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Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001137171-05-001234.txt : 20050816
<SEC-HEADER>0001137171-05-001234.hdr.sgml : 20050816
<ACCEPTANCE-DATETIME>20050816134401
ACCESSION NUMBER:		0001137171-05-001234
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20050812
FILED AS OF DATE:		20050816
DATE AS OF CHANGE:		20050816

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ALAMOS GOLD INC
		CENTRAL INDEX KEY:			0001178819
		STANDARD INDUSTRIAL CLASSIFICATION:	MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-49946
		FILM NUMBER:		051030123

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 1400
		STREET 2:		400 BURRARD STREET
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			00000
		BUSINESS PHONE:		6046431787
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>alamos.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
<META NAME="author" CONTENT="Traci Deman">
<META NAME="date" CONTENT="08/16/2005">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="left"><font size="2">MB
APPROVAL</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">OMB
Number: 3235-0116</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">Expires:
August 31, 2005</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">Estimated
average burden</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">hours
per response 6.2</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">UNITED
STATES</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">SECURITIES
AND EXCHANGE COMMISSION</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">Washington,
D.C. &nbsp;20549</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">FORM
6-K</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">REPORT
OF FOREIGN ISSUER PURSUANT TO</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">RULE
13a-16 AND 15d-16 UNDER THE</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">SECURITIES
EXCHANGE ACT OF 1934</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><font size="2">For
the month of:
&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;&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;August,
2005</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><font size="2">Commission
File Number:
&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;&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;000-49946</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">Alamos
Gold Inc.</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><font size="2">(Translation
of registrant's name into English)</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">Suite
1503, 110 Yong Street</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">Toronto,
Ontario, Canada &nbsp;M5C 1T4</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><font size="2">(Address
of principal executive offices)</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">Suite
1400 - 400 Burrard Street</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><b><font size="2">Vancouver,
British Columbia, Canada &nbsp;V7X 1A6</font></b></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><font size="2">(Former
Name or Former Address, if Changed Since Last Report)</font></p>
<p style="font-size: 11pt; width: 540pt; font-family: Times New Roman; line-height: 12pt; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F. &nbsp;</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt">&nbsp;</p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><font size="2">Form
20- F.....<b> Form 40-F..XXX</b></font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ____</font></p>
<p style="font-size: 8pt; width: 540pt; font-family: Times New Roman; line-height: 12pt; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="justify"><font size="2"><b>Note:</b>
Regulation S-T Rule 101(b)(1) only permits the submission in paper of &nbsp;a
Form &nbsp;6-K if submitted solely &nbsp;to provide an attached annual report to
security holders.</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): ____</font></p>
<p style="font-size: 8pt; width: 540pt; font-family: Times New Roman; line-height: 12pt; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; font-family: Times New Roman; line-height: 12pt; margin-top: 0pt; margin-bottom: 0pt" align="justify"><font size="2"><b>Note:</b>
Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K
if submitted to furnish a report or other document that the registrant foreign
private issuer must furnish and make public under the laws of the jurisdiction
in which the registrant is incorporated, domiciled or legally organized (the
registrant's &quot;home country&quot;), or under the rules of the home country
exchange on which the registrant's securities are traded, as long as the report
or other document is not a &nbsp;press &nbsp;release, &nbsp;is &nbsp;not
required to be and has not been distributed to the registrant's security
holders, and, if discussing a material event, has already been the subject of a
Form 6-K submission or other Commission filing on EDGAR.</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="justify"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">Indicate
by check mark whether by furnishing the information contained in this Form, the
registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><font size="2">Yes
...... <b>No ..XXX...</b></font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt" align="center"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2">If
&quot;Yes&quot; is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- ________</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<p style="font-size: 8pt; width: 540pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: -12pt; padding-right: 0pt"><font size="2">SEC
1815 (11-2002)</font></p>
<p style="font-size: 8pt; width: 540pt; text-indent: 81pt; line-height: 12pt; font-family: Times New Roman; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><b><font size="2">Potential
persons who are to respond to the collection of information contained in this
form are not required to respond unless the &nbsp;form displays a currently
valid OMB control number.</font></b></p>
<p style="font-size: 12pt; width: 540pt; font-family: Times New Roman; line-height: 12pt; margin-top: 0pt; margin-bottom: 0pt; padding-right: 0pt"><font size="2"><br>
</font></p>
<u>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
</u>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; LINE-HEIGHT: 14pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman" align="center"><b><font size="2">Signatures</font></b></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman" align="center"><font size="2"><br>
</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; LINE-HEIGHT: 14pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman" align="justify"><font size="2">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2"><br>
</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 13pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2"><br>
</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; LINE-HEIGHT: 14pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2">ALAMOS
GOLD INC.</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; LINE-HEIGHT: 14pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2">(Registrant)</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; LINE-HEIGHT: 10pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2"><br>
</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 5pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; LINE-HEIGHT: 5.6pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2"><br>
</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: -14pt; WIDTH: 576pt; LINE-HEIGHT: 14pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2">August
12, 2005</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; TEXT-INDENT: 144pt; LINE-HEIGHT: 14pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><u><font size="2">By:
/s/ Sharon L. Fleming</font></u></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: -15.5pt; WIDTH: 576pt; LINE-HEIGHT: 15.5pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2">Date</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; TEXT-INDENT: 144pt; LINE-HEIGHT: 13.5pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2">Sharon
L. Fleming</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; TEXT-INDENT: 144pt; LINE-HEIGHT: 13.5pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2">Corporate
Secretary</font></p>
<p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; WIDTH: 576pt; LINE-HEIGHT: 10pt; MARGIN-RIGHT: 36pt; FONT-FAMILY: Times New Roman"><font size="2"><br>
</font></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; line-height:10.5pt; font-family:Times New Roman; font-size:8.5pt" align="center">&nbsp;</p>
<p>&nbsp;</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; line-height:10.5pt; font-family:Times New Roman; font-size:8.5pt" align="center"><b>FORM
51-102F3<br>
MATERIAL CHANGE REPORT</b></p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman"><b><u>Item
1.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman"><b><u>Name
and Address of Company</u></b></p>
<p style="margin-top:10pt; margin-bottom:0pt; padding-left:72pt; font-family:Times New Roman">Alamos
Gold Inc. (the "Company" or "Alamos")<br>
Suite 1503, 110 Yonge Street<br>
Toronto, Ontario<br>
M5C 1T4</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman"><b><u>Item
2.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman"><b><u>Date
of Material Change</u></b></p>
<p style="margin-top:10pt; margin-bottom:0pt; padding-left:72pt; font-family:Times New Roman">August
12, 2005</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman"><b><u>Item
3.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman"><b><u>News
Release</u></b></p>
<p style="margin-top:10pt; margin-bottom:0pt; padding-left:72pt; font-family:Times New Roman">The
news release was issued at Toronto, Ontario on August 12, 2005.</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman"><b><u>Item
4.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman"><b><u>Summary
of Material Change</u></b></p>
<p style="margin:0pt; padding-left:71.5pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:71.5pt; font-family:Times New Roman" align="justify">Alamos
released unaudited interim financial results for the three and six month period
ended June&nbsp;30, 2005, and a current update of other corporate developments.
