABLE cellspacing=0><TR><TD valign=top width=134><font size="2">&nbsp;</font></TD><TD valign=bottom width=124.2><P style="margin:0pt; padding-right:2.2pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Nine Months Ended</font></B></P>
<P style="margin:0pt; padding-right:2.2pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><U><font size="2">September 30, 2003</font></U></B></P>
</TD><TD valign=bottom width=342 colspan=3><P style="margin:0pt; padding-right:2.2pt; font-family:Times New Roman; font-size:9pt" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; padding-right:2.2pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><U><font size="2">&nbsp;&nbsp;Year Ended December 31&nbsp;&nbsp;</font></U></B></P>
</TD></TR>
<TR><TD valign=top width=134><font size="2">&nbsp;</font></TD><TD valign=top width=124.2><font size="2">&nbsp;</font></TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:4.5pt; padding-right:2.2pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><U><font size="2">2002</font></U></B></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:4.5pt; padding-right:2.2pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><U><font size="2">2001</font></U></B></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:4.5pt; padding-right:2.2pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><U><font size="2">2000</font></U></B></P>
</TD></TR>
<TR><TD valign=top width=134><P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><font size="2">High</font></P>
<P style="margin-top:0pt; margin-bottom:1.65pt; text-indent:89.1pt; font-family:Times New Roman"><font size="2"><BR></font></P>
</TD><TD valign=top width=124.2><P style="margin-top:0pt; margin-bottom:1.65pt; text-indent:3.95pt; font-family:Times New Roman" align=center><font size="2">Cdn$1.5747</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-left:-5.4pt; padding-right:21.6pt; font-family:Times New Roman" align=right><font size="2">Cdn$1.6155</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-left:-5.4pt; padding-right:21.6pt; font-family:Times New Roman" align=right><font size="2">Cdn$1.6021</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:12.6pt; font-family:Times New Roman" align=right><font size="2">Cdn$1.5590</font></P>
</TD></TR>
<TR><TD valign=top width=134><P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><font size="2">Low</font></P>
<P style="margin-top:0pt; margin-bottom:1.65pt; text-indent:89.1pt; font-family:Times New Roman"><font size="2"><BR></font></P>
</TD><TD valign=top width=124.2><P style="margin-top:0pt; margin-bottom:1.65pt; text-indent:25.6pt; font-family:Times New Roman" align=center><font size="2">1.3342</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:21.6pt; font-family:Times New Roman" align=right><font size="2">1.5123</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:21.6pt; font-family:Times New Roman" align=right><font size="2">1.4936</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:12.6pt; font-family:Times New Roman" align=right><font size="2">1.4341</font></P>
</TD></TR>
<TR><TD valign=top width=134><P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><font size="2">Average</font></P>
<P style="margin-top:0pt; margin-bottom:1.65pt; text-indent:89.1pt; font-family:Times New Roman"><font size="2"><BR></font></P>
</TD><TD valign=top width=124.2><P style="margin-top:0pt; margin-bottom:1.65pt; text-indent:25.6pt; font-family:Times New Roman" align=center><font size="2">1.4295</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:21.6pt; font-family:Times New Roman" align=right><font size="2">1.5704</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:21.6pt; font-family:Times New Roman" align=right><font size="2">1.5484</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:12.6pt; font-family:Times New Roman" align=right><font size="2">1.4850</font></P>
</TD></TR>
<TR><TD valign=top width=134><P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><font size="2">End of Period</font></P>
<P style="margin-top:0pt; margin-bottom:1.65pt; text-indent:89.1pt; font-family:Times New Roman"><font size="2"><BR></font></P>
</TD><TD valign=top width=124.2><P style="margin-top:0pt; margin-bottom:1.65pt; text-indent:25.6pt; font-family:Times New Roman" align=center><font size="2">1.3504</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:21.6pt; font-family:Times New Roman" align=right><font size="2">1.5796</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:21.6pt; font-family:Times New Roman" align=right><font size="2">1.5926</font></P>
</TD><TD valign=top width=114><P style="margin-top:0pt; margin-bottom:1.65pt; padding-right:12.6pt; font-family:Times New Roman" align=right><font size="2">1.5002</font></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On January 23, 2004, the noon buying rate reported by the Bank of Canada was US$1.00 = Cdn$1.3119.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">THE COMPANY</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Pan American Silver Corp. is a company incorporated under the <I>Company Act</I> (British Columbia). &nbsp;The Company's head office is located at 1500 - 625 Howe Street, Vancouver, British Columbia, V6C&nbsp;2T6 and its registered and records office is located at 900 Waterfront Centre, 200 Burrard Street, Vancouver, British Columbia, V7X&nbsp;1T2. &nbsp;In this Prospectus, the term
"Pan American" refers to the Company and its principal subsidiaries.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">A description of the Company's principal subsidiaries as at its most recent financial year end is set out under the heading
"Subsidiaries" on page 3 of the Company's annual information form which is incorporated by reference in this Prospectus.</font></P>
<p align="center">
<font size="2">
<BR>
7
<BR>
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">BUSINESS OF THE COMPANY</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Pan American is principally engaged in the exploration for, and the acquisition, development and operation of silver properties. &nbsp;Pan American: (i) owns and operates the producing Huaron silver mine in Peru; (ii) owns and operates the producing La Colorada silver mine located in Mexico; (iii) owns and operates the producing Quiruvilca silver mine in Peru; and (iv) mines and sells silver-rich pyrite stockpiles at a small-scale operation in central Peru. &nbsp;Pan American also either holds an interest in or may earn an interest in non-producing silver resource and silver exploration properties in Peru, Argentina, the United States, Russia and Mexico, including the significant Alamo Dorado deposit in Mexico.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">RECENT DEVELOPMENTS</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Although no decision has yet been made with respect to a possible closure of the Quiruvilca Mine in 2004, Pan American has significantly reduced the level of ongoing development and exploration work at the Quiruvilca Mine in preparation for a possible closure. &nbsp;Production levels at the Quiruvilca Mine were reduced in the fall of 2003 from approximately 45,000 tonnes per month to approximately 30,000 tonnes per month in preparation for a possible closure in 2004. &nbsp;As a result of the reduced level of development and exploration work, Pan American expects that minable reserves at Quiruvilca will be exhausted at some point between July and September of 2004. &nbsp;Pan American has budgeted US$2.9 million for concurrent reclamation and closure related costs at Quiruvilca in calendar 2004 (including closing of adits, rehabilitation of tailings ponds, rehabilitation o
f waste dumps and water treatment). &nbsp;In the fourth quarter of 2002, Pan American prepared an estimate of the expected future reclamation costs to be incurred at the Quiruvilca and charged operations with a US$10 million provision for future reclamation.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In August 2003, the Company completed the offering of a total of US$86.25 million aggregate principal amount of Debentures to increase its financial strength and ability to fund new projects. &nbsp;See
"Changes to Consolidated Capitalization".</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In July 2003, Pan American initiated a technical and economic evaluation of a possible expansion of the Huaron mine in Peru, which would increase this mine's production. &nbsp;In September 2003, a feasibility study on the Huaron expansion was launched. &nbsp;The engineering portion of this study is expected to be completed in January 2004 and the other components of the study are expected to be completed in the first calendar quarter of 2004. &nbsp;As part of the feasibility study, a US$1 million drill programme was initiated to upgrade the mine's resources and to increase the proven and probable reserve base. In October 2003, Pan American bought back the existing 3% net smelter royalty on the Huaron mine from a group of Peruvian companies for a total of US$2.5 million in cash. The buyout of the royalty should reduce the mine's cash costs by approximately US$850,000 per 
year, starting in 2006.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In July 2003, Pan American substantially completed a major expansion at its La Colorada silver mine in Mexico. &nbsp;The expansion included the construction of a 600 tonne per day oxide mill, which will add to the mine's current production from the existing 200 tonne per day sulphide mill. &nbsp;Production at La Colorada, however, has not reached design capacity as quickly as anticipated in the original feasibility study for the expansion, and actual silver production in 2003 is expected to be approximately 1.15 million ounces below original estimates and anticipated silver production for 2004 is expected to be approximately 900,000 ounces below original estimates. &nbsp;Production at La Colorada is expected to reach design capacity during the third calendar quarter of 2004, following additional capital expenditures of approximately $1.5 million incurred over a 12 month 
period.</font> </P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">A 6,000 metre infill drilling program has been initiated on Pan American's 50%-owned Manantial Espejo silver-gold exploration property in Argentina. &nbsp;Results to date have confirmed the size of the deposit and increased
Pan American's confidence in its geological model. &nbsp;The drilling program and related geotechnical and environmental work is expected to be completed in the first calendar quarter of 2004.</font> </P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-right:0.1pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In May 2003, Pan American completed a seven-hole drill program on the Alamo Dorado project in Mexico and is undertaking metallurgical testing to update a 2002 feasibility study completed by AMEC&nbsp;E&amp;C&nbsp;Services,&nbsp;Inc. &nbsp;The updated feasibility study will examine the economic merits of processing ore from the Alamo Dorado deposit in a conventional oxide leaching mill circuit versus heap leach processing. &nbsp;The update will also examine the economic merits of a combination mill for high grade ore and heap leach for low grade ore. &nbsp;The updated study is expected to be completed in the second calendar quarter of 2004. &nbsp;Until this study is completed and a production decision made, the acquisition of Corner Bay and the Alamo Dorado project is not expected to have any material affect on the operating results and financial posi
tion of the Company.</font></P>
<p align="center">
<font size="2">
<BR>
<BR>
8
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On February 20, 2003, the Company acquired all of the issued and outstanding shares of Corner Bay pursuant to a plan of arrangement under the <I>Canada Business Corporations Act</I>. &nbsp;Under this plan of arrangement, each Corner Bay share was exchanged for 0.3846 common shares of the Company plus 0.1923 common share purchase warrants of the Company (the
"Warrants"), resulting in the issuance of a total of 7,636,659 common shares and 3,818,330&nbsp;Warrants. &nbsp;Each whole Warrant allows the holder to purchase one common share of the Company for a price of Cdn$12.00 at any time over a five-year exercise period. &nbsp;Pan&nbsp;American also issued options to purchase up to 553,846 common shares (having exercise prices of between Cdn$4.55 and Cdn$12.00 and having exercise periods of between one and five years from the date of grant) in consideration for the termination of 960,000 fully vested stock options held by employees and shareholders of Corner Bay. &nbsp;Corner Bay, through its subsidiary corporations, owns the Alamo Dorado silver-gold deposit in Mexico. &nbsp;The Alamo Dorado project is described under the heading
"Narrative Description of the Business - Development Projects - Alamo Dorado Project" on pages 32 through 38 of the Company's annual information form which is incorporated by reference in this Prospectus.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Pan American currently has no outstanding forward sales contracts in respect of its silver production and does not anticipate entering into any forward sales contracts in respect of its silver production at any time in the immediate or foreseeable future.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">USE OF PROCEEDS</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Unless otherwise indicated in the applicable Prospectus Supplement, the net proceeds from the sale of Shares will be used by the Company to fund ongoing development and exploration programs, acquisitions, working capital requirements and for other general corporate purposes.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">DESCRIPTION OF SECURITIES</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company is authorized to issue 100,000,000 common shares, without par value, of which 53,187,852 are issued and outstanding as at the date of this Prospectus. &nbsp;There are options outstanding to purchase up to 1,801,704 common shares at prices ranging from US$3.42 to US$9.02 and warrants outstanding to purchase up to 4,354,496<B> </B>common shares at prices ranging from US$3.52 to US$9.02. &nbsp;Pursuant to the terms of the Debentures, each US$1,000 principal amount of Debentures are convertible into 104.4932 common shares (subject to adjustment in certain events), representing a conversion price of US$9.57. &nbsp;Holders of common shares are entitled to one vote per common share at all meetings of shareholders, to receive dividends as and when declared by the directors of the Company and to receive a <I>pro rata</I> share of the assets of the Company available fo
r distribution to the shareholders in the event of the liquidation, dissolution or winding-up of the Company. &nbsp;There are no pre-emptive, conversion or redemption rights attached to the common shares of the Company.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; font-family:Times New Roman Bold" align=center><B><font size="2">PLAN OF DISTRIBUTION</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company may offer and sell the Shares to or through underwriters or dealers and also may offer and sell Shares to one or more other purchasers directly or through agents. &nbsp;Each Prospectus Supplement will set forth the terms of the offering, including the name or names of any underwriters, dealers or agents, the number and the price or prices of the Shares offered (or the manner of determination thereof if offered on a non-fixed price basis), the proceeds to the Company from the issue or sale of the Shares offered, the underwriting discounts or commissions, and any other fees, commissions or concessions to be allowed or re-allowed to dealers.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Shares offered pursuant to any Prospectus Supplement may be sold from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at other negotiated prices. &nbsp;The Company may only offer and sell Shares under this Prospectus during the 25-month period from the date of this Prospectus.</font></P>
<p align="center">
<font size="2">
<BR>
<BR>
9
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Any underwriters, dealers or agents who participate in the distribution of Shares may be entitled under agreements to be entered into with the Company to indemnification by the Company against certain liabilities, including liabilities under Canadian and United States securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. &nbsp;Such underwriters, dealers or agents may be customers of, engage in transactions with, or perform services for, the Company in the ordinary course of business.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In connection with any offering of Shares, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of the Shares offered at a level above that which might otherwise prevail in the open market. &nbsp;Such transactions, if commenced, may be discontinued at any time.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">CHANGES TO CONSOLIDATED CAPITALIZATION</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Since December 31, 2002, the following changes have occurred to the share and loan capital of the Company, on a consolidated basis:</font></P>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">on February 20, 2003, the Company completed the acquisition of Corner Bay by issuing 7,636,659 common shares of the Company and 3,818,330 Warrants (having an exercise price of Cdn$12.00 per common share for a five-year period ending February 20, 2008). &nbsp;The Company also granted 553,846 stock options to purchase common shares of the Company (having exercise prices of between Cdn$4.55 and Cdn$12.00 and having exercise periods of between one and five years from the date of grant) in consideration for the termination of 960,000 fully vested stock options held by employees and shareholders of Corner Bay;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the Company issued 2,193,306 common shares of the Company pursuant to the exercise of stock options;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the Company issued 100,943 common shares of the Company pursuant to the exercise of warrants;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">the Company reduced its $5.15 million loan on the Huaron property from Banco de Credito del Peru by $1,489,583 to $3,656,249. &nbsp;The Huaron loan bears interest at six-month LIBOR plus 3% and is repayable at the rate of $135,417 per month;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">Pan American drew down $9,500,00 and cancelled $500,000 of its $10,000,000 La Colorada project loan facility with International Finance Corporation ("IFC"). &nbsp;The IFC loan bears interest at six-month LIBOR plus 3.50% until certain technical and financial tests are achieved and six-month LIBOR plus 3.25% thereafter. &nbsp;The IFC loan is repayable in semi-annual instalments of $1,000,000 commencing November 15, 2004. &nbsp;In addition to the interest payments on the outstanding balance of the IFC loan, Pan American will be required to make additional payments to IFC by May 15 of each year if the average price of silver for the preceding calendar year exceeded $4.75 per ounce. &nbsp;Such payment would be equal to 20% of the positive difference between the average price per ounce of silver for a year and $4.75 multiplied by the number of ounces of 
silver produced by the La Colorada mine divided by $9,500,000 and multiplied by the greater of the loan balance at the end of the year or the originally scheduled loan balance at the end of a year;</FONT></li>
</ul>
<p align="center">
<font size="2">
<BR>
<BR>
10
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">on July 30, 2003, the Company issued US$75,000,000 principal amount of Debentures and on August&nbsp;8, 2003, the Company issued an additional US$11,250,000 principal amount of Debentures. &nbsp;Each US$1,000 principal amount of Debentures is convertible into 104.4932 common shares of the Company (subject to adjustment in certain events) at the option of the holder at any time prior to the earlier of the close of business on July 31, 2009 and the last business day immediately preceding any date fixed for redemption, representing a conversion price of US$9.57. &nbsp;To date, no Debentures have been converted into common shares. &nbsp;Pursuant to the terms of the indenture governing the Debentures, on or after July 31, 2005, the Debentures may be redeemed in whole or in part by the Company, at its option on not more than 60 and not less than 30 days p
rior notice and subject to regulatory approval, at a price equal to par, plus accrued and unpaid interest, if any, provided that the weighted average trading price of the common shares of the Company on NASDAQ for the 20 consecutive trading days ending five trading days preceding the date of the redemption notice equals at least 125% of the conversion price. &nbsp;On redemption or upon maturity, provided that no default or event of default has occurred and is continuing under the indenture governing the Debentures, the Company may, at its option, on not more than 60 and not less than 30 days prior notice and subject to regulatory approval, elect to satisfy its obligation to repay the principal amount of the Debentures by issuing and delivering that number of freely tradable common shares of the Company obtained by dividing the principal amount of the outstanding Debentures which are to be redeemed or have matured, as the case may be, by 95% of the weighted average trading price of the Company's common shares
 on NASDAQ for the 20 consecutive trading days ending five trading days preceding the date fixed for redemption or maturity, as the case may be. &nbsp;In addition, the interest payable on the Debentures may, at the Company's election, be payable by the application of the proceeds of the sale of the Company's common shares. &nbsp;The value of the Debentures is comprised of a $35,357,000 fair value of the Debentures, $23,049,000 fair value of the future interest payments and $27,844,000 fair value ascribed to the holder's option to convert the principal balance into common shares. &nbsp;These components have been measured at their respective fair values on the date the Debentures were issued. &nbsp;The $23,049,000 fair value of the future interest payments on the Debentures has been classified in the Company's financial statements as a liability and the $63,201,000 fair value of the Debentures and the conversion option have been classified as equity. &nbsp;Over the six-year term of the Debentures, the carrying
 value of the Debentures is accreted to their face value and the fair value of the future interest payments is amortized. The periodic accretion is charged to deficit. For the three months ended September 30, 2003, the Company recorded accretion totalling $975,000 for the accretion of the conversion option amounting to $773,000 and interest amortization of $202,000. &nbsp;As at September 30, 2003, the Company had accrued $765,000 of interest of which $563,000 is reflected in interest and financing costs and $202,000 is reflected as a reduction in the liability component of the Debentures;</FONT></li>
</ul>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">Pan American has sold forward 19,860 tonnes of zinc according to the following schedule. </FONT></li>
</ul>
<font size="2">
<BR>
<BR>
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE cellspacing=0><TR>
<TD valign=bottom width=180.133><P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align=center><B><font size="2">Month</font></B></P>
</TD><TD valign=bottom width=191.267><P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align=center><B><font size="2">Total Quantity<BR>
(tonnes)</font></B></P>
</TD><TD valign=bottom width=195.133><P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align=center><B><font size="2">Average Contract Price</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align=center><B><font size="2">(US$/tonne)</font></B></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">January 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,700</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$835.71</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">February 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,700</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$835.71</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">March 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,730</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$909.53</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">April 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,745</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$912.44</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">May 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,690</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$908.36</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">June 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,640</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$973.05</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">July 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,605</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$971.59</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">August 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,055</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,013.65</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">September 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,055</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,013.65</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">October 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,035</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,013.14</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">November 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">970</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,010.55</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">December 2004</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">935</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,009.48</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">January 2005</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">500</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,050.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">February 2005</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">500</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,050.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">March 2005</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">500</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,050.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">April 2005</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">500</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,050.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">May 2005</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">500</font></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$1,050.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">June 2005</font></P>
</TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><U><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500</font></U></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><U><font size="2">$1,050.00</font></U></P>
</TD></TR>
<TR><TD valign=top width=180.133><font size="2">&nbsp;</font></TD><TD valign=top width=191.267><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><U><font size="2">19,860</font></U></P>
</TD><TD valign=top width=195.133><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><U><font size="2">$&nbsp;&nbsp;&nbsp;954.63</font></U></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">These sales were designated as a hedge. &nbsp;The difference between the average monthly London zinc cash settlement price and the forward sales price will be credited or charged to Pan American's revenue during the January 2004 through June 2005 period.</font></P>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">Pan American has sold forward 7,380 tonnes of lead according to the following schedule.</FONT></li>
</ul>
<div align="center">
  <center>
<TABLE cellspacing=0><TR>
<TD valign=bottom width=180.867><P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align=center><B><font size="2">Month</font></B></P>
</TD><TD valign=bottom width=190.2><P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align=center><B><font size="2">Total Quantity<BR>
(tonnes)</font></B></P>
</TD><TD valign=bottom width=195.467><P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align=center><B><font size="2">Average Contract Price</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:9pt; border-bottom:0.5pt solid #000000" align=center><B><font size="2">(US$/tonne)</font></B></P>
</TD></TR>
<TR><TD valign=top width=180.867><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">February 2004</font></P>
</TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,000</font></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$741.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.867><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">March 2004</font></P>
</TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,020</font></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$736.50</font></P>
</TD></TR>
<TR><TD valign=top width=180.867><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">April 2004</font></P>
</TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">1,015</font></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$706.98</font></P>
</TD></TR>
</TABLE>
  </center>
</div>
<div align="center">
  <center>
<TABLE cellspacing=0><TR><TD valign=top width=180.867><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">May 2004</font></P>
</TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">985</font></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$726.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.867><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">June 2004</font></P>
</TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">875</font></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$632.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.867><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">July 2004</font></P>
</TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">930</font></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$717.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.867><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">August 2004</font></P>
</TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">680</font></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><font size="2">$725.00</font></P>
</TD></TR>
<TR><TD valign=top width=180.867><P style="margin-top:2.5pt; margin-bottom:2.5pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">December 2004</font></P>
</TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><U><font size="2">&nbsp;&nbsp;&nbsp;875</font></U></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><U><font size="2">$605.00</font></U></P>
</TD></TR>
<TR><TD valign=top width=180.867><font size="2">&nbsp;</font></TD><TD valign=top width=190.2><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><U><font size="2">7,380</font></U></P>
</TD><TD valign=top width=195.467><P style="margin-top:2.5pt; margin-bottom:2.5pt; padding-right:51.15pt; line-height:13pt; font-family:Times New Roman" align=right><U><font size="2">$700.15</font></U></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">These sales were designated as a hedge. &nbsp;The difference between the average monthly London lead cash settlement price and the forward sales price will be credited or charged to Pan American's revenue during the February 2004 through December 2004 period.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">RISK FACTORS</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><I><font size="2">Prospective investors in Shares should consider, in addition to information contained in the Prospectus Supplement relating to that offering or in other documents incorporated by reference herein, the risks described in the Company's Annual Information Form under the heading
"Narrative Description of the Business - Trends and Uncertainties" and in the Company's management's discussion and analysis of financial condition and results of operations that are incorporated by reference herein as at the date of the Prospectus Supplement relating to the particular offering of Shares and the risks noted below.</font></I></P>
<p align="center">
<font size="2">
<BR>
12
<BR>
</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">Peruvian Mine Closure Law</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On October 14, 2003, the Peruvian government published Law 28090
"Mine Closure Law" which establishes provisions relating to mine closure plans. &nbsp;For existing mining operations the law provides that a mine closure plan must be submitted for certification to the Peruvian Ministry of Energy and Mines within six months of the law entering into force. &nbsp;No enabling regulations were published with the law. &nbsp;Therefore, the effect of the law on the Company's Peruvian mining and exploration activities cannot be determined.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The law provides that a mine operator must grant an environmental warranty for the estimated costs associated with its mine closure plan. &nbsp;The law does not establish when such warranties must be in place nor does the law specify the form of the required warranty. &nbsp;However, the law indicates that a warranty may take the form of insurance, cash collateral, a trust agreement or other forms as permitted by the Civil Code of Peru. &nbsp;The Company's Huaron and Quiruvilca mines will submit closure plans as required by the law, but until these plans have been certified and the nature and form of whatever environmental warranty is required have been determined, the impact of this law on the Company's Peruvian mining and exploration activities cannot be determined.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-right:-2.15pt; line-height:13pt; font-family:Times New Roman"><B><font size="2">Level of Indebtedness</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">As of September 30, 2003, the Company had approximately $35.1 million of consolidated indebtedness. &nbsp;In addition, the terms of the Company's bank agreements and the Indenture governing the Debentures permit the Company and its subsidiaries to incur additional debt.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company's substantial debt may have important consequences to shareholders. &nbsp;For instance, it could:</font></P>
<ul>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">make it more difficult for the Company to satisfy its financial obligations;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">require the Company to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under its debt, which would reduce funds available for other business purposes;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">increase its vulnerability to general adverse economic and industry conditions, including a decrease in the price of silver, zinc or lead;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">limit its flexibility in planning for, or reacting to, changes in its business;</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">place it at a competitive disadvantage compared with its competitors that have less debt or greater financial resources; and</FONT></li>
  <li>
    <p style="margin-top:0pt; margin-bottom:10pt; padding-left:108pt; line-height:13pt; font-family:Symbol" align="justify"><FONT FACE="Times New Roman" size="2">limit its ability to obtain additional financing required to fund working capital or capital expenditures or for other general corporate purposes.</FONT></li>
</ul>
<p style="line-height: 13pt; font-family: Symbol; margin-top: 0pt; margin-bottom: 10pt; padding-left: 108pt" align="justify">&nbsp;</p>
<P style="text-indent: 0; line-height: 13pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 10pt; padding-right: -2pt" align=center><font size="2">13</font> </P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin-top:0pt; margin-bottom:10pt; padding-right:-2pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp; </P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-right:-2pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company's ability to make payments on its indebtedness and to fund its operations, working capital and capital expenditures, will depend on its ability to generate cash in the future. &nbsp;This is subject to general economic, industry, financial, competitive, legislative, regulatory, and other factors that are beyond the Company's control. &nbsp;In particular, global or regional economic conditions could cause the price of silver to fall and hamper the Company's ability to repay its indebtedness, including the Debentures. &nbsp;The Company's operations may not generate sufficient cash flow or borrowings may not be available in an amount sufficient to enable the Company to pay its indebtedness, or to fund its other cash needs. &nbsp;The Company may need to refinance all or a portion of its indebtedness on or before maturity, but such refinancing m
ay be unavailable to it on commercially reasonable terms, or at all, to meet its obligations or to successfully execute its business strategy.</font> </P>
<P style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">Acquisitions</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">An element of the Company's business strategy is to make selected acquisitions. &nbsp;For example, the Company completed the acquisition of Corner Bay Silver Inc. in February 2003. &nbsp;The Company expects to continue to evaluate acquisition opportunities on a regular basis and intends to pursue those opportunities that it believes are in its long-term best interests. &nbsp;The success of the Company's acquisitions will depend upon its ability to effectively manage the operations of entities it acquires and to realize other anticipated benefits. &nbsp;The process of managing acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of management resources. &nbsp;There can be no assurance that the Company will be able to successfully manage the operations of businesses it acquires or that the anticipated benefits of its acquisition
s will be realized.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">Hedging Activities</font> </B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">From time to time, the Company engages in hedging activities in connection with base metals, such as forward sales contracts and commodity put and call option contracts, to minimize the effect of declines in metal prices on our operating results. &nbsp;While these hedging activities may protect the Company against low metal prices, they may also limit the price the Company can receive on hedged products. &nbsp;As a result, the Company may be prevented from realizing possible revenues in the event that the market price of a metal exceeds the price stated in forward sale or option contracts. &nbsp;As of December 31, 2003, the Company's zinc forward contract position had a negative value of approximately $1.4 million and its lead forward contract position as at December 31, 2003 had a negative value of $0.1 million. &nbsp;In addition, the Company may experience losses if a 
counterparty fails to purchase under a contract when the contract price exceeds the spot price of a commodity. &nbsp;The Company's current policy is to not hedge the price of silver and therefore it is fully exposed to declines in silver prices.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">Employee Relations</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Certain of the Company's employees and the employees of Peruvian mining contractors indirectly employed by the Company are represented by unions. &nbsp;At November 30, 2003, there were 270 employees represented by the Sindicato de Trebajadores de Pan American Silver S.A.C.
- - Mina Quiruvilca (the "Quiruvilca Union") and 71 employees represented by the Sindicato de Trebajadores de Shorey y Anexos (the
"Shorey Union"). &nbsp;There are also 17 employees at the Huaron mine who are members of a
"union committee" who have rights pursuant to an agreement dated January 1, 2003. &nbsp;The Company has experienced labour strikes and work stoppages in the past. &nbsp;The labour agreements with the Quiruvilca Union and the Shorey Union expired on January 1, 2004, and ordinary course negotiations to renew the contracts will be ongoing in 2004. &nbsp;There can be no assurance that these contracts will be renewed on terms favourable to the Company, if at all and the Company may experience future work stoppages.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align=justify><B><font size="2">Enforcing Civil Liabilities in the United States</font> </B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company is organized under the laws of the Province of British Columbia, and its principal executive office is located in British Columbia. &nbsp;Many of the Company's directors, controlling persons, officers and the experts named in this prospectus are residents of Canada and a substantial portion of the their assets and a majority of the Company's assets are located outside the United States. &nbsp;As a result, it may be difficult for U.S. investors to effect service of process within the United States upon the directors, controlling persons, officers and the experts who are not residents of the United States or to enforce against them judgments of United States courts based upon civil liability under the federal securities laws of the United States. &nbsp;There is doubt as to the enforceability in Canada against the Company or against any of its directors, control
ling persons, officers or experts who are not residents of the United States, of original actions or actions for enforcement of judgments of United States courts of liabilities based solely upon the federal securities laws of the United States.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="text-indent: 0; line-height: 13pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 10pt" align=center><font size="2">14</font></P>
<P style="text-indent: 0; line-height: 13pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 10pt" align=center>&nbsp;</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">AUDITORS, TRANSFER AGENT AND REGISTRAR</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The auditors of the Company are Deloitte &amp; Touche LLP, Four Bentall Centre, 2800
- - 1055 Dunsmuir Street, Vancouver, British Columbia, V7X 1P4.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The transfer agent and registrar for the common shares of the Company is Computershare Trust Company of Canada at its principal offices in Vancouver and Toronto.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">EXPERTS</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The consolidated financial statements of the Company for the years ended December 31, 2002 and 2001 which are incorporated in this Prospectus by reference have been audited by Deloitte &amp; Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The consolidated balance sheets of Corner Bay Silver Inc. as at June 30, 2002 and 2001 and the consolidated statements of operations and deficit and cash flows of Corner Bay Silver Inc. for each of the years in the three-year period ended June 30, 2002 which are included in this Prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, independent auditors, given on the authority of said firm as experts in accounting and auditing.</font></P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">LEGAL MATTERS</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Certain legal matters relating to the Shares offered pursuant to any Prospectus Supplement will be passed upon for the Company by Borden Ladner Gervais LLP and Skadden, Arps, Slate, Meagher &amp; Flom LLP. &nbsp;As of the date of this Prospectus, the partners and associates of Borden Ladner Gervais LLP, collectively, beneficially own less than 1% of the outstanding common shares of the Company.</font> </P>
<P style="margin-top:10pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman Bold" align=center><B><font size="2">DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT</font></B></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The following documents have been filed with the SEC as part of the Registration Statement of which this Prospectus forms a part: the documents referred to under the heading
"Documents Incorporated by Reference", the consent of Deloitte &amp; Touche
LLP, the consent of PricewaterhouseCoopers LLP and the Power of Attorney.</font></P>
<p align="center">
<font size="2">
<BR>
<BR>
<BR>
15</font>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR><BR></font></P>
<P style="margin-top:0pt; margin-bottom:15pt; line-height:13pt; font-family:Times New Roman" align=center><B><font size="2">INDEX TO FINANCIAL STATEMENTS</font></B></P>

<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<B><FONT size=2 face="serif">INDEX TO FINANCIAL STATEMENTS</FONT></B></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;</TD>
   <TD width="4%"><B><FONT size=2 face="serif">Page</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<B><FONT size=2 face="serif">Consolidated Financial Statements of Corner Bay Silver Inc</FONT></B></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-2</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Auditors' Report</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-3</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Consolidated Balance Sheets as at December 31, 2002 (unaudited) and as at June 30, 2002 and</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">June 30, 2001 (audited)</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-4</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Consolidated Statements of Operations and Deficit for the six months ended December 31,</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">2002 and December 31, 2001 (unaudited) and for the years ended June 30, 2002, June 30, 2001</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">and June 30, 2000 (audited)</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-5</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Consolidated Statements of Cash Flows for the six months ended December 31, 2002 and</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">December 31, 2001 (unaudited) and for the years ended June 30, 2002, June 30, 2001, and</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">June 30, 2000 (audited)</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-6</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Notes to Consolidated Financial Statements</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-7</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Supplementary Information about Mineral Property Expenditures for the six months ended</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">December 31, 2002 (unaudited)</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-22</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Supplementary Information about General and Administrative Costs for the six months ended</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">December 31, 2002 (unaudited)</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-23</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<B><FONT size=2 face="serif">Unaudited Pro Forma Consolidated Financial Statements of Pan American</FONT></B></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-24</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<B><FONT size=2 face="serif">Silver Corp</FONT></B></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Compilation Report</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-25</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Comment to Readers in the United States of America</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-26</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Pro Forma Consolidated Balance Sheet as at December 31, 2002 (unaudited)</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-27</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Pro Forma Consolidated Statement of Operations for the year ended December 31, 2002</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">(unaudited)</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-28</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Pro Forma Consolidated Statement of Operations for the nine months ended September 30,</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">2003 (unaudited)</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-29</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="94%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Notes to the Pro Forma Consolidated Financial Statements</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">F-30</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; text-indent:36pt; line-height:13pt; font-family:Times New Roman" align=center><font size="2"><BR></font></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><I><font size="2">Unaudited and Audited Consolidated Financial Statements of</font></I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-2</font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; line-height:13pt; font-family:Times New Roman" align=center><B><font size="2">AUDITORS' REPORT</font></B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">September 6, 2002</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">To the Directors of</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Corner Bay Silver Inc.</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">We have audited the consolidated balance sheets of Corner Bay Silver Inc. as at June 30, 2002 and 2001 and the consolidated statements of operations and deficit and cash flows for each of the years in the three-year period ended June 30, 2002. &nbsp;These financial statements are the responsibility of the Company's management. &nbsp;Our responsibility is to express an opinion on these financial statements based on our audits.</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">We conducted our audits in accordance with Canadian and United States generally accepted auditing standards. &nbsp;Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. &nbsp;An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. &nbsp;An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2002 and 2001 and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2002 in accordance with Canadian generally accepted accounting principles. &nbsp;</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">(signed) PRICEWATERHOUSECOOPERS LLP</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Chartered Accountants</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Toronto, Ontario</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=center><B><font size="2">COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCES</font></B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Company's ability to continue as a going concern, such as those described in note 1 to the consolidated financial statements. &nbsp;Our report to the shareholders dated September 6, 2002 is expressed in accordance with Canadian reporting standards, which do not permit a reference to such events and conditions in the auditors' report when they are adequately disclosed in the financial statements.</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">(signed) PRICEWATERHOUSECOOPERS LLP</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Chartered Accountants</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Toronto, Ontario</font></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-3</font></P>
<p>
<font size="2">
<BR>
</font>
</p>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">CONSOLIDATED BALANCE SHEETS</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">As at December 31, 2002, June 30, 2002 and 2001</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">(expressed in Canadian dollars, unless otherwise stated)</font></B></P>
<P style="margin:0pt; font-family:Arial"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Arial"><font size="2"><BR></font></P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="54%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><B><FONT size=2 face="serif">December 31</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><B><FONT size=2 face="serif">June 30</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><B><FONT size=2 face="serif">June 30</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%">
    <p align="center"><B><FONT size=2 face="serif">(Unaudited)</FONT></B></p>
   </TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><B><FONT size=2 face="serif">ASSETS</FONT></B></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Current</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Cash</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">4,831,220</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">5,323,564</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">4,022,422</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Accounts receivable</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">163,965</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">197,673</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">176,912</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Prepaid expenses and deposits</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">2,595</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">16,887</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">27,389</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">4,997,780</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">5,538,124</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">4,226,723</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Deposits- reclamation bonds</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">30,000</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">30,000</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">30,000</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Investments - quoted market value of $nil</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">(2001 - $61,933) (note 8)</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">43,353</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Deferred exploration expenditure (note 3)</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">8,781,564</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">7,705,865</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">4,551,072</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Property, plant and equipment (note 4)</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">3,893,658</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">3,896,461</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">96,870</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">17,703,002</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">17,170,450</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">8,948,018</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><B><FONT size=2 face="serif">LIABILITIES</FONT></B></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Current</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Accounts payable and accrued liabilities</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">1,355,103</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">316,914</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">387,963</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><B><FONT size=2 face="serif">SHAREHOLDERS' EQUITY</FONT></B></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="13%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Capital stock (note 5)</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">25,499,004</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">24,314,504</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">14,813,154</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Contributed surplus</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">537,005</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">537,005</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">537,005</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><FONT size=2 face="serif">Deficit</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">(9,688,110)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">(7,997,973)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">(6,790,104)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">16,347,899</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">16,853,536</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">8,560,055</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="54%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">17,703,002</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">17,170,450</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="serif">8,948,018</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Nature of operations and going concern (note 1)</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Commitments (note 10)</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">APPROVED BY THE BOARD OF DIRECTORS</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">(signed) JOHN H. WRIGHT, Director</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">(signed) ROSS J. BEATY, Director</font></P>
<P style="margin:0pt; font-family:Times New Roman" align="center"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-4</font></P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small><font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">(expressed in Canadian dollars, unless otherwise stated)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE width="627" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="center" colspan=4 width="170"><B><FONT size=2 face="serif">For the six months ended</FONT></B></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="208" colspan="8">
    <p align="center"><font size="2">&nbsp;<B><FONT size=2 face="serif">For the years ended</FONT></B>&nbsp;</font></p>
   </TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD align="center" colspan=4 width="170" style="border-bottom: 1 solid #000000"><B><FONT size=2 face="serif">December 31,</FONT></B></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD width="208" colspan="8" style="border-bottom: 1 solid #000000">
    <p align="center"><font size="2">&nbsp;<B><FONT size=2 face="serif">June 30,</FONT></B>&nbsp;</font></p>
   </TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74" align="right"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="10" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="6" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="74" align="right"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="10" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="6" align="right"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56" colspan="2"><font size="2"><B><FONT face="serif">2002</FONT></B>&nbsp;</font></TD>
   <TD width="10" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="6" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="4" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="8" align="right"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><B><FONT size=2 face="serif">2000</FONT></B></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<BIG> <SMALL><BIG> <SMALL>
<TR>
   <TD width="191"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="39"><HR noshade size=1></TD>
   <TD width="15"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="4"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="8"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">OTHER INCOME</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Interest</FONT></font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">61,361</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">49,739</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">94,013</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">127,474</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">48,611</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Other</FONT></font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">14,500</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">73,001</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">201,831</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">97,500</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">64,900</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD width="191"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD colspan=2 width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="4"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="8"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">75,861</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">122,740</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">295,844</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">224,974</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">113,511</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">OTHER EXPENSES</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">General and administrative</FONT></font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">1,765,998</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">497,925</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">1,467,007</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">798,073</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">521,338</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Amortization</FONT></font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">9,109</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="15"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">25,312</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">19,251</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<BIG> <SMALL><BIG> <SMALL>
<TR>
   <TD width="191"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="39"><HR noshade size=1></TD>
   <TD width="15"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="4"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="8"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">1,765,998</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">507,034</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">1,467,007</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">823,385</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">540,589</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD colspan=2 width="200"><FONT size=2 face="serif">Gain on disposal of assets</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="15"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font size="2">-</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">(14,465)</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD colspan=2 width="200"><FONT size=2 face="serif">Gain on disposal of investments</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">(5,805)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font size="2">-</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font size="2">-</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD colspan=2 width="200"><FONT size=2 face="serif">Writedown of investments</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="15"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font size="2">-</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">22,606</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">Write-down of property, plant</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">and equipment</FONT></font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">42,511</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">95,833</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font size="2">-</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">Write-down of deferred</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">exploration expenditure</FONT></font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="15"><font size="2">-</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">373,627</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">1,088,239</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD width="191"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="39"><HR noshade size=1></TD>
   <TD width="15"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="4"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="8"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">1,765,998</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">507,034</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">1,503,713</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">1,292,845</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">1,636,969</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD width="191"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD colspan=2 width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="4"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="8"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">Loss for the period</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">(1,690,137)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">(384,294)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">(1,207,869)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">(1,067,871)</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">(1,523,458)</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">Deficit, beginning of period</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">(7,997,973)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">(6,790,104)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">(6,790,104)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">(5,722,233)</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">(4,198,775)</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<BIG> <SMALL><BIG> <SMALL>
<TR>
   <TD width="191"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD colspan=2 width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="4"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="8"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">Deficit, end of period</FONT></TD>
   <TD width="7"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">(9,688,110)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">(7,174,398)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">(7,997,973)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">(6,790,104)</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">(5,722,233)</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<BIG> <SMALL><BIG> <SMALL>
<TR>
   <TD width="191"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="74"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="10"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="6"><HR noshade size=1></TD>
   <TD colspan=2 width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="10"><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</big></small></big></small>
   <TD width="4"><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD width="8"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
</small></big></small></big>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">Basic and diluted</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">loss per share</FONT></font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">($0.09)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">($0.02)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">($0.07)</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">($0.08)</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">($0.14)</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><FONT size=2 face="serif">Weighted average number</FONT></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="74"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="39"><font size="2">&nbsp;</font></TD>
   <TD width="15"><font size="2">&nbsp;</font></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD width="56"><font size="2">&nbsp;</font></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="191"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">of shares outstanding</FONT></font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD width="7"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">19,385,808</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="74"><FONT size=2 face="serif">15,876,053</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="56"><FONT size=2 face="serif">16,697,807</FONT></TD>
   <TD width="10"><font size="2">&nbsp;</font></TD>
   <TD width="6"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">13,912,182</FONT></TD>
   <TD width="4"><font size="2">&nbsp;</font></TD>
   <TD width="8"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="serif">10,760,945</FONT></TD>
   <TD width="12"><font size="2">&nbsp;</font></TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-5</font></P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">CONSOLIDATED STATEMENTS OF CASH FLOWS</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">(expressed in Canadian dollars, unless otherwise stated)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="35%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="center" colspan=4 width="23%"><B><FONT size=2 face="serif">For the six months ended</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="36%" colspan="8">
    <p align="center"><font size="2">&nbsp;<B><FONT size=2 face="serif">For the years ended</FONT></B>&nbsp;</font></p>
   </TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD align="center" colspan=4 width="23%" style="border-bottom: 1 solid #000000"><B><FONT size=2 face="serif">December 31,</FONT></B></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font size="2">&nbsp;</font></TD>
   <TD width="37%" colspan="8" style="border-bottom: 1 solid #000000">
    <p align="center"><font size="2">&nbsp;<b><font face="serif">June 30,</font></b></font></p>
   </TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%" align="center"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="2%" align="center"><font size="2">&nbsp;</font></TD>
   <TD width="1%" align="center"><font size="2">&nbsp;</font></TD>
   <TD width="10%" align="center"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="2%" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="1%" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="10%" align="right"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="2%" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="1%" align="right"><font size="2">&nbsp;</font></TD>
   <TD width="1%" align="right"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><B><FONT size=2 face="serif">2000</FONT></B></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><FONT size=2 face="serif">CASH PROVIDED BY (USED IN)</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><FONT size=2 face="serif">Operating activities</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Loss for the period</FONT></font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,690,137)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(384,294)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,207,869)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,067,871)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2 face="serif">(1,523,458)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Write-off of deferred</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">exploration expenditure</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">373,627</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">1,088,239</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Writedown of investments</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">22,606</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Amortization</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">9,109</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">25,312</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">19,251</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Write-off of property, plant</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">and equipment</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">42,511</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">95,833</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Gain on disposal of</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">investments</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(5,805)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Gain on disposal of assets</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(14,465)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<BIG> <SMALL><BIG> <SMALL>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,690,137)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(375,185)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,171,163)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(573,099)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(407,827)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><FONT size=2 face="serif">Net (increase) decrease in non-cash</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">working capital balances related to</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">operations (note 11)</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">1,086,189</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(184,805)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(81,308)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">82,054</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">237,610</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(603,948)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(559,990)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,252,471)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(491,045)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(170,217)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><FONT size=2 face="serif">Investing activities</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Deferred exploration expenditure</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">and property, plant and equipment</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Expenditures</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,072,896)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,415,279)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(3,147,522)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,460,057)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(2,185,566)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Option receipts</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">5,975</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">25,000</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Proceeds on disposal of assets</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">28,057</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Proceeds on disposal of</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">investments</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">49,158</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">73,486</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Purchase of assets under construction</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(400,000)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Purchase of equipment</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(6,873)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><font size="2">-</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,072,896)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,415,279)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(3,505,237)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,454,082)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(2,059,023)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><FONT size=2 face="serif">Financing activities</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Issue of common shares</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">1,184,500</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">350,849</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">6,058,850</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">5,038,397</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">2,499,391</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
 <SMALL>
<BIG> <SMALL>
<BIG>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><FONT size=2 face="serif">Increase (decrease) in cash during</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="10%"><font size="2">&nbsp;</font></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><font size="2">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">the period</FONT></font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(492,344)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">(1,624,420)</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">1,301,142</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">3,093,270</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">270,151</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><FONT size=2 face="serif">Cash, beginning of the period</FONT></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">5,323,564</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">4,022,422</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">4,022,422</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">929,152</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">659,001</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<BIG> <SMALL><BIG> <SMALL>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="35%"><FONT size=2 face="serif">Cash, end of the period</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">4,831,220</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">2,398,002</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">5,323,564</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">4,022,422</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><font size="2">&nbsp;</font></TD>
   <TD width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="serif">929,152</FONT></TD>
   <TD width="2%"><font size="2">&nbsp;</font></TD>
</TR>
<BIG> <SMALL><BIG> <SMALL>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
<BIG> <SMALL><BIG> <SMALL>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</small></big></small></big>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
   <TD><font size="2">&nbsp;</font></TD>
 <SMALL>
<BIG> <SMALL>
<BIG>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</big></small></big></small>
   <TD><font size="2">&nbsp;</font></TD>
</TR>
</TABLE><P>
<FONT size=2 face="serif">Supplemental cash flow information (note 11)</FONT>
</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-6</font></P>
<BIG> <SMALL><BIG> <SMALL>
<p>&nbsp;</p>
<p>&nbsp;</p>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; line-height:15pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman"><b><font size="2">1.</font></b></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">NATURE
OF OPERATIONS AND GOING CONCERN</font></B></P>
<P style="margin:0pt; line-height:15pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company is in the process of exploring its mineral properties and is establishing the amount of ore reserves that are economically recoverable from the Mexico property. &nbsp;The recoverability of amounts shown for these properties and related deferred exploration expenditures are dependent upon the discovery of economically recoverable reserves, the preservation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain the financing necessary to complete the development of the properties, and future profitable production or, alternatively, upon the Company's ability to dispose of its interest on an advantageous basis. &nbsp;Changes in future conditions could require material writedowns of the carrying amounts of deferred exploration expenditure.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman"><b><font size="2">2.</font></b></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</font></B></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP). &nbsp;Significant differences from United States accounting principles are disclosed in Note 15.</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman" align=justify><B><font size="2">Basis of consolidation</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Corner Bay Resources Inc. and Pan MacKenzie Resources Inc. (including its wholly owned subsidiary Minera Corner Bay S.A. de C.V.).</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Deferred exploration expenditure</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The deferred exploration expenditure is recorded at cost, net of incidental revenues generated from the particular properties. &nbsp;These net costs are deferred until the properties to which they relate are placed into production, sold or abandoned.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In March 2000, the Accounting Standards Board of the Canadian Institute of Chartered Accountants (CICA) issued Accounting Guideline No. 11 entitled,
"Enterprises in the Development Stage" (AcG 11), and subsequently, on March 12, 2002, issued Emerging Issues Committee (EIC) 126
"Accounting by Mining Enterprises for Exploration Costs." &nbsp;These guidelines address three distinct issues: (i) capitalization of costs/expenditures (ii) impairment and (iii) disclosure. &nbsp;Prior to their issuance, development state entities were exempt from following certain aspects of Canadian generally accepted accounting principles (GAAP). &nbsp;EIC 126 and AcG 11 require that all companies account for transactions based on the underlying characteristics of the transactions rather than the maturity of the enterprise. &nbsp;In addition, EIC 126 and AcG 11 require specific disclosure of information by development stage companies. &nbsp;These guidelines were effective for financial periods beginning on or after April 1, 2000, which affects the Company's financial years ended on or after June 30, 2001.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-7</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; line-height:15pt; font-family:Times New Roman" align=justify><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000" align=justify><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">EIC 126 and AcG 11 affect mining companies with respect to the deferral of exploration costs. &nbsp;The appropriate accounting guidance is contained in Section 3061,
"Property, Plant and Equipment" of the CICA Handbook which permits, but does not require, exploration costs to be capitalized as part of a mining property, if the Company considers that such costs have the characteristics of property, plant and equipment. &nbsp;Under this view, deferred exploration expenditure would not automatically be subject to regular assessment of recoverability, unless conditions such as those discussed in EIC 126 and AcG 11 exist.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">There would need to be an assessment of deferred exploration expenditure. &nbsp;Assessment of the probability of recoverability of deferred exploration expenditure from future operations will require the preparation of a projection based on objective evidence of economic reserves such as a feasibility study.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The status of the Company's operations is such that, like most mining companies in the exploration stage, it would not be practical to obtain a feasibility study or provide other information that could be used to support capitalization of deferred exploration expenditure under the alternative view.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">EIC 126 and AcG 11 did not have a significant impact on the Company's consolidated financial statements.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Property, plant and equipment</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Land and exploration equipment are recorded at cost. &nbsp;Exploration equipment is amortized on a reducing balance basis at various rates from 14% to 33%. &nbsp;Amortization relating to equipment used on the mineral properties is capitalized as part of the deferred exploration expenditure balance.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Assets under construction</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Assets under construction consist of equipment to be commissioned at the Mexico property site. &nbsp;The assets will be included as part of the equipment balance once refurbished and transferred to the site. &nbsp;These assets are not being amortized, as they are not currently ready for use.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Financial instruments</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The carrying amounts of cash, receivables, prepaid expenses and deposits, accounts payable and accrued liabilities approximate the fair values of those financial instruments due to the short-term maturities of such instruments. &nbsp;Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash. &nbsp;The Company places its cash with high credit quality financial institutions.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-8</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000" align=justify><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Income taxes</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The provision for future income taxes is based on the liability method. &nbsp;Future income taxes arise from the recognition of the tax consequences of temporary differences by applying statutory income tax rates applicable to future years to differences between the financial statements' carrying amounts and the income tax bases of certain assets and liabilities. &nbsp;The Company records a valuation allowance against any portion of those future income tax assets that it believes is not, more likely than not, to be realized.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Stock-based compensation plan</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company has one stock option plan, which is described in note 5. &nbsp;No compensation expense is recognized for this plan when stock or stock options are issued to employees. &nbsp;Any consideration paid on exercise of stock options or purchase of stock is credited to capital stock.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Effective July 1, 2002, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants Handbook Section 3870, Stock-based Compensation and Other Stock-based Payments. &nbsp;This section establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments in exchange for goods and services. &nbsp;The section requires that all stock-based awards made to non-employees be measured and recognized using a fair-value based method. &nbsp;The section encourages a fair-value based method for all awards granted to directors, officers and employees, but only requires the use of a fair value based method for direct awards of stock, stock appreciation rights and awards that call for settlement in cash or other assets.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">For stock options granted to directors, officers and employees, the Company has adopted the intrinsic value method of accounting for stock-based compensation. &nbsp;Under this method compensation expense is recognized for the excess, if any, of the quoted market price of the Company's common shares over the common share option exercise price on the day that options are granted.</font> </P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Loss per share</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Basic loss per share is computed by dividing the loss for the year by the weighted average number of common shares outstanding during the year, including contingently issuable shares that are included when the conditions necessary for issuance have been met. &nbsp;Diluted earnings per share are calculated in a manner similar to basic earnings per share, except the weighted average number of shares outstanding are increased to include potential common shares from the assumed exercise of options and warrants, if dilutive. &nbsp;The number of additional shares included in the calculation is based on the treasury stock method for options and warrants and on the as if converted method for convertible securities.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">During the year ended June 30, 2001, the Company changed its method of accounting for earnings per share to comply with the revised standard issued by the CICA Handbook, Section 3500,
"Earnings per share". &nbsp;There was no difference between the loss per share calculated under the new standard and the amount that would have been calculated using the previous standard.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-9</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000" align=justify><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Use of estimates</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The preparation of financial statements in conformity with Canadian generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses during the reporting period. &nbsp;Actual results could differ from these estimates.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">Translation of foreign currencies</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">As the Company considers all of its foreign operations to be fully integrated, all items denominated in foreign currencies have been translated using the temporal method. &nbsp;Under this method, monetary assets and liabilities and non-monetary items carried at market values are translated at the year and period end exchange rate. &nbsp;Other non-monetary items and revenue and expenses are translated at approximate rates in effect at the dates of the transactions, except depletion and amortization, which are translated at the same rates as the related assets.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman"><B><font size="2">3.</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">MINERAL PROPERTIES</font></B></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<div align="center">
  <center>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="44%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%" align="center"><B><FONT size=2 face="serif">Mexico</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD colspan=2 width="11%" align="center"><B><FONT size=2 face="serif">Maritimes</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD colspan=2 width="13%" align="center"><B><FONT size=2 face="serif">Chibougamau</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center"><B><FONT size=2 face="serif">Total</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD colspan=2 align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD colspan=2 align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Balance - June 30, 1999</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">1,018,492</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">401,611</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">1,097,825</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">2,517,928</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Expenditures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">2,114,901</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">1,411</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">2,116,312</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Option receipts</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">(25,000)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(9,586)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(34,586)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Writedown</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(1,088,239)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(1,088,239)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Balance - June 30, 2000</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">3,133,393</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">378,022</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">3,511,415</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Expenditures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">1,388,451</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">1,580</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">1,390,031</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Option receipts</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">(5,975)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(5,975)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Amortization of equipment capitalized</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">29,228</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">29,228</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Writedown</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">(373,627)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(373,627)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Balance - June 30, 2001</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">4,551,072</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">4,551,072</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Expenditures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">3,147,522</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">3,147,522</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Amortization of equipment capitalized</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">7,271</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">7,271</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Balance - June 30, 2002</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">7,705,865</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">7,705,865</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Expenditures (Unaudited)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">534,911</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">534,911</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Purchase of concessions (Unaudited)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">537,985</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">537,985</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Amortization of equipment</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="10%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="44%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">capitalized (Unaudited)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">2,803</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">2,803</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="44%"><FONT size=2 face="serif">Balance - December 31, 2002 (Unaudited)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="10%"><FONT size=2 face="serif">8,781,564</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="10%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">8,781,564</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Alamo Dorado silver/gold property is located in the northwestern state of Sonora, Mexico. &nbsp;Paved roads connect the state capital of Hermosillo to the town of Alamos, which is 67 kilometers northwest of the Alamo Dorado Project.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The 5,369 hectare property consists of the 504 hectare Alamo Ocho concession held under option by the Company, and the 4,865 hectare Alamo Dorado concession, which is owned 100% by the Company and surrounds the Alamo Ocho concession. &nbsp;The Company can earn a 100% interest in Alamo Ocho by paying US$800,000 over six years. &nbsp;Payments are made semi-annually, of which US$441,000 (unaudited) was paid to December 31, 2002 (June 30, 2002, 2001 and 2000 were US$450,000, $325,000 and $nil, respectively).</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-10</font></P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">During the year ended June 30, 2002, the Company incurred $131,147 (2001 and 2000 - $nil) in rental payments, and is committed to annual rental payments of $114,150. &nbsp;During the six-month periods ended December 31, 2002 and 2001, the Company incurred $35,906 and $23,491 (unaudited), respectively, in rental payments.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman"><b><font size="2">4.</font></b></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">PROPERTY, PLANT AND EQUIPMENT</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman">&nbsp;</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="18%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="9%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center"><B><FONT size=2 face="serif">June 30</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="9%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center"><B><FONT size=2 face="serif">June 30</FONT></B></TD>
</TR>
<TR>
   <TD width="18%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" colspan=2 width="10%"><B><FONT size=2 face="serif">Accumulated</FONT></B></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="14%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD align="center" colspan=2 width="10%"><B><FONT size=2 face="serif">Accumulated</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><B><FONT size=2 face="serif">2001</FONT></B></TD>
</TR>
<TR>
   <TD width="18%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%" align="center"><B><FONT size=2 face="serif">Cost</FONT></B></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" colspan=2 width="10%"><B><FONT size=2 face="serif">Amortization</FONT></B></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="14%"><B><FONT size=2 face="serif">Net</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%" align="center"><B><FONT size=2 face="serif">Cost</FONT></B></TD>
   <TD align="center" colspan=2 width="10%"><B><FONT size=2 face="serif">Amortization</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center"><B><FONT size=2 face="serif">Net</FONT></B></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="18%"><FONT size=2 face="serif">Equipment</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">66,683</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="9%"><FONT size=2 face="serif">14,722</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">53,961</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">129,415</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="9%"><FONT size=2 face="serif">32,545</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">96,870</FONT></TD>
</TR>
<TR>
   <TD width="18%"><FONT size=2 face="serif">Assets under</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="9%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="9%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="18%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Construction</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">3,842,500</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="9%">-</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">3,842,500</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="9%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%">-</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="18%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">3,911,183</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="9%"><FONT size=2 face="serif">14,722</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">3,896,461</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">129,415</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="9%"><FONT size=2 face="serif">32,545</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">96,870</FONT></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="18%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%" align="right">&nbsp;</TD>
   <TD width="3%" align="right">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="9%" align="right">&nbsp;</TD>
   <TD width="3%" align="right">&nbsp;</TD>
   <TD align="right" colspan=2 width="15%"><B><FONT size=2 face="serif">December 31</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
</TR>
<TR>
   <TD width="18%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%" align="right">&nbsp;</TD>
   <TD width="3%" align="right">&nbsp;</TD>
   <TD align="right" colspan=2 width="10%"><B><FONT size=2 face="serif">Accumulated</FONT></B></TD>
   <TD width="3%" align="right">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD align="right" width="14%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
</TR>
<TR>
   <TD width="18%" align="center"><B><FONT size=2 face="serif">(Unaudited)</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="right"><B><FONT size=2 face="serif">Cost</FONT></B></TD>
   <TD width="3%" align="right">&nbsp;</TD>
   <TD align="right" colspan=2 width="10%"><B><FONT size=2 face="serif">Amortization</FONT></B></TD>
   <TD width="3%" align="right">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD align="right" width="14%"><B><FONT size=2 face="serif">Net</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD align="right"><HR noshade size=1></TD>
   <TD align="right">&nbsp;</TD>
   <TD colspan=2 align="right"><HR noshade size=1></TD>
   <TD align="right">&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD align="right"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="18%"><FONT size=2 face="serif">Equipment</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2 face="serif">139,917</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2 face="serif">88,759</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2 face="serif">51,158</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
</TR>
<TR>
   <TD width="18%"><FONT size=2 face="serif">Assets under</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
</TR>
<TR>
   <TD width="18%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Construction</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2 face="serif">3,842,500</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2 face="serif">3,842,500</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="18%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2 face="serif">3,982,417</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2 face="serif">88,759</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2 face="serif">3,893,658</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">During the six months ended December 31, 2002, the Company wrote off $nil (December 31, 2001 - $nil; years ended June 30, 2002, 2001 and 2000 of $42,511, $95,833 and $nil, respectively) of property, plant and equipment.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">During the six months ended December 31, 2002, the Company recorded amortization of $2,803 (years ended June 30, 2002, 2001 and 2000 of $7,271, $29,228 and $nil, respectively), which were capitalized as deferred exploration expenditure.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-11</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (Unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman"><b><font size="2">5.</font></b></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">CAPITAL STOCK</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman"><B><font size="2">Authorized</font></B></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman"><font size="2">Unlimited number of common shares, without nominal or par value.</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<U><P style="margin:0pt; text-indent:1980pt; font-family:Times New Roman"><font size="2">117,900</font></U></P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="71%"><B><FONT size=2 face="serif">Issued and outstanding - common shares</FONT></B></TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">Number of</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">shares</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><B><FONT size=2 face="serif">Net</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">outstanding</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><B><FONT size=2 face="serif">Proceeds</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Balance - June 30, 1999</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">9,899,115</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">7,275,366</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Shares issued for cash in private placement</FONT></TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">September 21, 1999</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">596,540</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">773,976</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">December 20, 1999</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">400,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">1,198,435</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Warrants exercised for cash during the year</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">545,454</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">409,080</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Options exercised for cash during the year</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">393,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">117,900</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Balance - June 30, 2000</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">11,834,109</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">9,774,757</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Shares issued in prospectus offering
    - December 14, 2000</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">3,666,667</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">4,978,397</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Options exercised for cash</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">200,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">60,000</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Balance - June 30, 2001</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">15,700,776</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">14,813,154</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Shares issued for cash in private placement
    - February 19, 2002</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">1,830,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">4,575,000</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Warrants exercised for cash</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">183,333</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">275,000</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Options exercised for cash</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">612,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">1,208,850</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Shares issued for assets under construction</FONT></TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">purchased - June 18, 2002 (note 11)</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">850,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">3,442,500</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Balance - June 30, 2002</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">19,176,109</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">24,314,504</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Options exercised for cash (unaudited)</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">465,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">1,184,500</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2 face="serif">Balance - December 31, 2002 (unaudited)</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">19,641,109</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">25,499,004</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On September 21, 1999, the Company completed a private placement of 596,540 shares at a price of $1.30 per share.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On December 20, 1999, the Company completed a private placement of 400,000 units. &nbsp;Each unit consists of one common share at $3.00 and one-half common share purchase warrant. &nbsp;Each whole purchase warrant entitles the holder to purchase one additional common share at a price of $4.00 per common share at anytime until December 20, 2001. &nbsp;Effective December 20, 2001, all options that had not been exercised prior to this date expired.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On December 14, 2000, the Company publicly offered 3,666,667 units. &nbsp;Each unit consisted of one common share at $1.50 and one-half common share purchase warrant. &nbsp;Each whole purchase warrant entitles the holder to purchase one additional common share at $2.25 per share at anytime until December 14, 2001. &nbsp;In connection with the December 14, 2000 offering, the underwriters received 183,333 warrants of the Company. &nbsp;Each warrant entitles the underwriter to purchase one common share for $1.50 at any time until December 14, 2001. &nbsp;Effective December 14, 2001, all warrants that had not been exercised prior to this date expired. &nbsp;Refer to the following warrants table.</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On February 19, 2002, the Company completed a private placement of 1,830,000 shares at a price of $2.50 per share.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-12</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="65%">&nbsp;</TD>
   <TD width="18%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="13%" align="center"><B><FONT size=2 face="serif">Weighted</FONT></B></TD>
</TR>
<TR>
   <TD width="65%">&nbsp;</TD>
   <TD align="center" width="18%"><B><FONT size=2 face="serif">Number of</FONT></B></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="13%" align="center"><B><FONT size=2 face="serif">average</FONT></B></TD>
</TR>
<TR>
   <TD width="65%">&nbsp;</TD>
   <TD align="center" width="18%"><B><FONT size=2 face="serif">Warrants</FONT></B></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="13%" align="center"><B><FONT size=2 face="serif">price</FONT></B></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Balance - June 30, 1999</FONT></TD>
   <TD align="center" width="18%">-</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%"><FONT size=2 face="serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    -</FONT></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Issued - December 20, 1999</FONT></TD>
   <TD align="center" width="18%"><FONT size=2 face="serif">200,000</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%"><FONT size=2 face="serif">4.00</FONT></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Balance - June 30, 2000</FONT></TD>
   <TD align="center" width="18%"><FONT size=2 face="serif">200,000</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%"><FONT size=2 face="serif">4.00</FONT></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Issued - December 14, 2000</FONT></TD>
   <TD align="center" width="18%"><FONT size=2 face="serif">2,016,666</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%"><FONT size=2 face="serif">2.18</FONT></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Balance - June 30, 2001</FONT></TD>
   <TD align="center" width="18%"><FONT size=2 face="serif">2,216,666</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%"><FONT size=2 face="serif">2.34</FONT></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Expired</FONT></TD>
   <TD align="center" width="18%"><FONT size=2 face="serif">(2,033,333)</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%"><FONT size=2 face="serif">2.42</FONT></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Exercised</FONT></TD>
   <TD align="center" width="18%"><FONT size=2 face="serif">(183,333)</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%"><FONT size=2 face="serif">1.50</FONT></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Balance - June 30, 2002</FONT></TD>
   <TD align="center" width="18%">-</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%">-</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Expired</FONT></TD>
   <TD align="center" width="18%">-</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%">-</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Exercised</FONT></TD>
   <TD align="center" width="18%">-</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="13%">-</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2 face="serif">Balance - December 31, 2002 (unaudited)</FONT></TD>
   <TD align="center" width="18%">-</TD>
   <TD width="3%" align="center">&nbsp;</TD>
</center>
   <TD width="13%" align="center">
    <p align="left"><FONT size=2 face="serif">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    -</FONT></p>
</TD>
</TR>
  <center>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"></TD>
   <TD width="18%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="13%">&nbsp;</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">Options</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On December 15, 1995, the shareholders of the Company approved the amended stock option plan (dated November 1, 1995) (the Plan) which provides for the issuance of 1.0 million stock options under the terms of the Plan. &nbsp;On December 20, 1999 and December 15, 2000, the shareholders approved an amendment to provide for the further issuance of an additional 1.4 and 2.0 million common share options, respectively, under the terms of the Plan.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Under the Plan, the Company provides options to buy common shares of the Company to directors, officers and service providers. &nbsp;The board of directors grants such options for periods of up to ten years at prices not lower than the market price at the date of granting.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">No compensation expense is recognized when stock options are issued to employees and directors. &nbsp;All consideration paid by employees from the exercise of stock options or purchase of stock is credited to capital stock.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Compensation expense is recorded when stock options are issued to non-employees and is recognized over the vesting period of the options. &nbsp;Compensation expense is determined as the fair value of the options at the date of grant using an option-pricing model. &nbsp;During the six months ended December 31, 2002 and year ended June 30, 2002, no stock options were issued to non-employees.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-13</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">As at June 30, 2002, the Company had outstanding and exercisable stock options as follows:</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE width="628" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="184">&nbsp;</TD>
   <TD width="45">&nbsp;</TD>
   <TD align="center" colspan=2 width="124"><B><FONT size=2 face="serif">Exercise</FONT></B></TD>
   <TD width="44" align="center">&nbsp;</TD>
   <TD width="210" align="center"><B><FONT size=2 face="serif">Expiry</FONT></B></TD>
   <TD width="9">&nbsp;</TD>
</TR>
<TR>
   <TD width="184">&nbsp;</TD>
   <TD width="45">&nbsp;</TD>
   <TD align="center" colspan=2 width="124"><B><FONT size=2 face="serif">Price</FONT></B></TD>
   <TD width="44" align="center">&nbsp;</TD>
   <TD width="210" align="center"><B><FONT size=2 face="serif">Date</FONT></B></TD>
   <TD width="9">&nbsp;</TD>
</TR>
<TR>
   <TD width="184"><HR noshade size=1></TD>
   <TD width="45">&nbsp;</TD>
   <TD colspan=2 align="center" width="124"><HR noshade size=1></TD>
   <TD align="center" width="44">&nbsp;</TD>
   <TD align="center" width="210"><HR noshade size=1></TD>
   <TD width="9">&nbsp;</TD>
</TR>
<TR>
   <TD width="184"><FONT size=2 face="serif">500,000</FONT></TD>
   <TD width="45">&nbsp;</TD>
   <TD align="center" width="18"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="104"><FONT size=2 face="serif">2.65</FONT></TD>
   <TD width="44">&nbsp;</TD>
   <TD align="center" width="210"><FONT size=2 face="serif">12/20/02</FONT></TD>
   <TD width="9">&nbsp;</TD>
</TR>
<TR>
   <TD width="184"><FONT size=2 face="serif">660,000</FONT></TD>
   <TD width="45">&nbsp;</TD>
   <TD width="18">&nbsp;</TD>
   <TD align="center" width="104"><FONT size=2 face="serif">3.00</FONT></TD>
   <TD width="44">&nbsp;</TD>
   <TD align="center" width="210"><FONT size=2 face="serif">06/30/03</FONT></TD>
   <TD width="9">&nbsp;</TD>
</TR>
<TR>
   <TD width="184"><FONT size=2 face="serif">380,000</FONT></TD>
   <TD width="45">&nbsp;</TD>
   <TD width="18">&nbsp;</TD>
   <TD align="center" width="104"><FONT size=2 face="serif">1.75</FONT></TD>
   <TD width="44">&nbsp;</TD>
   <TD align="center" width="210"><FONT size=2 face="serif">10/02/04</FONT></TD>
   <TD width="9">&nbsp;</TD>
</TR>
<TR>
   <TD width="184"><FONT size=2 face="serif">40,000</FONT></TD>
   <TD width="45">&nbsp;</TD>
   <TD width="18">&nbsp;</TD>
   <TD align="center" width="104"><FONT size=2 face="serif">1.80</FONT></TD>
   <TD width="44">&nbsp;</TD>
   <TD align="center" width="210"><FONT size=2 face="serif">12/12/04</FONT></TD>
   <TD width="9">&nbsp;</TD>
</TR>
<TR>
   <TD width="184"><FONT size=2 face="serif">60,000</FONT></TD>
   <TD width="45">&nbsp;</TD>
   <TD align="center" width="18"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="104"><FONT size=2 face="serif">3.00</FONT></TD>
   <TD width="44">&nbsp;</TD>
   <TD align="center" width="210"><FONT size=2 face="serif">02/28/05</FONT></TD>
   <TD width="9">&nbsp;</TD>
</TR>
<TR>
   <TD width="184"><HR noshade size=1></TD>
   <TD width="45">&nbsp;</TD>
   <TD width="18"><HR noshade size=1></TD>
   <TD width="104"><HR noshade size=1></TD>
   <TD width="44">&nbsp;</TD>
   <TD width="210"><HR noshade size=1></TD>
   <TD width="9">&nbsp;</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">As at June 30, 2002, the Company had outstanding and exercisable stock options as follows:</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE width="614" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="110" valign="bottom" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="84" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">Number</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">of</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">options</FONT></B></TD>
   <TD width="5" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="7" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="62" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">2002</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">Weighted</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">average</FONT></B></TD>
   <TD width="6" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="80" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">Number</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">of</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">options</FONT></B></TD>
   <TD width="4" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="10" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="59" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">2001</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">Weighted</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">average</FONT></B></p>
   </TD>
   <TD width="4" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="62" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">Number</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">of</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">options</FONT></B></p>
   </TD>
   <TD width="4" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="9" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="70" valign="bottom" align="center" style="border-bottom: 1 solid #000000">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">2000</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">Weighted</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">average</FONT></B></p>
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"><B><FONT size=2 face="serif">price</FONT></B></p>
   </TD>
   <TD width="6" valign="bottom">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
</TR>
<TR>
   <TD width="110" valign="bottom">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="84" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="5" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="7" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="62" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="6" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="80" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="4" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="10" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="59" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="4" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="62" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="4" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="9" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="70" valign="bottom" align="center">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
   <TD width="6" valign="bottom">
    <p style="text-indent: 0; margin-top: 0; margin-bottom: 0"></TD>
</TR>
<TR>
   <TD width="110">
<FONT size=2 face="serif">Outstanding </FONT>
   </TD>
   <TD width="84" align="center">&nbsp;</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="7" align="center">&nbsp;</TD>
   <TD width="62" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="80" align="center">&nbsp;</TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="10" align="center">&nbsp;</TD>
   <TD width="59" align="center">&nbsp;</TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="62" align="center">&nbsp;</TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="9" align="center">&nbsp;</TD>
   <TD width="70" align="center">&nbsp;</TD>
   <TD width="6">&nbsp;</TD>
</TR>
<TR>
   <TD align="right" width="110">
    <p align="left"><FONT size=2 face="serif">- Beginning of year </FONT>
   </TD>
   <TD align="center" width="84"><FONT size=2 face="serif">1,607,000</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD align="center" width="7"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="62"><FONT size=2 face="serif">2.60</FONT></TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" width="80"><FONT size=2 face="serif">1,707,000</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD align="center" width="10"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="59"><FONT size=2 face="serif">2.38</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD align="center" width="62"><FONT size=2 face="serif">700,000</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD align="center" width="9"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="70"><FONT size=2 face="serif">0.30</FONT></TD>
   <TD width="6">&nbsp;</TD>
</TR>
<TR>
   <TD align="right" width="110">
    <p align="left"><FONT size=2 face="serif"> Granted </FONT>
   </TD>
   <TD align="center" width="84"><FONT size=2 face="serif">645,000</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="7" align="center">&nbsp;</TD>
   <TD align="center" width="62"><FONT size=2 face="serif">1.95</FONT></TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" width="80"><FONT size=2 face="serif">100,000</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="10" align="center">&nbsp;</TD>
   <TD align="center" width="59"><FONT size=2 face="serif">1.70</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD align="center" width="62"><FONT size=2 face="serif">1,400,000</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="9" align="center">&nbsp;</TD>
   <TD align="center" width="70"><FONT size=2 face="serif">2.84</FONT></TD>
   <TD width="6">&nbsp;</TD>
</TR>
<TR>
   <TD align="right" width="110">
    <p align="left"><FONT size=2 face="serif"> Exercised </FONT>
   </TD>
   <TD align="center" width="84"><FONT size=2 face="serif">(612,000)</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="7" align="center">&nbsp;</TD>
   <TD align="center" width="62"><FONT size=2 face="serif">1.98</FONT></TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" width="80"><FONT size=2 face="serif">(200,000)</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="10" align="center">&nbsp;</TD>
   <TD align="center" width="59"><FONT size=2 face="serif">0.30</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD align="center" width="62"><FONT size=2 face="serif">(393,000)</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="9" align="center">&nbsp;</TD>
   <TD align="center" width="70"><FONT size=2 face="serif">0.30</FONT></TD>
   <TD width="6">&nbsp;</TD>
</TR>
<TR>
   <TD width="110"></TD>
   <TD width="84" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="7" align="center"><HR noshade size=1></TD>
   <TD width="62" align="center"><HR noshade size=1></TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="80" align="center"><HR noshade size=1></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="10" align="center"><HR noshade size=1></TD>
   <TD width="59" align="center"><HR noshade size=1></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="62" align="center"><HR noshade size=1></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="9" align="center"><HR noshade size=1></TD>
   <TD width="70" align="center"><HR noshade size=1></TD>
   <TD width="6">&nbsp;</TD>
</TR>
<TR>
   <TD width="110"><FONT size=2 face="serif">Outstanding</FONT>
   </TD>
   <TD width="84" align="center">&nbsp;</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="7" align="center">&nbsp;</TD>
   <TD width="62" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="80" align="center">&nbsp;</TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="10" align="center">&nbsp;</TD>
   <TD width="59" align="center">&nbsp;</TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="62" align="center">&nbsp;</TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="9" align="center">&nbsp;</TD>
   <TD width="70" align="center">&nbsp;</TD>
   <TD width="6">&nbsp;</TD>
</TR>
<TR>
   <TD align="right" width="110">
    <p align="left"><FONT size=2 face="serif"> - End of year</FONT>
   </TD>
   <TD align="center" width="84"><FONT size=2 face="serif">1,640,000</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD align="center" width="7"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="62"><FONT size=2 face="serif">2.57</FONT></TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" width="80"><FONT size=2 face="serif">1,607,000</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD align="center" width="10"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="59"><FONT size=2 face="serif">2.60</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD align="center" width="62"><FONT size=2 face="serif">1,707,000</FONT></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD align="center" width="9"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="70"><FONT size=2 face="serif">2.38</FONT></TD>
   <TD width="6">&nbsp;</TD>
</TR>
<TR>
   <TD width="110"></TD>
   <TD width="84" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="7" align="center"><HR noshade size=1></TD>
   <TD width="62" align="center"><HR noshade size=1></TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="80" align="center"><HR noshade size=1></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="10" align="center"><HR noshade size=1></TD>
   <TD width="59" align="center"><HR noshade size=1></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="62" align="center"><HR noshade size=1></TD>
   <TD width="4" align="center">&nbsp;</TD>
   <TD width="9" align="center"><HR noshade size=1></TD>
   <TD width="70" align="center"><HR noshade size=1></TD>
   <TD width="6">&nbsp;</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">As at December 31, 2002, the Company had outstanding and exercisable stock options as follows:</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="69%">&nbsp;</TD>
   <TD colspan=4 width="28%">
    <p align="center"><B><FONT size=2 face="serif">December 31, 2002</FONT></B></p>
   </TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>
    <p align="right">&nbsp;</p>
   </TD>
   <TD colspan=4><HR noshade size=1></TD>
   <TD>
    <p align="right">&nbsp;</p>
   </TD>
</TR>
<TR>
   <TD width="69%">
    <p align="right">&nbsp;</p>
   </TD>
   <TD width="16%" align="center">
    <p align="right"><B><FONT size=2 face="serif">Number</FONT></B></p>
   </TD>
   <TD width="3%" align="center">
    <p align="right">&nbsp;</p>
   </TD>
   <TD colspan=2 width="9%" align="center">
    <p align="right"><B><FONT size=2 face="serif">Weighted</FONT></B></p>
   </TD>
   <TD width="3%">
    <p align="right">&nbsp;</p>
   </TD>
</TR>
<TR>
   <TD width="69%">
    <p align="right">&nbsp;</p>
   </TD>
   <TD width="16%" align="center">
    <p align="right"><B><FONT size=2 face="serif">of</FONT></B></p>
   </TD>
   <TD width="3%" align="center">
    <p align="right">&nbsp;</p>
   </TD>
   <TD colspan=2 width="9%" align="center">
    <p align="right"><B><FONT size=2 face="serif">average</FONT></B></p>
   </TD>
   <TD width="3%">
    <p align="right">&nbsp;</p>
   </TD>
</TR>
<TR>
   <TD width="69%">
    <p align="right">&nbsp;</p>
   </TD>
   <TD width="16%" align="center">
    <p align="right"><B><FONT size=2 face="serif">Options</FONT></B></p>
   </TD>
   <TD width="3%" align="center">
    <p align="right">&nbsp;</p>
   </TD>
   <TD colspan=2 width="9%" align="center">
    <p align="right"><B><FONT size=2 face="serif">price</FONT></B></p>
   </TD>
   <TD width="3%">
    <p align="right">&nbsp;</p>
   </TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD colspan=2 align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="69%"><FONT size=2 face="serif">Outstanding - Beginning of period</FONT></TD>
   <TD align="center" width="16%"><FONT size=2 face="serif">1,640,000</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="7%"><FONT size=2 face="serif">2.57</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="69%"><FONT size=2 face="serif">Exercised (unaudited)</FONT></TD>
   <TD align="center" width="16%"><FONT size=2 face="serif">(465,000)</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="7%"><FONT size=2 face="serif">2.55</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="69%"><FONT size=2 face="serif">Outstanding - End of period (unaudited)</FONT></TD>
   <TD align="center" width="16%"><FONT size=2 face="serif">1,175,000</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="7%"><FONT size=2 face="serif">2.59</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman"><b><font size="2">6.</font></b></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">INCOME TAXES</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">As at December 31, 2002, the Company has non-capital loss carry-forwards of approximately $4,200,000, unaudited, (June 30, 2002 - $2,500,000) available to reduce future taxable income. &nbsp;These losses will expire between 2003 and 2009. &nbsp;In addition, the Company has $7,300,000 in unclaimed exploration and development expenses in Canada. &nbsp;No recognition is given in these consolidated financial statements to any potential benefit from the utilization of these non-capital losses or unclaimed exploration and development expenses.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-14</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman"><B><font size="2">7.</font></B></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman"><B><font size="2">RELATED PARTY TRANSACTIONS</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Certain geological, consulting and corporate services were provided to the Company and its subsidiaries by seven directors and/or officers, and/or companies controlled by directors and/or officers. &nbsp;The cost of such services (including salaries) for the six months ended December 31, 2002 was $nil, unaudited, (years ended June 30, 2002, 2001 and 2000 were $680,213, $354,989 and $230,279, respectively). &nbsp;The services provided were at rates similar to those charged to non-related parties.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company, as prime tenant of share corporate offices with the above-mentioned related party companies, charge rent of $nil for the six months ended December 31, 2002 (years ended June 30, 2002, 2001 and 2000 were $6,000, $51,400 and $46,800, respectively) and had overhead recoveries of $nil for the six months ended December 31, 2002 (years ended June 30, 2002, 2001 and 2000 were $7,500, $97,575 and $71,913, respectively).</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman" align=justify><B><font size="2">8.</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">INVESTMENT</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">As at December 31, 2002, the Company held nil (unaudited) (June 30, 2002, 2001 and 2000
- - nil, 309,665 and 309,665, respectively) shares of MSV Resources Inc. &nbsp;The investment was disposed of during the year ended June 30, 2002.</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman" align=justify><B><font size="2">9.</font></B></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman" align=justify><B><font size="2">SEGMENT INFORMATION</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Working capital balances are retained in Canada and principal property balances are located as described in note 3.</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman" align=justify><B><font size="2">10.</font></B></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman" align=justify><B><font size="2">COMMITMENTS</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company leases office space under leases expiring November 30, 2004. &nbsp;Future minimum lease payments are as follows:</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman"><B><font size="2">Year ended June 30</font></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:27pt; line-height:14pt; font-family:Times New Roman"><font size="2">2003</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:355pt; line-height:14pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">69,660</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:27pt; line-height:14pt; font-family:Times New Roman"><font size="2">2004</font></P>
<P style="margin:0pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">69,660</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:27pt; line-height:14pt; font-family:Times New Roman"><U><font size="2">2005</font></U></P>
<U><P style="margin:0pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">29,025</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:355pt; line-height:20pt; font-family:Times New Roman"><font size="2">$</font></U></P>
<P style="margin:0pt; text-indent:372.5pt; line-height:18pt; font-family:Times New Roman"><U><font size="2">168,345</font></U></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman"><B><font size="2">11.</font></B></P>
<P style="margin:0pt; text-indent:27pt; font-family:Times New Roman"><B><font size="2">SUPPLEMENTAL CASH FLOW INFORMATION</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">During the six months ended December 31, 2002 and 2001 and the years ended June 30, 2002, 2001 and 2000, the Company paid no income taxes or interest.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-15</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Net (increase) decrease in non-cash working capital balances related to operations:</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:243pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="17%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" colspan=4 width="31%"><B><FONT size=2 face="serif">Six months ended</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="17%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" colspan=4 width="31%" style="border-bottom: 1 solid #000000"><B><FONT size=2 face="serif">December 31,</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="44%" colspan="7" style="border-bottom: 1 solid #000000">
    <p align="center">&nbsp;<B><FONT size=2 face="serif">Years ended June 30,</FONT></B>&nbsp;</p>
   </TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="17%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%" align="center"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center"><B><FONT size=2 face="serif">2000</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="17%">&nbsp;</TD>
   <TD colspan=2 width="15%">
    <p align="center"><FONT size=2 face="serif">(Unaudited)</FONT></p>
   </TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD colspan=2 width="15%" align="center"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="17%"><FONT size=2 face="serif">Receivables</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">33,708</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">(150,298)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="12%" align="center"><FONT size=2 face="serif">(20,761)</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(17,438)</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="12%" align="center"><FONT size=2 face="serif">32,625</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="18%"><FONT size=2 face="serif">Prepaid expenses and deposits</FONT></TD>
   <TD align="center" width="14%" valign="bottom"><FONT size=2 face="serif">14,292</FONT></TD>
   <TD width="3%" align="center" valign="bottom">&nbsp;</TD>
   <TD width="1%" align="center" valign="bottom">&nbsp;</TD>
   <TD align="center" width="14%" valign="bottom"><FONT size=2 face="serif">18,147</FONT></TD>
   <TD width="3%" valign="bottom">&nbsp;</TD>
   <TD width="1%" valign="bottom">&nbsp;</TD>
   <TD width="12%" align="center" valign="bottom"><FONT size=2 face="serif">10,502</FONT></TD>
   <TD width="3%" align="center" valign="bottom">&nbsp;</TD>
   <TD width="1%" align="center" valign="bottom">&nbsp;</TD>
   <TD align="center" width="12%" valign="bottom"><FONT size=2 face="serif">(1,452)</FONT></TD>
   <TD width="3%" align="center" valign="bottom">&nbsp;</TD>
   <TD width="1%" align="center" valign="bottom">&nbsp;</TD>
   <TD width="12%" align="center" valign="bottom"><FONT size=2 face="serif">(21,502)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="18%"><FONT size=2 face="serif">Accounts payable and accrued liabilities</FONT></TD>
   <TD align="center" width="14%" valign="bottom"><FONT size=2 face="serif">1,038,187</FONT></TD>
   <TD width="3%" align="center" valign="bottom">&nbsp;</TD>
   <TD width="1%" align="center" valign="bottom">&nbsp;</TD>
   <TD align="center" width="14%" valign="bottom"><FONT size=2 face="serif">(52,654)</FONT></TD>
   <TD width="3%" valign="bottom">&nbsp;</TD>
   <TD width="1%" valign="bottom">&nbsp;</TD>
   <TD width="12%" align="center" valign="bottom"><FONT size=2 face="serif">(71,049)</FONT></TD>
   <TD width="3%" align="center" valign="bottom">&nbsp;</TD>
   <TD width="1%" align="center" valign="bottom">&nbsp;</TD>
   <TD align="center" width="12%" valign="bottom"><FONT size=2 face="serif">100,944</FONT></TD>
   <TD width="3%" align="center" valign="bottom">&nbsp;</TD>
   <TD width="1%" align="center" valign="bottom">&nbsp;</TD>
   <TD width="12%" align="center" valign="bottom"><FONT size=2 face="serif">226,487</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="17%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">1,086,189</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2 face="serif">(184,805)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="12%" align="center"><FONT size=2 face="serif">(81,308)</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">82,054</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="12%" align="center"><FONT size=2 face="serif">237,610</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On June 18, 2002, assets under construction were acquired for $3,442,500, through issuance of common shares (note 4). &nbsp;The purchase price was based on the value of the common shares.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman" align=justify><B><font size="2">12.</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">ACQUISITION OF COMPANY BY PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On May 21, 2002, the Company and Pan American Silver Corp. (Pan American) announced a proposed plan of arrangement whereby Pan American would acquire all of the issued and outstanding shares of the Company. &nbsp;On June 28, 2002, both companies announced amended terms to the proposed plan of arrangement. &nbsp;The amended proposal for a plan of arrangement is subject to approval of the shareholders of the Company and Pan American and approval by the Ontario Superior Court of Justice and various regulatory authorities. &nbsp;The shareholders of the Company and Pan American approved the plan of arrangement on September 4 and 5, 2002, respectively. &nbsp;If remaining approvals are obtained and all material covenants are satisfied in a timely fashion, the plan of arrangement would become effective in September 2002.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Under the terms of the amended plan of arrangement, each Corner Bay Silver Inc. common share would be exchanged for 0.3846 of a Pan American common share and 0.1923 of a Pan American common share purchase warrant. &nbsp;Each whole Pan American common share purchase warrant (the Pan American Warrant) provides the holder with the rights to purchase a Pan American common share at CAN$12 for a five-year period after the effective date of the plan of arrangement ("Plan of Arrangement"). &nbsp;The Pan American Warrants will trade on the Toronto Stock Exchange.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman" align=justify><B><font size="2">13.</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify><B><font size="2">SUBSEQUENT EVENT</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In July 2002, the principal mineral concession, which hosts the Alamo Dorado concession, was purchased outright from the concession owners by paying the remaining option payments in a final lump sum payment of US$345,000 (US$300,000 plus Impuesto Al Valor Agregado (IVA) taxes).</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">SUBSEQUENT EVENT (UNAUDITED)</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company received regulatory approval on the plan on arrangement and on February 20, 2003 the Company and Pan American Silver Corp. completed the Plan of Arrangement.</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-16</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman"><B><font size="2">14.</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">COMPARATIVES</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Certain prior years' comparative numbers have been restated to reflect the current year's presentation.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman"><B><font size="2">15.</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">DIFFERENCE BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:-0.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Canadian GAAP varies in certain significant respects from the principles and practices generally accepted in the United States ("U.S. GAAP"). &nbsp;The effect of these principal measurement differences on the Company's consolidated financial statements are quantified below and described in the accompanying notes.</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">Consolidated statement of operations</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="31%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" colspan=4 width="25%"><B><FONT size=2 face="serif">Six months ended</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="31%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" colspan=4 width="25%" style="border-bottom: 1 solid #000000"><B><FONT size=2 face="serif">December 31</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="39%" colspan="7" style="border-bottom: 1 solid #000000">
    <p align="center">&nbsp;<B><FONT size=2 face="serif">Years ended June 30,</FONT></B></p>
   </TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="31%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="11%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><B><FONT size=2 face="serif">2000</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="31%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%" align="center"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD colspan=2 width="12%" align="center"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="32%"><FONT size=2 face="serif">Loss for the period reported under</FONT></TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="31%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Canadian GAAP</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(1,690,137)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(384,294)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(1,207,869)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(1,067,871)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(1,523,458)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="31%"><FONT size=2 face="serif">Exploration expenses adjustment</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(537,714)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(1,415,279)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(3,154,793)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(1,039,657)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(993,487)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="32%"><FONT size=2 face="serif">Loss for the period reported under</FONT></TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="31%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">U.S. GAAP</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(2,227,851)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(1,799,573)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(4,362,662)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(2,107,528)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2 face="serif">(2,516,945)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:45pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">a)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:45pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In accordance with U.S. GAAP, the Company would be required to charge all costs of deferred exploration expenditures to earnings as operating expenses as incurred until proven economic reserves are established. &nbsp;As a result of accounting for these expenditures in this manner, the unaudited loss for the six months ended December 31, 2002 and 2001 would be increased by $537,714 and $1,415,279, respectively, and loss for the years ended June 30, 2002, 2001 and 2000 would be increased by $3,154,793, $1,039,657 and $993,487, respectively.</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:45pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">b)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:45pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company accounts for its share options using the intrinsic value method, which in the Company's circumstances amounts does not result in different from the amounts that would be determined under the provisions of the Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock Issued to Employees," (APB 25) and related interpretations. &nbsp;Accordingly, no compensation expense for its share option plan has been recognized or recorded in the consolidated statement of operations and deficit for any of the years presented. &nbsp;A company that does not adopt the fair value method must disclose the cost of the stock compensation awards at their fair value at the date the award is granted. &nbsp;The unaudited value of the Company's options that were granted during six months ended December 31, 2002 was $nil (2001 - $17,846) (three years ended June 30, 2002 were $447,952, $37,605 and $878,747, respectively). &nbsp;The fair value for 2002 was estimated using the Black-Scholes model with assumptions of a three-year expected term volatility ranging from 50% to 56% and interest rates from 3.75% to 4.04%. &nbsp;The fair value for 2001 and 2000 was estimated using the Black-Scholes model with assumptions of a two-year expected term, 60% volatility and interest rates ran
ging from 6.0% to 6.5%.</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-17</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:45pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; padding-left:27pt; padding-top:3pt; text-indent:-27pt; font-family:Times New Roman; border-top:0.5pt solid #000000"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">Basic loss per share</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:216pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="33%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" colspan=3 width="24%"><B><FONT size=2 face="serif">Six months ended</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" colspan=3 width="24%" style="border-bottom: 1 solid #000000"><B><FONT size=2 face="serif">December 31,</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="39%" colspan="6" style="border-bottom: 1 solid #000000">
    <p align="center">&nbsp;<B><FONT size=2 face="serif">Years ended June 30,</FONT></B>&nbsp;</p>
   </TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">2000</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;</TD>
   <TD colspan=2 width="13%"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD colspan=2 width="13%" align="center"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%"><FONT size=2 face="serif">Loss for the period under</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">U.S. GAAP</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(2,227,851)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(1,799,573)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(4,362,662)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(2,107,528)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(2,516,945)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%"><FONT size=2 face="serif">Weighted average number of</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Common shares outstanding</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">19,385,808</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">15,876,053</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">16,697,807</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">13,912,182</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">10,760,945</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="33%"><FONT size=2 face="serif">Loss per share under U.S. GAAP</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">($0.11)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">($0.11)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">($0.26)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">($0.15)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">($0.23)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">Consolidated statements of comprehensive loss</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="33%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" colspan=3 width="24%"><B><FONT size=2 face="serif">Six months ended</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" colspan=3 width="24%" style="border-bottom: 1 solid #000000"><B><FONT size=2 face="serif">December 31,</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="39%" colspan="6" style="border-bottom: 1 solid #000000" align="center">&nbsp;<B><FONT size=2 face="serif">Years ended June 30,</FONT></B>&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">2002</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">2001</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><B><FONT size=2 face="serif">2000</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;</TD>