The summary of activities and financial results should be read in conjunction
with Alamos' unaudited financial statements and Management Discussion and
Analysis for the six month period ended June 30, 2005, which are available under
the Company's name at www.sedar.com. &nbsp;</p>
<p style="margin:0pt; padding-left:71.5pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:71.5pt; font-family:Times New Roman" align="justify">Alamos
is developing the Mulatos gold mine, located in Sonora, Mexico.</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman"><b><u>Item
5.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman"><b><u>Full
Description of Material Change</u></b></p>
<p style="margin-top:10pt; margin-bottom:0pt; padding-left:72pt; font-family:Times New Roman" align="justify">Reference
the accompanying news release dated August 12, 2005.</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman" align="justify"><b><u>Item
6.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align="justify"><b><u>Reliance
on Section 7.1(2) or (3) of National Instrument 51-102</u></b></p>
<p style="margin-top:10pt; margin-bottom:0pt; padding-left:72pt; font-family:Times New Roman">Not
Applicable</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman"><b><u>Item
7.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman"><b><u>Omitted
Information</u></b></p>
<p style="margin-top:10pt; margin-bottom:0pt; padding-left:72pt; font-family:Times New Roman">Not
Applicable</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman"><b><u>Item
8.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman"><b><u>Executive
Officer</u></b></p>
<p style="margin-top:10pt; margin-bottom:0pt; padding-left:72pt; font-family:Times New Roman" align="justify">The
following Executive Officer of the Company is available to answer questions
regarding this report:</p>
<p style="margin-top:10pt; margin-bottom:0pt; padding-left:108pt; font-family:Times New Roman">John
A. McCluskey<br>
President and Chief Executive Officer<br>
416.368.9932 (ext 203)</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman"><b><u>Item
9.</u></b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Times New Roman"><b><u>Date
of Report</u></b></p>
<p style="margin:0pt; text-indent:72pt; font-family:Times New Roman">Dated at
Toronto, Ontario, this 12<sup>th</sup> day of August, 2005.</p>
<p style="margin-top:10pt; margin-bottom:0pt; font-family:Times New Roman"><br>
<br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; text-indent:226.25pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">-
1 -</p>
<p style="margin:0pt; font-family:Times New Roman; font-size:11pt"><br>
</p>
<p style="margin-top:11pt; margin-bottom:0pt; font-family:Times New Roman; font-size:11pt"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="top" width="343.2">
      <p style="margin:0pt; font-family:Times New Roman">Friday, August 12, 2005</p>
    </td>
    <td valign="top" width="324">&nbsp;</td>
  </tr>
</table>
<p style="margin:0pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; padding-left:87.6pt; padding-right:108pt; font-family:Times New Roman" align="center"><u>Alamos
Gold Reports Second Quarter 2005 Financial Results and Progress on Development
and Exploration Activities</u></p>
<p style="margin:0pt; padding-right:103.5pt; font-family:Times New Roman"><br>
</p>
<p style="margin:0pt; padding-right:-5.4pt; font-family:Times New Roman" align="justify">Toronto,
Ontario - Alamos Gold Inc. (Alamos) announced today the unaudited interim
financial results for the three and six month period ended June 30, 2005, and a
current update of other corporate developments. Alamos is developing the Mulatos
gold mine, located in Sonora, Mexico.</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">All figures
in United States dollars unless otherwise stated.</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"><b><u>Highlights
Second Quarter 2005:</u></b></p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">&nbsp;</p>
<ul>
  <li>
    <p style="margin:0pt; font-family:Times New Roman" align="justify"><font FACE="Times New Roman">Commenced
stacking ore-grade colluvium overliner on leach pad;</font></li>
  <li>
    <p style="margin:0pt; font-family:Times New Roman" align="justify"><font FACE="Times New Roman">Commenced
overburden removal at the Estrella Pit;</font></li>
  <li>
    <p style="margin:0pt; font-family:Times New Roman" align="justify"><font FACE="Times New Roman">Expenditures
of $10.8 million on development at Mulatos, plus $3.3 million on mining</font> equipment;</li>
  <li>
    <p style="margin:0pt; font-family:Times New Roman" align="justify"><font FACE="Times New Roman">Expenditures
of $0.6 million on exploration at El Salto / Mina Vieja (adjacent to the
Estrella Pit)</font> and
at the
Escondida / El Victor underground drift development;</li>
  <li>
    <p style="margin:0pt; font-family:Times New Roman" align="justify"><font FACE="Times New Roman">Election
of Mark Wayne and Brian W. Penny to the Board of Directors;</font></li>
  <li>
    <p style="margin:0pt; font-family:Times New Roman" align="justify"><font FACE="Times New Roman">Subsequent
to the end of the second quarter, poured first dore bar at Mulatos weighing 117
ounces.</font></li>
</ul>
<p style="margin:0pt; padding-left:18pt; font-family:Times New Roman" align="justify"><br>
</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><b><u>Results
of Operations</u></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">Alamos had a
loss from operations of $2.3 million ($0.03 per share) in the three-month period
ended June 30, 2005 compared with $1.4 million ($0.02 per share) for the
corresponding period in 2004 and $3.5 million ($0.04 per share) for the
six-month period ended June 30, 2005 compared with $1.9 million ($0.03 per
share) for the corresponding period in 2004. Mining operations, consisting of
stacking ore-grade colluvium overliner on the leach pad and overburden removal
at the Estrella Pit, commenced in the period, resulting in the recording of the
cost of broken-ore inventory of $546,092. There was no production revenue in the
period. In July 2005, production commenced with the pouring of Alamos' first
dore bar weighing 117 ounces.</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">The increased
loss in the three-month period ended June 30, 2005 compared with the
corresponding period in 2004 mainly relates to higher compensation costs,
including non-cash stock-based compensation (2005 - $927,000; 2004 $469,190) and
interest expense (2005 - $303,806; 2004 - $64,434) and related financing and
accretion expense (2005 - $241,428; 2004 $nil) attributed to the debenture
issued in February 2005. Offsetting higher administrative and finance-related
costs was higher interest income of $323,523 (2004 - $54,297).</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"><b><u>Capital
Resources and Liquidity</u></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">Alamos had
total cash and cash equivalents of $35.7 million at June 30, 2005 vs. $18.1
million (which included short-term investments) at December 31, 2004, plus an
additional $2.3 million set aside in trust to fund interest payable on the
debenture for the first year. The estimate to complete construction and
procurement at its Mulatos project at June 30, 2005 was approximately $25
million. Alamos anticipates spending an additional $5 million in 2005 on its
exploration and development programs at the Escondida / El Victor for drift
development and drilling, and on other targets within its Salamandra group of
concessions. Alamos expects to generate some cash flow from mining operations
from run-of-mine ore and colluvium prior to achieving feasibility production
rates of 10,000 tonnes of ore per day in the fourth quarter 2005.</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"><b><u>Development
at Mulatos Project</u></b></p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><b><u><br>
</u></b></p>
<p style="margin:0pt; font-family:Times New Roman" align="justify">Alamos is
currently producing dore from leaching gold-bearing overliner material and
run-of-mine ore from the top of Cerro Estrella. Development costs for the second
quarter of 2005 amounted to $10.8 million at Mulatos. The focus in its second
quarter development was on completing work on the leach pad, ponds, power and
process systems to enable initial production. Development in the third quarter
2005 will focus on the crusher/conveying system, which is expected to be
completed in the fourth quarter 2005.</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"><b><u>Exploration</u></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">Alamos'
exploration programs are focused on both resource/reserve development and new
discoveries on its 21,300 hectare Salamandra group of concessions.</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">Drilling at
Mina Vieja was completed in June 2005 with a total of 2,769 meters in 24 holes.
Drilling at El Salto consisted of 54 drill holes. Both these locations are
adjacent to the Estrella Pit which contains almost 1.4 million recoverable
ounces of gold. Alamos expects to have revised resource and reserve figures
incorporating these results in the third quarter 2005.</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">The Escondida
and El Victor underground drift advance was a total 480 meters including drill
stations. Drilling is expected to begin in the third quarter using two drill
rigs.</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">Alamos
intends to drill-test targets at El Jaspe and Los Bajios in the third quarter.</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"><b><u>Outlook</u></b></p>
<p style="margin-top:10pt; margin-bottom:0pt; font-family:Times New Roman" align="justify">Alamos
achieved a significant milestone at Mulatos by pouring its first dore bar in
July 2005. It is now focused on increasing production from colluvium and
run-of-mine ore in the third quarter and completing construction and achieving
feasibility production rates of 10,000 tonnes of ore per day in the fourth
quarter. Alamos expects to have a revised reserve figure incorporating results
from El Salto and Mina Vieja, adjacent to the current reserves within the
Estrella Pit, &nbsp;in the third quarter 2005.</p>
<p style="margin-top:10pt; margin-bottom:0pt; font-family:Times New Roman" align="justify">Alamos'
common shares are traded on the Toronto Stock Exchange under the symbol "AGI"
and convertible debentures under the symbol AGI.DB".</p>
<p style="margin-top:10pt; margin-bottom:0pt; font-family:Times New Roman" align="justify">FOR
FURTHER INFORMATION PLEASE CONTACT:</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="top" width="403.2">
      <p style="margin-top:10pt; margin-bottom:0pt; font-family:Times New Roman" align="justify">John
      A. McCluskey</p>
    </td>
    <td valign="top" width="264">
      <p style="margin-top:10pt; margin-bottom:0pt; font-family:Times New Roman" align="justify">Victoria
      Vargas</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="403.2">
      <p style="margin-top:10pt; margin-bottom:0pt; font-family:Times New Roman" align="justify"><b>President
      and Chief Executive Officer</b></p>
    </td>
    <td valign="top" width="264">
      <p style="margin-top:10pt; margin-bottom:0pt; font-family:Times New Roman" align="justify"><b>Investor
      Relations</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="403.2">
      <p style="margin:0pt; font-family:Times New Roman">Tel:
      &nbsp;&nbsp;416-368-9932 x203</p>
    </td>
    <td valign="top" width="264">
      <p style="margin:0pt; font-family:Times New Roman">Tel:
      &nbsp;&nbsp;416-368-9932 x201</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="403.2">&nbsp;</td>
    <td valign="top" width="264">
      <p style="margin:0pt; font-family:Times New Roman">Email: <font COLOR="#0000FF"><u>vvargas@alamosgold.com</u></font></p>
    </td>
  </tr>
</table>
<p style="margin:0pt; font-family:Times New Roman" align="justify">__________________________________________________________________________________________</p>
<p style="margin:0pt; font-family:Times New Roman" align="justify"><i><br>
</i></p>
<p style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align="center"><i>The
TSX has not reviewed and does not accept responsibility for the adequacy or
accuracy of this release.</i></p>
<p style="margin:0pt; font-family:Times New Roman; font-size:9pt" align="justify"><i><br>
</i></p>
<p style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align="justify"><i>Safe
Harbor Statement under the United States Private Securities Litigation Act of
1995: Statement in this release that are forward-looking, including statements
relating to the future recovery of the Mulatos Project, are subject to various
risks and uncertainties concerning the specific factors identified about in the
Company's periodic filings with the Ontario Securities Commission and the U.
S. Securities Exchange Commission. &nbsp;Such information contained herein
represents management's best judgment as of the date hereof based on
information currently available. The Company does not intend to update this
information and disclaims any legal liability to the contrary. &nbsp;</i></p>
<p style="margin:0pt; font-family:Times New Roman; font-size:9pt" align="justify"><br>
<br>
</p>
<p>&nbsp;</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="margin:0pt; padding-left:108pt; line-height:30pt; font-family:Times New Roman; font-size:14pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Consolidated
Financial Statements</p>
<p style="margin:0pt; padding-left:108pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><b>(Expressed
in US Dollars)</b></p>
<p style="margin:0pt; padding-left:108pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">June
30, 2005</p>
<p style="margin:0pt; padding-left:108pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Unaudited
- - Prepared by Management - See Notice to Reader</p>
<p style="margin:0pt; padding-left:108pt; font-family:Times New Roman; font-size:12pt"><br>
</p>
<p style="margin:0pt; padding-left:108pt; font-family:Times New Roman; font-size:12pt"><br>
</p>
<p style="margin:0pt; padding-left:108pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><b><u>Index</u></b></p>
<p style="margin:0pt; padding-left:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Consolidated
Balance Sheets</p>
<p style="margin:0pt; padding-left:108pt; font-family:Times New Roman; font-size:12pt"><br>
</p>
<p style="margin:0pt; padding-left:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Consolidated
Statements of Operations and Deficit</p>
<p style="margin:0pt; padding-left:108pt; font-family:Times New Roman; font-size:12pt"><br>
</p>
<p style="margin:0pt; padding-left:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Consolidated
Statements of Cash Flows</p>
<p style="margin:0pt; padding-left:108pt; font-family:Times New Roman; font-size:12pt"><br>
</p>
<p style="margin:0pt; padding-left:108pt; padding-right:-35.7pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Consolidated
Statements of Mineral Properties</p>
<p style="margin:0pt; padding-left:108pt; font-family:Times New Roman; font-size:12pt"><br>
</p>
<p style="margin:0pt; padding-left:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Notes
to Consolidated Financial Statements</p>
<p style="margin:0pt; padding-left:216pt; font-family:Times New Roman; font-size:12pt"><br>
</p>
<p style="margin:0pt; padding-left:216pt; font-family:Times New Roman; font-size:12pt"><br>
</p>
<p style="margin-top:3pt; margin-bottom:0pt; font-family:Arial; font-size:12pt"><br>
</p>
<p style="margin-top:3.5pt; margin-bottom:0pt; font-family:Arial; font-size:14pt"><b><i><br>
</i></b></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin-top:3.5pt; margin-bottom:0pt; font-family:Arial; font-size:14pt"><b><i><br>
</i></b></p>
<p style="margin-top:5pt; margin-bottom:5pt; padding-left:27pt; line-height:20pt; font-family:Arial; font-size:12pt"><b>NOTICE
TO READER OF THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:20pt; font-family:Arial; font-size:12pt" align="justify">The
financial statements of Alamos Gold Inc. including the accompanying interim
consolidated balance sheet at June 30, 2005 and the interim consolidated
statements of operations and deficit, cash flows, mineral properties for the
three month and six month periods then ended are the responsibility of the
Company's management. These consolidated financial statements have not been
reviewed by the independent external auditors of the Company. The interim
consolidated financial statements have been prepared by management and include
the selection of appropriate accounting principles, judgments and estimates
necessary to prepare these financial statements in accordance with Canadian
generally accepted accounting principles for interim reports.</p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:12pt"><b><br>
<br>
</b></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; padding-left:27pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial"><b>CONSOLIDATED
BALANCE SHEETS</b></p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial"><b>(Stated in United
States dollars)</b></p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial"><b>(Unaudited -
prepared by management)</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; font-family:Arial" align="right"><b>June 30</b></p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; font-family:Arial" align="right"><b>December 31</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right"><b>2005</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="24">
      <p style="margin:0pt; font-family:Arial; font-size:10.5pt" align="center"><b>&nbsp;</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right"><b>2004</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="605" colspan="6">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="center"><b>A
      S S E T S</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt"><b>Current
      Assets</b></p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; text-indent:10.5pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Cash
      and cash equivalents</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">$
      &nbsp;&nbsp;35,746,347</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;$
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,127,463</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; padding-left:0.05pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">&nbsp;&nbsp;&nbsp;Restricted
      cash (note 5)</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">2,324,140</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; text-indent:10.5pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Short-term
      investments</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">-</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,000,000</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; text-indent:10.5pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Amounts
      receivable</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">3,892,141</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;112,117</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; text-indent:10.5pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Advances
      and prepaid expenses</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">4,109,712</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,733,284</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; text-indent:10.5pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Inventory</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">546,092</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">46,618,432</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29,972,864</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; padding-left:0.05pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Deferred
      financing charges (note 7)</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">1,198,684</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; padding-left:0.05pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Equipment
      (note 3)</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">19,650,313</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,442,580</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; padding-left:0.05pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Mineral
      properties (note 4)</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">49,758,802</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">35,463,590</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td style="border-top:1pt solid #000000; border-bottom:1.5pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$117,226,231</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td style="border-top:1pt solid #000000; border-bottom:1.5pt solid #000000" valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$
      &nbsp;75,879,034</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="605" colspan="6">
      <p style="margin:0pt; padding-left:0.05pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="center"><b>L
      I A B I L I T I E S</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; padding-left:0.05pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt"><b>Current
      Liabilities</b></p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; padding-left:12.6pt; text-indent:-9pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Accounts
      payable and accrued liabilities</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">2,526,818</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;943,319</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; padding-left:0.05pt; font-family:Arial; font-size:10.5pt"><br>
      </p>
      <p style="margin:0pt; padding-left:0.05pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Convertible
      debentures (note 5)</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">30,914,475</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">-
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">Asset
      retirement obligations (note 6)</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">210,000</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">50,000</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="605" colspan="6">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="center"><b>&nbsp;S
      H A R E H O L D E R S' &nbsp;&nbsp;E Q U I T Y</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">&nbsp;Share
      capital (note 11(a))</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">87,263,256</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86,170,028</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">&nbsp;Convertible
      debentures (note 5)</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">9,983,025</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">&nbsp;Contributed