   <TD align="right" colspan=2 width="13%">
    <p align="center"><FONT size=2 face="serif">(Unaudited)</FONT></p>
   </TD>
   <TD align="center" colspan=2 width="13%"><FONT size=2 face="serif">(Unaudited)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="33%"><FONT size=2 face="serif">Loss for the period under</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">U.S. GAAP</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(2,227,851)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(1,799,573)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(4,362,662)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(2,107,528)</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(2,516,945)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="34%"><FONT size=2 face="serif">Other comprehensive earnings, net</FONT></TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="34%"><FONT size=2 face="serif">of income taxes</FONT></TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Unrealized gain on marketable</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">securities</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">18,580</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">9,290</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Realized (gain) loss on sale of</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">marketable securities</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(18,580)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">33,948</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="33%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Writedown to fair value</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">22,606</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The consolidated statements of comprehensive loss provide a measure of all changes in equity of the Company that result from transactions, other than those with shareholders, and other economic events that occurred during the period.</font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Under U.S. GAAP, the Company's holding of marketable securities with quoted market values that would be marked to market with the resulting unrealized gain or loss being taken to the consolidated statement of comprehensive loss in the relevant period.</font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-18</font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify>&nbsp;</P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; padding-left:27pt; padding-top:3pt; text-indent:-27pt; font-family:Times New Roman; font-size:9pt; border-top:0.5pt solid #000000"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">Consolidated statement of cash flows</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:178.15pt; font-family:Times New Roman; font-size:9pt"><B><font size="2">&nbsp;Six months ended</font></B></P>
<B><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:191.9pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">December 31</font></U></B></P>
<B><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:321.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Years ended June 30,</font></U></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:441pt; font-family:Times New Roman; font-size:9pt"><B><U><font size="2"><BR></font></U></B></P>
<B><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">2002</font></U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:234pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><B><U><font size="2">2001</font></U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:288pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><B><U><font size="2">2002</font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:351pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">2001</font></U></B></P>
<B><U><P style="margin:0pt; padding-left:27pt; text-indent:407.25pt; font-family:Times New Roman; font-size:9pt"><font size="2">2000&nbsp;&nbsp;&nbsp;</font></U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:163.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(Unaudited)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:217.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(Unaudited)</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:441pt; font-family:Times New Roman; font-size:9pt"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">Operating activities</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:157.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:165pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(1,138,859)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:211.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:219pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(1,975,269)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:267.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:273pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(4,399,993)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:328.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:336pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(1,900,413)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:391.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:399pt; font-family:Times New Roman; font-size:9pt"><font size="2">(2,258,579)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">Investing activities</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:171.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(537,985)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:258pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:279.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(357,715)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:347.25pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(44,714)</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:416.25pt; font-family:Times New Roman; font-size:9pt"><font size="2">29,339</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Financing activities</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:171pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">1,184,500</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:231.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">350,849</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:279pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">6,058,850</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:342pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">5,038,397</font></U></P>
<U><P style="margin:0pt; padding-left:27pt; text-indent:405pt; font-family:Times New Roman; font-size:9pt"><font size="2">2,499,391</font></U></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman; font-size:9pt"><font size="2">Increase (decrease) in cash and cash</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:27.35pt; text-indent:17.65pt; line-height:15pt; font-family:Times New Roman; font-size:9pt" align=justify><font size="2">equivalent during the period</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:27.35pt; text-indent:171.4pt; line-height:15pt; font-family:Times New Roman; font-size:9pt" align=justify><font size="2">(492,344)</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:27.35pt; text-indent:218.65pt; line-height:15pt; font-family:Times New Roman; font-size:9pt" align=justify><font size="2">(1,624,420)</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:27.35pt; text-indent:278.65pt; line-height:15pt; font-family:Times New Roman; font-size:9pt" align=justify><font size="2">1,301,142</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:27.35pt; text-indent:341.65pt; line-height:15pt; font-family:Times New Roman; font-size:9pt" align=justify><font size="2">3,093,270</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:411.4pt; line-height:13pt; font-family:Times New Roman; font-size:9pt" align=justify><font size="2">270,151</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Opening cash and cash equivalents</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:171pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">5,323,564</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:225pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">4,022,422</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:279pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">4,022,422</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:348.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">929,152</font></U></P>
<U><P style="margin:0pt; padding-left:27pt; text-indent:411.75pt; font-family:Times New Roman; font-size:9pt"><font size="2">659,001</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Closing cash and cash equivalents</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:157.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:171pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">4,831,220</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:211.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:225pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">2,398,002</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:267.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:279pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">5,323,564</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:328.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:342pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">4,022,422</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:391.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin:0pt; padding-left:27pt; text-indent:411.75pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">929,152</font></U></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><B><font size="2">Consolidated balance sheets</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:239.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><B><font size="2">December 31</font></B></P>
<B><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:363pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">June 30,</font></U></B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:432pt; font-family:Times New Roman; font-size:9pt"><B><U><font size="2"><BR></font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:256.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">2002</font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:333pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">2002</font></U></B></P>
<B><U><P style="margin:0pt; padding-left:27pt; text-indent:398.25pt; font-family:Times New Roman; font-size:9pt"><font size="2">2001&nbsp;&nbsp;&nbsp;</font></U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:244.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(Unaudited)</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:432pt; font-family:Times New Roman; font-size:9pt"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">Investments under Canadian GAAP</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:231.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:285pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:301.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:357pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:373.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:407.25pt; font-family:Times New Roman; font-size:9pt"><font size="2">43,353</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Unrealized gain on marketable securities</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:285pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:357pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></U></P>
<U><P style="margin:0pt; padding-left:27pt; text-indent:407.25pt; font-family:Times New Roman; font-size:9pt"><font size="2">18,580</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Investments under US GAAP</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:231.4pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:284.65pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">-</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:301.15pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:356.65pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">-</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:373.15pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:406.9pt; line-height:18pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">61,933</font></U></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman; font-size:9pt"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman; font-size:9pt"><font size="2">Deferred exploration expenditure under</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">Canadian GAAP</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:231.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:252pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">8,781,564</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:301.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:324pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">7,705,865</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:373.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:396pt; font-family:Times New Roman; font-size:9pt"><font size="2">4,551,072</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Deferred exploration expenditure</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:246pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(8,243,579)</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:318pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(7,705,865)</font></U></P>
<U><P style="margin:0pt; padding-left:27pt; text-indent:390pt; font-family:Times New Roman; font-size:9pt"><font size="2">(4,551,072</font></U><font size="2">)</font></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman; font-size:9pt"><font size="2">Deferred exploration expenditure under</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">U.S. GAAP</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:231.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:258.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">537,985</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:301.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:357pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">-</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:373.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin:0pt; padding-left:27pt; text-indent:429pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">-</font></U></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman; font-size:9pt"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">Deficit under Canadian GAAP</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:231.75pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:246pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(9,688,110)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:301.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:318pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(7,997,973)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:373.5pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin:0pt; padding-left:27pt; text-indent:390pt; font-family:Times New Roman; font-size:9pt"><font size="2">(6,790,104)</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Exploration expenditures</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:246pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(8,243,579)</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27pt; text-indent:318pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">(7,705,865)</font></U></P>
<U><P style="margin:0pt; padding-left:27pt; text-indent:390pt; font-family:Times New Roman; font-size:9pt"><font size="2">(4,551,072</font></U><font size="2">)</font></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Deficit under U.S. GAAP</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:231.4pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:241.15pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">(17,931,689)</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:301.15pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:313.15pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">(15,703,838)</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; padding-left:27.35pt; text-indent:373.15pt; line-height:20pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:385.15pt; line-height:18pt; font-family:Times New Roman; font-size:9pt"><font size="2"><U>(11,341,176</U>)</font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:18pt; font-family:Times New Roman; font-size:9pt"><font size="2">Cumulative comprehensive other income</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:17.65pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">under Canadian GAAP</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:231.4pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:284.65pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:301.15pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:356.65pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:373.15pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:428.65pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Unrealized gain (loss) on marketable securities</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:284.65pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:356.65pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">-</font></U></P>
<U><P style="margin:0pt; padding-left:27.35pt; text-indent:406.9pt; font-family:Times New Roman; font-size:9pt"><font size="2">18,580</font></U></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman; font-size:9pt"><font size="2">Cumulative comprehensive other income</font></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:17.65pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">under U.S. GAAP</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:231.4pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:284.65pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">-</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:301.15pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:356.65pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">-</font></U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:27.35pt; text-indent:373.15pt; line-height:14pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">$</font></U></P>
<P style="margin:0pt; padding-left:27.35pt; text-indent:406.9pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">18,580</font></U></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman; font-size:9pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-19</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;</P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:18pt; font-family:Times New Roman"><B><font size="2">New standards for U.S. GAAP</font></B></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 142,
"Goodwill and Other Intangible Assets". &nbsp;This new standard features new accounting rules for goodwill and intangible assets. &nbsp;The Company does not foresee any impact on a cumulative effect of an accounting change or on the carrying value of assets and liabilities recorded in the consolidated balance sheets upon adoption. &nbsp;SFAS No. 142 will be adopted on July 1, 2002.</font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Also issued in June 2001 was SFAS No. 143,
"Accounting for Asset Retirement Obligations." &nbsp;This statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. &nbsp;It requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of a fair value can be made. &nbsp;The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. &nbsp;The Company is analyzing the impact of SFAS No. 143 and will adopt this standard on July 1, 2002.</font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In August 2001, the FASB issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-lived Assets." &nbsp;This statement supersedes SFAS No. 121 and the accounting and reporting provisions of APB 30, and also amends ARB 51. &nbsp;This statement will require one accounting model be used for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired, and will broaden the presentation of discontinued operations to include more disposal transactions. &nbsp;The Company is analyzing the impact of SFAS No. 144 and will adopt this standard on July 1, 2002.</font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Effective July 1, 2002, the Company will adopt, for United States reporting purposes, SFAS No. 145,
"Rescission of FASB Statements No. 4, 44 and 64, Amendments of SFAS No. 13, and Technical Corrections as of April 2002." &nbsp;This statement rescinds SFAS No. 4,
"Reporting Gains and Losses from Extinguishment of Debt," and an amendment of that statement, SFAS No. 64,
"Extinguishment of Debt Made to Satisfy Sinking-Fund Requirements".</font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">This statement also rescinds SFAS No. 44,
"Accounting for Intangible Assets of Motor Carriers." &nbsp;This statement amends SFAS No. 13,
"Accounting for Leases", to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. &nbsp;This statement also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings or describe their applicability under changed conditions. &nbsp;The adoption of the new standard is not currently expected to have a significant impact on the Company's results of operations or financial position.</font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><B><font size="2">New Standards for U.S. GAAP, unaudited to December 31, 2002</font></B></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The Company adopted the following standards on July 1, 2002:</font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:63.35pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">i)</font></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:63.35pt; text-indent:-18.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">the adoption of SFAS No. 142, Goodwill and Other Intangible Assets, did not have a material affect on the Company's consolidated financial position or results of operations.</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-20</font></P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman"><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the consolidated financial statements</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">December 31, 2002 and 2001 (unaudited) and June 30, 2002, 2001 and 2000</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:0.5pt solid #000000"><B><font size="2">(expressed in Canadian dollars)</font></B></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:63.35pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">ii)</font></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:63.35pt; text-indent:-18.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">the adoption of SFAS No. 143, Accounting for Asset Retirement Obligations, did not have a material impact on the Company's results of operations or shareholders' equity.</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:63.35pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">iii)</font></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:63.35pt; text-indent:-18.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">the adoption of SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets, did not have a material affect on the Company's consolidated financial position or results of operations.</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:63.35pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">iv)</font></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:63.35pt; text-indent:-18.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">the adoption of SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendments of SFAS No. 13, and Technical Corrections as of April 2002, did not have a material affect on the Company's results of operations or its financial position.</font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><B><font size="2">Financial Accounting Standards Board (FASB)</font></B></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On July 30, 2002, the FASB issued SFAS No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities." &nbsp;The standard requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. &nbsp;Examples of costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing or other exit or disposal activity. &nbsp;SFAS No. 146 is to be applied retroactively to exit or disposal activities initiated after December 31, 2002. &nbsp;The adoption of the new standard is not currently expected to have a significant impact on the Company's result of operations or financial position.</font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><B><font size="2">New Standard for Canadian GAAP</font></B></P>
<P style="margin:0pt; padding-left:27.35pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The CICA approved a new Handbook Section 3062,
"Goodwill and Other Intangible Assets," which require intangible assets with an indefinite life and goodwill to be tested for impairment on annual basis. &nbsp;Goodwill and indefinite life intangible assets will no longer be amortized. &nbsp;Intangible assets with definite lives will continue to be amortized over their useful lives. &nbsp;The new section is consistent with those recently approved by the FASB (SFAS No. 142). &nbsp;The adoption of this new standard is not expected to have any material effect on the Company's financial position, results of operations or cash flows. &nbsp;Section 3026 was adopted on July&nbsp;1, 2002 and the Company does not expect this adoption to have a significant impact on the Company's results of operations or financial position.</font></P>
<P style="margin:0pt; padding-left:27.35pt; line-height:18pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-21</font></P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big><font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">Supplementary Information about Mineral Property Expenditures</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; text-indent:192.75pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><B><font size="2">Six months ended</font></B></P>
<B><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:199.75pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">December 31,</font></U></B></P>
<B><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:339.5pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">&nbsp;&nbsp;&nbsp;
<U>Years ended June 30,</U></font></B></P>
<P style="margin:0pt; text-indent:468pt; font-family:Times New Roman; font-size:9pt"><B><U><font size="2"><BR></font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:198pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2002</font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:261pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2001</font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:324pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2002</font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:387pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2001</font></U></B></P>
<B><U><P style="margin:0pt; text-indent:450pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2000</font></U></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Field office expenditures</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Depreciation</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:166pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">11,410</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:229pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:264pt; font-family:Times New Roman"><font size="2">938</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:292pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">7,721</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:355pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:382.5pt; font-family:Times New Roman"><font size="2">1,768</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:418pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">3,435</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Vehicles</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:201pt; font-family:Times New Roman"><font size="2">774</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:274pt; font-family:Times New Roman"><font size="2">5</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332pt; font-family:Times New Roman"><font size="2">47</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:390pt; font-family:Times New Roman"><font size="2">543</font></P>
<P style="margin:0pt; text-indent:453pt; font-family:Times New Roman"><font size="2">428</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">General office</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">16,963</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">4,500</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">7,630</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:382.5pt; font-family:Times New Roman"><font size="2">6,423</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">8,279</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Office rent</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:193.5pt; font-family:Times New Roman"><font size="2">6,629</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">4,611</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">8,542</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:382.5pt; font-family:Times New Roman"><font size="2">4,506</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">4,721</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Professional fees</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">38,686</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">4,262</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:314.5pt; font-family:Times New Roman"><font size="2">27,569</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">25,596</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">31,799</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Telephone</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:193.5pt; font-family:Times New Roman"><font size="2">6,426</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">2,408</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">4,102</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:382.5pt; font-family:Times New Roman"><font size="2">3,319</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">2,673</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Exchange loss</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:212.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:246.5pt; font-family:Times New Roman"><font size="2">128,826</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:309.5pt; font-family:Times New Roman"><font size="2">172,154</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:372.5pt; font-family:Times New Roman"><font size="2">205,224</font></P>
<P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Insurance</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:193.5pt; font-family:Times New Roman"><font size="2">1,040</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:275.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:338.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:401.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Bank charges</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:206pt; font-family:Times New Roman"><font size="2">88</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:264pt; font-family:Times New Roman"><font size="2">142</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:327pt; font-family:Times New Roman"><font size="2">142</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:390pt; font-family:Times New Roman"><font size="2">150</font></P>
<P style="margin:0pt; text-indent:453pt; font-family:Times New Roman"><font size="2">499</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Travel &amp; accommodation</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:193.5pt; font-family:Times New Roman"><font size="2">3,824</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:275.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332pt; font-family:Times New Roman"><font size="2">14</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:390pt; font-family:Times New Roman"><font size="2">339</font></P>
<P style="margin:0pt; text-indent:458pt; font-family:Times New Roman"><font size="2">16</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Field supplies</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:201pt; font-family:Times New Roman"><font size="2">584</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:264pt; font-family:Times New Roman"><font size="2">100</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:327pt; font-family:Times New Roman"><font size="2">110</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:390pt; font-family:Times New Roman"><font size="2">214</font></P>
<P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Drafting and reproduction</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:206pt; font-family:Times New Roman"><font size="2">90</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:274pt; font-family:Times New Roman"><font size="2">4</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332pt; font-family:Times New Roman"><font size="2">50</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:395pt; font-family:Times New Roman"><font size="2">49</font></P>
<P style="margin:0pt; text-indent:458pt; font-family:Times New Roman"><font size="2">58</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><U><font size="2">Courier</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:201pt; font-family:Times New Roman"><font size="2">210</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:274pt; font-family:Times New Roman"><font size="2">6</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332pt; font-family:Times New Roman"><font size="2">68</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:390pt; font-family:Times New Roman"><font size="2">313</font></U></P>
<U><P style="margin:0pt; text-indent:453pt; font-family:Times New Roman"><font size="2">304</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:188.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">86,724</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:246.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">145,802</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:309.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">228,149</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:372.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">248,444</font></U></P>
<U><P style="margin:0pt; text-indent:440.5pt; line-height:18pt; font-family:Times New Roman"><font size="2">52,212</font></U></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Alamo Dorado expenditures</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Surveying</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:183.5pt; font-family:Times New Roman"><font size="2">198,050</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:246.5pt; font-family:Times New Roman"><font size="2">119,768</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:309.5pt; font-family:Times New Roman"><font size="2">225,250</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:372.5pt; font-family:Times New Roman"><font size="2">213,773</font></P>
<P style="margin:0pt; text-indent:435.5pt; font-family:Times New Roman"><font size="2">159,814</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Salaries and benefits</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">65,450</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:275.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:338.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:401.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Temporary labour</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">58,601</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:251.5pt; font-family:Times New Roman"><font size="2">22,387</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:314.5pt; font-family:Times New Roman"><font size="2">43,530</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">27,341</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">33,739</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Vehicles</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">27,786</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:251.5pt; font-family:Times New Roman"><font size="2">22,538</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:314.5pt; font-family:Times New Roman"><font size="2">35,411</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">19,524</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">39,027</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">General office</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">21,256</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">7,099</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:314.5pt; font-family:Times New Roman"><font size="2">15,164</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:382.5pt; font-family:Times New Roman"><font size="2">9,584</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">5,732</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Property payments</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:212.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:246.5pt; font-family:Times New Roman"><font size="2">231,947</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:309.5pt; font-family:Times New Roman"><font size="2">364,262</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">13,695</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">1,547</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Professional fees</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">11,410</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">1,466</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">5,716</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:390pt; font-family:Times New Roman"><font size="2">689</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">1,363</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Telephone</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:193.5pt; font-family:Times New Roman"><font size="2">5,611</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">3,791</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">5,571</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:382.5pt; font-family:Times New Roman"><font size="2">2,886</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">3,931</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Insurance</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:201pt; font-family:Times New Roman"><font size="2">985</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">1,365</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">5,059</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:382.5pt; font-family:Times New Roman"><font size="2">3,866</font></P>
<P style="margin:0pt; text-indent:453pt; font-family:Times New Roman"><font size="2">946</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Option payments</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:212.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:251.5pt; font-family:Times New Roman"><font size="2">75,505</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:309.5pt; font-family:Times New Roman"><font size="2">187,793</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:372.5pt; font-family:Times New Roman"><font size="2">152,180</font></P>
<P style="margin:0pt; text-indent:435.5pt; font-family:Times New Roman"><font size="2">160,936</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Freight</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:201pt; font-family:Times New Roman"><font size="2">967</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:275.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:338.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:401.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">11,054</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Travel and accommodation</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">43,578</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:251.5pt; font-family:Times New Roman"><font size="2">15,184</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:314.5pt; font-family:Times New Roman"><font size="2">23,142</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">21,110</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">14,332</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Assays and metallurgy</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:193.5pt; font-family:Times New Roman"><font size="2">1,881</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:251.5pt; font-family:Times New Roman"><font size="2">37,868</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:314.5pt; font-family:Times New Roman"><font size="2">62,529</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">91,049</font></P>
<P style="margin:0pt; text-indent:435.5pt; font-family:Times New Roman"><font size="2">168,239</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Field supplies</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:188.5pt; font-family:Times New Roman"><font size="2">10,466</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">3,496</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">8,068</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">13,793</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">22,307</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Drilling</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:212.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:246.5pt; font-family:Times New Roman"><font size="2">296,608</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:309.5pt; font-family:Times New Roman"><font size="2">387,923</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:372.5pt; font-family:Times New Roman"><font size="2">315,204</font></P>
<P style="margin:0pt; text-indent:435.5pt; font-family:Times New Roman"><font size="2">897,650</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Property taxes</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:212.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256.5pt; font-family:Times New Roman"><font size="2">7,696</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:314.5pt; font-family:Times New Roman"><font size="2">19,435</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">12,272</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">13,634</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Contractors</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:212.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:251.5pt; font-family:Times New Roman"><font size="2">33,696</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:314.5pt; font-family:Times New Roman"><font size="2">95,549</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">28,548</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">30,067</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Drafting and reproduction</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:193.5pt; font-family:Times New Roman"><font size="2">1,416</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:264pt; font-family:Times New Roman"><font size="2">966</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:319.5pt; font-family:Times New Roman"><font size="2">2,193</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:377.5pt; font-family:Times New Roman"><font size="2">33,892</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">4,533</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><U><font size="2">Courier</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:201pt; font-family:Times New Roman"><font size="2">730</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:264pt; font-family:Times New Roman"><font size="2">302</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:327pt; font-family:Times New Roman"><font size="2">497</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:382.5pt; font-family:Times New Roman"><font size="2">1,153</font></U></P>
<U><P style="margin:0pt; text-indent:453pt; font-family:Times New Roman"><font size="2">639</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:183.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">448,187</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:246.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">881,682</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:302pt; line-height:20pt; font-family:Times New Roman"><font size="2">1,487,092</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:372.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">960,559</font></U></P>
<U><P style="margin:0pt; text-indent:428pt; line-height:18pt; font-family:Times New Roman"><font size="2">1,569,490</font></U></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Deferred mineral property</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><U><font size="2">Expenditures</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:166pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:183.5pt; font-family:Times New Roman"><U><font size="2">534,911</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:229pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:239pt; font-family:Times New Roman"><U><font size="2">1,027,484</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:292pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:302pt; font-family:Times New Roman"><U><font size="2">1,715,241</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:355pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:365pt; font-family:Times New Roman"><U><font size="2">1,209,003</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:418pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin:0pt; text-indent:428pt; font-family:Times New Roman"><U><font size="2">1,621,702</font></U></P>
<P style="margin:0pt; text-indent:428pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; text-indent:428pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-22</font></P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small><font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">Supplementary Information about General and Administrative costs</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; text-indent:219.75pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><B><font size="2">Six months ended</font></B></P>
<B><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:226.75pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">December 31,</font></U></B></P>
<B><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:357.5pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><U><font size="2">Years ended June 30,</font></U></B></P>
<P style="margin:0pt; text-indent:468pt; font-family:Times New Roman; font-size:9pt"><B><U><font size="2"><BR></font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:225pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2002</font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:279pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2001</font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:342pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2002</font></U></B></P>
<B><U><P style="margin-top:0pt; margin-bottom:-11pt; text-indent:396pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2001</font></U></B></P>
<B><U><P style="margin:0pt; text-indent:450pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">2000</font></U></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Salaries and benefits</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:193pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:210.5pt; font-family:Times New Roman"><font size="2">243,383</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:256pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:264.5pt; font-family:Times New Roman"><font size="2">141,138</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:310pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:327.5pt; font-family:Times New Roman"><font size="2">337,064</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:373pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:381.5pt; font-family:Times New Roman"><font size="2">188,174</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:427pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:435.5pt; font-family:Times New Roman"><font size="2">285,414</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Consulting fees</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:239.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">75,418</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:327.5pt; font-family:Times New Roman"><font size="2">317,331</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:381.5pt; font-family:Times New Roman"><font size="2">143,464</font></P>
<P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Insurance</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:220.5pt; font-family:Times New Roman"><font size="2">7,439</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">17,276</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332.5pt; font-family:Times New Roman"><font size="2">44,982</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:386.5pt; font-family:Times New Roman"><font size="2">22,620</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">24,209</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Interest and bank charges</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:228pt; font-family:Times New Roman"><font size="2">915</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:274.5pt; font-family:Times New Roman"><font size="2">2,174</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:337.5pt; font-family:Times New Roman"><font size="2">8,205</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:391.5pt; font-family:Times New Roman"><font size="2">1,585</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">1,495</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Transfer agent and filing fees</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:215.5pt; font-family:Times New Roman"><font size="2">31,305</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">15,416</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332.5pt; font-family:Times New Roman"><font size="2">47,925</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:386.5pt; font-family:Times New Roman"><font size="2">20,764</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">22,953</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Accounting and legal</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:215.5pt; font-family:Times New Roman"><font size="2">27,843</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">37,122</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:327.5pt; font-family:Times New Roman"><font size="2">128,110</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:386.5pt; font-family:Times New Roman"><font size="2">96,366</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">27,855</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Office rent</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:215.5pt; font-family:Times New Roman"><font size="2">39,977</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">43,081</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332.5pt; font-family:Times New Roman"><font size="2">84,011</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:381.5pt; font-family:Times New Roman"><font size="2">121,165</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">28,061</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Telephone</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:220.5pt; font-family:Times New Roman"><font size="2">9,322</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:274.5pt; font-family:Times New Roman"><font size="2">6,228</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332.5pt; font-family:Times New Roman"><font size="2">16,386</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:386.5pt; font-family:Times New Roman"><font size="2">11,098</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">8,563</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Meals and entertainment</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:220.5pt; font-family:Times New Roman"><font size="2">6,493</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">15,472</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332.5pt; font-family:Times New Roman"><font size="2">33,772</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:391.5pt; font-family:Times New Roman"><font size="2">4,037</font></P>
<P style="margin:0pt; text-indent:445.5pt; font-family:Times New Roman"><font size="2">6,512</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Travel</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:215.5pt; font-family:Times New Roman"><font size="2">21,597</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">54,724</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:327.5pt; font-family:Times New Roman"><font size="2">115,544</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:386.5pt; font-family:Times New Roman"><font size="2">43,455</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">46,529</font></P>
<P style="margin:0pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Advertising and new</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">&nbsp;&nbsp;&nbsp;Dissemination</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:215.5pt; font-family:Times New Roman"><font size="2">29,336</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">80,371</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:327.5pt; font-family:Times New Roman"><font size="2">178,603</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:386.5pt; font-family:Times New Roman"><font size="2">57,247</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">37,061</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Income tax paid (recovery)</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:208.8pt; font-family:Times New Roman"><font size="2">(30,298)</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:293.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332.5pt; font-family:Times New Roman"><font size="2">44,000</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:397.3pt; font-family:Times New Roman"><font size="2">(52)</font></P>
<P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">General office</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:220.5pt; font-family:Times New Roman"><font size="2">8,904</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:269.5pt; font-family:Times New Roman"><font size="2">19,536</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332.5pt; font-family:Times New Roman"><font size="2">41,419</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:386.5pt; font-family:Times New Roman"><font size="2">94,076</font></P>
<P style="margin:0pt; text-indent:440.5pt; font-family:Times New Roman"><font size="2">46,399</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Plan of arrangement costs</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:210.5pt; font-family:Times New Roman"><font size="2">212,321</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:293.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:332.5pt; font-family:Times New Roman"><font size="2">68,160</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:410.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><U><font size="2">Exchange loss (gain)</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:208.8pt; font-family:Times New Roman"><font size="2">(14,628)</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:262.8pt; font-family:Times New Roman"><font size="2">(10,031)</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:337.5pt; font-family:Times New Roman"><font size="2">1,495</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:384.8pt; font-family:Times New Roman"><font size="2">(5,926)</font></U></P>
<U><P style="margin:0pt; text-indent:433.8pt; font-family:Times New Roman"><font size="2">(13,713</font></U><font size="2">)</font></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:210.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">593,909</font></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:264.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">497,925</font></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:320pt; line-height:20pt; font-family:Times New Roman"><font size="2">1,467,007</font></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:381.5pt; line-height:20pt; font-family:Times New Roman"><font size="2">798,073</font></P>
<P style="margin:0pt; text-indent:435.5pt; line-height:18pt; font-family:Times New Roman"><font size="2">521,338</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Provision for plan of arrangement costs</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Severance</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:203pt; font-family:Times New Roman"><font size="2">1,128,470</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:293.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:356.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:410.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:9pt; font-family:Times New Roman"><U><font size="2">Accounting, legal and other</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:215.5pt; font-family:Times New Roman"><font size="2">43,619</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:293.65pt; font-family:Times New Roman"><font size="2">-</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:356.65pt; font-family:Times New Roman"><font size="2">-</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:410.65pt; font-family:Times New Roman"><font size="2">-</font></U></P>
<U><P style="margin:0pt; text-indent:464.65pt; font-family:Times New Roman"><font size="2">-</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-20pt; text-indent:193pt; line-height:20pt; font-family:Times New Roman"><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:203pt; line-height:20pt; font-family:Times New Roman"><U><font size="2">1,765,998</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:256pt; line-height:20pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:264.5pt; line-height:20pt; font-family:Times New Roman"><U><font size="2">497,925</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:310pt; line-height:20pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:320pt; line-height:20pt; font-family:Times New Roman"><U><font size="2">1,467,007</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:373pt; line-height:20pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:381.5pt; line-height:20pt; font-family:Times New Roman"><U><font size="2">798,073</font></U></P>
<P style="margin-top:0pt; margin-bottom:-20pt; text-indent:427pt; line-height:20pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin:0pt; text-indent:435.5pt; line-height:18pt; font-family:Times New Roman"><U><font size="2">521,338</font></U></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-23</font></P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small><font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify><I><font size="2">Unaudited Pro Forma Consolidated Financial Statements of</font></I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt"><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt">&nbsp;</P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt">&nbsp;</P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt">&nbsp;</P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt">&nbsp;</P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-24</font></P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><font size="2"><BR></font></P>
 <SMALL>
<BIG> <SMALL>
<BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<p style="font-family: Times New Roman; font-size: 11pt; margin: 0pt">&nbsp;</p>
<p style="font-family: Times New Roman; font-size: 11pt; margin: 0pt">&nbsp;</p>
<p style="font-family: Times New Roman; font-size: 11pt; margin: 0pt">&nbsp;</p>
</big></small></big></small>
<TABLE cellspacing=0><TR><TD valign=bottom width=323><P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">Deloitte &amp; Touche LLP</font></P>
<P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">P.O. Box 49279</font></P>
<P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">Four Bentall Centre</font></P>
<P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">2800 - 1055 Dunsmuir Street</font></P>
<P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">Vancouver, British Columbia</font></P>
<P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">V7X 1P4</font></P>
<P style="margin:0pt; font-family:Arial; font-size:7.5pt"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">Tel: (604) 669 4466</font></P>
<P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">Fax: (604) 685 0395</font></P>
<P style="margin:0pt; line-height:9.5pt; font-family:Arial; font-size:7.5pt"><font size="2">www.deloitte.ca</font></P>
</TD><TD valign=bottom width=304.2><P style="margin:0pt; font-family:Arial Narrow; font-size:12pt" align=right><font size="2"><img src="document2004.jpg" alt="[document2004.jpg]" align=middle height=47.067 width=119.067></font></P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><B><font size="2">PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The following pro forma consolidated balance sheet of Pan American Silver Corp. as at December 31, 2002 and the pro forma consolidated statements of operations for the nine months ended September 30, 2003 and the year ended December 31, 2002 illustrate on a pro forma basis the effects of the acquisition of Corner Bay Silver Inc. and certain other significant transactions and give effect to significant assumptions described in the notes to the pro forma consolidated financial statements.</font></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:CG Times" align=center><B><font size="2">COMPILATION REPORT</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">To the Directors of</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Pan American Silver Corp.</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">We have read the accompanying unaudited pro forma balance sheet of Pan American Silver Corp. (the
"Company") as at December 31, 2002 and the unaudited pro forma statements of operations for the year then ended and the nine months ended September 30, 2003 and have performed the following procedures.</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:36pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">1.</font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Compared the figures in the columns captioned
"Pan American Silver Corp." to the unaudited financial statements of the Company for the nine months ended September 30, 2003, and the audited financial statements of the Company for the year ended December 31, 2002, respectively, and found them to be in agreement.</font> </P>
<P style="margin:0pt; padding-left:18pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:36pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">2.</font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Compared the figures in the column captioned
"Corner Bay Silver Inc." and the information contained in Note 5 to the unaudited financial statements of Corner Bay Silver Inc. for the six months ended December&nbsp;31, 2002 and 2001 and the audited financial statements for the year ended June 30, 2002, and found them to be in agreement.</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:36pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">3.</font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Made enquiries of certain officials of the Company who have responsibility for financial and accounting matters about:</font> </P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:54pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman"><font size="2">a)</font></P>
<P style="margin:0pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman"><font size="2">the basis for determination of the pro forma adjustments; and</font> </P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:54pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman"><font size="2">b)</font></P>
<P style="margin:0pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman"><font size="2">whether the pro forma financial statements comply as to form in all material respects with the Securities Act of Ontario and the related regulations.</font> </P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman"><font size="2">The officials:</font> </P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:54pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman"><font size="2">a)</font></P>
<P style="margin:0pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman"><font size="2">described to us the basis for determination of the pro forma adjustments; and</font> </P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:54pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman"><font size="2">b)</font></P>
<P style="margin:0pt; padding-left:54pt; line-height:13pt; font-family:Times New Roman"><font size="2">stated that the pro forma statements comply as to form in all material respects with the Securities Act of Ontario and the related regulations.</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:36pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman"><font size="2">4.</font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman"><font size="2">Read the notes to the pro forma statements, and found them to be consistent with the basis described to us for determination of the pro forma adjustments.</font> </P>
<font size="2">
<BR>
<img src="document2006.jpg" alt="[document2006.jpg]" align=middle height=46.067 width=63.333>
<BR>
<BR>
</font><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-25</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<BIG> <SMALL><BIG> <SMALL>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</small></big></small></big>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:18pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:18pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:36pt; text-indent:-18pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">5.</font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Recalculated the application of the pro forma adjustments to the aggregate of the amounts in the columns captioned
"Pan American Silver Corp." and "Corner Bay Silver Inc." for the nine months ended September&nbsp;30, 2003, and as at and for the year ended December 31, 2002, and found the amounts in the column captioned
"Pro forma Pan American Silver Corp." to be arithmetically correct.</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">A pro forma financial statement is based on management assumptions and adjustments which are inherently subjective. &nbsp;The foregoing procedures are substantially less than either an audit or a review, the objective of which is the expression of assurance with respect to management's assumptions, the pro forma adjustments, and the application of the adjustments to the historical financial information. &nbsp;Accordingly, we express no such assurance. &nbsp;The foregoing procedures would not necessarily reveal matters of significance to the pro forma financial statements, and we therefore make no representation about the sufficiency of the procedures for the purposes of a reader of such statements.</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">(signed) DELOITTE &amp; TOUCHE LLP</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Chartered Accountants</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Vancouver, British Columbia</font> </P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">January 26, 2004</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; font-family:CG Times" align=center><B><font size="2">COMMENTS TO READERS IN THE UNITED STATES OF AMERICA</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Under Canadian securities regulations, when pro forma financial statements are included in a prospectus, an auditors' compilation report on the financial statements is required to be included in the prospectus. &nbsp;Under applicable securities regulations in the United States of America, such compilation reports would not be included in such a prospectus.</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">(signed) DELOITTE &amp; TOUCHE LLP</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Chartered Accountants</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">Vancouver, British Columbia</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2">January 26, 2004</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
<BR>
<BR>
</font><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-26</font></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
 <SMALL>
<BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small></big></small></big></small><font size="2">
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">PRO FORMA CONSOLIDATED BALANCE SHEET</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">December 31, 2002 (Unaudited)</font></B></P>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center><B><font size="2">(Expressed in Thousands of United States Dollars)</font></B></P>
<TABLE width="663" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73">&nbsp;</TD>
   <TD width="19">&nbsp;</TD>
   <TD width="6">&nbsp;</TD>
   <TD width="29">&nbsp;</TD>
   <TD width="50">&nbsp;</TD>
   <TD width="31">&nbsp;</TD>
   <TD width="43">&nbsp;</TD>
   <TD width="45">&nbsp;</TD>
   <TD width="5">&nbsp;</TD>
   <TD align="center" colspan=2 width="87"><B><FONT size=2 face="serif">Pro Forma</FONT></B></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD align="center" colspan=3 width="98"><B><FONT size=2 face="serif">Pan American</FONT></B></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" colspan=2 width="81"><B><FONT size=2 face="serif">Corner Bay</FONT></B></TD>
   <TD align="center" width="31"><B><FONT size=2 face="serif">Note</FONT></B></TD>
   <TD colspan=2 width="90" align="center"><B><FONT size=2 face="serif">Pro forma</FONT></B></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD align="center" colspan=2 width="87"><B><FONT size=2 face="serif">Pan American</FONT></B></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD align="center" colspan=3 width="98"><B><FONT size=2 face="serif">Silver Corp.</FONT></B></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" colspan=2 width="81"><B><FONT size=2 face="serif">Silver Inc.</FONT></B></TD>
   <TD align="center" width="31"><B><FONT size=2 face="serif">5</FONT></B></TD>
   <TD colspan=2 width="90" align="center"><B><FONT size=2 face="serif">adjustments</FONT></B></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD align="center" colspan=2 width="87"><B><FONT size=2 face="serif">Silver Corp.</FONT></B></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><B><FONT size=2 face="serif">ASSETS</FONT></B></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73">&nbsp;</TD>
   <TD width="19">&nbsp;</TD>
   <TD width="6">&nbsp;</TD>
   <TD width="29">&nbsp;</TD>
   <TD width="50">&nbsp;</TD>
   <TD width="31">&nbsp;</TD>
   <TD width="43">&nbsp;</TD>
   <TD width="45">&nbsp;</TD>
   <TD width="5">&nbsp;</TD>
   <TD width="29">&nbsp;</TD>
   <TD width="56">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Cash and cash equivalents</FONT></TD>
   <TD width="7"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">10,185</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">3,212</FONT></TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(e)</FONT></TD>
   <TD align="center" width="43"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="45"><FONT size=2 face="serif">86,250</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD align="center" width="29"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="56"><FONT size=2 face="serif">96,647</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(g)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">(3,000)</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Accounts receivable</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">4,598</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">109</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">4,707</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Inventories</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">4,637</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">4,637</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Prepaid expenses and other</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">3,210</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">2</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">3,212</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73" align="center"><HR noshade size=1></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><HR noshade size=1></TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="50" align="center"><HR noshade size=1></TD>
   <TD width="31" align="center"><HR noshade size=1></TD>
   <TD width="43" align="center"><HR noshade size=1></TD>
   <TD width="45" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="56" align="center"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">22,630</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">3,323</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">83,250</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">109,203</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Property, plant and equipment</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">59,447</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">2,588</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">62,035</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Mineral properties</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">4,193</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">5,838</FONT></TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(a)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">53,360</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">82,769</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(b)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">18,858</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(c)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">520</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Direct smelting ore</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">4,303</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">4,303</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Other assets</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">4,393</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">20</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">4,413</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73" align="center"><HR noshade size=1></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><HR noshade size=1></TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="50" align="center"><HR noshade size=1></TD>
   <TD width="31" align="center"><HR noshade size=1></TD>
   <TD width="43" align="center"><HR noshade size=1></TD>