      surplus</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">2,955,036</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,877,036</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">&nbsp;Deficit</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">(16,626,379)</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">(
      &nbsp;&nbsp;&nbsp;13,161,349)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td style="border-top:1pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">83,574,938</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td style="border-top:1pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;74,885,715</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="245.067">&nbsp;</td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td style="border-bottom:1.5pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;$117,226,231</p>
    </td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td style="border-bottom:1.5pt solid #000000" valign="bottom" width="149">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt" align="right">&nbsp;$
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75,879,034</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="245.067">
      <p style="margin:0pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt">&nbsp;Continuing
      operations (note 1)</p>
    </td>
    <td valign="bottom" width="18.933">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="24">&nbsp;</td>
    <td valign="bottom" width="149">&nbsp;</td>
  </tr>
</table>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial">See notes to
consolidated financial statements</p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
<br>
</b></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; text-indent:27pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; text-indent:27pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt"><b>Consolidated
Statements of Operations and Deficit</b></p>
<p style="margin:0pt; text-indent:27pt; font-family:Arial"><b>(Stated in United
States dollars) (unaudited)</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<b>
<p style="margin:0pt; text-indent:36pt; font-family:Arial; font-size:12pt"><br>
</b></p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="156">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="156" rowspan="3">&nbsp;</td>
    <td valign="bottom" width="178" colspan="3">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="center"><b>For
      the three months ended</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="178" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>For the six
      months ended</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="178" colspan="3">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="center"><b>June
      30</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="178" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>June 30</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>2005</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>2004</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial" align="right"><b>2005</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>2004</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial">&nbsp;</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial; font-size:9pt">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify"><b>Expenses</b></p>
    </td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Salaries
      and management fees</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">$629,999</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">$351,577</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">$847,285</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">$486,289</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Foreign
      exchange loss</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">85,437</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">115,916</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">179,188</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">99,486</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Legal,
      audit and accounting</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">70,677</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">115,385</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">144,897</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">170,117</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Office
      and administration</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">102,909</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">64,754</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">251,947</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">118,820</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Shareholder
      communications</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">102,179</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">106,381</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">196,763</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">141,260</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Travel
      and accommodation</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">74,370</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">65,073</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">131,188</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">107,825</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Trust
      and filing fees</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">53,346</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">120,481</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">110,780</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">127,740</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Stock-based
      compensation</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">927,000</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">469,190</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">927,000</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">551,965</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Interest
      expense</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">303,816</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">64,434</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">617,714</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">129,336</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Interest
      income</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(323,523)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(54,297)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(604,694)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(65,348)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Financing
      costs</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">33,561</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">87,965</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Depreciation</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">55,913</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">18,245</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">116,660</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">27,056</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Accretion
      of debenture discount</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">207,867</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">453,337</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Accretion
      of asset retirement obligations</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">3,000</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">5,000</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">&nbsp;</td>
    <td valign="bottom" width="81.133" rowspan="2">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>2,326,551</b></p>
    </td>
    <td valign="bottom" width="15.733" rowspan="2">&nbsp;</td>
    <td valign="bottom" width="81.133" rowspan="2">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>1,437,139</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt"><b>Loss
      for the period</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>3,465,030</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>1,894,546</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Deficit,
      beginning of the period</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">14,299,828</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">9,846,532</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">13,161,349</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">9,389,125</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="156">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733" rowspan="2">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify"><b>Deficit,
      end of the period</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>$16,626,379</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>$11,283,671</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>$16,626,379</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>$11,283,671</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="156">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="156">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify"><b>Loss
      per share (note 10)</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>$
      &nbsp;0.03</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>$
      &nbsp;0.02</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>$
      &nbsp;0.04</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>$
      &nbsp;0.03</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="156">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
  </tr>
</table>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; font-family:Arial">See notes to consolidated financial
statements</p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; text-indent:9pt; font-family:Arial; font-size:12pt"><b><br>
<br>
</b></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; text-indent:9pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC</b></p>
<p style="margin:0pt; text-indent:9pt; line-height:12.5pt; font-family:Arial; font-size:10.5pt"><b>Consolidated
Statements of Cash Flows</b></p>
<p style="margin:0pt; text-indent:9pt; font-family:Arial"><b>(Stated in United
States dollars) (unaudited)</b></p>
<b>
<p style="margin:0pt; text-indent:36pt; font-family:Arial; font-size:12pt"><br>
</b></p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="228">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="200.267" colspan="3">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="center"><b>For
      the three month period</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="200.267" colspan="3">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="center"><b>For
      the six month period</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="200.267" colspan="3">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="center"><b>ended
      June 30</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="200.267" colspan="3">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="center"><b>ended
      June 30</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="228" rowspan="2">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt"><b>Cash
      (used for) provided by:</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>2005</b></p>
    </td>
    <td valign="bottom" width="15.733" rowspan="2">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="center"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2004</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>2005</b></p>
    </td>
    <td valign="bottom" width="18.133" rowspan="2">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="center"><b>2004</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="92.267">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="92.267">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="89.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt"><b>Operating
      Activities</b></p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Net
      loss for the period</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">$(2,326,551)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;$(1,437,139)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;$(3,465,030)</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">$
      (1,894,546 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Adjustments
      for items not involving cash:</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Depreciation</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;55,913</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18,245</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;116,660</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27,056</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Accretion
      of asset retirement obligations</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,000</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,000</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      &nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Foreign
      exchange (gain) loss on debenture</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(361,982)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;405,758</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Accretion
      of debenture discount</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;207,867</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;453,337</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Amortization
      of deferred financing costs</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61,000</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101,000</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Foreign
      exchange gain on note payable</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36,000)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61,612 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Stock-based
      compensation</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">927,000</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;469,190</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;927,000</p>
    </td>
    <td valign="bottom" width="18.133">
      <p style="margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;551,965</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;1,433,753 )</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;985,704 )</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;1,456,275 )</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;1,377,137 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Changes
      in non-cash working capital components:</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Amounts
      receivable</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(138,387)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,342)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(330,164)</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36,967 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Inventory</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(546,092)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(546,092)</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      &nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Prepaid
      expenses</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,605</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(69,847)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,687</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;381,804 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Accounts
      payable and accrued liabilities</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;638,022</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;78,422</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;854,487</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;300,098 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;1,451,605 )</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;985,471 )</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;1,455,357 )</p>
    </td>
    <td valign="bottom" width="18.133">
      <p style="margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;2,096,006 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt"><b>Investing
      Activities</b></p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Mineral
      property under development</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;(11,654,670)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;(3,953,781)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;(16,256,878)</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;5,203,167 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Short-term
      investments</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      &nbsp;&nbsp;</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,000,000</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      &nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Contractor
      advances and deposits</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;(1,885,567)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;(2,399,115)</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      &nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Asset
      retirement obligation</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      &nbsp;&nbsp;</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      &nbsp;&nbsp;</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Purchase
      of equipment</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;(3,277,454)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;(2,385,802)</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;(9,598,596)</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;2,408,270 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      16,817,691 )</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;6,339,583 )</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      13,254,589 )</p>
    </td>
    <td valign="bottom" width="18.133">
      <p style="margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      &nbsp;&nbsp;7,611,437 )</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt"><b>Financing
      Activities</b></p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">&nbsp;</td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Proceeds
      from issuance of convertible debentures</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;40,306,300</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Deferred
      financing costs</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(99,823)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;(1,715,684)</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Proceeds
      from the issue of common shares</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;132,615</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,438,872</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,093,228</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,402,564</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32,792</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,438,872</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;39,683,844</p>
    </td>
    <td valign="bottom" width="18.133">
      <p style="margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,402,564</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Restricted
      cash</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;516)</p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;(2,355,014)</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
      &nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Net
      (decrease) increase in cash and cash equivalents</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(
      18,237,020 )</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,113,818</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,618,884</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,695,121</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Cash
      and cash equivalents - beginning of period</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53,983,367</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,562,878</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,127,463</p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,981,575</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="228">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt"><b>Cash
      and cash equivalents - end of period</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$35,746,347</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$21,676,696</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="92.267">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$35,746,347</b></p>
    </td>
    <td valign="bottom" width="18.133">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="89.867">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$21,676,696</b></p>
    </td>
  </tr>
</table>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; padding-left:-5.4pt; text-indent:14.4pt; font-family:Arial">See
notes to consolidated financial statements</p>
<p style="margin:0pt; padding-left:45pt; font-family:Arial; font-size:9pt"><b><br>
<br>
</b></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; padding-left:45pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:45pt; font-family:Arial"><b>CONSOLIDATED
STATEMENTS OF MINERAL PROPERTIES</b></p>
<p style="margin:0pt; padding-left:45pt; font-family:Arial"><b>(Stated in United
States dollars) (unaudited)</b></p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="168">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>December</b></p>
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>31,
      2003</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>Expenditures
      2004</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>December</b></p>
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>31,
      2004</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>Expenditures</b></p>
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>June
      30, 2005</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>June
      30,</b></p>
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>2005</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>MINERAL
      PROPERTY UNDER DEVELOPMENT</b></p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>Mulatos
      Project</b></p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>Acquisition</b></p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$13,845,789</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$4,628,311
      &nbsp;</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$18,474,100</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$18,474,100</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>Exploration:</b></p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Administration</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">155,351</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">320,798</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">476,149</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">476,149</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Analytical</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">90,803</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">90,803</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">90,803</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Feasibility
      study</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">254,989</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">586,787</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">841,776</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">51,604</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">893,380</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Field
      work and supplies</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,294,998</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">362,623</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,657,621</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">400,320</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,057,941</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Geological</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">844,675</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">149,998</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">994,673</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">994,673</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Claims
      maintenance</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">182,454</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">181,531</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">363,985</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">363,985</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Equipment
      rental</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">195,007</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">12,867</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">207,874</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">207,874</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Property
      and other taxes</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">471,920</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,867,753</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,339,673</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">(1,570,852)</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">768,821</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Site
      development</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">146,981</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">146,981</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">146,981</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Travel
      and accommodation</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">117,517</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">34,470</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">151,987</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">151,987</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>Development:</b></p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Administration</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">138,298</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">138,298</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">550,041</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">688,339</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Roads</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,139,547</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,139,547</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,892,554</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">3,032,101</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Leach
      pad</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,940,174</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,940,174</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">4,120,573</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">6,060,747</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Facilities</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,231,261</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,231,261</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,752,645</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,983,906</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Water