   <TD width="45" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="56" align="center"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD align="center" width="14"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="73"><FONT size=2 face="serif">94,966</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" width="29"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="50"><FONT size=2 face="serif">11,769</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD align="center" width="43"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="45"><FONT size=2 face="serif">155,988</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD align="center" width="29"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="56"><FONT size=2 face="serif">262,723</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73" align="center"><HR noshade size=1></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><HR noshade size=1></TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="50" align="center"><HR noshade size=1></TD>
   <TD width="31" align="center"><HR noshade size=1></TD>
   <TD width="43" align="center"><HR noshade size=1></TD>
   <TD width="45" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="56" align="center"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><B><FONT size=2 face="serif">LIABILITIES</FONT></B></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD width="45" align="center">&nbsp;</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">CURRENT</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD width="45" align="center">&nbsp;</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Operating line of credit</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD align="center" width="14"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="73"><FONT size=2 face="serif">125</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" width="29"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD align="center" width="43"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD align="center" width="29"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="56"><FONT size=2 face="serif">125</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Accounts payable and accrued liabilities</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">15,227</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">901</FONT></TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(c)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">520</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">16,648</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Advances for metal shipments</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">2,158</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">2,158</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Current portion of bank loans</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD width="45" align="center">&nbsp;</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">and capital lease</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">1,638</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">1,638</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Current portion of convertible debentures</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD width="45" align="center">&nbsp;</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">liability</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(e)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">1,213</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">1,213</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Current portion of other liabilities</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">1,083</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">1,083</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73" align="center"><HR noshade size=1></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><HR noshade size=1></TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="50" align="center"><HR noshade size=1></TD>
   <TD width="31" align="center"><HR noshade size=1></TD>
   <TD width="43" align="center"><HR noshade size=1></TD>
   <TD width="45" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="56" align="center"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">20,231</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">901</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">1,733</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">22,865</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Deferred revenue</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">923</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">923</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Future income taxes</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73">-</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(b)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">18,858</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">18,858</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Bank loans and capital lease</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">3,942</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">3,942</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Provision for reclamation</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">12,971</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">12,971</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Convertible debentures liability</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73">-</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(e)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">21,836</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">21,836</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Severance indemnities and commitments</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">1,407</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45">-</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">1,407</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73" align="center"><HR noshade size=1></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><HR noshade size=1></TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="50" align="center"><HR noshade size=1></TD>
   <TD width="31" align="center"><HR noshade size=1></TD>
   <TD width="43" align="center"><HR noshade size=1></TD>
   <TD width="45" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="56" align="center"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">39,474</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">901</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">42,427</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">82,802</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73" align="center"><HR noshade size=1></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><HR noshade size=1></TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="50" align="center"><HR noshade size=1></TD>
   <TD width="31" align="center"><HR noshade size=1></TD>
   <TD width="43" align="center"><HR noshade size=1></TD>
   <TD width="45" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="56" align="center"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><B><FONT size=2 face="serif">SHAREHOLDERS' EQUITY</FONT></B></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD width="45" align="center">&nbsp;</TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Share capital</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">161,024</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">16,952</FONT></TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(a)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">46,140</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">224,116</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Convertible debentures</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73">-</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50">-</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(e)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">63,201</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">63,201</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Additional paid in capital</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">1,092</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">357</FONT></TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(a)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">1,136</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">2,228</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(a)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">(357)</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><FONT size=2 face="serif">Deficit</FONT></TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">(106,624)</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">(6,441)</FONT></TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(a)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">6,441</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">(109,624)</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="73" align="center">&nbsp;</TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="50" align="center">&nbsp;</TD>
   <TD align="center" width="31"><FONT size=2 face="serif">(g)</FONT></TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">(3,000)</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD width="56" align="center">&nbsp;</TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73" align="center"><HR noshade size=1></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><HR noshade size=1></TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="50" align="center"><HR noshade size=1></TD>
   <TD width="31" align="center"><HR noshade size=1></TD>
   <TD width="43" align="center"><HR noshade size=1></TD>
   <TD width="45" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="56" align="center"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD align="center" width="73"><FONT size=2 face="serif">55,492</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="50"><FONT size=2 face="serif">10,868</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD width="43" align="center">&nbsp;</TD>
   <TD align="center" width="45"><FONT size=2 face="serif">113,561</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center">&nbsp;</TD>
   <TD align="center" width="56"><FONT size=2 face="serif">179,921</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73" align="center"><HR noshade size=1></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center"><HR noshade size=1></TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="50" align="center"><HR noshade size=1></TD>
   <TD width="31" align="center"><HR noshade size=1></TD>
   <TD width="43" align="center"><HR noshade size=1></TD>
   <TD width="45" align="center"><HR noshade size=1></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD width="29" align="center"><HR noshade size=1></TD>
   <TD width="56" align="center"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216">&nbsp;</TD>
   <TD width="7">&nbsp;</TD>
   <TD align="center" width="14"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="73"><FONT size=2 face="serif">94,966</FONT></TD>
   <TD width="19" align="center">&nbsp;</TD>
   <TD width="6" align="center">&nbsp;</TD>
   <TD align="center" width="29"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="50"><FONT size=2 face="serif">11,769</FONT></TD>
   <TD width="31" align="center">&nbsp;</TD>
   <TD align="center" width="43"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="45"><FONT size=2 face="serif">155,988</FONT></TD>
   <TD width="5" align="center">&nbsp;</TD>
   <TD align="center" width="29"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="56"><FONT size=2 face="serif">262,723</FONT></TD>
   <TD width="10">&nbsp;</TD>
</TR>
<TR>
   <TD width="216"><HR noshade size=1></TD>
   <TD width="7"><HR noshade size=1></TD>
   <TD width="14"><HR noshade size=1></TD>
   <TD width="73"><HR noshade size=1></TD>
   <TD width="19">&nbsp;</TD>
   <TD width="6"><HR noshade size=1></TD>
   <TD width="29"><HR noshade size=1></TD>
   <TD width="50"><HR noshade size=1></TD>
   <TD width="31"><HR noshade size=1></TD>
   <TD width="43"><HR noshade size=1></TD>
   <TD width="45"><HR noshade size=1></TD>
   <TD width="5">&nbsp;</TD>
   <TD width="29"><HR noshade size=1></TD>
   <TD width="56"><HR noshade size=1></TD>
   <TD width="10">&nbsp;</TD>
</TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:15pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:15pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:15pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:15pt; font-family:Times New Roman"><B><font size="2">APPROVED BY THE BOARD OF DIRECTORS</font></B></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><font size="2">(signed)
JOHN H. WRIGHT, Director</font></P>
<P style="margin:0pt; text-indent:217.8pt; font-family:Times New Roman"><font size="2">(signed)
ROSS J. BEATY, Director</font></P>
<P style="margin:0pt; text-indent:217.8pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; text-indent:217.8pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-27</font></P>
<P style="margin:0pt; text-indent:217.8pt; font-family:Times New Roman">&nbsp;</P>
<BIG> <SMALL> <SMALL>
<BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small></big></small></big></small></big></small></small></big><font size="2">
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><B><font size="2">PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS</font></B></P>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><B><font size="2">For the nine months ended September 30, 2003</font></B></P>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman Bold" align=center><B><font size="2">(Expressed in Thousands of United States Dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="48%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD align="center" colspan=2 width="18%"><B><FONT size=2 face="serif">Pro Forma</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;</TD>
   <TD colspan=2 width="13%" align="center"><B><FONT size=2 face="serif">Pan American</FONT></B></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD colspan=2 width="10%" align="center"><B><FONT size=2 face="serif">Pro forma</FONT></B></TD>
   <TD align="center" colspan=2 width="18%"><B><FONT size=2 face="serif">Pan American</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;</TD>
   <TD colspan=2 width="13%" align="center"><B><FONT size=2 face="serif">Silver Corp.</FONT></B></TD>
   <TD width="8%" align="center"><B><FONT size=2 face="serif">Notes</FONT></B></TD>
   <TD colspan=2 width="10%" align="center"><B><FONT size=2 face="serif">adjustments</FONT></B></TD>
   <TD align="center" colspan=2 width="18%"><B><FONT size=2 face="serif">Silver Corp.</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="48%"><FONT size=2 face="serif">REVENUE</FONT></TD>
   <TD width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">32,265</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="8%">-</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">32,265</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="48%"><FONT size=2 face="serif">EXPENSES</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="17%" align="center">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Operating</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">28,962</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">28,962</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">General and administration</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">1,548</FONT></TD>
   <TD width="8%" align="center"><FONT size=2 face="serif">6(b)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%"><FONT size=2 face="serif">297</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">1,845</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Depreciation and amortization</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">1,365</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">1,365</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Reclamation</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">231</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">231</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Exploration</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">1,588</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%">-</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">1,588</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Interest and financing costs</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">1,015</FONT></TD>
   <TD width="8%" align="center"><FONT size=2 face="serif">5(f)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%"><FONT size=2 face="serif">323</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">1,338</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">34,709</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%"><FONT size=2 face="serif">620</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">35,329</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="48%"><FONT size=2 face="serif">LOSS FROM OPERATIONS</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(2,444)</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%"><FONT size=2 face="serif">(620)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">(3,064)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%"><FONT size=2 face="serif">OTHER INCOME</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">508</FONT></TD>
   <TD width="8%" align="center"><FONT size=2 face="serif">6(b)</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="8%"><FONT size=2 face="serif">12</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">520</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="48%"><FONT size=2 face="serif">NET LOSS FOR THE PERIOD</FONT></TD>
   <TD width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(1,936)</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="8%"><FONT size=2 face="serif">(608)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">(2,544)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="48%"><FONT size=2 face="serif">LOSS PER SHARE</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="17%" align="center">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Basic and fully diluted</FONT></TD>
   <TD width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="12%"><FONT size=2 face="serif">(0.03)</FONT></TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">(0.05)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="48%"><FONT size=2 face="serif">WEIGHTED AVERAGE SHARES</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%" align="center">&nbsp;</TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="17%" align="center">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="48%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">OUTSTANDING</FONT></TD>
   <TD align="right" colspan=2 width="13%">
    <p align="center"><FONT size=2 face="serif">51,030,066</FONT></p>
   </TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="8%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD align="center" width="17%"><FONT size=2 face="serif">52,097,106</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><BIG> <SMALL> <SMALL>
<BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL><BIG><P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;</P>
</big></small></big></small></big></small></big></small></big></small></small></big><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-28</font></P>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL>
 <SMALL><BIG>
 <p>&nbsp;</p>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
 </big></small></small></big></small></big></small></big></small></big></small></big><font size="2">
<BR>
</font>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">Pro Forma Consolidated Statement of Operations</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">Year ended December 31, 2002</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><font size="2">(Expressed in Thousands of United States Dollars)</font></B></P>
<TABLE cellspacing=0><TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD 
valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9
.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Pro Forma</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Pan American</font></B></P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Corner Bay</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Note</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Pro Forma</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Pan American</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=90.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Silver Corp.</font></B></P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Silver Inc.</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=40><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">5</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=80><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Adjustments</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.333><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Silver Corp.</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><font size="2">(Note 6(a))</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9
.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=136.533 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">REVENUE</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16.8><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16.8><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=27.267><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45,093</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=8.667><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=40><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45,093</font> </P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9
.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=136.533 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">EXPENSES</font></P>
</TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=120.933 colspan=4><P style="margin:0pt; font-family:Times New Roman"><font size="2">Operating</font></P>
</TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43,161</font> </P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43,161</font> </P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=181.8 colspan=7><P style="margin:0pt; font-family:Times New Roman"><font size="2">General and administration</font></P>
</TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,698</font> </P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;997</font> </P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,695</font> </P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=191.067 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Depreciation and amortization</font></P>
</TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,872</font> </P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,872</font> </P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=137.733 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Reclamation</font></P>
</TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;860</font> </P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;860</font> </P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=137.733 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Exploration</font></P>
</TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,206</font> </P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">(d)</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;343</font> </P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,549</font> </P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=181.8 colspan=7><P style="margin:0pt; font-family:Times New Roman"><font size="2">Interest and financing costs</font></P>
</TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;988</font> </P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">(f)</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">1,167 &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">2,155</font> </P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=281.133 colspan=9><P style="margin:0pt; font-family:Times New Roman"><font size="2">Write down of mineral properties</font></P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=15.6><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=181.8 colspan=7><P style="margin:0pt; padding-left:6.7pt; font-family:Times New Roman"><font size="2">and reclamation</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.267><P style="margin:0pt; font-family:Times New Roman"><B><font size="2">&nbsp;</font></B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27,218</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=8.667><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=40><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27,246</font> </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=15.6><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=30.2><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=30.2><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=30.2><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=30.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16.8><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16.8><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=27.267><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.267><P style="margin:0pt; font-family:Times New Roman"><B><font size="2">&nbsp;</font></B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80,003</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=8.667><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,025</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=40><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">1,510</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">82,538</font> </P>
</TD></TR>
<TR><TD valign=bottom width=197.4 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Loss from operations</font></P>
</TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(34,910)</font></P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,025)</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,510)</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;(37,445)</font></P>
</TD></TR>
<TR><TD valign=bottom width=197.4 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Interest income</font></P>
</TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;269</font> </P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">-</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">269</font></P>
</TD></TR>
<TR><TD valign=bottom width=197.4 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Other income</font></P>
</TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;983</font> </P>
</TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;160</font> </P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">-</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">1,143</font></P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=197.4 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Gain on disposal of investments</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">-</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">4</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=40><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">-</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">4</font></P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=197.4 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Net loss for the year</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.267><P style="margin:0pt; font-family:Times New Roman"><B><font size="2">&nbsp;</font></B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(33,658)</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=8.667><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(861)</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=40><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,510)</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(36,029)</font></P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9
.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=197.4 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Loss per share</font></P>
</TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=15.6><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=181.8 colspan=7><P style="margin:0pt; font-family:Times New Roman"><font size="2">Basic and fully diluted</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.267><P style="margin:0pt; font-family:Times New Roman"><B><font size="2">&nbsp;</font></B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.80)</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=8.667><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.04)</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=40><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.73)</font></P>
</TD></TR>
<TR><TD valign=bottom width=15.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=30.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=16.8><font size="2">&nbsp;</font></TD><TD valign=bottom width=27.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9
.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=197.4 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Weighted average shares</font></P>
</TD><TD valign=bottom width=9.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=90.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=8.667><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.2><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=40><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=80><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=93.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=15.6><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=181.8 colspan=7><P style="margin:0pt; font-family:Times New Roman"><font size="2">outstanding</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.267><P style="margin:0pt; font-family:Times New Roman"><B><font size="2">&nbsp;</font></B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=90.067><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41,849,413</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=8.667><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.2><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;19,385,808</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=40><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=80><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;49,486,072</font> </P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-29</font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<BIG> <SMALL> <SMALL>
<BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small></big></small></big></small></big></small></small></big>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the Pro Forma Consolidated Financial Statements</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">September 30, 2003 and December 31, 2002</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:1.5pt solid #000000"><B><font size="2">(Expressed in United States Dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align=justify><font size="2"><B>1.</B></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font size="2"><B>BASIS OF PRESENTATION</B></font></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The unaudited pro forma consolidated financial statements of Pan American Silver Corp. ("Pan American") as at December 31, 2002 and for the nine months ended September 30, 2003 and the year ended December&nbsp;31, 2002 have been prepared by management after giving effect to the acquisition by Pan American of Corner Bay Silver Inc. ("Corner Bay"). &nbsp;These unaudited pro forma consolidated financial statements have been compiled from and include:</font></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(a)</font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">A pro forma balance sheet combining the audited balance sheet of Pan American as at December&nbsp;31, 2002 with the unaudited balance sheet of Corner Bay as at December 31, 2002;</font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(b)</font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">A pro forma statement of operations combining the audited statement of operations of Pan American for the year ended December 31, 2002 with the unaudited statement of operations of Corner Bay for the twelve month period ended December 31, 2002; and</font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(c)</font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">A pro forma statement of operations combining the unaudited statement of operations of Pan American for the nine months ended September 30, 2003 with the unaudited statement of operations of Corner Bay for the period from January 1, 2003 to February 20, 2003.</font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The pro forma balance sheet at December 31, 2002 has been prepared as if the transactions described in Notes 3 and 4 had occurred on December 31, 2002. &nbsp;The pro forma statement of operations for the year ended December 31, 2002 and the nine months ended September 30, 2003 have been prepared as if the transactions described in Notes 3 and 4 had occurred on the first day of the respective financial periods.</font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In addition to disclosures required under Canadian security regulations to comply with the Securities and Exchange Commission regulations, the Company has reconciled the pro forma information to accounting principles generally accepted in the United States of America ("US GAPP") (see Note 7).</font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">It is management's opinion that these pro forma consolidated financial statements include all adjustments necessary for the fair presentation of the transactions described in Notes 3 and 4 in accordance with Canadian generally accepted accounting principles applied on a basis consistent with Pan American's accounting policies. &nbsp;The pro forma consolidated financial statements are not intended to reflect the results of operations or the financial position of Pan American which would have actually resulted had the proposed transactions been effected on the dates indicated. &nbsp;Further, the pro forma financial information is not necessarily indicative of the results of operations that may be obtained in the future.</font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The unaudited pro forma financial statements should be read in conjunction with the historical financial statements and notes thereto of Pan American and Corner Bay described above.</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align=justify><font size="2"><B>2.</B></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font size="2"><B>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The unaudited pro forma financial statements have been compiled using the significant accounting policies as set out in the audited financial statements of Pan American for the year ended December 31, 2002. &nbsp;The significant accounting policies of Corner Bay conform in all material respects to those of Pan American, except as described in and adjusted for in Note&nbsp;5&nbsp;(d).</font></P>
<font size="2">
<BR>
<BR>
<BR>
</font><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-30</font></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>&nbsp;</P>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL>
 <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
 </big></small></small></big></small></big></small></big></small></big></small></big>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the Pro Forma Consolidated Financial Statements</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">September 30, 2003 and December 31, 2002</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:1.5pt solid #000000"><B><font size="2">(Expressed in United States Dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align=justify><font size="2"><B>3.</B></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font size="2"><B>BUSINESS COMBINATION</B></font></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><I><font size="2">Acquisition of Corner Bay</font></I></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">On February 20, 2003, Pan American completed its proposed merger with Corner Bay. &nbsp;Under the terms of the acquisition common shares of Corner Bay were, directly or indirectly, exchanged for common shares of Pan American and warrants to purchase Pan American common shares, on the basis of one Pan American common share for every 2.60 Corner Bay shares and one Pan American warrant for every 5.20 Corner Bay common shares. &nbsp;Pan American also agreed to issue 553,846 stock options to replace 960,000 fully vested stock options currently held by Corner Bay employees and directors.</font></P>
<P style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Each whole Pan American warrant will allow the holder to purchase a Pan American common share for a price of Cdn.$12.00 for a five-year period ended February 20, 2008. &nbsp;</font></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">As a result, Pan American issued 7,636,659 common shares to the shareholders of Corner Bay, and 3,818,330 warrants to purchase common shares. &nbsp;The common shares issued were valued at $54,203,000 which was derived from an issue price of $11.30 translated at $0.6595 for each U.S. dollar, less a deemed 5% issue cost of $2,707,000. &nbsp;The share purchase warrants were valued at $8,889,000, which was derived from a warrant valued at $2.328 per warrant. &nbsp;The warrants were valued using an option pricing model assuming a weighted average volatility of the Company's share price of 35% and a weighted average annual risk free rate of 4.16%. &nbsp;The value of the stock options granted was determined to be $1,136,000.</font></P>
<P style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The business combination has been accounted for as an acquisition by Pan American of Corner Bay and the purchase method of accounting has been applied. &nbsp;The consideration given has been allocated to the fair value of net assets acquired as follows:</font></P>
<div align="center">
  <center>
<TABLE cellspacing=0><TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=288><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">As at</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=288><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">December 31,</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=288><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">2002</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=368 colspan=6><P style="margin:0pt; font-family:Times New Roman"><font size="2">Fair value of net assets acquired</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=352 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Current assets</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;3,323,000</font> </P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=352 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Mineral properties</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;81,164,000</font> </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=352 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Other assets</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20,000</font> </P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=288><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;84,507,000</font> </P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=48 colspan=3><P style="margin:0pt; font-family:Times New Roman"><font size="2">Less:</font></P>
</TD><TD valign=bottom width=304 colspan=2><P style="margin:0pt; font-family:Times New Roman"><font size="2">Current liabilities</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(901,000)</font></P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=304 colspan=2><P style="margin:0pt; font-family:Times New Roman"><font size="2">Provision for future income tax liability</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;(18,858,000)</font></P>
</TD></TR>
<TR><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=288><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><B><font size="2">&nbsp;</font></B></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;64,748,000</font> </P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=288><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=368 colspan=6><P style="margin:0pt; font-family:Times New Roman"><font size="2">Consideration given by Pan American</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=352 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Issue of 7,636,659 common shares</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;54,203,000</font> </P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=352 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Issue of 3,818,330 share purchase warrants</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,889,000</font> </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=352 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Issue of 553,846 replacement stock options</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,136,000</font> </P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=288><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;64,228,000</font> </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=48 colspan=3><P style="margin:0pt; font-family:Times New Roman"><font size="2">Add:</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=304 colspan=2><P style="margin:0pt; font-family:Times New Roman"><font size="2">Estimated costs of acquisition</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;520,000</font> </P>
</TD></TR>
<TR><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=288><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=89.333><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;64,748,000</font> </P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<font size="2">
<BR>
</font><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-31</font></P>
<p><font size="2">
<BR>
<BR>
</font></p>
<BIG> <SMALL> <SMALL>
<BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small></big></small></big></small></big></small></small></big>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the Pro Forma Consolidated Financial Statements</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">September 30, 2003 and December 31, 2002</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:1.5pt solid #000000"><B><font size="2">(Expressed in United States Dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:36.7pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The purchase consideration of $64,748,000 for 100% of Corner Bay exceeds the carrying value of the net assets at December 31, 2002 by $53,880,000 which has been applied to increase the carrying value of mineral properties. &nbsp;The resulting future income tax liability of $18,858,000 has also been applied to increase the carrying value of mineral properties.</font></P>
<P style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The value of the common shares issued by Pan American was estimated based on the average closing price of Pan American's common shares for the period before and after the date that the terms of the transaction were agreed and announced.</font></P>
<P style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36.8pt; text-indent:-36.8pt; font-family:Times New Roman" align=justify><B><font size="2">4.</font></B></P>
<P style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align=justify><B><font size="2">CONVERTIBLE DEBENTURE</font></B></P>
<P style="margin:0pt; font-family:Arial"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">During the third quarter ended September 30, 2003, the Company completed an offering of $86,250,000 convertible, unsecured senior subordinated debentures (the
"Debentures"), which are due on July 31, 2009. &nbsp;These Debentures bear interest at a rate of 5.25% per annum, payable semi-annually on January 31 and July 31 of each year, beginning on January 31, 2004.</font></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The value of the Debentures is comprised of a $35,357,000 fair value of the Debentures, $23,049,000 fair value of the future interest payments and $27,844,000 fair value ascribed to the holder's option to convert the principal balance into common shares. &nbsp;These components have been measured at their respective fair values on the date the Debentures were issued. &nbsp;The $23,049,000 fair value of the future interest payments is classified as a liability and the $63,201,000 fair value of the Debentures and the conversion option have been classified in shareholders' equity as
"Convertible Debentures". &nbsp;Over the six-year term of the Debentures, the carrying value of the Debentures is accreted to their face value and the fair value of the future interest payments is amortized. The periodic accretion is charged to deficit.</font></P>
<P style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman" align=justify><B><font size="2">5.</font></B></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><B><font size="2">ADJUSTMENTS TO THE PRO FORMA FINANCIAL STATEMENTS</font></B></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Adjustments to the pro forma balance sheet as at December 31, 2002 and the pro forma consolidated statement of operations for the year then ended and the nine month period ended September 30, 2003 are as follows:</font></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(a)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Effect the terms of the acquisition, principally eliminating the shareholders' equity in Corner Bay and allocating the cost of acquisition.</font> </P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(b)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Record future income tax on the acquisition of Corner Bay and the related acquisition of mineral properties of $18,858,000.</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(c)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Accrue acquisition costs of $520,000.</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(d)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Write off deferred exploration expenditures in Corner Bay to comply with Pan American's accounting policy.</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(e)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Record the fair value of the convertible debentures consisting of $23,049,000 fair value of future interest payments and $63,201,000 fair value of the convertible debentures and conversion option.</font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(f)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Record interest expense on the convertible debentures.</font></P>
<font size="2">
<BR>
</font><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-32</font></P>
<p><font size="2">
<BR>
<BR>
</font></p>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL>
 <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
 </big></small></small></big></small></big></small></big></small></big></small></big>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the Pro Forma Consolidated Financial Statements</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">September 30, 2003 and December 31, 2002</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:1.5pt solid #000000"><B><font size="2">(Expressed in United States Dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(g)</font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">Record convertible debenture issue costs of $3,000,000 as a charge to deficit.</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman" align=justify><B><font size="2">6.</font></B></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><B><font size="2">CORNER BAY SILVER INC.</font></B></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:10pt; padding-left:36pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The amounts used to prepare the pro forma operating statements of Corner Bay, which has a historical year end of June 30, have been determined as follows:</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2">(a)</font></P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; font-family:Times New Roman" align=justify><font size="2">Year ended December 31, 2002</font></P>
<div align="center">
  <center>
<TABLE cellspacing=0><TR><TD valign=bottom width=16 colspan=2><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=45.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=81.733><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">Six months</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=82.4><font size="2">&nbsp;</font></TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">Six months</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=87.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">Twelve months</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">Twelve months</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=16 colspan=2><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=45.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=81.733><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">ended</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=82.4><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">Year ended</font></B></P>
</TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">ended</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=87.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">ended</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">ended</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=16 colspan=2><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=45.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=81.733><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">December 31,</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=82.4><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">June 30,</font></B></P>
</TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">December 31,</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=87.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">December 31,</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">December 31,</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=16 colspan=2><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=45.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.733><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">2002</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=82.4><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">2002</font></B></P>
</TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">2001</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=87.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">2002</font></B></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.867><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right><B><font size="2">2002</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=16 colspan=2><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=45.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=81.733><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">(Cdn.$)</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=82.4><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">(Cdn.$)</font></P>
</TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">(Cdn.$)</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=87.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">(Cdn.$)</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">(U.S.$)</font></P>
</TD></TR>
<TR><TD valign=bottom width=16 colspan=2><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=45.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=81.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=82.4><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">(Audited)</font></P>
</TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=87.867><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=64 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">Expenses</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=45.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=81.733><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=82.4><font size="2">&nbsp;</font></TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=87.867><font size="2">&nbsp;</font></TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=125.733 colspan=7><P style="margin:0pt; padding-left:17.55pt; text-indent:-9.2pt; font-family:Times New Roman"><font size="2">General and administrative</font></P>
</TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=81.733><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;593,909</font> </P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=82.4><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;1,467,007</font> </P>
</TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;507,034</font> </P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=87.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;1,553,882</font> </P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;997,126</font> </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=125.733 colspan=7><P style="margin:0pt; padding-left:17.55pt; text-indent:-9.2pt; font-family:Times New Roman"><font size="2">Write-off of property, plant and equipment</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.733><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=82.4><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42,511</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=87.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42,511</font> </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27,279</font> </P>
</TD></TR>
<TR><TD valign=bottom width=15.333><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=16.667 colspan=2><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=16><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=45.733><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=10.267><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=81.733><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;593,909</font> </P>
</TD><TD valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=82.4><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,509,518</font></P>
</TD><TD valign=bottom width=3.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;507,034</font></P>
</TD><TD valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=87.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,596,393</font></P>
</TD><TD valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,024,405</font></P>
</TD></TR>
<TR><TD valign=bottom width=125.733 colspan=7><P style="margin:0pt; font-family:Times New Roman"><font size="2">Other income</font></P>
</TD><TD valign=bottom width=10.267><P style="margin:0pt; font-family:Times New Roman"><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=81.733><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(75,861)</font></P>
</TD><TD valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=82.4><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(295,844)</font></P>
</TD><TD valign=bottom width=3.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;(122,740)</font></P>
</TD><TD valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=87.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(248,965)</font></P>
</TD><TD valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(159,761)</font></P>
</TD></TR>
<TR><TD valign=bottom width=125.733 colspan=7><P style="margin:0pt; padding-left:17.55pt; text-indent:-9.2pt; font-family:Times New Roman"><font size="2">Gain on disposal of investments</font></P>
</TD><TD valign=bottom width=10.267><font size="2">&nbsp;</font></TD><TD valign=bottom width=81.733><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=82.4><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5,805)</font></P>
</TD><TD valign=bottom width=3.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=87.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5,805)</font></P>
</TD><TD valign=bottom width=9.6><font size="2">&nbsp;</font></TD><TD valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,725)</font></P>
</TD></TR>
<TR><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=136 colspan=8><P style="margin:0pt; font-family:Times New Roman"><font size="2">Net loss for the period</font></P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=81.733><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;518,048</font> </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=82.4><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;1,207,869</font> </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=3.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;384,294</font> </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=87.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,341,623</font> </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=9.6><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;</font></P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign=bottom width=77.867><P style="margin:0pt; font-family:Times New Roman" align=right><font size="2">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;860,919</font> </P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2">(b)</font></P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; font-family:Times New Roman" align=justify><font size="2">Nine months ended September 30, 2003</font></P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The period from the acquisition date of February 20, 2003 to September 30, 2003 are included in the unaudited financial statements of Pan American for the nine months ended September 30, 2003. &nbsp;The pro forma adjustments include revenue and expenses for the period from January 1, 2003 to February&nbsp;20, 2003.</font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-15pt; padding-left:72pt; text-indent:-36pt; line-height:15pt; font-family:Times New Roman" align=justify><font size="2">(c)</font></P>
<P style="margin:0pt; padding-left:72pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The financial statements of Corner Bay are denominated in Canadian dollars ("Cdn.$") and have been translated into United States dollars using the following exchange rates:</font></P>
<P style="margin:0pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE cellspacing=0><TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=337.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=142.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Exchange</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=337.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=142.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Rate</font></B></P>
</TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=337.067><font size="2">&nbsp;</font></TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=142.667><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=417.067 colspan=6><P style="margin:0pt; font-family:Times New Roman"><font size="2">Pro forma statements of operations for the year ended December 31,</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=142.667><font size="2">&nbsp;</font></TD></TR>
<TR><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=401.067 colspan=5><P style="margin:0pt; font-family:Times New Roman"><font size="2">2002 and the nine month period ended September 30, 2003</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=142.667><P style="margin:0pt; font-family:Times New Roman"><font size="2">1 Cdn.$ = U.S.$0.7408</font></P>
</TD></TR>
<TR><TD valign=bottom width=417.067 colspan=6><P style="margin:0pt; font-family:Times New Roman"><font size="2">Pro forma balance sheet as at December 31, 2002</font></P>
</TD><TD valign=bottom width=16><font size="2">&nbsp;</font></TD><TD valign=bottom width=142.667><P style="margin:0pt; font-family:Times New Roman"><font size="2">1 Cdn.$ = U.S.$0.6648</font></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
</font><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-33</font></P>
<p><font size="2">
<BR>
<BR>
</font></p>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL>
 <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
 </big></small></small></big></small></big></small></big></small></big></small></big>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the Pro Forma Consolidated Financial Statements</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">September 30, 2003 and December 31, 2002</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:1.5pt solid #000000"><B><font size="2">(Expressed in United States Dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
<BR>
</font>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36.8pt; text-indent:-36.8pt; font-family:Times New Roman" align=justify><B><font size="2">7.</font></B></P>
<P style="margin:0pt; padding-left:36.8pt; font-family:Times New Roman" align=justify><B><font size="2">DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES</font></B></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; text-indent:0.7pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The pro forma consolidated financial statements are prepared in accordance with accounting principles generally accepted in Canada ("Canadian GAAP") which differ in certain respects with accounting principles generally accepted in the United States ("US GAAP"). &nbsp;The differences between Canadian GAAP and US GAAP as they relate to the Company are summarized as follows.</font></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; text-indent:0.7pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">FASB Statement No. 143,
"Accounting for Asset Retirement Obligations ("SFAS 143"), addresses financial accounting and reporting for obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or the normal operation of long-lived assets, except for certain obligations of leases. &nbsp;SFAS 143 is effective for financial statements issued for financial years beginning after June 15, 2002. &nbsp;Under SFAS 143, the Company's provision for reclamation of $13,184,000 would be removed from the accounts with a credit to earnings. &nbsp;The expected fair value of future site restoration costs for the La Colorada, Huaron and Quiruvilca mines is estimated at $19,600,000 and would be recorded as part of the carrying value of the asset and as a corresponding liability. &nbsp;Due to the impairment in the carrying value of the Quiruvilca mine, the Company would recognize a $12,500,000 charge to earnings. &nbsp;The current period's reclamation provision of $231,000 would be reversed
 and future period operations would be charged with annual amortization of future site restoration cost of $710,000 and the accretion of a liability for future site restoration costs of $418,000.</font></P>
<P style="margin:0pt; padding-left:36.8pt; text-indent:-0.8pt; font-family:Times New Roman" align=justify><font size="2"><BR></font></P>
<P style="margin:0pt; padding-left:36pt; text-indent:0.7pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">In May 2003, FASB Statement No. 150 ("SFAS 150"),
"Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity" was issued. &nbsp;This Statement requires that three types of financial instruments be reported as liabilities by their issuers. &nbsp;Those types of instruments include: mandatorily redeemable instruments; forward purchase contracts, written put options and other financial instruments not in the form of shares that either obligate the issuer to repurchase its equity shares and settle its obligation for cash or by transferring other assets; and certain financial instruments that include an obligation that may be settled in a variable number of equity shares, has a fixed or benchmark tied value at inception that varies inversely with the fair value of the equity shares. &nbsp;SFAS 150 is effective for instruments entered into or modified after May 31, 2003. &nbsp;In accordance with SFAS 150 the resulting change to the financial statements would be to increase liabilities by $63,201,000 and decrease shareholders'
 equity by a corresponding amount. &nbsp;Debt issue expenses of $3,000,000 would be reclassified from shareholders' equity to assets and would be amortized over three years at an annual rate of $1,000,000. &nbsp;Interest expense would be higher by $202,000.</font></P>
<font size="2">
<BR>
<BR>
</font><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-34</font></P>
<p><font size="2">
<BR>
</font></p>
<BIG> <SMALL> <SMALL>
<BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small></big></small></big></small></big></small></small></big>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">PAN AMERICAN SILVER CORP.</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><B><font size="2">Notes to the Pro Forma Consolidated Financial Statements</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">September 30, 2003 and December 31, 2002</font></B></P>
<P style="font-family: Times New Roman; border-bottom-color: #000000; border-bottom-width: 1.5pt; margin: 0pt; padding-bottom: 3pt"><B><font size="2">(Unaudited)</font></B></P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; border-bottom:1.5pt solid #000000"><B><font size="2">(Expressed in United States Dollars)</font></B></P>
<P style="margin:0pt; font-family:Times New Roman"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<font size="2">
<BR>
<BR>
</font>
<P style="margin:0pt; padding-left:36.7pt; text-indent:-0.7pt; line-height:13pt; font-family:Times New Roman" align=justify><font size="2">The following tables illustrate how SFAS 143 and 150, if applied, would change the pro forma consolidated balance sheets and statements of operations of the Company.</font></P>
<P style="margin:0pt; font-family:Arial"><font size="2"><BR></font></P>
<div align="center">
  <center>
<TABLE cellspacing=0><TR><TD valign=top width=98><font size="2">&nbsp;</font></TD><TD valign=top width=168><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" width=319.2 colspan=3><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">December 31, 2002</font></B></P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=266 colspan=2><font size="2">&nbsp;</font></TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Total Assets</font></B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=120><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Total Liabilities</font></B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" width=103.2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B><font size="2">Shareholders' Equity</font></B></P>
</TD></TR>
<TR><TD width=266 colspan=2><P style="margin:0pt; font-family:Times New Roman"><font size="2">Reported under Canadian GAAP</font></P>
</TD><TD width=96><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:1.6pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:25.1pt; font-family:Times New Roman"><font size="2">262,723</font></P>
</TD><TD width=120><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:39.1pt; font-family:Times New Roman"><font size="2">82,802</font></P>
</TD><TD width=103.2><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:25.1pt; font-family:Times New Roman"><font size="2">179,921</font></P>
</TD></TR>
<TR><TD width=266 colspan=2><P style="margin:0pt; font-family:Times New Roman"><font size="2">SFAS 150 adjustments</font></P>
</TD><TD width=96><font size="2">&nbsp;</font></TD><TD width=120><font size="2">&nbsp;</font></TD><TD width=103.2><font size="2">&nbsp;</font></TD></TR>
<TR><TD width=266 colspan=2><P style="margin:0pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Reclassify convertible debenture</font></P>
</TD><TD width=96><P style="margin:0pt; text-indent:54.25pt; font-family:Times New Roman"><font size="2">-</font></P>
</TD><TD width=120><P style="margin:0pt; text-indent:39.1pt; font-family:Times New Roman"><font size="2">63,201</font></P>
</TD><TD width=103.2><P style="margin:0pt; text-indent:23.4pt; font-family:Times New Roman"><font size="2">(63,201)</font></P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" width=266 colspan=2><P style="margin:0pt; text-indent:9pt; font-family:Times New Roman"><font size="2">Debt issue costs</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" width=96><P style="margin:0pt; text-indent:35.1pt; font-family:Times New Roman"><font size="2">3,000</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" width=120><P style="margin:0pt; text-indent:63.25pt; font-family:Times New Roman"><font size="2">-</font></P>
</TD><TD style="border-bottom:0.5pt solid #000000" width=103.2><P style="margin:0pt; text-indent:35.1pt; font-family:Times New Roman"><font size="2">3,000</font></P>
</TD></TR>
<TR><TD style="border-bottom:2pt double #000000" width=266 colspan=2><P style="margin:0pt; font-family:Times New Roman"><font size="2">Reported under US GAAP</font></P>
</TD><TD style="border-bottom:2pt double #000000" width=96><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:1.6pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:25.1pt; font-family:Times New Roman"><font size="2">265,723</font></P>
</TD><TD style="border-bottom:2pt double #000000" width=120><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:34.1pt; font-family:Times New Roman"><font size="2">146,003</font></P>
</TD><TD style="border-bottom:2pt double #000000" width=103.2><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:25.1pt; font-family:Times New Roman"><font size="2">119,720</font></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt; font-family:Arial"><font size="2"><BR></font></P>
<B><P style="margin:0pt; text-indent:340.15pt; line-height:11pt; font-family:Times New Roman; font-size:9pt"><font size="2">Nine months</font></B></P>
<P style="margin-top:0pt; margin-bottom:-11pt; text-indent:364.9pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><B><font size="2">ended</font></B></P>
<P style="margin:0pt; text-indent:416.45pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><B><font size="2">Year ended</font></B></P>
<P style="margin-top:0pt; margin-bottom:-11pt; text-indent:336.65pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><B><font size="2">September 30</font></B></P>
<P style="margin:0pt; text-indent:409.45pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><B><font size="2">December 31</font></B></P>
<P style="margin-top:0pt; margin-bottom:-11pt; text-indent:368.4pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><B><U><font size="2">2003</font></U></B></P>
<P style="margin:0pt; text-indent:439.7pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><B><U><font size="2">2002</font></U></B></P>
<P style="margin:0pt; font-family:Arial"><font size="2"><BR></font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Arial"><font size="2"><FONT FACE="Times New Roman">Pro forma</FONT> <FONT FACE="Times New Roman">net loss under Canadian GAAP</FONT></font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:328.5pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:359.5pt; font-family:Times New Roman"><font size="2">(2,544)</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:406.7pt; font-family:Times New Roman"><font size="2">$</font></P>
<P style="margin:0pt; text-indent:423.5pt; font-family:Times New Roman"><font size="2">(36,029)</font></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman"><font size="2">SFAS 143 Adjustments</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:52.9pt; font-family:Times New Roman"><font size="2">Reclamation</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:373.7pt; font-family:Times New Roman"><font size="2">231</font></P>
<P style="margin:0pt; text-indent:454.35pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:52.9pt; font-family:Times New Roman"><font size="2">Amortization of future site restoration costs</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:367pt; font-family:Times New Roman"><font size="2">(533)</font></P>
<P style="margin:0pt; text-indent:454.35pt; font-family:Times New Roman"><font size="2">-</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:52.9pt; font-family:Times New Roman"><U><font size="2">Accretion of future site restoration costs</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:367pt; font-family:Times New Roman"><font size="2">(313)</font></U></P>
<U><P style="margin:0pt; text-indent:454.35pt; font-family:Times New Roman"><font size="2">-</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman"><font size="2">Sub-total</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:359.5pt; font-family:Times New Roman"><font size="2">(3,159)</font></P>
<P style="margin:0pt; text-indent:423.5pt; font-family:Times New Roman"><font size="2">(36,029)</font></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman"><font size="2">SFAS 150 adjustments</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:52.9pt; font-family:Times New Roman"><font size="2">Additional interest expense</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:359.5pt; font-family:Times New Roman"><font size="2">(2,510)</font></P>
<P style="margin:0pt; text-indent:428.5pt; font-family:Times New Roman"><font size="2">(3,361)</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:52.9pt; font-family:Times New Roman"><U><font size="2">Amortization of debt issue costs</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:367pt; font-family:Times New Roman"><font size="2">(750)</font></U></P>
<U><P style="margin:0pt; text-indent:428.5pt; font-family:Times New Roman"><font size="2">(1,000)</font></U></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman"><font size="2">Net loss before cumulative effect of change in</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:52.9pt; font-family:Times New Roman"><font size="2">accounting policy</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:359.5pt; font-family:Times New Roman"><font size="2">(6,419)</font></P>
<P style="margin:0pt; text-indent:423.5pt; font-family:Times New Roman"><font size="2">(40,390)</font></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman"><U><font size="2">Change in accounting policy</font></U></P>
<U><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:373.7pt; font-family:Times New Roman"><font size="2">684</font></U></P>
<U><P style="margin:0pt; text-indent:454.35pt; font-family:Times New Roman"><font size="2">-</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman"><U><font size="2">Pro forma net loss under US GAAP</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:328.5pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:359.5pt; font-family:Times New Roman"><U><font size="2">(5,735)</font></U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:406.7pt; font-family:Times New Roman"><U><font size="2">$</font></U></P>
<P style="margin:0pt; text-indent:423.5pt; font-family:Times New Roman"><U><font size="2">(40,390)</font></U></P>
<font size="2">
<BR>
<BR>
<BR>
</font><P style="margin:0pt; font-family:Times New Roman" align=center><font size="2">F-35</font></P>
<p><font size="2">
<BR>
</font></p>
<BIG> <SMALL> <SMALL>
<BIG> <SMALL>
<BIG> <SMALL><BIG> <SMALL><BIG> <SMALL><BIG>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
</big></small></big></small></big></small></big></small></big></small></small></big>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><font size="2"><BR></font></P>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>toc2.gif
<TEXT>
begin 644 toc2.gif
M1TE&.#EABP++`<00`+^_OW]_?^_O[\_/SZ^OKP```-_?WX^/CT!`0%!04'!P
M<)^?GQ`0$#`P,&!@8"`@(/___P``````````````````````````````````
M`````````````````````````"'Y!`$``!``+`````"+`LL!``7_("2.9&F>
M:*JN;.N^<"S/=&W?>-X"B.[_I,%@05L,@,BD<LEL.I_0J'1*G0H"C&,U"B@H
M:(*M>$PNF\_HM'K-;KO?\+A\3J_;[_B\?L_O^_^`@8*#A(6&AXB)BHN,C8Z/
MD)&2DY25EI>8F9J;508`GZ"A)&$EH9^D$)ZB0::?6BB?!J6M`+(H`I\BJ"*J
M);BQ(P.NJK3%`"+"N;J@O\6RN&&[G-/4U7$!#0L`#@4%G]PD"J\C"=T`#5[!