      systems</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,163,373</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,163,373</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">822,015</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,985,388</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Utilities</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">262,356</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">262,356</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,944,983</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,207,339</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Maintenance</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">521,837</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">521,837</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,053,105</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,574,942</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Asset
      retirement obligations</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">50,000</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">50,000</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">155,000</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">205,000</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Capitalized
      interest and debenture accretion</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">497,715</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">497,715</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Capitalized
      depreciation</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">149,428</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">149,428</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">274,203</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">423,631</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Other
      costs</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">116,465</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">116,465</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">398,493</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">514,958</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$17,453,503</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$16,004,858</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$33,458,361</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$13,342,399</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$46,800,760</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>UNPROVEN
      MINERAL PROPERTIES</b></p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>Active
      Projects</b></p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Drilling</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$
      534,457</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">$
      &nbsp;534,457</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">366,730</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">901,187</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Assaying</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">127,166</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">127,166</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">154,697</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">281,863</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Geology</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">86,789</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">86,789</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">52,500</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">139,289</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Administration</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">113,449</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">113,449</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">82,784</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">196,233</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Equipment</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">18,170</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">18,170</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">43,099</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">61,269</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Drifting</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">155,275</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">155,275</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">&nbsp;Other
      costs</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">114,560</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">114,560</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">97,728</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">212,288</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">994,591</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">994,591</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">952,813</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,947,404</p>
    </td>
  </tr>
</table>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><br>
<br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; font-family:Arial; font-size:12pt"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="168">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>December</b></p>
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>31,
      2003</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>Expenditures
      2004</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>December</b></p>
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>31,
      2004</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>Expenditures</b></p>
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>June
      30, 2005</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>March31,</b></p>
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>2005</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>Inactive
      Project</b></p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt"><b>La
      Fortuna Property</b></p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Acquisition</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">295,300</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">295,300</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">295,300</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Exploration:</p>
    </td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Analytical</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">28,714</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">28,714</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">28,714</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Field
      work and supplies</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">347,776</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">347,776</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">347,776</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Geological</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">226,336</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">226,336</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">226,336</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Claims
      maintenance</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">75,043</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,273</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">77,316</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">77,316</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt">Travel
      and accommodation</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">35,196</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">35,196</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">35,196</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,008,365</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,273
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,010,638</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,010,638</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">1,008,365</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">996,864</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,005,229</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">952,813</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right">2,958,042</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="168">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>$
      18,461,868</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>$17,001,722</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>$
      35,463,590</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>$14,295,212</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; line-height:10pt; font-family:Arial; font-size:8pt" align="right"><b>$49,758,802</b></p>
    </td>
  </tr>
</table>
<p style="margin:0pt; padding-left:45pt; font-family:Arial"><br>
</p>
<p style="margin:0pt; padding-left:45pt; font-family:Arial">See notes to
consolidated financial statements</p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
<br>
</b></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>Consolidated
Notes to Financial Statements</b></p>
<p style="margin:0pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>(Stated
in United States dollars) (unaudited)</b></p>
<p style="margin:0pt; font-family:Arial; font-size:12pt"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>1.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>NATURE
OF OPERATIONS</b></p>
<p style="margin-top:3.05pt; margin-bottom:0pt; padding-left:36pt; line-height:11.75pt; font-family:Arial; font-size:11pt" align="justify">The
Company is engaged in the acquisition, exploration and development of mineral
rights that are considered sites of potential economic mineralization. These
activities are currently conducted primarily in Mexico. The Company's
principal mineral rights interest is in the Mulatos deposit and an additional
nine satellite gold systems identified to date which together comprise the
21,300 hectares Salamandra Property in Sonora, Mexico. The Mulatos deposit
contains economically recoverable reserves which the Company intends to develop
and exploit.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">The
Company has not yet generated cash flow from operations to fund its exploration
and development activities and has therefore relied principally upon the
issuance of securities for financing. &nbsp;The Company intends to continue
relying upon the issuance of securities to finance its operations and
exploration and development activities to the extent such instruments are
issuable under terms acceptable to the Company. &nbsp;Accordingly, the Company's
financial statements are presented on a going concern basis, which assumes that
the Company will continue to realize its assets and discharge its liabilities in
the normal course of operations. &nbsp;If future financing is unavailable, the
Company may not be able to meet its ongoing obligations, in which case the
realizable values of its assets may decline materially from current estimates.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>2.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>ACCOUNTING
POLICIES AND BASIS OF PRESENTATION</b></p>
<p style="margin:0pt; text-indent:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">These
interim financial statements have been compiled in United States dollars in
accordance with accounting principles generally accepted in Canada for interim
reporting using the same accounting policies and measurement criteria as those
utilized in the preparation of the Company's audited financial statements
dated December 31, 2004, except as noted below. These interim financial
statements do not conform in all respects with disclosures required for annual
financial statements and should be read in conjunction with those annual
financial statements and notes thereto.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">The
Company has adopted the accounting recommendations contained in accounting
guideline AcG-15, consolidation of variable interest entities. There was no
impact on the financial statements as a result of the initial implementation of
this accounting standard.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt"><br>
<br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; padding-left:18pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>Consolidated
Notes to Financial Statements</b></p>
<p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>(Stated
in United States dollars) (unaudited)</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>3.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>EQUIPMENT</b></p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="145.067">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="282.6" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>June 30, 2005</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="104.533">
      <p style="margin:0pt; font-family:Arial" align="right"><b>December 31,
      2004</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">&nbsp;</td>
    <td valign="bottom" width="88.6">&nbsp;</td>
    <td valign="bottom" width="97">&nbsp;</td>
    <td valign="bottom" width="97">&nbsp;</td>
    <td valign="bottom" width="104.533">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">&nbsp;</td>
    <td valign="bottom" width="88.6">&nbsp;</td>
    <td valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">Accumulated</p>
    </td>
    <td valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">Net Book</p>
    </td>
    <td valign="bottom" width="104.533">
      <p style="margin:0pt; font-family:Arial" align="right">Net Book</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="88.6">
      <p style="margin:0pt; font-family:Arial" align="right">Cost</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">Depreciation</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">Value</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="104.533">
      <p style="margin:0pt; font-family:Arial" align="right">Value</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">&nbsp;</td>
    <td valign="bottom" width="88.6">&nbsp;</td>
    <td valign="bottom" width="97">&nbsp;</td>
    <td valign="bottom" width="97">&nbsp;</td>
    <td valign="bottom" width="104.533">&nbsp;</td>
    <a NAME="OLE_LINK1"></a><a NAME="OLE_LINK2"></a>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">