MW0DG!]T'``0)/28#"0T$``$/`23EW@`6,.AG0H`#!MH<("`(85^`>`T2O!K`
MH``#5`KZ84MH;EN!`=T<?%)08`2W`@P-_S20Y>53R(#\#C30A^"`M9LX<Y8)
MH"5`-W(C!#!P8,)G20/="(SHQI!$%V\F32PH\`"5NP:DC([05_#!QQ$!^@E`
M9U.75R(B$'1KL/483Q%:1;!C&E7$TP)*X<I=BA*9VF,0#C352;BPX1^`&_ZT
M.V)J`6EQZ8J07,H<A&-Y@U9$.\(KP;BR.(]02Y2$39\/2DR]"/=DZ5R)XUZ&
M0!?SU@,5L^B=/;EO6M\01!\>3KPX#-DDU`*'^Q,IU-Z#[5K^8L)=`5LF+3(O
M*:!L">?"PU0L/<)YV0!CNQ%1!G8QWW[4VSK&VM`$9<<)GAG?S[\_">1V!5!.
M:O^9TP!")%#FU/\[`=!3@G)%6684``E$%YAEE2W7&SW]&%`10(EM5T)(`LT"
M`4D%]!`=9>DIZ-^+,.H$(`0)X))4@=[XA,][)SQUP#PG0%C"A(KA5>$)1&:X
M8HJ[/850B$6.6(`#/ID(@7(9V;><`,H5P$Z,8(8Y#8`&E.:5@U$6J86+TD%%
M'@DG17A=E%><X%AFY;$9TF[!=<,`E`#2]>9E@+7X98+`D4*`5WB)Z>BCE`"H
M`)4"=H-=7$\1I"!:3QV#%IZ=/LADFGCFJ>%O:%Z&85,G`>H>=,&)D!=[%(V*
M*$.<I6<AI+SV2@B`APK037QQ$:`>K*.UF1A[O[WI'&`SED`2@;P<\Q3_=A!P
MX^!@Z+A:TJU!E<6LL:G2!EP`G'51JJ_LMML'BJ:Q:E%6BZGEX'WTA`K!``^,
M`X$`Y:`U%@.915L"-P[(0J&B#-#79XTCQ*?+G]*^:BY!7(I;:H.^4(8%M&RY
M*_+(=^`R3TU'\."`%@,H@``""IC\\J0.H&7``2]7&(#+7[3\,J4OHS#`SCLO
M@`J%+Q\@C0D`N)Q`>`MDE-$K`BR`@-%!4(TTRJG@C(#.\QPQ@`,KJQ:$UPD`
M$$8^!RB@@'<DQRWWW'37;??=>.>M]]Y\]^WWWX`'+OC@A!=N^.&()Z[XXHPW
M[OCCD$<N^>245V[YY9AGKOGFG'?N^>>@AR[Z_^BDEV[ZZ:BGKOKJK+?N^NNP
MQR[[[+37;OOMN.>N^^Z\]^[[[\`'+_SPQ!=O_/'()Z_\\LPW[_SST$<O_?34
M5V_]]=AGK_WVW'?O_??@AR_^^.27;_[YZ*>O_OKLA]_,*07![PL`1X2QRKZQ
M`.-4+?B'$H8PXP`%,>['/VDT0Q78:48PU/8O$O2B//?[5P2K%:(!H@!;$FQ%
M_YB100Z:8("V.*!=F)6*"+Z/?L@PA<),04%FG;!^\BLA"E,8#1D*L'V#&,`N
MA/40`CB@7[R`V4@0$,(*Q4,!!(I("0Z@%`$\X$W&RHP#9M(TP+@C1#6JXA5Y
MD(H$$&`!,RE(`8A@$/_6Z.)+"_`B`'Y$D'/`0QXQ$\$5%>"P5!3@``<`XF4:
M\,8$Q/%"3:LC.;"E18#08XHC*11*XO%#?T'`6)^X1VC2(:N55,<;=$0%4MY(
M'D3J0RP-$`D7Y8C).FZ2D;QH`)I:)H(TLNU(??K$`G:%0SP`["\)2HP[!N"A
M$`&``09P8H@<$(:%6(D;EWI.0^B!BQ$P0#=ZT4(7D)&MO&CC!,_Y91W[@;,@
M](,`9H1+R*8)@0=(S$T]`.<NL"$=$9CS.Y2DIJKDR3$)+D677UG0")1XHJK`
MQ9'S+.<Y`5,P!P'&F(_<RK?>>4]9@64H_PG,*MOXK836T@]Y.<";E%G.!$S_
MT02A_*@#CX#0ML`%EMU19CW7F0!@\BF@(I@B*0":S46%K"%(*952&!J4,08T
M:`VM$D]UX5-R`C5B"@BG0H?$S%R2X`&':J<(^.G$+QA@5T9%$U36V=2T8&RI
M5]+J,=8)$F+EM`2S^M;2+LJ'!8B&HTD=2%$8,-3D#$89`5B4'(45&RK"#3T-
MH$]3R,F+!PQDK;0!C"L@VI"I+`TD4+H2.\C)#Z=.$;(F^%I`*PLG80D'IN+\
M!-S@RH#*?,(GK^C"V%)`V:;<L6G_F0D!O(,`D5Q3JIR=##PDUH^IH`5=CX$%
M0&C)5CM<82BHX*A1HK-<%)1TA'IY@%+ZH5+9_O5?_P_`RF`KJ@LLZ'%$BCT&
M2(@2%NXJ-+)!ZP*%B)D@)C[`)>CM@7H]NHL%*$6D^HQM/$8;HBHM2)81P0C%
MA+O>7;SV3=C8[VA$`H_STK>]VXCHA8A07M8"1&+%;:M<)X/%P`XJ6PUXHG/O
M"JV&I$TI*J4'M@A"$2KE5Q=G5"J'H=NG64X%@__R:0G>J:X'8!`O#/2L"7B,
M%Q\_Z+3Y!"M85.Q4<MQ4JO]B+&B95N0?'V/%3/8J+Q2Z*"NG0L+9R@)P<2Q5
M,F<X#U9K*"_&*)`=(F0?.SP"V8:4%3N6)L7!`(LZ2JOD6'7&D=G$9XT8`+?9
M**0R"BL)&,$+IU1U(='!>?]R%3]1V\HP-<\S7K-P""O9/E,YTHRF9[E**DU%
M/SFQF&Y*2]%#Z%)`60!F/G,=(IQIE91&`1#[EQ_3DFL!Y(5?RV((06")YW\1
MBP13>?&5!%8N5!.JT8^4[E:>0>JK277.:M9%M3GU+6R?B`3J5/8R=1&?Y]CZ
MT]+)#*?1[6UG'Z`GHV:QN+J]42OV9!0-^*:T[6(+PI9&(HU]Y!<(8-4:&0!B
M``<XN@).<(%W$=8(/X+"*4R$AC?\X!`/0\*/L/"%6[S@&:>1Q$?.\(&#'.,B
M3WG'*V[RAZ-\XP'W>,LQ_G*2K]SA%S=XQ%,^<9R??.<]E[G#:0YTCE/<YRXO
M>LS_63YTG6N<Y#W_>-*?KO*C2QWCOH[I,PA0VYTIP)<9V5F(%D`EMSJ0:`NW
MBQ<O(PNN'T`6+0-;$^4Q]O(TB`"D<&M8T.,+K@?``#<3![)Y$8"R8RMJ1+/%
MS1#0Q`KIT.W20'Q&%(^SQO,DC:^PF@(4?_>9XCHL:_=UU]T6V<5+[>MV9_Q:
M%V_YQ\-L9U^*.Z@\&A8B=HWQNN:)Z*46^[<E,"]7-3PO<!86%U<=Z42G>M"9
MGO.0P_SF5W<ZSXU>\J8['^K4C_[UCR_TYM><^\S_N?*IWWWQ3__XVO_^\I$O
M_>=;?>;MM_G[K:]^^;-_^^M/OT<7$&M9^___`!B``CB`_P18@`9X@`B8@`JX
M@`S8@`[X@!`8@1(X@118@19X@1B8@1JX@1S8@:$##:1`#*G%0@Y40!V$+1B4
M#`ST0<R2#"$40R>4"RH80\O@02,T09Z@']]1`BHX#@-40:"0#*S`/S3V6"H4
M%##H/PM4"\1`0:@@`#NDA&UQ0ST""B?P0-_!+,0`A59(#*J@2:ZP0#64A?FS
M@C(D!$?8%H1$A2GD+P"T@R5H"BD3AC6("F\XA8B%.[^@!3ZD#]0R%=N``-$0
M2I06#%<3$`[P)4)&`J?63WGX2TW!1*D@1$UC>X54B""62/5P1P)!-80X2OM2
M,XST88UX#RH#;D!F-8(H*W,"B?^FD1=BIP]I<P*>%!:3^'65:`L@<0"=J&TA
M0Q(8(1J\R(.<"$U3E39-\P"?!0'\Y!1\%`]^1`IN!(U_9"RV\&"/-"<JL4K4
MX4/YD$:%QHJRL(U!0!VU*!:XQC9AA%T.L"BBD0#4DF,8QHQ#DA"R51JA%$2X
MZ#*V<$7^D(>XXS(UX4ZD0!ZMI64611%/2!X<-14;TVS^H&.$TDM.`4RE)FK+
M@$W'@%]70A"_IE11U2</:4?JQEWP:#\5%3`F!4MV$8[CQF\#9A<NA6KX52(Y
M5C`[UHAN\F2D=D>9-1CA!A9L$93B)%5D]V)8@&`2-0H?!E-)*6'U-!OY-@H$
MHV6.!1;_RM@8N=5*C9)J]*`%QD216S&3S_0*Q'4[!B`<(K8O8`54"$4*=949
M')4`0/(?$`D6[C`KV]"(^0AE<-%5]N$6W/66[H1A_D*7J5)/P,%IF^24>3E"
M5QD$2-)4'#E5=R:8FI$7:WE5X$824`(5_H60,<5G=K5C&.99=25DTW242%E6
M8'%6DHEN#>&:N[%2?2(-2*1EZH67V_)<-%*7EU::E<F,I2$@,WF6MH,PV`%.
M60E6#%5;`7%E7:F1P<!$<[)D*]`/!S&'&_8?I+EN";9&*(!.R6%;TID8R3`1
MUHEE=K0LYJ5$A*6=NO$-#M(,2Y-@LP4!W?E0,W9H)L$.`X``_WS&7E'1EPWE
MGZ*9C?[R7)CU(%Z!7I,U1A\6GS4&%\DVA3A&H;Y5F]9%(^6B6AT9'.&$'G,R
M`'YW-M98%*EB3/L)%WP&6((5//$@H-A1)BDBC=Z01Z0`G0VVF^.9&.PU5%&)
M`L.6!2[!7!4%GAV*38*!`./`H];"41P9I+R%#\^U;NE5446:#$=%DDC2H:?B
M7W?4(.-@+`(0,PAQI@[T!9&I6V1:F@H%#S-TI1SU&W4:5JH26-)`H1/6$*%9
MF#VBI:1$8:&5GUTJ'<=06V"$)]KY!?WP7%2JH@]"74BJ%TZD7<3C`-0Q4ZHD
M'9X`I^,HD8&I;9%$FB^9`A@36/E@H/\F<5/@F67V(1.E@E#/X)/82:H48JK8
M(!.61@(,\`5\.A;XT#2FZFS!*0NL&E,A<T<[LF-'F8AO$3':8"RC):N3:AI3
M,C,)NHA/Q0V?163"N@M\&F9#8RQ/:B'CNIV?P62YJ1K!55N:.B27<1&/RA!<
M4JJ26IK)"F*[T6+(B3L&0`^<X2%^*9HD%9(ZE&GH`@H(\I>Q"69.]"=M1I7I
M8EY125/T8V2CP1!'T*X.:Z$,RQD<$Z]]=F-.&12&50L-FVG!V4I*)11HX0W\
M@D%)I11=$%4``PH>FU@S"Z?N]&$,BJ">*K2J`FE<\EWC2B-RQ:J^"66JMF%#
MBA104FD=.1;_C.I.ME=2"_L)*_NQ&RNB;O9;>T8\-R,"T`1;4Q:B^V(3!I!;
M0M!0=1(QO1DN11$$%(-KI``P$O.JY$:=8(0*"#4`-L$E!.HRW14.<SL6%3N6
MW*9GP4`Q"_!>1!59IRH">'M&Y>8I@D01G2&,":1,4/&W7_LO,O63P8!WV_8O
MJ0M3`GJ1+S46_<`OWC&5LMD4L.NUK>2D2[:CL?M=!-%-:ANWEIN8*TH0EZMK
MQ]88*4E^X3=UYP=]\(=_S'M_];=TU*MTT$M_V#M_WK>]U=>]XV>]^A>^V>M]
M,7.FI(!'85$6K.<4M-<@(:11"ZL+?C<TF]==-2$`/K-W`.>^>!<,_](4=JB7
M>O^[+Y\G(*4B>DIS(B)Q&>]K>[*R=PM\!??[+PVB-'$G-E<#>#B3$51">5=C
M,@6\+UIP,WM'N;)7"@)<*)#'P'4G1_YKB!*AP&$P*=9"E\6WC!2B,U$I>7^'
M;%+SP[=G-%?P,OR',T;3,F\7%'E1-7NWC(N7Q+['Q`:\=F<G->GB1Z'A1?K[
M-E"H%/8@#A0<0A<\4XFX+!X5P&$QP+XVBXU!#M,[OL_+O>;G?M];Q_97?LYK
MQWJ<?'-\QWN<Q\WKQWP\R/$'?O=G$/GK@8S<R([\R)`<R9(\R91<R99\R9B<
MR9J\R9S<R9[\R:`<RJ(\RJ1<RJ9,-[A0/_\W:(4V%"(Q""4I*$`MJ#^CL`LJ
M"$%F"(6S0#_-`%"ZO#^LG$))&`K^XH4QI`HS.,Q/*(4CA$&TO&5#&`K!Q(98
M.)%(2$*G;`>`=T8]U*YC(4H.,D<.<XF@&(HFT*ZN.`*26!W"40Z[4#.F\5E]
M*2PN&1CR;%NM9KG^Y$"OY4,FD*+D&`Q?\,V1=&64R(_(4(Q4LY:L6"JK!2>K
M:EMBH6/3"$?1<!!/&)+93`=7(#"2:Q*\ZU"X11VN.P[<`!D.HI(TEI/P%$`L
M?:TL^])P:JZXJV;K$I]25A_!RTLQ.:^VL)-P<IV*`24G'9N!.V-$V1#CU#"H
M\*\;O096S*\CA9#_1_,MA[INI-NB41D`C_EL:.69#V*07UVG)76G`D?6'IE/
M0PJW@0H6M*G3A#F<?0F:W"4@&../07$0%N*;4)&:1653COO4=)!FG3&/"Q:=
MSGE7YA48+1./IRJ?<V@"1)&LC\88<$*<,&VLEYVLT$D`S;C6NH6VO5H?&PK7
M#'8,+=H0?$:>8*%7@<%7IM'803(8,GNGFK58Q2G8=:",1'@JA]U@B(J-GD8C
M7GJK.MU20KBFM[ECW[0+!L"FP36ZFLT+T+T+T)F,O]5L!];6N^$.A'HEITT;
ME4H;33H._2!MU(5%Q>VS'.:CR2%?XC4E.JW;<;!)BW($#&VZ7Y9N&BMN_P3W
M"5!EEXXKK/D@+=-JJXU16H.A``<.-V4=60P>#PBNMHHA"Z"-:F26KF*&D,CZ
M82+%K!MC8O%@K/\-``&>V1S&K87MU;[EU/1-!N2D40VQS[H`EAS;3HLVVG(!
M"B;KM?::LJ.`C,GH"PR@NT$AY#O[X$&0LR,1CR4%HD.Z)N@YVD]+$,\UL9H1
MLQF[8G;&LD+>X]+=GX[6BH+VXG$@+/93&E^3MYD1N/,64X/":4/`B,*V+78;
M(DL\N4-R:GF>8XFAY'O5Y[!-U??@M=V1:>]&Y?AFY0O>:[LV8Z*[&\0&&'.^
M3X/!UV.UNLSBG]5;OGB,R')<R-=+OG0<R*`>O?^=7NJ$+,BC_L=]?,CYA^K>
M^^K2*[ZR3NJ`O.JGKKVX3NNIGNNP'L?1FRVGD1ADARY9##3C6'FY5\*=EPH.
ML,#0CGL^<\,C_+9JEQD!VK^\,'O:_C4ID\:B1RFD%]7;'NXZ$^W_XS+\ZWJ\
M]QU(W,6";K-IK,)KS,*+;,,.;+-M5Q.`I^Z\H!#J!C-:('I"[,.4)WAO_'"N
M;LBU[NFF'NN\WO"M+NJASNH7O^O@2_$9+_$;;_&WSO$A#_(33_(?C_$CC_(E
MK_+-9\%Y9>8P'_,R/_,T7_,V?_,XG_,ZO_,\W_,^__-`'_1"/_1$7_1&?_34
M\SZX[$)RZ!3Z\4(9!(;_])/,1`C-2Q^$A#)#4;]``42#;1C-SQR#-O2%N$PU
MSCW+5:\,_Q/,_Q*%=,@TKG"'-_B#(2+W&^2#)%3-^WW-+(3U=<CUP+QZHW#,
M<4_,L$""HJ!`$*0?3=B$#C0+"13,.=A`K5SU+42Y>U^#+)3,TC"#`)7Y&\2&
MH%\W(+1F>*1'XJQ)_5P:!_=%ZWA*_IP*G2K0U70.$NT/*V:/J(39MSA$_3B7
MTH#$`3&0RGI:@P'[(0/0LX\,$C.,%1F)>6'#^K"..VO/'5//EDE*6!0&R"]'
MAV@UWF&*5$M*V!)8)I`?3O%U6T0/?1FP^PC!>"T7B'5J`<W\^BQ:=?4OG\A,
M_^4``@0$$8TQ#L@"+$XR$H4P*LUX0S8N.,P\"EZ0@6-%<#ANBP*`%<"-#LS:
M#Y<XW0`*@+2)&#D:S2T4HG@T#P\%E`AU$``-A].*+>/S^CV_[_\#!@KN)2`8
M,@S<,$$X?$$`%(RLX2R2@(E`K"@"P-P$,"1Y#HT@/(V.&!2PW21"!#BVED(8
M,'!F,6`Q((KB*#C>(*R^9I55VD)Z@N*82NI8%2QD<28P9V(.XSPX;^[)CNBV
MNG(_FOV2"G^E8CX^A,X^F,^JXK0BG\K2VHX`X'[OCE3#L60=0&6\L$$0\$`(
M#F\$&PAQ\&.`CQL\]D4"&&\@%'X-JCRA6`4"0WN6.O]FG(0CU2H4&%VZ<B1`
MGZ=?"ADRDD&/E*EP+`<!#2IT*-&B0,*96Q0@HSU#E#A5"3.1V\@``^8!;!C0
MC(**4!#R9+1MQ!R`"?J)NZ$.2HP3V$92S9+1U=66S`@HJ.1)"J8F2^!>,X=7
M[PC"9;RY.HN%V:(9:W&TC5F8&1>O`<!R]8K#9-@P9<HF1KMU1()"7^L>-+<D
M7-B$]`H0L'I#Y8V^<S&7C@>`@#91M&$^R@CW)02GO;H.YRS9=1FPJX'T&(WX
MA@+D1J]CSZY=T("6$!9Y#BZI6H$#6M0^8!!@9/GSHI9$2]L:AT1HS>/)4M^<
M`4`!#3[*!X$4>)3GBA@$'$#_H'GNF/0$?%F!D8,[6?602!/AX0%6$J"-DP=B
MZ_TW`V,+"C@7)0D.DXH^3300WV7QU!??9B86]X1^7_'GBG\`CC;``9&]9U]:
M8`E08$-T:+(,`PFB`EL>D#0!0"/T_%C`'8\`0%$H`:C(2A/U,`'`:/8\$%",
M92@7@!A<9&A.D4P>T-T#>$P'1I$R;I>GGGL2I0!KY?%V#!,)2'2BE#M\\D`X
M[4UHBA315%/G`B)@6!,4LA2PU5)9*?11-9L6\X2:NS$)!:-R\?)H6@:P\=<R
MI"'B13S+_,)J)CIU2"<S3W0JP(B'@FJJJ`T0,)U?-BQ@@'.4CB6>5M]IFA&O
MVOB*_T>AOSEJGRF897HI'>9!04M)ALD5Y90W7.M=$T,4D$0`4-+G#)3NH00`
MH2--*A::-(Z*8)O"DB8/0?.-D&^E?"*<L,*'F1I'%9#P=N5WG-SQ0Q!>+7(E
M,Q5&&A`"32S%VG+`/,$ANCKT!$HU0*KE)#82%T8QJA`R@H@I"AAA)(0[QN'`
MG'D@A/-N.D_<S:XHJ,S-"2PW*8*:!XS5A`"(L`'6QV(6(+)RLI@,!LI(.["5
M`%>?]2H8-FOTVL#>7,G#59BD@N>,E@)!=H[[V`+?>D0C9`_,P45\*<A9H_25
M(W^#]38)6P"PT&$>#R[RPI-3GEUWIM(DW@)CZ94(GHK&S/\*S23=2+`642(P
MX<AA+:!90@RXR$H!=X_WU<^885[XZ&?QFD"49YB=4'I-$+Y9V@GY/L;/H8O^
M+,U7W4U8F;:G[8"ZG#0"Z2^G>Z'ZU@ZZ/G7L*,S>W`I-P,X+K-N:X_/CS9OA
MEE<(X#3$#`W^$L#Y_,BX;A0%O`!X='-60B2&C,UMAG$`2)WN!B@Y#?TL>2RP
MTJ6JP;T%JJYR&MP@4/R4N[DQ8D*5B%-QXC.V<9`P0/[I6"\@XSK,>$,!";!8
M`NPB$!H-@%BU:4`K</>4!E9CA0*JF%ZJ01%.J"D<!/@!-@Y`1'WHY0!P^=`-
M<Y7#=92@AU_P3_\X(9*1>8<`KOO_'@UF"(0:JN]64*@6=?*W@P:P[P8'^(?S
M?!2%=3CN'<P8`)CHQD8:;(\F4QI;H<HQ,T;L"PSN".,8^243[QQ/0+L8`)[@
M6,$6UL9U"4B$_EP1#;PL;A8S-(`9-TD23D+JDVP`)2D%T,I3PK*3G00E*T=9
MRD284I:J#&4K7VG*7*8RE+5TY2UC&4Q:LN&5Q=E!L:2HE@,@0`1!L(H`BJ6`
M`,BP8`NXS'H28DUL"J$[3K3(.A;HP4R8LF#!P`(1?)<%0M7CFMBT137=J80R
M".``UU2`,X<@PX$!H5A<>J8*!"#.BL4A`>M(@2GMM416Q).?"YB(+YJ@4%;0
M;P#53-UE_ZK3$7C6DR;1V.A`+:)/;/:S.Z9,0;(,H,\31(-5[EQ`.C.Q3E2\
MXJ&/@.<^Y$D&;]JS8(A2`!9\A0`I'I2<_BQ%`!S0S\T0ZD4&,"K<"M'-?(8M
M22Z-YBQD"`!?$14(KY"B2\\I5!APLY];O4S8P@5-:5*#DC5=P$UGD5.*4B,`
M%Z6'+]CJ3`,X]0>`Y>H^@M$*FH:#KF$E#2H]*<QDVG(&OVSL+%<)66)*%I>4
MW>4P?:E9QU:6EY&%)3`=BTQ18I:TFWTL:F=1*@["-K:RG2UM:VO;V^(VM[K=
M+6][Z]O?`C>XPATN<8MKW.,B-[G*72YSF^O<YT(WNM*=+G6K:__=ZV(WN]K=
M+G>[Z]WO@C>\XATO><MKWO.B-[WJ72][V^O>]\(WOO*=+WWK:]_[XC>_^MTO
M?_OKW_\".,`"'C"!"VS@`R,XP0I>,(,;[.`'0SC"$IXPA04\DRA%:0A?TG"6
M.!REX0"APW!IPI5(W!$`G&``48*9`$:B8M9@V,18RER%:VQC\QH`PR<X71<6
M2`-G-*`E81@#C:>Y&P$*X)]<$`,0V@$9)WE-#I`\@-RZ8`4!+*$E)?C;C;OL
MY>T6XA")Z.,I$/(AF61.(8*<@24MP@!,.(""`"EB.J37+'#PX@Q,E-R7^^SG
MZ1H4&`V,Y)F!4(:#&8"2N*+.[:@!!"O_'Z];,,A+YO0JFB8G<S1_WC2GG7LY
M$'IB37+8U9I>*PE(DF96D.`D;Z)0)'VD",J([!J(>"07-W0ZU[IFKEF)$^HH
MM=E`I`H5G52M%`@\P&E%`X@87*"65BU:'+VJ1E=HO.MK8]NWQC8<R>@&,R>7
M08`W%%%B=K/LF/"Q%SE[;<K:>LALPSO>N/TTJ`F]JU^(+``/&(E!NW2DK*0B
M%'1>HP3%+1_HU5O>"E_X!GOM:WO[$=7TLQ@FZ!J.5S"1-*88.`[&"80B5O'=
MC`4M9R_K66.:UK*H/7EI0]O98K:\Y"N'^6I/VTN:DYRU-\\LREUN<ISK4N>C
MG6S.;3[TSP;=_^BI)7K25;YSU1;=Z4?ON<R?SO1C2GWI2,>Z:+5.=:%[/>9@
M9WG-LT[VJ'?][$U/.]"Y_G*>BUWII"B#LJ*)US'7<,PRO,Q>H=`"_>%)6?OL
MWT513(*CIEB&X7`H1C<94H&HY:Y6*#O;X4[YMT-][9B_>LHKGWFW_]SR:-_\
MUCM/^J\K7>V@G[GH-1_ZSYO^]9SW.>MA3WNKE_[V4X^[V=L>^]K/ONJ[O[SL
M<R_\L!,?^,8?N^]U[QA3,SSZTI\^]:MO_>MC/_O:WS[WN^_][X,__.(?/_G+
M;_[SHS_]ZE\_^]OO_O?#/_[RGS_]ZV__^^,___K?/__[[W\-7MB&X?^-_W`8
M%AC>#`2@BGV56GR)`GZ817S52.08<^"!C`W@`S)@C%F(B:W8C&58'J@8`JX$
M`<X""98@5&`8'AB0X858C"&@`/Y?#`+%!%I$>WR"+4`$%/R(*!'`YM"3?1A`
M`YC#IPW9Z<``'>B;)[R+LZV1DD$-/<V!1=&$_DC)@81"D'T<)O@''?A8&=!4
M'!R`HSU"`Y@'`=30#TC!E?Q'RQR`&HC,6/"`9@1!3JR#`A22#.+A'_"3O2R*
M+70%P6`)(U0<%-G")S3*\<R$)/Q`*`0ANGQ&$+U9:P1:\V!#+#"&/CA$&4`3
M/3R!&%6%#C2..Q@`//S0N12,K.T#`P`(A.3_H)WDX2OV00H4UCC\88V<F%A,
M!?-8!58,B4S,1BBT0MP`QRG"A0!Y`XBMCBTRCS+"Q6/4!K)!TIT\PAPQ$5@H
MA8GD1D?PAC/TA),D"2R"HPHJ1:FT1^LP29VLRRBJ!WL4XJV,SZBP"0PPP`/@
MR5)\3!F8!DHD0NIP@;4E(S\2#R8B2>:X2AN0"_U@28L`A#5BCS/X"--\B4'L
MR@/82CA:I!>J`D&TAQGRD#)*@UC-8Q]"B*ILRX&\%F`5``(\#`+P(BD8&R?P
M([C\RY%$B5[$9*71"$;0F%,<2R;4W8D$"KK,P&^LRU6X"PXTP+Y=Y%):1%>(
M$";."3I"Q1EA3#N>_\T`Q-$L6`0*""$%BA&U+8\2Z`3;``U^7&*W:>4-L9B0
M9`,;2`W5K`YL+&#=6!3M^(_>T`I3ZJ5*4L19%D0(?<4,?$XK5$(U\$XD'99:
M\`<+HM-*&`8#>6197M(R(@9K3(VI88]N4-"Z9$]<5MK^I`_>R!$`Y:5>7J0L
M'MXXC"(;#``:9($IJ$#=C$,0M=E;K,(_G(<<,-'`6%Q-_$"=W,=DGILWV!%D
M)%L6G,#8[%%L!N(7,22B]$(@T8<Y8,8PV=[QJ=[OX1[J]5[KK9YU!A_S>:=V
M#M_H%1]W@MUUBJ=ZIE[S8:=[LA9X+E][CJ?S9:=]PN=IR2=ZGA[O=5T."/\F
MKQ1+V#25C`C>9<C(`FS392"@0"4:/R&4/^757K7A93#)`,3&90"470W>.SD`
MGZ&`"ZQ(#2T-XNT4@2(`S"A+5EW)`NQ329453'65.VU4/X%548V5*^D3:\A(
M.]'$?OIG?R;?=@;I>1;I?X8G?;)G=RZIYR6IR@'ID):GZRD??QII\D6I>5;I
MD1*IE"*?EF8IE7:IEKX2JW22::)IFJKIFK)IF[KIF\)IG,KIG-)IG=KIG>)I
MGNKIGO)IG_KIGP)JH`KJH!)JH1KJH2)JHBKJPF$9-_TH-UT&E02`""2"2T&J
M%P7`:XD)`6`EI$:JI%JH/G0J-RW-92R>_EBJH^[_PV70F(]D:CB,JHS$!DWX
M2K*0@*>BU3I4T[LLZ*6N*J<N*O]M4SB\&BW@B3>$`@]T4PZ9@M]TXVNYI0C8
M`ZJI"0HD@`D<3Y(8!W7<3T8H"S!$(XG.*!-]`89TI5ABHBFX@Q2P1M7,`#Z@
MR!/P0[#J'P(D`LYP@\$1IR)!)P&%0P.PY1,8H+<&)S"@#+[!P*)IE*\AA<>H
MSKD,@S2:`1TM1;H"AQQ0;%J2I670*_[)P2R&3K`H8XH9!IEI3,6.CG*49L(B
MT>%D`V7,S)5,QU6(#,TNAZ0U%2,N@<6F)98@`,>B)2E@*Y=U[/M-S1/0`3=`
MIDLV%2<,R)-D2E.]2H4$_XC*#M!DN$*9?&K!Y(@!W`$DL)7SS!F!B,H7V"Q=
M5,03V&0I)"W>[`BY!>T0`.P=%BW]441'*D(C=%.WJ9@KY.3,L!LIX((%_6TD
M86W$XHGX"`@(O=9TB*PB#`LTE4K)0,IPAL2*0(4J!@AP+D!Z@&C=MI^/A,@F
MB"%:SD`,@*@]5`40_(>Z%.[JH.YR%..:@-!(S&SQR`XGS8J#M$@BV*0I/(PM
M:`D+J05TA"7HPI\-;.$FJ)G8B@`60@;#+H:;F8C5&JYQ(`1!I()FL@(63,>`
MOH$CX`ZO,(`0_.XS!B)&F(/C6L3Q(F_H.D(7%@U%-&P41$,.A94!3!1QD!)U
MT/\#[<2`'E3K$!0"N?;4&V"FMS)$,,B11HFK3!DP%*Q"$5"FH\2'N2F!.03;
M=SC3F0Y!/T1B)*(1&D&-@-@`120:"(N`"+,!"=M`":,P"D-`"(O`"+-!"<,P
M+L@P#9-$"]_P"Y^P#JOP#->P#YOP$<?P$+-P#Q]Q#J?P"?"P#3=Q$#\Q$5NQ
M%.,P%>_P"A<Q$V?Q!U=Q%!OQ%R<Q%',Q$[LP$@NQ&5_Q&`,Q&&]Q&WOQ&Y>Q
M%2]Q&CMQ'-_Q#ZMQ&)\Q%M/Q&MMQ%^.Q%BLQ(?-Q'A\R&B<R%1<')RB`-,7&
M_L[J(WCJP["J6O3JI'K3N^P$*FR33H'JJ[+"`4!JS4K_X";WA:?ND2FGT!"8
M,HQQ\E3=JJV*":0ZQ@*\\BE8\BOS42SO`)S,@#,!*[!BZ!!(4X+DDZL)R.DF
M@C%3:C(GA#`W,PD\\YA%\S1K<S43\S4C\S<O\S)SLS-;\S<?<SA3<S>7\S&?
MLS*G,SE#,SB[,S.K<SRW\S8[4SUCLSSC\S##\S[?LSCG\S^;LS0+M#^7LST;
M]#LG-$`O-#T3-#L_]#@W=$%K\T%7<S$[]$4SM$9;-#I#=$5+-$>'M$>/M#AG
M0DF][TJS=$N[]$O#=$S+]$S3=$W;]$WC=$[K]$[S=$_[]$\#=5`+]5`3=5$;
M]5$C=5(K]:[MZBMOZOU,:C":_[*JH@F"WD&&DJI%]"H6I*I*!Y2&\EML.%$K
M8/6G=K4G6S(W+8`L`^M2Q^`VW0$JFL%"/L+=.&L;'-4,I``S>`-:;P)%8$(`
MBY$2Z1`)%/8"0<73*B.#>"M?KT()%$JDSJM;^Q\UJ>0R0@C0^NL.A.9LP"8S
M2,PB")`]@`8D7(F*R+`<>6]/'%+]`@$#L(%F4_;^H0R3&`9L#FW,ZB#M1$&.
MD&7N@$I3.$)IX&,V[L!JHX)NQVU>%$=NS_;^?>PC"%RE<66[/$S4JLZVEDMQ
ME$)0<0-QBX?B0DMSS(ZF<7?3RD78QBV4Y)!U/S?_58098G:`="YN9H2I:;=.
MVF+?"O^++PRLFLB(I"U#`0CX^_"WLS0NX>:-Y[ZW_M$536T<=:<E#_R,ZNZV
M)OHV\!9#YD!"\Y)&_9#$M8*XZ<Z,[5(;?Q25^S3X_E$D69B:,+2O]+J9W$Q/
M9'X0JGQ1<)PV$XC1:5LB^IK$`"#W:XM*C*]X_ND3*]!CB!)F!U^P`N.U,^UU
MW-XX<4#-#Y1`8!>VO@4VSU(9_R[P8T-O>8A(?,0Q(/>Q'B/R%,/Q(J.Y(K/Q
M'K-Y&9^Y&Z>YF]LYG`\R(\^Y((OQ'-^Y'_,Y&?OY'^>Y(<?YFA.ZH,OYHM=Q
MHP<RHRMZI*OYH%,ZG@,ZG-=YIB/ZGK]YI_]Y(;=YHEMZH&__NJBG-KU\]:16
MP2_+QBRH<@5:]6N^.C/I3Q7H+R<+2`KM*JNOQ#;9ZJKB,JQ#ZBJK]1VX.K%2
MLTEG,TA3-+/S,T;K\T?/\[-[\TG/,T9#>T!W]+4W>[4/M$A_>S]GM+='.[A'
M]+A+>[J?>TF;.[>[^SJK.[J+>[M;N[S;>[AO^T3K^[L_M+;[.TG?NT(+?+_C
M.[P/_$:#-,`?O#27\Y%#?,1+_,13?,5;_,5C?,9K_,9S?,=[_,>#?,B+_,B3
M?,F;_,FC?,JK::]K:%%MLH&B*D)E:J(E1*_2A)C$2:KVTR:S:J[KU"T'NZ6V
M.I7!#-!?M:<6?52C`-*3T\QKE%B?_RH!Y'HF?W6RW#*D3M0D>^U44[TEM[7*
MQQ=<4X(TF2-5K(*]N!*3/<(]YI-P,(&Q-L391T+KN,6["FR"=/@0Y+7>`V\>
MP4#FI("4(T9?5YJ\W@TV)`EB3W-&R/4J%&MG?X<(C%/$;IQMX!1=3S;8OY=E
M5X%>0`SSM,)>%25:1`$6B'98>@-I)\&0[U@DB+=GGPV#T"KD(]MG%R\.:#9"
MC!GI#]&YT<SI_]!BN.RR!?DW9)SFOU=MY\JY9DPRV,()Y*-%F#X2F4CJ9X1V
M&TLDS!&&`P38BJ8<\;8DM0;,((!S+P<61#\0G,!M<X/($@:W"$IR"^T)$"WR
MEU=T'PIF@_]*NR`$"`A)@0P0Q`3GRA8`A#@LHD)`<3+'7)\WC&#Y7!#5HK"P
MO5:(H/#V:@822]:@47`(5H%'X)OK"8FL'C'6JA:=*_+M*SM=LUNA_8[/Z_?\
MOO\/&"@X2%AH>(B8J+C(V,C(L$60T*86@`-!M,,"@("$*3;F0%-W0C.TD!#'
M)/;39`=5=&))`*#F^G2F,J#&LO#`8+(&(9#TB4?&U28:0(I9R7;B=JFYX@OL
MB)VMO<W=[?T-'BZ^N("`:J;6,.D\O&*P<E!@H)[GD@!J:G-IES\$<<#`#D!9
M*QSH4#-02,)\S4Z\&^;@@2PG=>C=048P&H![8YYU]-?.X0D!$<?_F3R),J7*
ME2Q;CGOPD-V0)60$O!#3P``!!C$A&`CF0L`#6S5^W.FG;QB#8BN\9"R%4<!2
M(4YA@"JS0NC$%00@[.SY$T(#:B<44!*J!F,`:#*-0ACPKH=6EW3KVKV+-Z]>
M00?,MNE*[`%3(B3?Q7@'($Z7KEZK$!EPK91?MT(:L"JP90""`YG[^1W9@)=F
MSF_[(1U#.D"QM3[\+CY!2XY@.0Z"L8-LNP#CLFQU@S2PKD#J8I#?,>AZ'$("
ML\O_-7#^EF=Q%,B[-F]^X'GVZ#]Y4O]^W>SV[<6G)T\>'CIYZ=[/6V<N7OOS
M\NVK*X>O?CY[X_;3C]??'7_@X?<?=^;U_T>@?`;6-^!]^2TH('H)0D=?A.\Y
M6&"%WTF(H8(:NN<@=A[NM^&%(E)((HC^C1A@B2'&AV*+*DZXWD,`?"8``5]\
M04`=.>X8@"9P+1#`;CX1N<!#/RX020`O`!#DD$6^$J5#1/;HPQ=)K@`EEB/U
MQ*66,4$9@&U"###``67*H>:.MAF`9$\_%NFCCDQZY>22#Z7IY$AV&@`GD(RA
MJ:9M`FA"&FD$F+#H6UT-`-@.AYZ0:"2,F@"IH\-(BN@6BEZJ:::33OJ/IY9Z
MA>FCD6Y*J:FHOIJIJ)RV6NJKC<:Z*JF5VIJJIJ-V6FNCMZK*JJZN"MNKK*S6
M^BFLQ/Y*:[/#^O\Z*[.G3JNLL<&"BFNQP$J;;*[?7ANNM]&2&ZJXY_*:KKG6
MLMLMJ8WN16^]]MZ+;[[Z[LMOO_[^"W#``@],<,$&'XQPP@HOS'###C\,<<02
M3TQQQ19?C''&&F_,<<<>?PQRR"*/3'+))I^,<LHJK\QRRRZ_#'/,,L],<\TV
MWXQSSCKOS'///O\,=-!"#TUTT48?C7322F=,S(X/!;JE'8"R8(":I*09M3M$
M]NE0FUH^`>0"MD%Y0#!$HGG"UD`"T/07:I`]P)Q5VN#V"E@;`*33@7K)9]E=
M,V/W`5DO37CAVQA0!=Y,:0098S<TM(("H`BU#FR\K&7"H27\I@H3?A'_T(`6
MDI7RP@%.`&Y*U<.X8,!4GE-B@PZCLQ";7T3$]O@PR[UC@`();$$Y[;P83GSQ
MAPQ0E68Y=DZ$`A(E=8=0S[-@D"JUE#%]VI!`[Q,_<C'@ERE7)-.]52*QXSP/
ML!=QR6G7/T0&8NUW#H$H)U3/Y?#&[\^_'V#`P)C0P,X2(+'#`HZPN"*\P0=J
MD)T09&<4,)5"#`IHGPJD(CHPG88(!%S%^DIBODVDY6TX&$`!S/26$RJP`$71
M7_]>",,R7%`>94&'<M9!&19,(@%L,8(GKC<3?@3A#5,XRF6B4(.=I,!['T&#
M!Z/A@``XP#<AS%\:-H&##HY!!3Y,`A!C",8P_X+!+:R)1@`4@``;[6,3.R``
M#<DWBR_"0@BN,`I9GAC$?@@@``QH0#,VN(P_VO!0GG#?"+'(OHMP41:Z^6(8
M']F_,>ZCC#+ATAH+(CE+?"86]SL("QSXR1T8!7)5A(`"`F*^F,RC<QO<"#YL
MV,E2*N&*EDPA"DUH@AX8Y``NA*0OEP8&`6#F?I_!"/=L((#>50.53X&!6K('
M@05L+X=T_%X-3/%%`K`2%$$9BOHT$CF)^$X(FZPD])Q8D-/-P)B_;*?2_H<`
MQG@3G%BL`]Y,V0SA1(X%`A!@&3:GN6!0<P:?:\!G$&`6`"2')&:RS$=P\[IH
M,$::2>@GX!3'3XSD3O\$"N"=[^JPR7XNX40?0E"'8G2@!IVH1BGET$H!U%(3
M3:BD*H412QGD4IO"%*<R?1!-<WK2G_8T0RDRZ4LAY*(5H92G+PIJ46OJTZ<"
ME:@R,JI.D3JCIM[40EIE44R[NE2N*K6&<D``,>*P)%($:FU=LML73-`E4B13
M:EM+'))(228QA:EL!K!)D'H"-S^IIDE/BI+<5`-8O6;E3U:B$YOF1C<O#>,A
MTX+6NY#5+LON"K/QJM9FN?4LSQX+5)45[;:<1:UE?1:UV1H7O$*KVM&^UEVK
MQ9:Z+@O:U&H+7)DU+6]+&]O3VI:VLAVN9HM;KN,*-[?*Y6UG@^M<V.X679G_
M>LL!#O`TU;ASN]SMKG>_"][PBG>\Y"VO><^+WO2J=[WL;:][WPO?^,IWOO2M
MKWWOB]_\ZG>__.VO?_\+X``+>,`$+K"!#XS@!"MXP?;]$78%^E<\#6YJ;B5+
M7&$3)26I3;L.02R8\KHCII!I</S4T8,WH=BJ`8Y-6^J2F=9J5\2BF*\;9MLK
MP):W).@(2(_]`B_S0*:X??A,(=[K+O+&88=\N&Z!Z].&I[0)'(=-3XWE&IYV
M\Z->,EACB'-'DFV`@!<0$H_&E-R9]+E/&U!!>U<4P&1^-P]>8%<8>RP-:31S
M%4Z(.1YEO3-#'E"YQA1!!0KE`D!-)]!ATG$RP\0;_P/4()5FS)DU=0ZA*@+P
MG+<D("=",(`Y8/-HVK%%&`[(-`S$$Y<@5)JLB[8#IF51AR.8*=(LF+2J:T!%
MS&UJ<_]089JW##+DU4!YVI2#=^#QD'Y$Y0'0%(LG"#*=:CAF"<%(@.-X\9`R
M]M5U31%#M"FU[016!7\,1$$=:M`%(4AS"P/-!V7X&!,^+B[;3DCVL`T]`U,/
MHP&+&\#B1@`F2C\[=5LIWS"8S40AE'$)K0.%O*E6</C=!)KKMD$#(L-)8(,,
MG@%\`0^%,-<J8N2`S^:")9:@@@0$>B2PBW>H#:YP-B2DULQ4#EN2.7-XH-))
M+"PW`CC]$%"N`(*7G&`!5_^G2Q#&O)KG$P97D,'G,WGY`?0K8\]+2<EJ()#I
M2\^W'1R@]']^1.@Y$"4GMI=QC7LLF&\T\Q+Q((4O8&2'/:S?-53P]B-!&1-1
M9(,(2(!"L9=BU'-$P56`\`H.1O.'+YB#Z`K/A"$6/80YO`4!Q,;.K`-!BE70
M_-5MKH>.`J09K,&ET?$M!+IS7?"4.C97,#\\S]>"G75D6P/\F':U<TR2^/Y\
MPBL)@#:^,2,(X(D*?._&*]Z1$R7O.N)QX9C#WP*+-V$D+:I@C5W07O)&//KS
MUQ$Z5[-%?)WO30^F;P>2K&YQF#8=-9"B^>![9?BR='H*[ZB<$X3?^1J!_.!G
M*17_SW%XNH<QO+<5%M%]]%0_F50`FU0#_610RJ%OE$$8[@`/](=Z_U!SK<<"
M"$AS`K%S!>%)2E(29(<"HC1Y[K9&PK0#\_`%G=`0FL<0&3A_MG%*>7`.7:!O
MFH=U;.$`#+A)IV%_#3!J+K@6BD:#[&""$$1M#!!%!+AV,U0'/^@5KN<3P:!L
M#/<9TH05(\$`)80,%+@$-I%VG"9^6<%M)U`5H`86<9.&$%`58M`)U3<2$I%N
MO3!-:V1C*E@&V]-137%',M@#C)%UZ-<Z1N(5)U`Y!N!K]H='CJA,;/:(75%&
M?$0*2_"':AB(O3%QZC9-57`#HP:%%\-Q:HAR#\`8L7%Z_S*A`/E$#9L$&;`Q
M&T60/83A`(9QBS9`/Y$##:/1&5?Q&H)F9[_X:_OV`L*Q!1RF:P$U!/9T38RV
M!7CS`"9P3USP`,V`1EPG.+*0:0/`0PU!``]P9\5``$:"`)7#@PC%`MD8.:X8
M4?^02\]Q`[MA`#)0C;)PC>O8&X1X:+P&`$92#E;`5$JU54E%(SLE5@>)5585
M554%553U502)D`9Y4@6954<E5&!ED0P)D0.ID!DID0OYD*9F9J5Q5E03)WOU
M#G_25G+P5EEF!2AF98<E)'N#!WS""R,F08U%8CH9)I(U5X2R)EK#9'JW-G1#
M8T>Y*7,V#'?U6*"8-YGA-7X3/?\F%@R*8T]J\BB%,F/!@)-9LAL#\%9TDS?6
MY21/EB?7I6&#]92"%34PIC54*0?\Y%J<)5UUF5NMM2YVJ5MXR5JW55O)Y5O4
M=9=[F9>`B5R]!5V$V9>&^9?$M5R*.5VSI9>XA5K6Q908-8J;R9F=Z9F?"9JA
M*9JC29JE:9JGB9JIJ9JKR9JMZ9JO"9NQ*9NS29NU:9NWB9NYJ9N[R9N]Z9LU
MTS96AI00-B]4YI0C\61/4)5_%0Q(%@!/4U?NX#5+-B^_:9V!T&5=8R3"!`"M
MLSCJ.&BQTP*$N(OL(`+\A'9<$F:;<@FV\P*QL8R(!ALXL!.V,48;>)WYF0?"
M)@>2DX;_S9,]^8!V8D`$"U">,M$3#V<W5CAG$M=A%)>'^J<*`ZJ?%;H'_Q,,
MQ39`:Y0//\<[:6"@]?`"8`)VV?-Q_-03R+"$*/A_I0!T%@JC=_`_7'!(Z!1"
MCI=/]E,/4:1OEV="59!WQ[`$_H=X/R`53(&C,:JD)I<5E@`3RC`*WY0VOY`;
M4Y1`RJ=#$MH&`[@^1%I'+,1O!D2E2ZJD,^H0^^<,'/%-)#@]+K!U%R%F[F`9
M1U@1*V<'*HI_1(<6$`<1S4:FUVFFL,$&W4043S$7[+`3Y5EF,2&.;$@U9H(,
M=[A,[%9"Z2D7?OJGOQFH>`([$#4[R%@$@S%1=/`17H8]YX:*_Y:34<^0.?()
M/=E1!Z#Z95/E51Y9D1-YD5<%DA\I54-5JPEYJR))JV%%D1C9JQJ)JQSYJ\6J
MJ\<:DKL:K-!JK`XYK!LYDL2:JPT9D;Q*K;Z*K<KZK==JK</*:KW35Z*35GA2
M6'XCE,%`93M&&L-@8DJBELC)EGHW.%1&E%9FD__`KGR"0M'5F)9I7(-)F8@9
MF<\UF7Q9F8$IF7Y9L(MYL)`IL`V;F`H+L8(IL0R+L!7;L8QIL0E;F`2KL0M[
MF!0+LA\[L<V5LBB[L@;+EYCY#H>R=YEJLS>+LSFKLSO+LSWKLS\+M$$KM$-+
MM$5KM$>+M$FKM$O+M$WKM$\+M5$KM?]3BS.09I4_J1.",B89YIQ-)I=BZ6,-
MX6)`AF0Z5F1WP`LZ@F4ZL@1GXY5Y\YYEV90[HF4V$#UQ\C1>TR<J=C6"@S=(
MMI,4]C=]FR0@)C92,YVT([?VFB30Z5B'<F*#EC=]I3;Z([@8]C54:PC9Z9)?
M)A:\0$6_YAO$`$KJ^(_08Q8<Y5&_PQNFA'NR0&CXB6QT5@.6(0`V*J@"T8BF
M1#K_P`8+=TTUH`K<Z9UY0`"C=@"YN$=L$$$/"&C"P[N(JC\EF17/RQ5+`)Z@
M(SJT0Y\89VGPH+R4M%$Y01(UX)Z"1KQO:$I78;NXJ[E_P)^14Y2Q0S_&!$OZ
MP!@$!SVX*`3_.BIP3$&A>$!OYV,*;@0F`/<$%V>?;V%J/4!)]C:7L),^>(#`
MU0!-UK,/MD%NL^2@,%>'S;;!0*1'X(,+6OI$9G/!M?0/?D$J'>R@$UR]S5;`
M&/B^_M,#4'('"A`/*7HYZZ-_3H`4;F%Z5J!"5G=^+WJAXT=H&"&-]%,+Q7=N
M2I%!J!<3^<##B70'31Q*(*?"";I`L^3#!O2F-'IU(DQ!EV04Z&?%9<?%('$#
MF@`FQL1!ET1R"81-[%3#?#"CG9"J62$#06J_8=Q!03Q)D]=SK'$#,9&D2<QT
MDEH659.>2@"!R0AJ0=H%9W1^-.``-7J@HH=V/]IDB08'6+%UCH3'_XH(>J3,
M>*NH#R2D%-^IR8V'#`!;0$Z*B.;$#KBK>NKCR'ELP_QT<EQ@`C",R_>+Q83,
M!8;,10^`1L.3?8P\`S&0`'(B`\*T.-<3@!FW1WUT;JK&%.37`H$4/=7\;)#'
MCJ_:A7%T2&@K?`EJ?69,?5B$:7:L"T^"$>=,&?68!:4*I2OF`^T<S0XPS;X<
M")N:O"LPIU.T&X&L@&*Q#L@L![MK2VL`&<W`IM"\"J:C;O>@@R)D;$^H2OM7
M1J0P@Y2@I@;$T0]@:B2<@:/4A7;W8V%,/4#XTKN$O12T@8\S3T]4!RQ=</O+
M)?\)NJ[4OS2=T:)(T'JPJ><93;LAT`A]1__%!(ID`-&E0#_^&P0:33X'A]%&
M=]+YYQ"-*$<D`,9>H1BCU@\+S38[G:5A'0RCU](9G&WKM,Z=MH4U)X=4;4TE
M7-%2VA5P_=-V1`H*L#ARO-:)<]?J\]5)?:%Y5@R=<P->.8L#4!M_T92S>&K<
MRT^[XQ,?57"IT`;#08ND=,Y&)Q3D:(Z5<[K5,$0+5=F.>'K;"$Z>RA6IS04"
M)`(8[!"5$U+^M#K3ZXYEP4_^E+T16,+.0=(U(-N8)F:@W8Q%T`#4R+HC8=C1
M$0RMV`+O=T&872/,JJVV.JW;&JW.JI#=G:T=":SA#=[-VJW(&B/>C=[PO:SG
M/=_@2E7R+;]RT`#_Y5@#9\,5$2:O/%(G@G*)<[,WS=`WMD'+>[0E[4H;P_.5
M63)G8KDH]ZIB70$G<OD6/N%73,DG1@)B@).N;.ME=^(36KE8D+56/`*6<J4D
MC(5B83F6%_8E9*E8*`EEUP5749GB<GG@<6,G<@7C(^XD+?D6,QYA%)X9JT*R
M#^N8$6NRC\FR$ZLL38ZQ3UZR&>OD5DXL5>ZP5\[E`_OE(SOFBAGF,ILV0QDP
M)L[8;1X(:./F<2[G<T[G=6[G=X[G>:[G>\[G?>[G?P[H@2[H@T[HA6[HAX[H
MB:[H+Q2<VM4V(ZHFC7>V>,)C)^XT7H9DU5`F@;?HH<FY1YYDA,'"4P12_TS!
M&J7V1*J0?/7I`UUA%.%3.DC=Z9T9OS5D961@*,Q\Y&)GS:<W-I>P?VHD$N/3
M3+,>FC.*PQ_Q8;I1=4YP=6L,$NAW3!@4C<9.FGM<`'T,13Q800$7!$,L!9M<
M2T=ZW%S!`$%J[:!IIGN$#)D@$+I>!F.Q&1ZT"Y8TSXF7?GSTNNG^F0:M"A5(
M.PL`>>GX@):TI^5N<*O$[^I^%4PM$V3X%G[A/*1`\%SA#WV-2%8$&P>Z\+JW
MJ0`P&&*6B\#A(_O\TT\DVW:T[_.W":YM&^/JK3#OWM+*WN*MWNE=\^O]W3B_
M\_@M\\]*WN/=WD`_]-QJ\SG/\_%-W^%:K<DJKO].W_3"&O-0/_52/_-!?_/X
MS6I7P-^"M2,M.)9DF02T'"9`$HU70BE4>>`.T>$]$;(>Z[(<&_<G.^5R7_=T
M#[-XO[%Z'^50KN5@7N9OW[)W+^5Y7_A[?_A]G^58ON6!K[)V;_A^S_B`?[%D
M7OEB?OEH'DUJWO&=[_F?#_JA+_JC3_JE;_JGC_JIK_JKS_JM[_JO#_NQ+_NS
M3_O@X&!F`K:7SKB7ZP.=EI)V0.)-VI,*![@AKET[MB-_\P5@XK:U;SR?GC8Q
M$;JH)_"4$KXW%\GZ0$H_W`O&=+SD!$ZT8&O#$+SW\W15:!OKJ=7.7SBU_A:Y
M*-/V9P*^T+\*]X8#%3G_&!?,.D1_(&!`4`&,A@@%R#DBP3B,$%",C1,W,SS[
M/S`H'!*+QB,RJ5PRF\XG-"J=4JO6*S:KY?4@@H;,5P*N6A#&X2?X.1R/7XT8
M:)\6XYDA\,@![[ZRSXL9C0T$`HL7@\-:RI;C(V2DY"1EI>4E9J930-=<G\F/
M'B?,@-_`04`8!,%"*>A(W%`JPQJ,'X2"P0'M)QGBS.'<:YP`P\(,`0-#EV:S
M\S-TM/0T=344YPQ:`('8*P^+P'&-M\(O1,(-'VRA$$S#L>VK0(Y`P?'/[0@@
M,.EP0<`[-0$8-%AC[2#"A`H7,FP8#1L$5U^XC<BG`I%!!@K^_#+0@!."`@8)
M_\F!L."=##\+$G!ZL`.?-WWF#/4864/`@U>-/*ISZ/,GT*!"AUJ#&&OE##\"
M3.SCMFODOEPS'J19YP/`2!6)T)%XQ16"@0*J*L:\^$/0"(IQ!O"B\8I`3Z)R
MY]*M:_<NF2X,1`#86)&B`+^`^NIK8$)``CYY_CPP>/,$,UPC'-R[0X"BBZ]>
M+)8[V^/`O5@'"M)@P&W>V-$1]Y[A9OK<Q@0;5:MF:\!VZ]RR84.@O<,V[M>O
M=^_VO?HV:^'<B,_>83RXZ^6QF_?^O1>Z[NG5MP-/'IUW<>?6D8M0#I[Z<^_9
M>:<GGWNX]O;8X;,7?WR^]/K;:ZNG'Y[[=?WE]Q]_[O^9Q]Q^X^%W7H(`EO<=
M@O()R*"$#ZY'H((31FA?@>\-2-T("G22@P,B"$#`*)P<<TJ*JIP8P`%A"'#`
M`2F$$\`"`ABP0(H!>`/`-F"M@>("*.!HD"Y!>D%D(Q&A,DR/C/!($8T#&+`4
MC$U&=%I5!ZSAY2HR$"##`-R4Z44:,XX`)IACAKDEG&JJV=N70XI)IIE<HKEF
MG6^Z>2:@>M(YJ)M_YKGGG&S:^6:@B';99Z%XQIGFHX3>"6>CB4)Z:::4\FDI
MHX?*66F;G(KJZ:"EAHJIH(KZ*>F9HWZJJJ&3[IGJHK7&BJJKD;)J*ZZO_BIK
ML+YV>FNOIMJJ*:BZGCIKKI+_.EGC#$!JB1>VV6J[+;?=>OLMN.&*.RZYY9I[
M+KKIJKLNN^VZ^RZ\\<H[+[WUVGLOOOGJNR^__?K[+\`!"SPPP04;?##""2N\
M,,,-._PPQ!%+/#'%%5M\,<89:[PQQQU[_#'((8L\,LE2G(B``P$HH,`]L(BH
M\H^C+.`E`0@HH`H`"1"@"P)CU4S`D(F!E-9N(YR8```+I.P`2RM[,4I5/@S`
M-"<)B)/8`"??+#75`20@`\\BIES6#.$`T1>.F$'V@@,QF2UU`BQ]/8/2<S3M
MUU4O*P!*'B_,@;<+((GX-<_<&*``TF"MP`EE/QS^@LYE+V"SRH#S"",!H`Q0
M#B@+_XC8BDE+W[T*R@HL`L3;,ZSL]=(YUAR`B0>(J`"8X2#0LBY;^^`YCF0V
M[;<Y`(Q%TPJ#6[GX'/?4W#)8"%`[-4M>BUGTDDC73;73)4NS`/.*-W*'1UPA
M;A!B?AUP^FIDA9)43PFP0].:R-CSATDRC7!,VUZ\X8O15:'5%?\B`HI8E"9J
M/UC`_O"`"%2<S0:NV%T"OV$2UM3/+!5470+(5S0"1J8R)C"`"3CX"P(:T"IA
M4=L=JF(`!+Q"=A(T20\2=P]`W$,0#G@)!`\8N/NI;P`-P`P!P!`B!HRE@S$,
M(5\*P3PZ[$Y]("1)_%P0P0/X`1`#``4!YL>#"M)0>]$8P/__5A$7/X0%1VTQ
MFC&2D14WY:,+#A#)"=X8B!XT`@!O;!D,#`*(-8B%AP'TP@[5%XJ.6(5N%C'$
M+;Q&MP9F)A!M1$0!JJ)'C.SNC(D0!SNR`D@``E*$U6+'M6*!`,V`[P:1Z00B
MG'>"P]AODX*HP?!"X@V#H,4@8WC`*?<W!R)N,1`J9"441V*`!UC2EJ!8`P$;
MH0?,!*"*A*3!';<X2:-Y\2%=&*8F;Y&`!N``"#<<)>HXV<N+="F+<_0"SOK2
M1ZV\<#+&V.0@8<&/I)1E,)_\@4;.-CG-A"4!)F*D(;Z2-'!RI"(EW(</NLF&
M'<2";((LI`6A2#91DC*$Z[C6"^W_$(`U9`6A\(/E5?89A#!V)8M:.J%6&M`8
M?1SP'QR]ROOTP982/E2B?U"D6YPI3UBH,PS,\&@UG0$1"#@`<#5MYC_(4("D
M!J&-/$"@/@AH",@-PP0.X.5/S1&8`N0D"*)(V3QKJ@]<BNB>@9@)+L)1@"8!
MX`$%4(`F25(/S,#5#DTJPU/BV8?(J,`&-1B:$&[Q5Y",\!\XA8,#;U&`E+VD
MF5>Q60KVL0LTZ'6>"9A)7=<*!)*6P+%[U<H72,/7R990JI,A:@3I"=.J_2$L
M(H@'#\C:!0!8%:L%#:HUDU*Y;OA``<K@ZT"8V@OZL90!`!B35`6QE&J!H@&T
MR"H0#."^_^Y9$#/_LP@@,&/:!F@&+'Q8!A`60!!-UD!IN/ON3Q]PV;@"]0S`
M90`4U083F+8S%O)=AV^U-`8JP3&L$7W:8F\+#`0TP*@&0.]F(U,"*C8U#71D
M``OX"N">F)9[$;&(8`NA-ABP1$TZ705S;_!<`>-6J#UX3`*B=HL]W!`(.+AL
M8&/2"5P4%8J!O,HQN0DXA*IB%W_T[RUJ@5:IAJ5[*@-)`EU$%<22X64(B.`*
MBC&\_\Z@Q3_HIFF;^B-V["/+]%4E;_&@Q1M;<0:E4(5'7]#6CCHYM?#K!DI]
M8%)VK@:L4C/S.FT\@NCI(2[BU/,6"4`5$7P8QT;3,8E+K`F(E/\B+;_PPRY0
M8-RK7.<6`Y`!];R`-QB$)0W)[4)5:(L'")/X*U_X\8W)*`/)0O0<.*QRV5ZC
M`E4H0+Y95D<QF,F"-5?6!P:8=+58X^7YFC6B!-P9DZ4<9@-P0P\C^1\@T`<!
MTK1RGH<E:JSERUD3="80@I&S<"<S$FKK^12?S.:6D1'9$:CWH:QVRZC-T=XK
M>2$%8;AW#$[`"(Z:R-[YCLB_Z4UO'=7[W_@&N)`23G""(_S@81#XO@O><(/K
M6^']IOC$$S[PBV?\X!`O.,,='O"(TUL?77B`F"3YC^,ZH&<GL!EMRY&"MNX-
M`#$R&LIH>SX-NF!(_9UVVW)&$0(8<`#_FK$RNQV0.0=,60'D3H?15GY<\1D&
M2'[)8N8F)^T0J8W`0CY`THRZBI_CHNO4=GIAFH1TQ\&\+PA(P9R'$.>T]!?M
M=*?MY("0160"NQY@#Z)!#G"[I!E&=?N+VP*`M,173]LO*%M#K0/Q]`<`KA[W
M$'SB)Q<UW=TO,HA7_.[Z*P`$9"7`8E9;%O'^BPRJX#0%H&O559:6HA^=\2[(
M@1X(`4+-SF]^*#,$[M^0^QKLGM#'\'T.?I_[X:^5^"0X_C%^KWSAOX'XSN]]
M]).O?154O_F\AS[PP[_\[A?_^>:7?O"YK_OK@Q_]ZF=^^;$??O=/!F\ULR-'
M::O_N"X%*]$%_\"U]-](])\,Y!]M(9/^B1I8T-98C,05*2`@75$0/."/,&#_
M)2"9)*#_@5`"!@$'(HG^`=)27`L'ZL0!KI*H/6`8T):]A:`0""`>[-\+ZE\*
ME.`"BEH)LJ#CN.`598T&#@\(-0D%`A((9<40\A0`>@$#GN`-5I7P&`T-FMD3
M2F$2EHT:+&!6E.`:/"`5RD@4-J$.N@4P12$%GB`'-B`5EL7&89S'1=S"^5O'
M5=P:AAP;RB&_29S((=S'K6$<ZJ$;<EP>/MP?XF$=:MP=TF$?[J%!/&`C+)>B
M/2(D1J(D3B(E5J(E7B(F9J(F;B(G=J(G?B(HAJ(HCB(IEJ(IGB(JIO^B*JXB
M*[:B*[XB+,:B+,XB+=:B+=XB+N:B+NXB+_:B+_XB,'KBR<`.`5#/T0"@X(F-
MCZP-XQS#X_A31"1&DUS/Z"C.[%!7WS#.1FP."_6-*FP.M<#"6'BCF=&.".0!
M)QS`GW#.50Q/SB2.$/`.Z!B=R@"/#Z1.B`Q.Z]C.[/B%T1F5;(`-\C0..<:`
M.0*/\8"%B(!&,(IB,:;,"DP9D!!;%C'/B;$#`%"6C45-`NP/8FC2#"'",4P.
MFI$>D[%41'&337@#$R44N8D:`+S=H8&"1[6D?X77$=%`$OG1_:16#?6`!T51
M7S5"*<P6.T2-2H984#X1:8!10XHB6D#@"73_FVI!TYA=9.B%$"C%&@Q(Q15:
MD([DP^_1%S5%E--1&P0.DR7A0E*ZQ:_-4E4@E%IJ$DGYTBIM4BQDA2S=8R`9
MTR#\S3<8)1ZH3EN*FE\JX4I=T%-ZXO_$54P26\RM$U;Z0#XUU`]DT=[(P2\H
M@)O905989K7!#@-P!03.PD']&FD""7Q])4*9IF<,@4:]5+%5BT@EV'QY@X^L
MYHS\#VCJ`VKR5)BQ6^'%U6)JHG)-&0W,Q!V(VE6M6JM-%2&PU@]T9!'LPR$T
MT)8!5D21@B+`VVFYP?JP10[0UG6V@SF02&K5I0^0UDGVEEI="V<Q%OT\P$BN
MD%%*)TN)IW?6U`H5_X!,%B=CO@`+!<%CAID".I<`3.8,<%=\J8%O25@[P1AB
MC85]M5,/9)&/=,Z*)!+=96AY>M4O6-@#W600)*CI/>>!C0!XO29O;5AO1-B;
M-6@O8:A46@0`.!=R`J@E*I<)3$YY%FA5*F!H^061S<^P+4(6Y6A$>>8/<&9[
M6J@AY<\YC,(>$)=)+);-Q92`\5F5WJ01XAG.Q-21K8";;1L9;`8KQ*B7=8$=
M2.E#C47<Z"@GAI$-)B=DZ@2IZ=DV012RX4(8[*EY)A0SY-J3AF9OC8&YK0-4
M'"I6X-(]4H051<UCW!B(5=FXV41,X9JLD2CX0*H[W=BQK9OJ*-8P1`T!;/\$
M(N;AQ[UA(0JBQ1%B(@YBJF+<J@)B(=8JK*JJK,*AKK[JK&8<KOYJ&_HJK]+J
MKK:J'8)<L0+KL?:AJ\[AL@XKM"*K(2HKM99<C!*H5FD1T<$-W67=X]W=0#V-
M.F31UE79JP6&SMA<X5VF9O56`K%>E6&%2;+/#,CK9'S0*&4=7;W!Z)6>.G"7
M_D'CO5H-Z!G22$0>,$Q>Y472<9V=#!!&X\F/ZMUK5KCIW-WHWL!%+9`?^YW?
M]HW?^GT?R(H?]8VL\97L]*F?]9$L\IDLRWI?RK[LRL+?Q])L^MFLRV8?S.KL
MS/)LS7KLSLY?S@KMSQ+M^QFM^>%LTJ+LT@)MT3JHK?RYG\BV[-%2[<E:[=,B
M;=7*[-:.)=`1P4F4#0V>(5_FH#>@K0@P(A).V1'B&$9I81J*858(`!?&``/2
M+5]"X5A0X-T*T!-JH%02H?_%H!DR89V*H1=B(-[ZWQ;FK=HB8=U"81@ZAHM$
MZ\@1Z[4V:R`F*ZLZJ^?::JQJ+NA6Z^=VKNF*;J].:^D&*^;Z(>FBKNMN;NS>
4*N?:;NV.+NO*KF/DK0?F;0@``#L_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>toc.gif
<TEXT>
begin 644 toc.gif
M1TE&.#EABP*B`<00`']_?[^_O^_O[\_/SP```*^OKX^/CT!`0-_?WQ`0$'!P
M<%!04&!@8#`P,)^?GR`@(/___P``````````````````````````````````
M`````````````````````````"'Y!`$``!``+`````"+`J(!``7_("2.9&F>
M:*JN;.N^<"S/=&V7#J#O`#F0"`/O!RGH#$1(D`=PG(P&Q,C(E):@B&01$!WE
M`,2@0<@$+'G.;WA,9HIR".MM3J_;[_B\?L_O^_^`@74+/P0$`0(+(P()<D6&
M`@<$!2(-!#TD!88B!@<E`P\,$`,)"B.6/0@-`3ZA`A`&!"*@HJ2F(@\$":]%
M!800AHB*FK*PGA"YNR(%OH6'B1`'/9V"U=;7V-G:V]S=WGN4P(<0K)P$HB,!
MFP`$QY*8Z9M23HL)!+P*ER+O$`((Y4H2/"`ABM$]$?DP*;#7X%6``.&"D2,G
M#P*]A00:DH,H0F*``9-$P/M&LJ3)DRA3_ZI<F4<B05V\*,I*N$\?"76R#)C(
M=TQF33,`12P@<$N$%)[QBH&QI^CA")<^=8Y82J`I0)<@$_2(R;*KUZ]@PXH=
M"P.J103\1.!4T"!<-)M)&?0<(:DG3E9U5Y4P-+*F78D]B"EPVG&<6D-R200V
M-/BJ80@,##UP2[:RY<N8,VNN8[:'.F4R&3T@DC:I`'0DZB;%>\E`4'%]W_X=
MA\D!8L<`<9Y6_.;VT\>P[`'?3+RX\>/(44+]`L`2/9QO%;V%)V``]'!)D!XN
M]D[`:U0[VR45.2+?8ZC79T&`9Q[WK%>GJR:?3[^^_?LWH!:U/="G).FE.6#=
M)@X!9!`^-O'#U?\C_1G5CST(8C)29.YMU\]&Z[U480!20=``:OB%*.*()!)G
M2#@!%"7`B8_<DT`"1%AR2P`)M.A0(ZW44LHI<.&0``.O.(!=**/L*`*(`NA5
MF%O$W"@%DDJ*@V(".H'B2(E89JGEEMP(0(4#"`@@!!%4(-&&`[Q0444;.SS!