      <p style="margin:0pt; font-family:Arial">Mining equipment</p>
    </td>
    <td valign="bottom" width="88.6">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;$20,141,179</p>
    </td>
    <td valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">$624,000</p>
    </td>
    <td valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;$19,517,179</p>
    </td>
    <td valign="bottom" width="104.533">
      <p style="margin:0pt; font-family:Arial" align="right">$10,352,040</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">
      <p style="margin:0pt; font-family:Arial">Office and computer equipment</p>
    </td>
    <td valign="bottom" width="88.6">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;171,558</p>
    </td>
    <td valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">38,424</p>
    </td>
    <td valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">133,134</p>
    </td>
    <td valign="bottom" width="104.533">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90,540</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="88.6">
      <p style="margin:0pt; font-family:Arial" align="right">$20,312,737</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;$
      &nbsp;&nbsp;662,424</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="97">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;$19,650,313</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="104.533">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;$10,442,580</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">&nbsp;</td>
    <td valign="bottom" width="88.6">&nbsp;</td>
    <td valign="bottom" width="97">&nbsp;</td>
    <td valign="bottom" width="97">&nbsp;</td>
    <td valign="bottom" width="104.533">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="145.067">&nbsp;</td>
    <td valign="bottom" width="88.6">&nbsp;</td>
    <td valign="bottom" width="97">&nbsp;</td>
    <td valign="bottom" width="97">&nbsp;</td>
    <td valign="bottom" width="104.533">&nbsp;</td>
  </tr>
</table>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>4.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>MINERAL
PROPERTIES</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial" align="justify"><b>Deferred
Costs</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial" align="justify">The
Company's properties are located in Mexico and its interest in these
properties is maintained under agreements with the titleholders.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Arial" align="justify"><b>a)</b></p>
<p style="margin:0pt; padding-left:72pt; text-indent:-18pt; font-family:Arial" align="justify"><b>Sonora,
Mexico</b></p>
<p style="margin:0pt; padding-left:53.85pt; font-family:Arial" align="justify"><b>Salamandra
Group</b></p>
<p style="margin:0pt; padding-left:53.85pt; text-indent:0.15pt; font-family:Arial" align="justify">The
Company had acquired a 100% interest in this property which comprises
approximately 21,300 hectares, in consideration for the payment of
CDN$11,154,011 in acquisition costs and assigned expenses. The most advanced
property within the group is Mulatos.</p>
<p style="margin:0pt; padding-left:53.85pt; text-indent:0.15pt; font-family:Arial" align="justify">The
property is subject to a sliding scale net smelter royalty (NSR) on the first
2,000,000 ounces of gold production from certain concessions. The royalty
commences at 1% when the price of gold is less than $300 per ounce, rising to 5%
when the price of gold exceeds $400 per ounce.</p>
<p style="margin:0pt; padding-left:53.85pt; text-indent:0.15pt; font-family:Arial" align="justify"><b>Mulatos
Project</b></p>
<p style="margin:0pt; padding-left:53.85pt; text-indent:0.15pt; font-family:Arial" align="justify">In
June 2004, the Company completed a feasibility study on a portion of the Mulatos
property known as the Estrella Pit Development. The Company has received all
requisite permits for construction and mine operation.</p>
<p style="margin:0pt; padding-left:36pt; text-indent:17.85pt; font-family:Arial" align="justify"><b>Other
Exploration Properties</b></p>
<p style="margin:0pt; padding-left:54pt; font-family:Arial" align="justify">The
Company has 9 exploration properties within the 21,300 hectares land package
comprising the Salamandra group of concessions.</p>
<p style="margin:0pt; padding-left:53.85pt; text-indent:0.15pt; font-family:Arial" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Arial" align="justify"><b>b)</b></p>
<p style="margin:0pt; padding-left:72pt; text-indent:-18pt; font-family:Arial" align="justify"><b>Durango,
Mexico</b></p>
<p style="margin:0pt; padding-left:54pt; font-family:Arial" align="justify"><b>La
Fortuna Property</b></p>
<p style="margin:0pt; padding-left:54pt; font-family:Arial" align="justify">The
Company owns a 100% interest in three mineral concessions, covering
approximately 606 hectares, which were written-down in 2000 to their estimated
recoverable amount of $1 million.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
<br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:17.85pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:17.85pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>Consolidated
Notes to Financial Statements</b></p>
<p style="margin:0pt; padding-left:17.85pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>(Stated
in United States dollars) (unaudited)</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:72pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>5.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>CONVERTIBLE
DEBENTURES</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Effective
February 2, 2005, the Company issued CDN$50 million 5.5% convertible unsecured
subordinated debentures maturing on February 15, 2010, net of a 3.5%
underwriters' fee. The debentures bear interest at an annual rate of 5.5%,
payable semi-annually in arrears on February 15 and August 15 of each year. The
debentures are convertible into common shares at a rate of 188.6792 common
shares for each CDN$1,000 principal amount of debentures. In certain
circumstances, the debentures may be redeemed in whole or in part at the option
of the Company after February 15, 2008.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">The
debentures are classified as a liability, with the exception of the portion
relating to their conversion features, which are classified as an equity
component, resulting in the carrying value of the debentures being less than
their face value. The discount is being accreted over the term of the
debentures, utilizing the effective interest rate method and the 12.6% interest
rate implicit in the debentures.</p>
<p style="margin:0pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">In
accordance with the terms of the trust indenture, the Company has set aside
CDN$2,848,000 ($2,324,140) for interest due from February 2, 2005 to February
15, 2006.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:11pt" align="justify"><b><br>
</b></p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>6.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>ASSET
RETIREMENT OBLIGATIONS</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">The
fair value of a liability for an asset retirement obligation is recognized in
the period in which it is incurred, on a discounted cash flow basis, if a
reasonable estimate can be made. The liability accretes to its full value over
time through charges to operations. In addition, the fair value is added to the
carrying amount of the Company's mineral property under development, and will
be amortized over the useful life of the property when it enters production.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Continuity
of asset retirement obligations:</p>
<p style="margin:0pt; text-indent:36pt; font-family:Arial" align="justify"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="221.667">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="186.333">
      <p style="margin:0pt; font-family:Arial" align="right"><b>Six months ended</b></p>
      <p style="margin:0pt; font-family:Arial" align="right"><b>June 30, 2005</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">&nbsp;</td>
    <td valign="bottom" width="186.333">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">
      <p style="margin:0pt; font-family:Arial">Obligations &nbsp;at January 1,
      2005</p>
    </td>
    <td valign="bottom" width="186.333">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;$
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50,000</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">
      <p style="margin:0pt; font-family:Arial">Discounted revisions in estimated
      cash flows</p>
    </td>
    <td valign="bottom" width="186.333">
      <p style="margin:0pt; font-family:Arial" align="right">155,000</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">
      <p style="margin:0pt; font-family:Arial">Accretion of discounted cash
      flows</p>
    </td>
    <td valign="bottom" width="186.333">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,000</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">
      <p style="margin:0pt; font-family:Arial">Liabilities settled</p>
    </td>
    <td valign="bottom" width="186.333">
      <p style="margin:0pt; font-family:Arial" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">
      <p style="margin:0pt; font-family:Arial">Obligations at June 30, 2005</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="186.333">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;$
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;210,000</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">&nbsp;</td>
    <td valign="bottom" width="186.333">&nbsp;</td>
  </tr>
</table>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:12pt"><b><br>
</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:12pt"><b><br>
<br>
</b></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; padding-left:36pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>Consolidated
Notes to Financial Statements</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:14pt; font-family:Arial; font-size:12pt" align="justify"><b>(Stated
in United States dollars) (unaudited)</b></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:12pt" align="justify"><b><br>
</b></p>
<p style="margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b><br>
</b></p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>7.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>DEFERRED
FINANCING CHARGES</b></p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Costs
incurred and allocated to the debt portion of the debenture financing are
amortized over the 5-year term of the debt on a straight-line basis and costs
incurred to establish a bank credit agreement</p>
<p style="margin:0pt; padding-left:27pt; text-indent:50775.435pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">&nbsp;are
amortized over a one-year term (see note 14).</p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:11pt" align="justify"><b><br>
</b></p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="221.667">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right"><b>June 30,</b></p>
      <p style="margin:0pt; font-family:Arial" align="right"><b>2005</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="18.667">
      <p style="margin:0pt; font-family:Arial"><b>&nbsp;</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right"><b>December 31,
      2004</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">&nbsp;</td>
    <td valign="bottom" width="124">&nbsp;</td>
    <td valign="bottom" width="18.667">&nbsp;</td>
    <td valign="bottom" width="124">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">
      <p style="margin:0pt; font-family:Arial">Convertible debenture</p>
    </td>
    <td valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$
      1,221,871</p>
    </td>
    <td valign="bottom" width="18.667">&nbsp;</td>
    <td valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right">&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;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">
      <p style="margin:0pt; font-family:Arial">Bank</p>
    </td>
    <td valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right">77,813</p>
    </td>
    <td valign="bottom" width="18.667">&nbsp;</td>
    <td valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right">&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;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">
      <p style="margin:0pt; font-family:Arial">less, accumulated amortization</p>
    </td>
    <td valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(101,000)</p>
    </td>
    <td valign="bottom" width="18.667">&nbsp;</td>
    <td valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right">&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;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$1,198,684</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="18.667">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="124">
      <p style="margin:0pt; font-family:Arial" align="right">&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;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="221.667">&nbsp;</td>
    <td valign="bottom" width="124">&nbsp;</td>
    <td valign="bottom" width="18.667">&nbsp;</td>
    <td valign="bottom" width="124">&nbsp;</td>
  </tr>
</table>
<p style="margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b><br>
</b></p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>8.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>RELATED
PARTY TRANSACTIONS</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">For
the three month period ended June 30, 2005, a director of the Company was paid
an aggregate of $34,260, (2004 - $309,700 (including a bonus of $249,000) to a
director and officer) for management and administrative services pursuant to a
monthly services contract. These fees have been paid in the normal course of
operations and are measured at the fair value as determined by management.