MA1QE+KA(#EUD\N84`%#F3S]?2G$&#UOH*867.H"I1'5-R,GEHHPVZNBCD$8J
MZ:245FKII9AFJNFFG';JZ:>@ABKJJ*26:NJIJ*:JZJJLMNKJJ[#&*NNLM-9J
MZZVXYJKKKKSVZNNOP`8K[+#$%FOLL<@FJ^RRS#;K[+/01BOMM-16:^W_M=AF
MJ^VVW';K[;?@ABONN.26:^ZYZ*:K[KKLMNONN_#&*^^\]-9K[[WXYJOOOOSV
MZ^^_``<L\,`$%VSPP0@GK/#"!GMY``,`**``/4I$'#'%8NX0@)`'*)!$``LP
M<P#%2AP0!0(`2`,``V"FG,0`"D0A,0`+0,RR10HTH07,!VP\\@A!>&S1#@70
M@W+.$\^RP`(T$R&``QW?_`;29O33B0(0F_`T"0[8S+3$`S#`=-/D+*T#`P9P
M%83*#%#2R2_D2!/3`&;#_73'$9N",ML*['VV$W0S;3?42)OBBXJ^L!+`#@Y4
M*;8.<#.LJ@,Y"VC"X5P9IHHB4">1LC\]CY#U_W"8'-`@+(:I,X)4#6BD%BOT
M2/-&#D*]EC)",/*V0(=06W2`YP>\<KL#.':$R`,`1`+/`#\#P\H#1;UQ.CVW
M6[3>,=;M@\EI#3BB>I$Z+=!@)"8,7[SSG!PV%46KB^0)\7(8)I4F)$\#Y"PU
M7C_+:Y*72CL$"WA-T0+0@)$\!@'G&,[#"EB"'I!.)).92NJ*H02$M(X73N&%
M[/IA,J/8[A@KRYU(%#"7]2#P-0_3'S`Z1)L?E5`=4FAA"21A(/>)0'@]L<(&
M<3&7[T7#$XR0T)542``6EL,*/G0(!:U0O2(^Y8AJB0S%\@2:9?R@>A7L'ZHZ
MJ(378#!ZP!G*Z7I#`/\M7.B!ZZ'9ZR:HEJD@(`'2(8SVO'`)^#00A!YZ`"_8
MT:$;*F",%KE'$XVX'D.0#!>FD&$ZH"8=Q<RE>@#9(>IB\KT@+H,`6>CC5([A
M1.--1'V?_!Y`!OG$3VXD'T1(62,7H4+^:7%4MDG>A;060!(`AQTE],D)T&@&
M3&9H@I!;'RE$(<=HC,0`+]*D"K=RP;?P[P"Y5,?B/(',F(RC=</YH?,$@#P2
M*.!IOG2D8I"7,[J,1)KQT($EDK"`%)[@=M5\"L0:D$Y(7D*--HQG1^:9#E8P
M('?LB`T$+?;*5"&32B<04RZN$A3MW&03N[0=>9@F)O2QKPCK>P0`BBG)?K#_
M`T3+-$H"/$%#$[33!.H8```>T,[,60R=,U3$.1)`&02@0RMW%"=&YSB%,L:#
MCN%8$67&V5);LL(MWT-1,=RRTJ*6$JGE:,`N`HJ"Z@VUH*02P$=]!TT2+*V4
M(WA`+A:$$5?RL@@/Z`(;&TA'!@1EAR_SZ2;)@S^(X10'!_'F0#XG0D\BL@0K
M<L(A\#E"'9@NIW.=X81.YT,/]22;[F.$%H;3V(LZ4K)&+0%ADM0`!9STG;G$
MZJCB.H!_%#,`CP4(,E4Q$D;XHH1.6$#T!'`+3+#4KSXL@!1&DH^WPN-^E>!*
M]4:B"2Y4L0A):BU-]1<`/8*U",=MCB>Y")EZ4`:+_RJ$!4]'$9*?AK4HD&6N
M<_V*`$I4-K>[]41SK7E$\P+DC;\#S@"NV),J&04^@[("$?:KGD/Y=T][&D5_
M^>O?,/4COP-.<('Q>V`%$S@,#`[P@_MK8`,#6+\.ON]_$2S@#A.XPA'&L(<5
M;&$.3[C#(&ZPA#.\8!6+^,0IOC"+/QSB&6NXQ`T>L8X-#)F8N,X$#J#'BC9:
M`+G\@+8AXY!>:-L`!VQ,R`][B`&`NP#A44*HEWQ([P#(%;>2`'HC6)J3FU""
M/R)$"[0S0%HADK9^>+8`2BX'6T32O7YT5RT-<`WF['QEA"J`,@?X,0/H69Y5
M+.X6#0A@BMIRA4E`!)J\0/_@52U(YT$5$2(:T80C-*'E8\QY/75>D9XSW4>Z
MD0-Z4B8"6QX2,6`X(84K7<]`8`A#5]LZA;#>ZZPQ66L""/;5HLBUK"GR#U_Z
M^M;!%D6L8TUK8_\:V<-F-J^=#6UA2[O8,7PVKI6M:V+W6MO)CO:NL6WK8Q_;
MVN/^=K6Y/>QF9WO=XO8VM<\=[F6G>][@CK>[RPWL:+#[VNJFMU`6,.9##J#)
M1KCA0Q8NIX<,L9@*1T0_68%!AYMVX5)@.`DH^1"G=7%!UNFXPS<^`NLT/`!R
M"#D11/Z0!9EV$1J_N,2[2)B0E\/F+=\(QDT@\YGW8^>?Z/CK</X1FL^\YU)0
M^=#_%RYTTVHA)O](.=,E#F$7V[C%,M8QC3><XQ-7'<<KUCJ%:RQV%+\"["\F
M\=G)[O4;L_WJ:(?[VJU>]J^_O>PQ-K'<Z=YVK.L=[[PXN\]],'C1&O[PB$^\
MXA?/^,8[_O&0C[SD)T_YREO^\IC/O.8WS_G.>_[SH`^]Z$=/^M*;_O2H3[WJ
M]:75(_2#<%+S!<2PN+A"Z61M:&K?(@K0,3..0FR4#)D`Q(2T-G=M95_K6\K^
M!@02THQ)-3,LT(Y@@$-N#6C.#UG)G;^RJN'^<+NO9<:X4/3I\VUJ%K,"[QF`
M-?BD3">$4W_HU+*SNCEM_7D[Y"A(6`"N$#]B;:86.1,Q_S='0JR``#536IW@
M9,"7#L(W?J[Q=+RW40VH%DGV.#1##Y23?E83-?"``"340+4T)USC-7F#>PXQ
M@(-1,;^S?762>!MH.9<#39C@9=ST1-Q4.I@@%5/&"Z0`2D813L\%6.?`&P?'
M)`TP`-1S#$[@0YJD.I)F3ND#"\"E"ESA`&,$A7>&1<BD.$MU;.N#6E9P&D/E
M0\D#5\TC.X-V0]WE3@A!$"!E/O%S1(E6/B5TA%.0A!#@68$G6S8T"JY32448
MA@<PAFUC`N.P(B`B(<<@)LI3<LTS#F!V&"0S4C@P/7_8A,7`AS?DAQ[R8Q!G
M>/\S@F4V<L!`!!2C2!LD!05P7/\%\`.-Q0#=E%DHL``_LCZS.!7C53U*!#2:
MQ1V-M(K0Q14<!1S?<P"-A%W_Y!W%$`!2Y$8)$!05]5"+D!@/)06RDU)"@0[$
MXP5)@``/$%V<1$A!V!?8A0SF^`#$XW\)X`2WPSR41$&VB!IF$(T;ITR&,8\9
MA46G\4+&Q@H`D#_DL(9O8(UT\1A[U(CLLXX;UXY[V$P8HGA<]`]`Q@".\$].
MP%[KD3^R4QW1L$HW9%FT%9![X4HBH0E2D2="&(3A@%VBA%+`*(4>Z88GX#.K
M=(S).!<@`6?-F")RI0.`!)-J$5@F`&;9*%>M^`KY$`Z+2`I]1$I^)12$EEB7
M="4(-(C_!$%/+A,\U'B2G024+6`8*IF2?X@(8/AEB020`@D1(B1]BX2,=DB-
M'V(":UB/<622!15+=E0"@T84BY`/#\!0'G(+-%A+/=*5%H%R9VE1[Q1([L@.
MN\2(#Q5,O\A=D20-AOF!*>,6WV0;<J`Z(#%*)70)HN1/`-55-P0U`7@8A@53
MJ4%2/?!9(N"06",*14,0D'$Z\%1%MT1!?R@2OOD;L0&9*V6/B-D#MN&.J/EZ
M)K,@8NF8&2)KW>>:=.$)SY"+#\$`HH``.3`7G;F2V<4^AUE(&3),$:EX!Z5,
MZ>"00#,4]'`).:-!6\$*XPF$QR";C%D^"#%8L;!+*=E#2P63_POA"!W)"D8"
MA#8UF_"@#@.J4VSH&CU9"5.U`%,9E:#TBMD$E]#467P90$)R#R`29):IBTYE
MH0L!-5V%7?V)B.-)DBGS3UI@AONY.!1:DHA8#@HQ6'^(H<\D4_]$&1TW5=F5
MH!!P5U3)/D8Z%36""<45BH>G546(HG/A"_T5'!9J3%X56A<%,F<CA,`A7*(#
M1U&8">'DDL%)C=2%I:+#6!1D,2G3(*J3IMCEF:5Y0ZTS,2M)6;XYB8MP;ALU
M7K-P#J_P(R,Q-BM%C\'35_D9"A<7GCO9:(%F`G-Y._^4&VT:I@27I_SSG$<"
M1[^)#-%C9X)%HS?!"DUF"ECDIH?EH/_L0Y`D,*EMA9>O1%J-BIL`M`B$ID#P
M@`3R!8N;&!,=\UQ9P!L\LH<E%*R?BE[4B%G;E38(!82HX5KJPZS9Q4VF4*<B
M15*KI*>9$%V$)CN$A0OHD`]STR'JD)"GII&<<#Z?6@`AF!I]8YQJ@2/5$PO/
M<:G%"I=#Z%<C80GMZJW39:ZPXU-8%*W+=:10**_D0*_>-`XP-G=9UW=YUW4L
M-K%A][!<=[%JE[%IMV,0^W<8&W=UYW9\5[$?2[&`=R0^MB"\X&3B"F<,<&1W
M5@EN!3+FA6H<0B:8Y*Z*D3M#]A!4N@BKE"2<,#(^TT>N^@B=UF@W$E4UJWT(
M^+3C"FB9=A#_-")G@:ED3.I+!5!JBH!D<)8R5Z)I-Y%G$"%;O,"A_A83>3(+
MT<J5\D1IH&9I1&9D.Y&UB^,$"WBT1M$Q#T%"5F!FE5!'9`L-N.IF22:V1)B1
M0TMH;$&,9KMG6,8(\Z,3Y/.0"$&U,9&T9(L6C0&X0M%E#X%O_E:Z]B9O[R9P
MZ(:Z_%:ZJ[MOYM9OKSMMJ2N[_W9OM>NZM\NZL:N[^D:[K;MMOTMNO2N\IPN[
M^09`!)>WGT`49!:2V?-S.?<Z3`<$*`<T4S>&&#=UY2>]TDAX9F1S'L1TCE"K
MUD%TKR%'IA5IVUMS'X%SW[AP2L=*)5=X1N=RIS5RWC%S:E._`*%R__/+<AIG
M`N@[-]T+<SXGOCWG<`M'<O4K)_O[$0W,2N);`B\7<1)G6AI\(1>WON-[<Q-\
M<8$WO3KG?RDKLA)[LAKKL1R[=RALLBT\LGZ'LB%[=S5<LB=LPQO+P?;;1:OW
MPT`<Q$(\Q$1<Q$9\Q$B<Q$J\Q$S<Q$[\Q%`<Q5(\Q51<Q59\Q5B<Q5J\Q5S<
MQ5Z\Q;77!)K4(0XC-!989#D3?2S#,Q1G`,7W"F%390[8?ZG9?)B)(M`4#E&;
M<A58-OWW?S$3)"8H,7ZS,B1S?(\C,>B7,]ZS-/\;,^!W0XDS@6AA6&D\`+(G
M?0X#,1*C?R#(!6DPR-&C22J#-QZ*-XKL4?^N=Q,UXS,4$S17(P=0<[:SUQ,Q
M^`.E?,D5@S1&DWV4<<N`U08<L<L7LPR>R">U%,:-PX+,!X)W;!0NXX(<,C*1
MC,QM?`0'/">H?`N?7'VC\#6EC'MKHP6\1\>ZIS014\IW4SA&D3/>;,$6DS2_
M-S8$AWTE1#.L$,>0\W2'U,UHPGMF[,?KUWZIN<U\\C#YIQD]B#]`H*EL%3NU
MH3]XN`QZJ(C$*CV5.::Q(`=PVZ>+"(A(J(29:%E]M(1O\(BST#S;]3J/4#^>
M])X'B!<["%:;4P(:P3S6HT*OO)(P[</R<R04!T@;M!!:T`-\J@3AL$%2,8JP
MXTG_T#F;U(MCRM3_0#!_D(&<+1A9+<T;"UTD0"@56N@6$(DA2;68GE&(-W2(
M*/#3'@+'ZI5QQ:")<1MFP8E`GPG7;^!7K./6.)#5UX-#-]1'ZE")/5$]T8O1
MK\K7^1F=:EBA;&U1-7T929D)22"+!B11\AF2MY.+$"04MTA7-1$4.%F=RS!I
M^D@>G"UKZ'HA/N0(J]V/O\C1?>$4SGB6F)"(?O4*PAB5"+2@XY61?[BYG,T+
MAO$*FM,1J&@"&Q1"G@,+C"6%6321%.=7H3E#Q!23T2`5%'D*YGA"UCV0MCW9
M4^"KOGA1^OJ0@>B%463;;R2-ZDE>Z9K7&%0,O7@D>653P6G9]%M)\+U>_WD-
M-`JD;#U!C*[:-86=0ZGQ&/Z=TVATE$EPW+Q=GV!QWO0[D@*YV",A29L)GE$X
MEJ!MDUUYWF^$)J$Z%2CIE5;976;:1J#%AOK'IQU%VSZ92A8*'!WYX$%1HV&U
M9*SJ9B1YHYD%$!@Y2ZDA(7FT1P\B9$EPX[TA2YF#M4!V#Z,=2$X>#V9$6X!D
M&_N+2NX#DJS=C-YUWG;)TJ7)Y6D4E"DP#@#Q`#SN74#X?IR@"1N7,Q<.A)ZT
MYFV.$%DN2,>0OJV82JG:YS?!2%_6Y@WN&7*%/D$11A4Z%A*>F`B4BA(%W>X#
MF8C8`\AY;.P!3I\I"]6].J4P1.21G&ETIL`@F?_UY.5EF:$]$>.*8YI75.-O
MA9F"*4%5W0Z.<(Y.%NE`+D_2Y4<$$)C*;>2<)3QR.^OX#.K/"E;+&0^C.Z+K
MNNSDJ=S1=`A.`:.%)%`409GL\^GE>8NT':'8GC(#KIJ*`@S\U+>XCIB6U03]
ML5&^N>N+:5G[].LEL^ZD_8N+@SQ94ZK:J03=J8L$51Z<#C1U806'#D!S<0[V
MGI^67AF/?I^IQ5:4?CTKNA<ZD:.+8Q0WM:!$P:Z54.(9U5M<8.I?":#+4%78
MDZ'!.-NO+J%:)>M%_G-#N!`H)57`,T-"D4O`,0Y#A8#SOMS9&ITGQ)TS[QT;
MMU5@A9^',2`-FO18^?#_60J3(0?S5%63`7H83T]73:K>$2E56J7C^YI998CS
M;M[N10H1`Y(:.U^99*]99M_VOZA2QU"&'R&D@9[R'*^@<)\[#1YHH>KSM(@[
ME\'T#MBE"#_I*RVV,_L(NX6IA?6F/Y6F*TWQD"&FC4^VX5E9<?E7&W>6'?6*
M$<E9M]#SOM7KXEIR7I63K(SX-KJO28!,B@7:PP0/T3?[/E!RB6X86EYFNY;=
MJA^H^Y5-O:]7HW^GAF_GZB.GL;JEY4#ZGCGXJ-]A`W?V,HHUUTI!7+HR*UE9
M\K7Z=$16>Z6E3G&JV76.ZS&`JZH%7W7H"WZEBPI28N'MH_`#WT07MW#,;C;S
M_W,%`LH!D>2AD$`)-03)E$)2D($K#RMTJ'K9DUH0D>[T&Y5LI0+"!T!""@G!
M"M!8&:XK&"00*"$22,*W1%[Q2@;2F61(-&MK4@&5@@ZI)KNYS"XCT"S$:)6D
M00!%$0#9).X`K3'HL4RVL23*T"CAO$PV3"[@03A<KF1V^84=#%A"#.0HT35M
M)N2DK"B<Q7J!B>T,]OD$0P0&S$7QQ=:XW"(0K"DK3!HE,0\7']>M-&#.((HF
M?3D0Y#P=J;W$>!LOH2SP00C8I0$`_Y$$WKO!V0K[_P,,*#!@@`<*O!C(H>U'
MK7@'&""4M,(@K@=N#C@(X.#`'`'VXEU10,/0)T54`O\D\`.!HC"/IK08P*B1
MXY9"BKQL%,;`9H`&!@(4>#>)A(@"&AG8*G#,U2`!!$CA(S`R",0`"V@X!0"4
MP:H5/0\6D/BBT,(4#:-.=?JS0,D'#(PBU=&`BX)^HQ(UB%-BKI>K$!8LR`@`
M*C&I,11<-=:@3`$")U/^#1Q@L"D%#3(Z@"HO<1;&2P<,*GC06%(R,^DX[@+Y
M[U"(BIHH70$Z'F*C3_3J4`OTT]>MD\9-:MS$Y0XJC8W#`W!V5&H2NMD*Z!UV
MZ&:CG8F6]!%;`!++)2Q[`8!")!K>#<!*Y%[5@-CS)M(_VTTEZ]953KD,S*]_
M?T`$`>)$]Y]S7@2@1X!#H1+_@"T#$%@"@_T$J)(`_A6(#X$4EO%@#5[8-2`O
M,<BFH`X,?HBA%[B10*)*Q'SHSXE@<&A*A,-=N"&!7T3H!8+QU&"7BO&\"*2.
M0@J8HX@\,N@#@:\$Z9PI.MSX(17^33(CE`):^.&#4U8H3(M>8<GBD4Y:J)>)
M`F*8HH($4H<AB78-Q>".,429@QYCBEDAAA3:222%`+*9YWQU\MA%AV#J]:,.
M?_*8IHHZ4J@'AG=V>&`X19Y(J)&3#``/?Y^"&JJHHY):JJFGHIJJJJNRVJJK
MK\(:JZRSTNK*BK7BFJNNN_+:JZ^_`ANLL,/R*L"AQ"*;K+++,MNLL\]"&ZVT
MTU);_ZVUUV*;K;;;<MNMM]^"&ZZXXY);KKGGHINNNNNRVZZ[[\(;K[RU"M#8
M00O`D40#1CW`33T+Y``:9`,P`(#!`"SEP%1_*0#``SP47,##!EM4+P$+B+>`
M6(O"PU8A]2[6&,:(;<Q42@XDP`<"!BP00"X&<X7`RP`4[$H##UBAF0$$,,"5
MI#/7+##,!RR,``.+4./*`3@_@:,"#;L6!0,-*R")P`5(RG(`1S_1<<$&'R3`
M.`4C1@?9GLZ;MMKNR@/UK70`H%<;!&2'B`E`H/R%.3W]EL@!'XUT"`V'$&8)
M`P_LJ!R4/%>A#P2'#V4.(D\UK@PIEM_1!3G!_%U-"5!)[O]*`DO1<HSD_B$"
M^A<,+#`)2@.$_H/F\8SNQD=1MT&*`%H0M[;OOZ-+&2)O&ZQ#&Y9EU\,A)ECT
MA`R$N>'@`02@^`@:/53BAPSXE;``Y4F\@5\/EFQ?!1*#?6^W,LN`^`T;0)P!
M@#7*Z!&[_'K%<@`4H5.AL8?4ZX`KL;M%_D9@`Q3-H0U4&,!9%@:\!T*P6_X#
MDI(L8KPR`("!7%!>(L:!@"<(YQ^28,GU2H@ZQSW.@I\+"T\T\KWQJ>1PYKL%
M`\ZB@EC,(1:$,8=3"O<%!:A0A^<`0_IB,9<A0L4&!RC#3K3#,W#<D!E'!.(_
MSD"8`R0``'.*(!>[*"TEOFT'2]'_APHT:#?K56,R/+"&#^2!B`3X8'D[X$'+
MAI$"-CY.<_W@Q3A(`<,JL%%R/:AA.31G,&`THAY'$`!75F":!TPED?88X"(\
M9X`'Z,5AX@'"`*;7.OTIB0"@U$$4(7#))HQ2&#RS0A42X`TOPC*6S^KDQ1"4
M%<MD[Q;,,0`'5^#!)^QLBS\I#/30>+<4V3&%LNF!6\+Q`G+\L00R'"+V;B:`
M4KJ"?=E,P0-"8;P:JB06_8B=,PAC`P5,88;;3$*_FJB#QC22E)I#IQX68),+
MKM,YN7"@+/OI3V`5Y`KR(P`9F/&T8>"-;L<TQ`AN8Y@5Q($'!DOE0BNJ!_)E
M<0L'J^&=__Q00RY@-!&")`0W9N<5-E+!')=QI'P\!R+[I9-]55,GC]*210!N
M@2/W1,#E7#!3YB`H#N3KDOO^:=2CXLJF*G%&#>S1AD0<K:(H*T=#,0FC**0"
MIQ5%XS4=MY,J)>(!2=1>`\;@T;H5-1$,Q*9+$9'2$2#@`?TXPT]-ZM:BB@YZ
M1MPA%-S1CRNPSG6U"(-=)+)7$[3.0;9H`U"V]KDU"&`.!J#"9*.@D(#18`!8
M@:QD*6N<R[HBLYN-1V=-^5G+AC:UD26M&SR+V@)@5K6<;:UI7QM;S;)VM;6M
M+&Q1BUO<KE:WE>4M:'\[6N&ZMK>]-6YN2TM<WXJVN;1][G*C&_]<YYZVNK)E
M[6ZS>]OC8M>VJ07N;+LK7N9>=[K>'2]XU8O:O_PUCC3(3#SLI=G%;*$+_3HD
M`YH@L"\$I6`9T>]46-$`6Z`$8#68F,,&8+&186P2"."!I!HP@P_&19\/SI@6
M98,O!2W``(D2L?P<("GYP6P0H)%K%!+@`,TN@@H-:-D'%T$S%>,KQ4N5'PW"
MD,$53W0-3P-;4J8F'K&`IF'BR4&->YS%<KS#`"^N[RJIZ#(E]X"!3?"&-][!
M,%->(0NB0X"6(<!E0;@#!6(6LY;+?.8O>WG-5VASOM[LY3B'><[\J#,-NIQF
M,`.:SEON,YJ_+.<QNYG0<%9SGA'-9S/_%QK/@=[SH"&]:$"SF=*6]K.A&RWH
M34>:T9,F\Z,Y+>E,D[K2IA8UJA-MZ3NS6L^I!O6E#_UI.]MAR$OV`6B*A]1?
M`SO8PAXVL8MM[&,C.]G*7C:SF^WL9T,[VM*>-K6K;>UK8SO;VMXVM[OM[6^#
M.]SB'C>YRVWN<Z,[W>I>-[O;[>YWPSO>\IXWO>MM[WOC.]_ZWC>_^^WO?P,\
MX$?=Y"&)`305&`UI?'B'PR`&!)F9PEY6R5<-]K6CCPR@!5.9\,8^HM]57&U'
M"H,HBKNV0'QA37I,6R+)G^*Q&+`%*`Q^P!<(1K6X1)9G/L/'T8:R`)I#%!X!
M@)B-$6<OV!BY_VK&:<#'8B[PIZ^J;30+8P'B1H(0$T*;HV"?#.80N!Y,17'X
MA`#=)N&(9=CE@"M8F`TZ=(@!&L+CL1``2^!^NA7M@G&R0Z-_'&!5?(CU'IVK
M04:=XXM6>N4DS!C)&0*;A(;8@'MGASKE124\K0C#UXA0H9KL>B=F4-28W4N?
M/I!7/YT<<2*<;$WJ#=$#N"M-JW8=I=VA@*!=A&_ORWN>#E!&A?C-CXIN(,(*
MO%=,N_Y![3GM0NYU6?GGBVJ"T:G@-KAW4A*84XK6E^,H6#CV#"9@@SZ0&7!\
M&=.E*J#\KL^<#T8H=&;88"2UQWXH-]1'7::!0>J/`>7H&L2"R%_L*/^,.UT?
M2Q'@$E`/3KP0]#$@J("1/]"$&4R>(2D2^YQ2$3@"#+0=2]V"&9U=W'2=#KB8
M*^`&"-;.^N'58;S12<',"=H=SC1,_:$"<_B1"=#19.#1^Y"=%T!2."A2>."!
M!FY.`?9!Z&E.@]S?!#;@$OH#+266*2P"+ID9VFC3'A$`/<616C$3]SP5]CW#
MV0'#-/U`\^A`&'+>VX'#,)536[&""LQ?/FG3AQP-["S4`.R?<_0?."$*];@A
M%-#A2EC?^NS@`:(&A3S3'S)A(@I$0$T.0<7"01$B,2"?X@V!]8G>U]!,3.V@
M\XW#/3D`)K:",P#`PGSBP5@"&D+4(TP4%*S_#RB1$U[='OQY5/A9U`B:W^^U
MU(8P3!]*TT9I(O+MH/))DP'-HB4JXC%&@3HL%?PU1>'1`26F`#2N5`DY1UCY
MD/,]#A[!0\\$$.<-P1;@!RJN4%;%`?W4C@#BE:?L`EDA@1SYG9D$WB;6%2^$
MD.1T50G$H];=@^,1'BRPXQ)\EW29EW(%9'H-9'%95WD-UWJAET(F%T)N%W+5
M%D&RET`NY'DE)'==)$4VI$8^)'1%9'AQ9$9*)'45I$-.)$22ET>F)$BN9$DR
M)$F*I$JVUT&Z9$UNI"TH6!#(URAH!NL,1F756(H1`X\1PY,1GH)-6(<1@X5A
MC7TYG30=Q@(`R-%4_U:*`,%F5.4S1,?#O$*.3100%1C=#$"-44W^@24(`1DP
MM=R+T0R$H$!!=(6#)!W.-4:'S=A_T$P3H``"_-Q_4!@^."4^[--\')W4W-R4
MO*4*7EVL.9JJA1JFR9JKK9ID/B:MP9IEWIJB9::M:1JN==JH469D>N:L@>:I
M36:ID::G?29G_EEICF:ML:9INF9HMIIJRJ9HXF9GSF9L\J9N0F9NWF9P>MD0
M*%E=\!K&*"$R,F=S.N=S0F=T2N=T4F=U6N=U8F=V:N=V<F=W>N=W@F=XBN=X
MDF=YFN=YHF=ZJN=ZLF=[NN=[PF=\RN=\TF=]VN=]XJ>]Y5S/'(`>=-+*,?\&
M)AZ$S-A8P309779-P]$,(^S7OP3,TDR4@F@<&#S$T`&H?N%7%7Q-S8@-SVB,
M`.3<PNP,UOQGA!YHBA3,"2AHP4A=U.3G>K;HBAP-03W4)@Y>4:$.RVS!%V#.
M#BR'%WP='5#C*$#&W6D.;L@?$IR0'.V.2)7$&3P$"1R>"5B#D?KH'@'%0E6=
MZKPH>UZ>A%P1!\K/$`&)[)F2YZ4`(>GB5J$@\\`B">",@]2/[6V5P_A`G`(?
M4>!4IU0IG2*"FLY@14E?&'7I>`ZJ/Q@-!PI?49'"HBX._44CTYV$'W#?5OT2
M$A"&[]4`$K7I2J`-%?E?FMJ!5O0II+J5I`:J,3W_8*&NYZKZ@P$LS".%'0RJ
M@!$N0\'=PN[P!J5.GAS9P&30Z@J,8%F.X29U:B61D@N0`=W-@5;`460I@R;%
M8*Y*:HO(D1-N$:N*)[9"X#>M!OOE@#VY"#.,4XHD0,OPJC"X(Q\B@5W8J4BU
M:Z>2T'=8A(WY@0J(E0/X1ZFN4Y:=J[6>'2-JJWHRXD`Q0Z*R%'20:8<&U22>
MD>ADJ.AUJBOZ:6&,(DWI@1PY*IRJ0"O834S$);\6"B<E0,0NCU(-K'FBK`[`
M*C[55>B@P-]P"BQ4:4KYTBGV*MXT!,QN@3?RK#&)34G]P).NB`KTD%W];`?A
M;/?$UW-U)$QB9$BZUTA*_ZU-:M=+AI?3RN34TJ1%?N35XN37GB1+YF1%&F39
M@JW7MF3:GJW8FBU*ENW3SN1-JJU)OBW9QF357J36ZJW;RBW7TFW;MB1\[86Z
M1ER,L4#+K&4$UH,"2!F3E1SK=('%?4X9)%B'!!1_^=?/!=DR>=C*04.#.DQ*
M;:C1WJ6!L$4.H,`U286Q<"Y;]D3*89_EGJLMZ!IR<AIL[N9K]N;NVF9J$B?O
M`B>MY6[O!N_O7N9I.N9FOIKP#B?Q%IKN'B]J)F]M4B_S5J;T0B_R8N]J#J_R
M:F9K-B_WBB]H:B_XGJ_U+F_Y%IIQ$MGX&6/*RN_\TF_]VN_]XF_^ZN_^\F__
M^O_O_P)P``OP`!-P`1OP`2-P`BOP`C-P`SOP`T-P!$OP!%-P!5NPO'0HZQA6
MO[S-R#D'RJ@,R]A%6"2FP16H[8E,QDC$?TF->*#`@D(H8B1<USC(APVER84<
M/K!,SSP!#%)EB9$NS!@M"(.!"%\P`\9H`-%HC4(I%U0J8B4K]$#5$ZH&S7[.
MV*706X&$<PQ"D@IIZ0S1W%&$W7EQ,FZ"T*9`2918XQPQ]'VI*81I,(RIQ*;(
M])3@_3F?,+Z``>6@'96/.3!04M"42:62Y"@#Q3H!F<Z.G>I`G*+/#K4Q]!VJ
M,"#L/0C?$[M?XP`J$$2B<."0#[2"#$D.%C&E(AN1^"#_0=[1@-V9L@O,*U&0
MX29'\O.YJC"T;!\P*YO2Q@KNG9H"@1'^JB2!LDJ,:>@HQRNQGP7^75$E4@VM
M`2LG\^P@*R"=D2_/\O-QJ^$ZDL&D*\M^P1KJTNX@#B??TVN(TS#W;`K*0XW&
MSCG]HB%;0QM"<PHJP2L/`1F"Q#A?,_05+(WR'!9O%2H=3"&3%".8:2,)(@<:
M'B\2E3'C@1+4%3.SD?Z(&43QU?4QLNH]K*XNYS[KV\IB@0-Y[.X5@%$041RH
ME3,^#A6_#C`J]..HL0'AAP.8SD-+T45[WN@0UA:8G4V#A)/:K(,XH]W^K=6.
M+=12+=8"+MO";=XJM5'?+5)W_ZW@$O760G51H^U1SRU3XVW4/G561_56:_52
MC_556S588[7?GK5:]^W@[B0+:+-SG"X[^8O#2,Q8'AAHB)B#C!$)'YEB/H4M
MI3!B=-A_7=G!J!P@&*6/?65*F*5X'$*2O6\=`UU1!O:?"G&*A-B(E4#V&B]F
M.B_P@C;YTN;X7B_["J=HH^]GK_;WJF_XEK9GN[9IKV]L>^_SMC9NOW;ZTC9L
M^V9H5V]O\[9LZ[9PL_9N'_?XNN^N+4K\>O1S0W=T2_=T4W=U6_=U8W=V:_=V
M<W=W>_=W@W=XB_=XDW=YF_=YHW=ZJ_=ZLW=[NS>P6$R&32X3#)EK2(Q$>2-F
M+R@=S/^<'Y3HOM@,SDQCFF:VV1S,@!Z<TEQHYCIH"E#-&+VWP"7Q%BPQXQ5M
MZJ1`&1#.2P`UWQ$S'S?!WFQ.DU;!)^BH-/&H-8".DFJXSGH!%TQ&A%?>&\=`
M'&]BXTSR(41.?L?I$Q=5)4D.D/.X]R`0FKZIZ"U-%N@!/\GXOTTR_":3^HB2
M2J3!"<'IIUI$_A7M"!PM#U&./>="?FL33E^1TC)0/C;YT]6R#]SRC>]=-NM/
M/:C$-/^`"\1Y'<W0);T5(XW!!XK2N.+JYAGK5OTJ(Y%EFD-=-L?12V.CP$;V
M1&`Y&G6(%1C`53J,-UVY#^1".5?A$/7#NL;!A%$<H@M</Q/_U#]WM@.I`,KN
MWAC>::U.X`"I%.CP>`LT[/IH,9G(D?XLC(^3.KZ!M!HL3-DXB`J\M1;H>%:B
M,2*4A(_+.ERQ&(D/+7=0\2L@;:Y_HS%-E?`\3FQ1M5.'[=J6-5JOM;B'-5F?
MNUFW=56O.[C7K;M_NU>'.[M_-5O7N[FG-;Z7.[W/.[PWM;R_.\#'>U+WN\#_
M>V\1+D\N.BDIIZ_=+BS,W*27[H+-Y>?VPXHIA(N%^,2G0)1-V0U+[N*&KK]H
M3!,8`)9!17$3MVHC]VRO?'"_?/>F-LS?-LL;M\O7/,W/O,S_ILKG/,\#-]"3
M]F\/O>^>MFWO/&KWO,W'O-('O=,7__WQ+C=R-O>O6_W58WW6:_W6<WW7>_W7
M@WW8B_W8DWW9F_W9HWW:J_W:LWW;N_W;PWW<7^>&D<P"06C3T(;;H.C!($R+
MG<"!X4.)\92'2L+0T4S168P"(%UBBDW*%/%;ZW?-*/A$80(FB@>*WAR3]5SQ
M`5W&W5/MF@WC$[$.OS7!9,R"4:4B6%WWF,+.\.?/%"C8G8W<^\J$2U.%VQ'D
MX*C><"G??$XOB9U=-7&%Q(*%K[1@E0/I*7N'APYAT-W%#\([@D'@H4163JER
M^($4#!)+[ZSRHT%$M6DK;"`'WBCF[`X7TWZOT/@'&\)+_S&=#BKO8<$Q_:K6
MY:D^!N-!-_\4'C\L"``/1)8/``%'R1X,"QE"XL!.(@3*2!K*2@(H7L$#*D!`
MP!@K@(-0"[)HI$+)6"($6(P&,;L%$$K(D@`R2`RJL+;[#8_+Y_2Z_8[/Z_?\
MOO\/&"@XF+=`E/.&\`6AQ36B0A*%=+`%49#TAG6I!%%&TKA#-L:BU=6VB<*@
M)D7RH-`6"BD0!2$`U?9TQF+K$!#P8)4"&81`<(;@@&4*@PJANI;"(L;`28+U
M60F!H)!+NA5*XDE[D`"@2XB>KK[.WN[^#A\?/YGM9A",+3TF(H1",G"`P`(!
M8N`80=#`7Z=1C`((>&!`%`PM!X"P0!+`W[-HGQ26*,A/@4*,;0K_MB$`P!>`
M!9TR6D1Q(*(,+!7;8-2XRJ.E!RBO&`$@)AL`!#,B@OF%#PE0EA\3),`G+ZK4
MJ52K6KV*]0Y`@>=@6,Q7@L$C(-#(/&A@P%BF`PDO,D29TNW$`,M8-*O5X`%!
M$Z]@Q");8@`!J)'4[H+BJQ@"%,.B.7@$05F#4TG\"<B[MXV!!'VO-2S!5"PI
M5?4\E24A0,'@K*Q;NWX-.[;K7Y/%$!BE:*Z9<BDLGL$WXPEA3@<?E/7T&09R
M;$BJD6#"$6_;(#Q8G.CMQA4,`0BHL+B18\L"D=A9<=Z"I?F2)F8:3&<3;I3G
M1A`<,``:%$R!!N>6YSC7F&P"#DA@@082_PA<`O7T0!A]SO!7'@2O+%!6;0]4
M@T`EFD"X$!@V,90/`P.1D1,+:2ATF4<`0!B@*-D(8,5C&#Y0@R^68-*8/^!<
M(V)_)0;&6PD<(L#4?)7T]=P7H'R!G#ETE>"`40(8)8,E:Q2PQ@!6:%E+1%/V
M<$:56%J)QI96?/EE#&'^=F669G8)IYIRCCDFEURBZ265;))IYYEY@CEGFV4.
MBB>@8@K:)YQI5GDHGV\6NNB>=3[ZIYR-3DIHI8Q*ZF:F<6Y*)J9W_AEIJ)V.
M^NF:I@Z*:JF7GNIGJH$ZZFFALT)`H9!N?`6C0$(L8`X:"YR@0D0*B"0$-`48
MXD0EORR@A`(-8/\IA@,(7!)L"=L,=D:O"BA1``,B#7'&``L84,T`1GUT'P#W
M_3,L8?#>YP`M`X@K!`-K+$:-A-H,NX6Y,B`0T0`/Y&H)ON0*BVY@Z^**K`)G
M/`LN2@,H`"UJ#!"`+K9G-+!``(O!)6(GQ^('I!)/0<RR`9.YC$8""*2ALA4K
MC]?RRY/13#,$*]\\X2LPP\RSS#[;;`7..`^]L\Q%U\SRTCK'/+/1/R<==`Q3
M/WUTUTH+O;735B,=-=A:4\TUT#F?G3;97Y]-M-A0JRTUVW)W3;?9<5?-M]=9
M,XWVV'ZOO7?/5Y<-=]-]'_XVX$\;CC4))R?;1FX'7HYYYIIOSGGGGG__#GKH
MHH].>NFFGXYZZJJOSGKKKK\.>^RRSTY[[;;?CGONNN_.>^^^_PY\\,(/3WSQ
MQA^/?/+*+\]\\\X_#WWTTD]/??767X]]]MIOSWWWWG\/?OCBCT]^^>:?CW[Z
MZJ_/?OONOP]__/+/3S_FO0*+,0/E'D`L)4&,*Z5V`>45`\C+BFCQBP,,`"`G
MF%8*[L._7XW,`6=P%U#>-0O.:,L`"`M"N]Z%A@BJ8"1&V!A0].(Q@G"+@4#Q
M'VI4@X(G9,P2"H(25!2!D@,@J8`-I(4-[>(>,^SG%T`A``0=<C(&+*A^3/Q=
M:D2BQ%.,ZQP.$DL%@9"A3A`A([4P3F"8`@DD_Y3E&F%,0C"&884RI$@:++K%
M1]JC(A99!($3&T4PZ-,D+"[(.R5#S<,.P!2)%.4C*Q"C5P(9GT6@X(Y;R($3
M@K#$)DI2=X],P8(04H5`.F@&+VA,F#AD!1?`P"C#Z(DU_%%*A02H#")HPW6<
MX,;HM!(&K_S*AW33H2*880E,Z48*TA40YWBB)KIDA$>V(LS-?,$C#C($:B(Y
MR6C6SIFU6%`:SN``)#G(&6.)!&H20"/4Q!(&LH@E&5?`"T+*13M^@<Q&HL-.
M%ORE%CZ4B#?BH\[ZM$$PT:)":KCP$"3ET@OJ3&=8`GJ1`#PA"LS,!CVD"5'=
M/=0-JG!`MI(3A'V<@/\\&B-``P9`$C>H0`#0N0(J5V``O>03GZ;4!T<VHI"6
M?D2C_7##<ACQ08:$1">M,-8/ZO.B5P`@`7)):35&6M(7IH"H9-C"0J.#T1!R
M):)4K=U61M0&<OAPFZ(9QFFT08Y+R(LZ"[`E&=%2I95V*)XEB`5J,*,0MDJN
MFVBP*8B2D\=_B+0!#L!2$A!I@"T4`X$$4``.I'$P6P96&[&TD3,(,("&VN0L
M5:WL[&B3@MN,@1K"\=`W&>,;2[1`!`*MQ14AP-?1%I.<7V%E=4S`F/:\9Y;6
M`6T<;HI'G886!L5@REE\^!,56*0,0Y#&"E)KTA8.-QNJ6(2#$@1-RTIW=-#_
M90$"@&``BU11CFU-`2WT%=):G'$%"/#B*5=K7+FL\2,L,E&0\!+'T\(!M\[2
M;7?;T("^;,8NV5`,/E%+"TB45UG]Q41+VO.59E8H,+%R%:=8U6`]S4I4$3;4
M@Q-E*U#1"5:*DO"K(-QA"Z\*PYI2U89!G&$3(XI2LOHPB5M\818[>,0R]G",
M:V5C&N-8Q"=^\8Q[7&,>KWC'EMH3KA:\B\DD3+R^PEBPS-4_F2"KDN:B5Q2@
M?"4:9.@!"L0R#!A8B0E6\(/^$%BZ'O;`"Y8Y7HE030&ZE4(QO!G*+41S)*"Q
M#;/@0S`?'9D5N@.`!0XKRWT%1F`\.@!^E>6?]$0)_R<FIX"R%$YP>4M<X.86
MN;I-&M.(<]S=&/>WL"W.;:&VVZ@'IVG%00[5>E,UI3/=ZDOC#=:6;ANK:_UI
M4A/.U9QNG*A776E/GSK8OWYUIXO=ZU)O>M8LDU#$OIHPH'1ENM2NMK6OC>UL
M:WO;W.ZVM[\-[G"+>]SD+K>YSXWN=*M[W>QNM[O?#>]XRWO>]*ZWO>^-[WSK
M>]_\[K>__PWP@`M\X`0ON,';W8^E:`.&%M2&"74(&I%PN>&1N&&U`K``HX5C
M6KHPEX+VHV3Q-F`+X<*/`BIA08H7,.0D2$"N"C!QVK:BB$?\80E@WA.">.?F
M`CRY!]5,3PV2@&`4NM>OPO_!99">92FYVA;0<:B"TB[\(B6$"PH+"RZ%Z2^#
M2"+Z`N^#L8.SS^AAKQP(G:TOT*SK,O_59X<&*=K(^`,?@%3.6S@$U?(@09$Q
M0*02UQL$%M6P"N^]1CT96<TK(+(600KT*/WND/>DH(T^A`EQ3'K>2-00.9(8
M`]R;<I$ZPJ<1/2+1&JHEC<A<7NSJ.\#JMP-"H'2Q@J]%PQ:0HXMAFE4GR)2+
MY-RC"YT,(P#*_(AZ6&``F<\\!<4M@D*N,6W/!B:8S(!LO>SNG!@H'P*O?*H4
MO$-W?W@F,B/`_7^)"9IQMITY!@Y+$[P?#?"S7GWR%ZD_!G\NU"["]X0E`4%5
M"U#_;-4D:4`$P@<$ON!]0E![K2!UL5`,QY`,SX<"6>0&V^0,"`4#"R!Y<Y4=
M#>A.JQ`-T^`<US!^3Y`AH]!_^O<=X<)RZ]<0=7%SE>$,(,@81I1]\U<^(@@'
MLB<8[&),;Z`4*R$11N45'O%/0^5[T4"`>3=\3G4+PE6!/`42D2$3`N`9%;$2
MT+1-1\A4UB53UF!+'5$2^_`</X)S$IAY\>$+<!%(94"$8;$07T5?Z.<B.'%Z
M5<`3/(6#XW.&;R![>25TMU17\6%8T3=^BS58]L013Y!\K!4.E;`QD:6!'0@+
MD/$8T7"%9?8&VX2(ZL<-D)6!+<B`E<@1EZ$7'K$9G2%^_QYA@J8A"H5H(O[P
M`/M'7S!8!3*(%Z>(?(&XA^:3BI%Q&T#`@SK%$K:H#;F$&AW2?`!X2LJEB`KQ
M!"W8A&&1``S@2]JR?:_4<CZ7B;MT$O407'2X6)/X'8:!C0NHC6_5%DDA'ZO8
M`H4$(J*WC,Z`'ZK0%?1U?.X7'9>QCHK8B^+#CO;7<M`0$XSG$6^&C,'B"<B%
M>5508)S0)%QP5]/X5BL`2.>P0(`W>17$@7+7D)F!2Y;PD.%@&>]E#5B%!@.@
MD2O"D4""`D-2).ZH>6O0)*('8*CA$>'DCY]1>N'P(__`&S!Y<YV28A/&847I
M8D%69#K6*CEV8IB"E#?6E$)&*_]3N91`1F0:)BA066)&B6)=F919J6)566%7
MN95$"992699:298A)B>HI0M$(I#"P'BZ0%+`$B7'(`87Q!)^I@WE``T!X'(T
M:6C_@&@3="TCQP4FDG$BXRZ+UA<KH0`&X`!ED7(@)##<43`'0Y@_85YF\`1#
MT0F%B08>E1$KHPUYV!6229F626;PTC#_$!'C,4`3DW2TL13],C)\J0UR]I<I
M801QV0"HN2T(Z2U9-R[ZPS!G!C&U&7&F!FRT)FS1>6S0:6R^9IW)5IVV1FS9
MR6S8N6R@MFNR)I[8R9W2B6S?J6R\II[C>9Z(4S?O"9[L69ZQ9FO-*031!Q`S
M="P=](___PF@`2J@`TJ@!6J@!XJ@":J@"\J@#>J@#PJA$2JA$TJA%6JA%XJA
M&:JA&\JA'>JA'PJB(2JB(TJB)6JB595P0NB71/(`]=!70!1R,**8.H`?<>%T
M%%=RQT)U[F)U/T=QNR!`0O`/6I<E&5<-`<!Q_3"90YJ<:]`K:8<:E_`MN+D2
M_HDKM$1S*A``,.>92)<050IM*8I(>0::1F0(MJE`M#EQ9T>F46I$BR:E1!(Q
M,O6B[*("&P4MU3)F0,=U&V2E)^H:9+=X0W=VX6`1^?=6;=<B=><6?,=!R-=Y
M4((7J(%(#I%+;R9Y+&D&GVDN]7$AVJ*3'@4@6D22GCHC46"!_\GA&3?@4*!X
M<_F`"(;7D/4Q>"2`J),*>KHA2AX9#->`#T@8DAXR#BW(J/"!1F^7J927>H`J
M&ZYG#6Y`4D9(3,H'4@GY%;U'!L4'2>T''^:7!LIB5Q^!CL^W?S*P<YIW!M+"
M(2C@,KKP9N=*JV>0JO0Q?OP3%O\7K-`WJ^0GKE^6#0N@?HU@$O7*4P!;3_/:
M2#W@JO]`?8XH$=G(&/"GA\R:%?57$BI2`$"`KW:G5OHC@`KE1D(@BO8T#N40
M?6TG5Q+"`P95CM.63H%6C5(P`SIYC>)4`PB;AO6!"=M0LV!Q7A3HD5!B8!MK
M`RRH&SOB$>-7'T9[3R'9'6CFL5*W2O]CD+)N]4X32[%7H8-^J!`%4``!``1?
M*`KX@7Y<F%`Z6P-0B!JA64<*UQ2HR;%B2$ZC$%XS%85*&+.6L3$?91(3@0(X
M&[1J^$N?)WV1800ALZ\A);9P:$A@\!!&0;!+$(=-2[D-8$MFZ[`L)85D.(-W
MF+6PT8=S25*=``2\F(2-T8D(!(F0Y2ZUEUMZM0MN)HC<YX&&*2\]^[*%T8C:
M0@YBX+*W`+@EB`FAL8#;=`UCQ(H&9KJ!(8O.!139$+G,VPK.M43T,539E[J9
MNU:U:QEP];FR\8L!00#"J",3`P3&J`1YU8QJ>V!EJ$3;]+IF8*GHI:CCRA?;
MT1WU!![1$8W_<6<-AJ6_A[5-2D"O2;L"]H$?%FB\*)*SZ(>^]'A!A^6S#>P1
M`F2/A4O``1-+NA".MC2U*6"_*.(>6/N]4Q&0%_L)FG4;!FD7-ED>7ZLM!N98
M>+$"TD)%]?41.?`%43*[*XEWX04CI@JJ#"61WA46`R`C0^RS(J.JT+@*`L4`
M^[?`.)F&-[!H)OEF(,E]M&"!T5L+.<G%#I7!EP%8(AG#SO'!/MR20*D086F5
M;$EA;@G'1YF63+F68QG'46G'<HS'=`QC>ZS'6/G&??R5?RS(=^R5/N:40S;(
M_A>7@TJ75&<&(N($5;*B`(,4A]9GCVD&?5%R_:"7),,2.C!EE>-F_P#RFE_&
M+-?'I/GBI$.TF#Z`'U=&I$P&+$)P`,=)I89`%!C#"23%,=T2FA`9<UZTR_T"
MI'@Y,,$Y=,/Y9AYC%@KDDTW'S-K@S/<S0+DLI1LS95&<R8;Y40S;HD.GIVFF
M<N?"G"V'GMY9G[@V;.L<GKJ6:N0IS_:9:[<VG=>YGO2,S^G9SOFLG?,LG_L\
MT.YYS]T9S[8:,?H)2,(4AB4,T1$MT1--T15MT1>-T1FMT1O-T1WMT1\-TB$M
MTB--TB5MTB>-TBFMTBO-TBWMTB\-TS'].E-B1$P0EWHJJ$@GS=B"(0R75!?X
M94$:$<1B1%J:,,EY#`\G4$IJ9S(=<#EM=O\J<AM*@AYM*!^OQR/UA(RT0+A(
M>@X6%7>-H,,H*9@TZ7D)8!1/T@DD[-3\YJR1`:UGER;WU+>>8+'*H-7(B'SV
M^DWU]#"YE7W0H7L]`$IM77`62TZJQ)#Y``ZYM+6G9(U`.`H/`RVK<2,WV+3&
MN`D+>0C@E->&_6^/C<(]8%AXIP7?C(RA2WX@^"%NVPDUP*A]NXD:$H88X8:?
MVE'A#-H#I]J)O1UHD06DD80]('0EQ-J^5Q;*:8(Q8(X5"(FBN-F%)<'610Z8
MO=O]%K[!&`0\!1#Z\<-V9$_*`+<[>5WX<1W%,!Q-FX_/`8\2\@50H;37O6\G
M[-O;H4W?P"2C()3_09L6]713%W6)((PA]5!%9+T*"\E0WP5M)>#&B-S@?)S(
M2CG'A?QCC.S@:@GA#Q[(%I[A&+[A;?GA>5S'A]SA@#SB'![B?ESA('[B+&[(
M*-[B(O[B+K[B,EXJ<#ETD"Q[XD4,3!8L(..84"``M)F?HRG-@F&#Y"SDD?"9
M:=$ORT(O+S+,/(?4O;D:@*8N4_;9ZER="8W0]%G/[DR=\\G/7U[F\`SF_<S.
M80[0[2G0!XWF9][E:6[F!?WF[SSG<D[F=F[/>+[G<)[G?"[F^FS0?D[0]XR?
M$K-/#9V:";'@\@WID2[IDT[IE6[IEX[IF:[IF\[IG>[IGP[JH2[JHT[J_Z5N
MZJ>.ZJFNZJO.ZJT>"$^Z:$\`=DQ!$$`ART7+F$\1?3C4%0"S@M(`07BJIB44
M:"+D/SQT0($QZZX^75!M`TZA(PG0`,X!N#7P$(MF5HO7(A?Q7C.0[7913%Z;
M>58P#!181@3Y>LQ>56\=A@03,PJE!%%,N9YU!KOZJM/'K=M.!HWM`]?:L.E5
MA`!?"\5D2HBM[A%E\(,H(5W[U]7K5+5@V6\0M0)O$]_<0@$HM6$X?L,08.@4
MLDE^\)4EVFX0:1O7\"=Q'Y,17@P$#9A+OPDEA"KA&T+5A6J5LSM%2"3U%;T=
M\A#%\[M`ZW012SB[+^.$NH(52_K^B(IA6SV`]/_UM.T;#QAD]="_V/-5E=WC
MVU;9UQ@#C%%6^!6-T<%J)4SB01YB3[8>K/$JLEN0P)#T??63!/=M!6T8)WU,
MC$<%D+_Y!,-#9V`!XD,VL@DO/)(V'[@1$IGD95Y":>.+3...W_A4&?EF^?B2
MK^*0?_F63^&8O_F:K\B>+^&$_/F4/_D3/OJF'_H1+I:JW\@:'N.93_JPC_JK
MC^/_<@K@&GR-=`FW_`-/JH`OA"Q1A-I\)FCET$+XP"_1\B\M.OR()LZE,9CP
M$F7"XD4%H&5$KNAW/N:';NB%OOW>3^C:'_Y]_OWB']#D/_Z#?O[J[^;HO_YM
M_L_^S.;RK^9>'N>"#O__\[_F]4_G(%!`BS*61@.AT)`@+0(EXFS:ZPK#LF@"
M@$(`&0X-A"-!T6(X>L0G-"J=4JO6*S:KW7*[WB\X+!Z3R^8S.JU>L]ON-SPN
MG]/K]CL^K]_S^_X_8*#@(&&AX2%BHN(B8Z/C(V2DY"1EI>4E9J;F)F>GYR=H
MJ.@H::GI*6JJZBIKJ^LK;*SL+&VM[2UNKNXN;Z_O+W"P\#!QL?$Q<K+R,G.S
M\S-TM/0T=;7U-7:VMK%``<$"T`*#$`N#`A##`!'0#\`"`@"!00Q$=T-`04()
MT0`!`((`!P08A(-0H$&*(?8"//@Q$,"!``(4G&,0X`D"!?X`,#C0+<D`;^F(
M_P1\J&!!/6_@3HZ;@O+)`((GH0PXT+"!DR$OB>0[H*"!.@@!#G#<^``*QQ\$
MA]1L"!'`.H(VP\$C(`+!@@<7"SP@"N`HS`8W'2@4*'.G@W,&%#!@NB#!5IDE
MAA;]\4"`$08=R3W9.<3IPX@,#Z@K8`Z=D(,)4]Y[PDZ!`0A)I\XDXI<N`Z,E
MS]8SDM.S@(P;ERHF>9"A0ZD7MUV*63"*@P0)H$)0D*`!O2$$5D-@<-?!@]P(
M'I!=$%EAB@`$HM!^RS<>[]U#R`H=Z-B@[HL"`@"@#H#W$.5$J$N'4/Y)>>KF
M>?OF2T1YT"$'Z!U@7E]Y;OA0B$I.$%Z(>-@A1]L0`/\T(`1$X_%48'W8!2A9
M@Q#P!X%ZZ]Q'0'SIZ72<3O0D*$!"`J`D475#]"#=`7Y5%Y^`TFTG(50,+,!7
M``FHHUQ;ZSP10([<"9B@@"N^!^!R+:ZF7@(12EADB=.%9YV.)VH''FN3S"=?
M%`A$UD(`#L2@%WJ\"9#`6Q52J`]8_`3PH(Z2-:`>=$241TX`!B20HV1A6I;C
MBSLR*>=JYP&JT*`*W1D%`PW@*0-U.3&H&X&)+@IC=>"Q66":1#0$815`/FDA
M$1.Z]ZAY!,XI6:80O/!H"T'E=*ET\4`AJ12"$H7?K/?9B2>!*AQHHF-*#D$K
M%+"NQI=&]`R@T7M,TKEKF]G_59E)`HU&$=\Y/'&XWA.9$3"J`$=,^BE2!3J0
MD)?G2:?>F@)YI^>3$4D1((?E"2IMA8+Z!D5&`CTW4&[!UD,`=?U^^P1_W@1\
M*00/[/.$`D=]:":IY'(J'U0(4,EIN.JM.T0##]LGWVRC&EM;I@:/RFVH'"W&
M$P$:=TEP@4^,2=S(&"G@;[%_<ELA1_M\QV2`[,[\;J'36A(/`P%+H41X#6PK
M:#P^Z^;/O%;3!L"8ZD"E+D&+K4DAS;T*6M,W)F^TD[T;/_0RU3[_,^:V7&&-
M5'T&W%4@0`EL2Q0"#?3:)'J#2[;<5^Q(X6EU[1P0X>/N;`R1`!VA%S:D1(C6
M@Z<`_\CVJL^[,933W'Y'82M$PE8ZMKMYVIP94`([UO>VA.N&^3HU=O:@<C_L
MQ'K9\"IMB=V&D_32=IEY#)ZWX!XA<K/,U:P7`F2I>U%\8_>&H=D;,_1RDQD&
MZC;VPO>6ZDO[0F$G]`8:8`!?Z6?ZN.!1,.QP%!%?S"*HT5<\(?]0M0!A22<H
M#UC4@Q@W$:OX3TX,@`L4Y'<Z\!`E45%0F/8R,P#C(>``+NB?98:5JI.Q""K$
M\1+OBI2]U6BP>\/+!/N61(`(*<!IGCK/F&QCIM@L`'RJZL>HML8"?0CA>B01
M"GL.E30GC,E25FL;1EA6#VD9JE<.((A#5N.$2S&.0EB,$__&AL,_AGTE"IOJ
M(M[\!,()35%@;Q*>`#Q'(R8EB$05,]9!^'+%=MP+=;CJUGV2N*B<L)%Q>\RB
M&N%8,P/XA'!L`I`@S??"2&S1:K4)8`#8QIX#`4<XQ!E3KPH@!*D]P0"KH8VB
MJ,@R?""1)`U0TGD6$!_P,0R*X8E!>5@IQ42Y1V1@@L"O5*6B+OH23PD+IL5<
MV2L#(4AULK.8IT0UN`2)L5"L3"4T[X,G!W#H9&PA0C&A@+K>S.@]-FHE<I34
M'2*,I&*UZ18"0[<:74*E8XZD(R1="4OP%$`=(6&!"/#2F2((`7X&*8P_1?!/
M@0I4!05-#$(!*E&&'L>@!NWG027_NM#(--2B$,WH/S<Z4(>2%*,8#6E`.5K1
MAV;TI`I-Z4@]VM*$3E2E!"UI1%$ZT(Z2(YA8N:"KVOB=E'PC'%QCRF'8$I3*
M@8.;Y*@<%A70@P#@A$*%\0=`1`*$H\"CG?781TG^,02*_`!JFHN'`Y[J#26H
MI*P>T:K^/K(2</!E(N]02&;@1X*RNF<`65GJ2>A1.7ELYP%W_8DH5:61Q"(%
MBTMA058<Q0^;K*8J5\G*109C%Q;Y]0&%J59(3)(F`SB6.GZ%2P#(^@/-+58(
M'SEJ`Q:0VKO6(Z^N%8A8A=*5PB2U)5V-ST1*>8X?J*<IV@DL7@FK6*NX%JY'
ML8<Z2A!'_^9612DH^2U)P(K;W)#`5][5P0=K4(/N=A<'*0!O#,0K`O*>(`4Y
M<,$.U&N#\KKWO/`-+PW66P+Z?O>^Z<WO?-O;WQ?@EP<!]NY["?Q?`[,7P?95
ML(''NU\!)SB^/=@K$$9E!"0HX4Y-F"2(0RSB$9.XQ"8^,8I3K.(5L[C%+GXQ
MC&,LXQG3N,8VOC&.<ZSC'?.XQS[^,9"#+.0A$[G(1CXRDI.LY"4SN<E.?C*4
MHRSE*5.YRE:^,I:E\!$%<(>!2/U./"H"#A-UQ2[+#0X+#)N?"AJE0(X=G&B4
M\M8D=-D)KN$N1N)A9X(`Y(M`@"P$0[BC!S1F<>>`C&2DTI#*Z/\$"H!1#5>\
M`I9\B*P?<S-+02S+#X+H!2*+1HEA@`"]+`<YU!2Y8)F_0J4XJJ@\'EPAX4#T
MD@G!*0%"R$BQB&0B$"T3F80CSVI>_1[>Z`=AYPR/1#S+CY<PKM@MFP*/P@,5
MSC6HDBR24CTN0FO+V'H=1J10J(Z-1&KO.D0J(O6/0:20<U-*5:MV``%/^<"@
MC(U-RB&+J)X0V\JM#)JI:EBO:BGO8VNO-]B,"L&',JGC,(Y8SY8""LA!.M4Y
MW'SY+M`;"_3MY\P;V2!L%;#0+620!PEAQGM/O`L$HE_5VV<'I)3&8/(-IR6R
M8:/6G__J=<J5YU.Q/%L'SX7B#8I53&7_)I_"S2C61:.+DX(9XTUWT(4`(P(M
MZ`5GG`>/*O(A9[W?E!K`QH22\CSQO.7[J4_D9#NK;D.;27=SS)]ZYXY"U1,A
MVSDE[:Y3=C#F3#)Y?[B685="896N=E*4$%'4KO)S?BTZN*M9V:%.^,]M?<B>
MJT$4TA[VH32]9D.4;69=WA8`P@0%[+88_J"`<W*)S_,M`'VCSW>=S]?)RWV7
M(."GT,$/NG,$(IS@T5F@(^I9+SKE:]/KKZZZ!4JV\CQFOGF.`!725ZU(G(<7
M@5K0&'NCB$!/;4L_FD^X,CHZX$\\)3]N<Y%#\CW[ZD\]29HYG2^>AXVJ6A#@
M#4E_*HV34'EJ_T$02!$.>=X0%=K%",5S.)/SW9@='6#NV<_869%T/`B(Y(@T
MZ00YR%'6*)-C^)K`$2#97$0X@:!`K`D.D=L[L9,Q>9\3K-.PQ`?CC&#2M%L<
M>1XV?1L]/4$)@E"T3<=*S91&P11/X11(O=1._>!%Y9014M1-)6$1UE1,L91)
MT91(#:$3NA046N%'86$5(N$64J$0>B$0ZA03DM05@N$1-N$7!F$:FN$:DJ%-
MN>$8+F$<RM04LF$9VJ$29J$8WB$<OL<V&9[]0:!I)('&X(0>!4!5B!EU:-97
M@%V*>`@!&.`0;`['*06<H95:&2)5,1:%%`!RU19A=6(B0A9!.(!IO9_%;`F6
M;7U/.^Q-$0R7"[(`97T5;0V60845/3BBLG6B51D$5GV$3(`%*8[':AA7>*@6
M@4C8#=37$$&8?#68>3VCA3'8A#D8-188,_)7A6FC?C7C@%7C-E+8@XGC-W)C
M.7KC@4TC>D78.9)C-B[8.&)C.T;C-;*C?[GC.CIC/0*8-/)C/MHC.':C/+XC
6/0:D/]XC0.ZB,MK/;NE>Q*A#"```.S\_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>4
<FILENAME>usprospectusa002.jpg
<TEXT>
begin 644 usprospectusa002.jpg
M_]C_X``02D9)1@`!`0(`7`!7``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+
M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#<I+#`Q-#0T'R<Y/3@R/"XS-#+_
MVP!#`0D)"0P+#!@-#1@R(1PA,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R
M,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C+_P``1"``J`"<#`2(``A$!`Q$!_\0`
M&P```P$``P$```````````````<(!@(#!`7_Q``M$``"`0,%``$"!00#````
M```!`@,$!1$`!@<2(3$30106(C)"%2,WL5&$L__$`!0!`0``````````````
M``````#_Q``4$0$`````````````````````_]H`#`,!``(1`Q$`/P#$;PYB
MW+=]V25MFN]906VGFS101L%!48&9`!^OMU[=7[`=B/C.=IMBLV5S0LMOW':Z
M:U;I[-(M3;O[)J5R"2N<]F`7!5^QQEE_EU06NR">:EJ(JBGE>&>)P\<D;%61
M@<@@CT$'W.@WN_\`B2^;%5ZWL+C9P4'XZ).O1F\PZ9)7WS.2/5]!.-+[5A\3
M[W.^MFK-721O=:1C!6J%5>_W5^H)P&7[X`+*^!@:6_)_!TPJ*F^[/@0PE3+/
M:T&&5ON80!Z",GIYC&%SD*`Y<%\DW*LO`VI>JR:K26(FWR2GLR,G9F0G&2"N
M2"Q\Z`#Y&#6"X3_R_8O^Q_X2:-`O]>RU6JNOETI[9;*:2IK*A^D42?+'_0`&
M22?``2?!KQZJ_AOC?\FV8W6X>WFXQ*70IC\-'^X1^C/8^%OMD`8_3DAI-G;.
MLG&^V9(8)$!5/K5]PFPIE*@DLQ_BBC.%S@#/R22?D[5YFVCNRYBW02U-!5.5
M6%*]%3Z['SJI5F&<X&"03D8S[A;<^<@K75`V?:YXWIH'$E?+%(WLH)Q"<>$+
MXQ^?U8'A0Y1>@KFOV3MZV\NV'<U/5K0W*LDJ%:A1`15O]!RT@]'0@$EC@@DK
M\%B6-);BN^73<'-6WZN[U\];4)%+"LDS]B$6GD`'^R?^223DDDF@9/'W"J[:
MWM<;M=5AJ:2DF(M"N_=B,@K*_@`91A?C]W8@#"L=%RYR&=C;=6*@DC_K==E*
M967M])1^Z4CX\\`!^2?@@$:8FC00!HU?^C03AP-L"Z?F./=EQI)Z2BIHF_!F
90=#4/(F.P!'L?1B>W@)*X)PV#5'Z-!__V3\_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>5
<FILENAME>document2002.jpg
<TEXT>
begin 644 document2002.jpg
M_]C_X``02D9)1@`!`0(`7`!7``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+
M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#<I+#`Q-#0T'R<Y/3@R/"XS-#+_
MVP!#`0D)"0P+#!@-#1@R(1PA,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R
M,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C+_P``1"``J`"<#`2(``A$!`Q$!_\0`
M&P```P$``P$```````````````<(!@(#!`7_Q``M$``"`0,%``$"!00#````
M```!`@,$!1$`!@<2(3$30106(C)"%2,WL5&$L__$`!0!`0``````````````
M``````#_Q``4$0$`````````````````````_]H`#`,!``(1`Q$`/P#$;PYB
MW+=]V25MFN]906VGFS101L%!48&9`!^OMU[=7[`=B/C.=IMBLV5S0LMOW':Z
M:U;I[-(M3;O[)J5R"2N<]F`7!5^QQEE_EU06NR">:EJ(JBGE>&>)P\<D;%61
M@<@@CT$'W.@WN_\`B2^;%5ZWL+C9P4'XZ).O1F\PZ9)7WS.2/5]!.-+[5A\3
M[W.^MFK-721O=:1C!6J%5>_W5^H)P&7[X`+*^!@:6_)_!TPJ*F^[/@0PE3+/
M:T&&5ON80!Z",GIYC&%SD*`Y<%\DW*LO`VI>JR:K26(FWR2GLR,G9F0G&2"N
M2"Q\Z`#Y&#6"X3_R_8O^Q_X2:-`O]>RU6JNOETI[9;*:2IK*A^D42?+'_0`&
M22?``2?!KQZJ_AOC?\FV8W6X>WFXQ*70IC\-'^X1^C/8^%OMD`8_3DAI-G;.
MLG&^V9(8)$!5/K5]PFPIE*@DLQ_BBC.%S@#/R22?D[5YFVCNRYBW02U-!5.5
M6%*]%3Z['SJI5F&<X&"03D8S[A;<^<@K75`V?:YXWIH'$E?+%(WLH)Q"<>$+
MXQ^?U8'A0Y1>@KFOV3MZV\NV'<U/5K0W*LDJ%:A1`15O]!RT@]'0@$EC@@DK
M\%B6-);BN^73<'-6WZN[U\];4)%+"LDS]B$6GD`'^R?^223DDDF@9/'W"J[:
MWM<;M=5AJ:2DF(M"N_=B,@K*_@`91A?C]W8@#"L=%RYR&=C;=6*@DC_K==E*
M967M])1^Z4CX\\`!^2?@@$:8FC00!HU?^C03AP-L"Z?F./=EQI)Z2BIHF_!F
90=#4/(F.P!'L?1B>W@)*X)PV#5'Z-!__V3\_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>6
<FILENAME>document2004.jpg
<TEXT>
begin 644 document2004.jpg
M_]C_X``02D9)1@`!`0(`'@!-``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+
M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#<I+#`Q-#0T'R<Y/3@R/"XS-#+_
MVP!#`0D)"0P+#!@-#1@R(1PA,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R
M,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C+_P``1"``O`'<#`2(``A$!`Q$!_\0`
M&P```@(#`0``````````````!@<`!`,%"`+_Q``\$``"`0,"!0($`P0(!P``
M```!`@,$!1$&$@`'$R$Q%"(5,D%1%E)A%R,S0@@E-F)U@9&S-SA5<8.ALO_$
M`!8!`0$!```````````````````!`O_$`!<1`0$!`0`````````````````1
M`4'_V@`,`P$``A$#$0`_`!K2U5KW7M^J:.@U76PU(B:J<RUTL4>-R@A0F0.[
MC````XWLNL^8W+*YT]#J$_$*,[NGZEA()T#^YDF'NW?8/G:&&5\#BOR!_MY7
M?X9)_NQ<&W/^>)=%6Z`RH)GN*NL98;F58Y`Q`\D`LN3]-P^_&>*9=FNU)?K+
M1W6A?=3540D3)!*Y\J<$@,#D$9[$$<:+]I6C/BOPW\1477_/N/1^7=_%QT_'
M][SV\]N$'=;G>*+DUIVV25"&@N%9531JF0PCC90$;&`1U&D?!S_)W&,<#U3<
MM/2:;AH:?3TT-U3:7N1N!?J'^8&+9M"]^P&",#)/?-I#]YW72X6G15'/;:ZJ
MHYFN*(9*:9HV*].4XRI!QD#M^@XW/*JMJ[CRUM-5754U54R=;?-/(7=L3.!D
MGN>P`_RX46H;K47;^CWI\U*3"2EN:THDDC"K(B1RA"F/F4+A<_=6^V3@O=]J
M*'D-I:S0KB.Y2U+3/D?)%.2%P1]693D$?)COD\*'7^TK1GQ7X;^(J+K_`)]Q
MZ/R[OXN.GX_O>>WGMQDUO!%>^7UQB@O5+;X:N!3'7R3!82I8$`N#C8X]N>_9
MO!\%167EU8[CR/J=0-&XN_0J*I:AG8A!$[>P("%P5C(R<D%B?H!QIM/7:KJN
M2.L;5,^^FHI:22#))*]28;E&3@+E,X`'=F/?/"AD:&E3E_RXN=57ZCMETB@E
MD-)%2UZM!O$>_HHY4$.QR2O?R"!DG-[1G-^U:G]=\36BL?I^GT_4W!?WV[=G
M&X+XVC[_`##@&T/9Z"\<A]2>O@ZWHZJIJX/>R[)4IEVMV(SC)['MQ0Y,:/L.
MK/C?QN@]5Z;H=']](FW=U-WRL,YVCS]N`8.MN<=)I*_"V4MOANNV+=+)%7!>
ME)N93&P"MAAM&03GOXX8=ONEONU.T]MKJ6MA5MC24TRR*&P#@E21G!';]1QS
M;SLL]!9]>+Z"#H^LI15S^]FWRO+)N;N3C.!V';@]YI6VET+RQ-OTTCV^EK[B
MJ5*)*S&16C;<-S$D`]-00#W`(\$Y`U_:5HSXK\-_$5%U_P`^X]'Y=W\7'3\?
MWO/;SVX*^.-_BEA_"OP_\.?UQ_U7UTGY]W\+&WY?;_[\\=`\D;M5W3EZL=4^
M_P!#5/2Q,22QC"HP!))\;RHQ@``#Z<,T,?B<3B<5""L?)_7^FKD+A9[Y::6J
M"E-ZRR$,I\@J8B"/!P1Y`/D#BW1\D]07>])4:QU#ZNF2(KO@J9)IS^50TB85
M<DGZ_;'?(O<R.8%Z;5\&B-.2^@J998J>>L?&6:8#:JD`E5`<$L!NSXQCW:JR
MZMUGHOF%;M)7^Y0W:":6.!AUA(R]9AA^H1U-P)^5_IX&"K<13'UARZMNJM+4
M5EBD]#\/V"CF$?5,2*NW8<G)4J!_,.ZJ3G&"&VG17-NQT"T-!JRV+3)C8DKM
M-L```52\)(4`#"CL/MPY..?[Q>.=5@M4USN<_0HX-O4DV4;;=S!1V4$^2/IP
M!EJ30>J-2<LK38:RY44]XI*H2SU,TC['11(J^X)DMM9,DCO@DDGN;5+RR6KY
M4T>D;U.@JJ9I)8ZFE9F6.0N[*P!`W##D$$#R<8."%YI_4G.+5-!)76:K]531
MRF%GZ=(F'`!(PP!\,/\`7AY5FI]/VZK>EKK[;*6ICQOAGJXT=<C(R"<CL0?\
M^`3?[)N8GX;_``[^(;9\)ZO5]-UY-N[SC/2SMS[MN<9[XSWX)X.5$MOY4W'3
M='44KW>XM%+45,@*Q[E=&V`A2VQ0IQD>6)P,X#.@GBJ:>.>"5)895#QR1L&5
MU(R"".Q!'UXHV_4-DNT[06V\6^MF5=[1TU2DC!<@9(4DXR1W_4<(@4Y>Z$J-
M-:+N.G[XU+4I6SRM(*:1]K1O&B%22%(/M/C[COP'::Y1ZPTQJ6GJ:._TJ6U:
MR*2H2&HFB:HA1\X=`NTDKGVDD=R,_7AN0ZALE1<C;8;Q;Y*\,R&E2I0RAESN
M&P'.1@Y&.V#QGN%TM]IIUGN5=2T<+-L62IF6-2V"<98@9P#V_0\`N.:/+"X:
MUNU#<K554L4T4!@F6JD95VABR%=J$YRSYR?RX^O&>BY;7.ZZ`J]/ZPO#UM:U
M8:FEK$J))C`=@5?G`)&=^5\88X(/<$%^U/:JW25_^#7VBGK(+943+Z.K5I(]
ML9PXVG(P2._WQPO.2^KI6I[]/J74+F%&IDADN5:=JLPE)"EVP"0O@>=OZ<%9
M['H3FMINVBW6K4]I@I%8NL3$R!2?.-\)(&>^!VR2?)/#2TW!>J73]+#J&KAJ
M[JN_KSP`!&]Y*X`5?"[1X'C_`#XM6^Z6^[4[3VVNI:V%6V-)33+(H;`."5)&
M<$=OU''BXWJU6?I?$[G14/5ST_4SK%OQC.-Q&<9'^HXJ+W$XJ6^Z6^[4[3VV
MNI:V%6V-)33+(H;`."5)&<$=OU'$X#G'75REYIZPE.E[4]2EMHV_>@D2SQ*V
M2P0GQE_:H&\[N_T5<>B]3VNQ7&]774JULFK::*0T-37/+(.JL;1])U'N#=\9
M8D8&/81[B"NY8ZVTCJR:Z:'='IY6D$(BF16BC.#TY%E.&'?`[MG8&.#CC55?
M*375[2XWNYP4J7)V#"E1H5>H<E06]F(U&"S$YR2I[>[/&5,?D_?M5ZDMMQN.
MHIGGI&:-**5H8XPQ&[J8V@$C.T9/;(('<'C9<X/^%5Z_\'^_'Q;Y<PWF@TG3
MVF]6)+7-0J(D,4D;1SK^?",2'SDMGR3D'N0/?,BSU]_Y?W.V6R#KUD_2Z<>]
M5W;948]V('@'Z\7B%;H.^5NF^0^HKK;F1:N&XE8V==P4N($W8\$@-D9[9`R"
M.W%'E9RUM>L-,W:Y7"5S,6>CI5&0L#[%82G!!<@L,*2!V.<Y&#;0O+ZO3E=>
M=,:BIO1RUU4[I^\63;[(]C^QN^'3.,C.WOV/`;0Z(YLZ3CKK78GS1U&.I)35
M46QB5P63J$,C=\%@%/M'?L#P5[_H_P!SK5U+<;4*A_0/1M4F`]UZ@>-0P^QP
MQ!QY[9S@8J<@?[>5W^&2?[L7#!Y3\MJO1OJKG=VA-QJHEB2.)BW0C[,RL?!8
ML%S@$#9V8Y/"^IN6G,?1^I)JG32=3I[HXZR*:%5FC/YHY&_[9!!`(R"<`\03
M27_,A4?XG</_`)FXJW*DEYA<]*FTW*J>&'UDU*IBR=D,`?VJ&)`+!"?MN8G'
MTX)]'\M-4Z>YJT5TKT]91Q[Y)[AUE.^1X&W=BV\^]BN2,GS@9XFK>5NJ;?K.
M74^CZGK2S51J0G56.:&1RQ?YL*R?3!.2&P00"2!!+RPLFBM,ZGN5MJKA+-+9
M:J!EJ9$9=I3=GVH#G*CZ_?A8\J^7]OUU/=#<JNJAAHEC"I3;0S,Y;N68$8`0
M]L=\CN,=V/9J?FC<+1J.VZIIDEAJK5/'2,6IPW7*[54=,@88,<EACVCN.^<G
M)C1]^TG\;^-T'I?4]#H_OD?=MZF[Y6./F'G[\4+OD=>):#F"E`-[0W&"2)E$
MA"JR*9%<KX8@*RC[;SW^A'[9?K+=-9UE[UO3UM=!4;Y#!2,>\A("KDN"$5<@
M`-D;5'C/!SRVY;:ML&O[9<[G:>A1P=7J2>IB;;NB=1V5B?)'TXSU?+;7&C-4
MU=QT,T+TU3U$C"-'OAB+*P1A-V/<``@DG;DXSCB#1<G[MZ'FGZ"UO-\*N'6C
M"5)]_316>-F"G;O&W&>X]S8\\3AK<O?VC^OK?QIT?1])>CGH]3J9_EZ7;;C.
+=W?.W'UXG%Q'_]D_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>7
<FILENAME>document2006.jpg
<TEXT>
begin 644 document2006.jpg
M_]C_X``02D9)1@`!`0(`.0!.``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+
M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#<I+#`Q-#0T'R<Y/3@R/"XS-#+_
MVP!#`0D)"0P+#!@-#1@R(1PA,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R
M,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C+_P``1"``N`#\#`2(``A$!`Q$!_\0`
M&@```P$!`0$```````````````4&!`<#`O_$`#00``$$`0($`P<#`P4`````
M``$"`P0%$082``<3(10B,146(R=19J0R06$7)7%"1%)BD?_$`!0!`0``````
M``````````````#_Q``4$0$`````````````````````_]H`#`,!``(1`Q$`
M/P#[8IN5;VF&M3KT%<L4*UA*I[DS*4`N=+<4)DES`5]$D_0'BPF<J>55?(BQ
MYM=$C/RU[(S;UF\A3RL@80"YE1RH#`^H^O"/2;>HD<IY6A$Z2M6[-#3\%V5+
MZ;$1'6<<'4#A45.)2E1/D2K.`/W!XSW.C'JK4<RNEPM1V=-8U\.L@+K(\:26
MVFD!"D/+>1\#SA+@*=J<G=G*?*#"HY<\O+75^HZ#W3Z7L;PWQ_:,A76ZS97^
MG<-N,8]3G^."[Y=\M8.D']05-!!M&4;>F?;JV&7,N!!^,IS8,$GU]2,>O&?4
M&E;VYU?K1#%8^_62["G<E,D!KQ\5ML]5#2U;4[@K83A2<8(S^Q7V6C[;45+J
MZ3IK2K]%`LXD-J/5OMM,+EO-OA2G2@J^!M2%#;V"]V[U/`.&M%\DW;B?4A$%
M,Z!GQ#3ED^C;A)4K!4X`K:$J*L$[<'=CCTK="<F;;3ZKZ)&B&K0LH<DNV$AI
M+:L@87O6"DY(P#C.X?4980]+QJOFW=/S],MS(>H$(5$F-0T.M1BEE:9"7B>[
M9<)^A"]_<DY`BZ+2E]#TEI@JIK6+[O6$Y=I&BL,E]]W;EF0RAT%M_:,("NZO
M^&<`\!>,<FN6TJ.U(CTC;S#J`MMQN>^I*TD9!!#F"".^>&E)RNT9IRX8MJFF
M\/.8W=-WQ3R]NY)2>RED'L2.XXV:%K&JK2<9EANR88=6N0W&L6F6W6`M144[
M&4A*1DE03ZIW8[8VBDX#A\_3JZSF')IIFO-9-U$73ZK=Y_VHHN)*72E7HGND
M)!.`G.?_`#B\HM>JL[2JB6-.Y6MW<=<FG=,A+QD(3E1#B4CX2^F4+QE0PK&[
M<,<2<_7?*>SU#)N9FH7W')54JH>8\*^&U,*65*]&]P4<D9"O3^>_%I5:"A5D
M^FEO6=E/-+'7'KFY1:"8Z5(2@D=-M!4=J0GS$^I/KWX!7I_F9[=]SO[1T/>3
MQO\`N=WA_#Y_Z#?NQ_&/YX\U:SG:HY<:AOZZO<KZOV9+5!EKEXE+6ALC=TT`
MA`"@L`]3.4`X[YX-"Z/TRNKT_<4EO96,"M7(56+D!*`V'.HAY.`VA1"E$GS9
M(*$X(&0IQ`T%"K-/SM/QK.R%+)COQT0E%HICI>*BHH7T]Y(W*QO4KU[YX!7`
MYF.FQM8MWIF=4^#JEW+`6ZAQQZ*DD$J0".FYZ>0DX.02,#.C2?,B'JO4*JEA
MACSUZ;%AV/+#^&RO:6W@`.D\,I)0"H#)\W89<3]'5=GJ&3<S.NXY*JE5#S&_
M#:F%+*E>@W!1R1D*]/Y[\;*6H?IX_0>N[*S0$(0V9Y:4I`2,?J0A)43VR5%1
M./\`.0:<'!P<!S.V<G,\[9SM6RV_8(T:XJ*TX<)6Z))V)/<=BK`]1_D<(]':
M@78ZCT.Y5ZAG6CUA$F.Z@;<E*=#2PA*AN:/E82'3M24I3D8`)![U'S?^QOR^
M#YO_`&-^7P$GRJB28.FM`6,2REML3I$Z'-AJ>6MIT8?<0I*5**6RDL?Z$@G<
M<GUSGT54S;O2NB;2;JG4ZG[2SD-RTIMW4I6VA#Z@CUR!F..X.?.OO^G;:?-_
M[&_+X/F_]C?E\!)P-5NPZ9=#:.RY2(VHYU:Q:3;EZ"E*&4E:?$2D9)6K>4I3
M@`[?0;>ZBKE&XC\K=0:FLY:6%(L8TNQ<G.1THVA8:!<2I(0M021NR%+V]RK'
M'0_F_P#8WY?!\W_L;\O@%]#<`\T9,%^S?NG)4N8MAR)/>":Y#02@LR(@PVA(
M.Y*7#G>K:<9((5T.LDW5[RLC0;]R4M<*4BU83)45*=1&2/C()R3O2L@J'?N1
IGUXI/F_]C?E\,*3^I'MACV_[J>S/-UO`>(ZWZ3MV[_+^K&<_MG@/_]D_
`
end

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