&nbsp;</p>
<p style="margin:0pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>9.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>SEGMENTED
INFORMATION</b></p>
<p style="margin:0pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="144.533">&nbsp;</td>
    <td valign="bottom" width="71.467">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right"><b>June
      30,</b></p>
    </td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right"><b>December
      31,</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="144.533">&nbsp;</td>
    <td valign="bottom" width="71.467">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right"><b>2005</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right"><b>2004</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="144.533">&nbsp;</td>
    <td valign="bottom" width="71.467">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="216" colspan="2">
      <p style="margin:0pt; line-height:13pt; font-family:Arial; font-size:11pt">Assets
      by geographic segment, at cost</p>
    </td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="144.533">&nbsp;</td>
    <td valign="bottom" width="71.467">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="144.533">
      <p style="margin:0pt; font-family:Arial">Mexico</p>
    </td>
    <td valign="bottom" width="71.467">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; font-family:Arial" align="right">$
      &nbsp;&nbsp;79,708,714</p>
    </td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;$
      &nbsp;&nbsp;48,776,475</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="144.533">
      <p style="margin:0pt; font-family:Arial">Canada</p>
    </td>
    <td valign="bottom" width="71.467">&nbsp;</td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; font-family:Arial" align="right">37,517,517</p>
    </td>
    <td valign="bottom" width="132">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27,102,559</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="144.533">&nbsp;</td>
    <td valign="bottom" width="71.467">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; font-family:Arial" align="right">$117,226,231</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="132">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;$
      &nbsp;&nbsp;75,879,034</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="144.533">&nbsp;</td>
    <td valign="bottom" width="71.467">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
    <td valign="bottom" width="132">&nbsp;</td>
  </tr>
</table>
<p style="margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="120">
      <p style="margin:0pt; font-family:Arial"><b>Six months ended June 30</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="72">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="90.2">
      <p style="margin:0pt; font-family:Arial" align="right"><b>2005</b></p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="66.067">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="82.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial"><b>2004</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="120">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="72">
      <p style="margin:0pt; font-family:Arial">Mexico</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; font-family:Arial" align="right">Canada</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="90.2">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;Total</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="66.067">
      <p style="margin:0pt; font-family:Arial">Mexico</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="82.867">
      <p style="margin:0pt; font-family:Arial">Canada</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial">&nbsp;Total</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="120">
      <p style="margin:0pt; font-family:Arial">Loss</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="72">
      <p style="margin:0pt; font-family:Arial">$345,145</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="84">
      <p style="margin:0pt; font-family:Arial" align="right">$3,119,885</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="90.2">
      <p style="margin:0pt; font-family:Arial" align="right">$3,465,030</p>
    </td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="66.067">
      <p style="margin:0pt; font-family:Arial">$45,804</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="82.867">
      <p style="margin:0pt; font-family:Arial">$1,848,742</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial">$1,894,546</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="120">&nbsp;</td>
    <td valign="bottom" width="72">&nbsp;</td>
    <td valign="bottom" width="84">&nbsp;</td>
    <td valign="bottom" width="90.2">&nbsp;</td>
    <td valign="bottom" width="15.733">&nbsp;</td>
    <td valign="bottom" width="66.067">&nbsp;</td>
    <td valign="bottom" width="82.867">&nbsp;</td>
    <td valign="bottom" width="81.133">&nbsp;</td>
  </tr>
</table>
<p style="margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">The
Company is in the development stage and has no reportable revenue.</p>
<p style="margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt" align="justify"><br>
<br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:9pt; font-family:Arial; font-size:11pt" align="justify"><b><br>
</b></p>
<p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>Consolidated
Notes to Financial Statements</b></p>
<p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Arial; font-size:12pt" align="justify"><b>(Stated
in United States dollars) (unaudited)</b></p>
<p style="margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt" align="justify"><b><br>
</b></p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>10.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>LOSS
PER SHARE</b></p>
<p style="margin:0pt; padding-left:18pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial" align="justify">Loss
per share has been calculated using the weighted-average number of shares
outstanding during the six-month period ended June 30, 2005 of 77,121,261 (2004
- - 55,748,451) shares and three-month period ended June 30, 2005 of 77,147,039
(2004 - 60,797,746) shares. Fully-diluted loss per share is not disclosed as
it is antidilutive.</p>
<p style="margin:0pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:27pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>11.</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>SHARE
CAPITAL</b></p>
<p style="margin:0pt; font-family:Arial; font-size:9pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-11pt; padding-left:72pt; text-indent:-36pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify">a)</p>
<p style="margin:0pt; padding-left:72pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify">Authorized
share capital of the Company consists of unlimited common shares without
&nbsp;par value.</p>
<p style="margin:0pt; font-family:Arial; font-size:9pt" align="justify"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="264">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="108">&nbsp;</td>
    <td valign="bottom" width="120">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="264">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="108">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Number
      of Shares</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Amount</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="264">&nbsp;</td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="108">&nbsp;</td>
    <td valign="bottom" width="120">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="264">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Outstanding
      at January 1, 2005</p>
    </td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="108">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">76,777,918</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">$86,170,028</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="264">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Exercise
      of stock options</p>
    </td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="108">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">147,500</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">118,538</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="264">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Exercise
      of warrants</p>
    </td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td valign="bottom" width="108">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">345,000</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">974,690</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="264">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Outstanding
      at June 30, 2005</p>
    </td>
    <td valign="bottom" width="36">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="108">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">77,270,418</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">$87,263,256</p>
    </td>
  </tr>
</table>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:9pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:9pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-11pt; padding-left:54pt; text-indent:-18pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify">b)</p>
<p style="margin:0pt; padding-left:54pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify">Stock
options at June 30, 2005:</p>
<p style="margin-top:0pt; margin-bottom:-11pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify"><b>&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
<p style="margin:0pt; text-indent:36pt; font-family:Arial; font-size:9pt" align="justify"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Number</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Expiry
      Date</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Exercise
      Price</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">&nbsp;</td>
    <td valign="bottom" width="192">&nbsp;</td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>CDN
      $</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">980,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">June
      2, 2010</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.73</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">375,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">December
      16, 2009</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.50</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">850,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">June
      25, 2009</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">110,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">February
      12, 2009</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.75</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">883,500</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">December
      9, 2008</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.50</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">557,483</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">July
      23, 2008</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.13</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">345,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">June
      2, 2008</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.73</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">50,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">January
      30, 2008</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0
      .76</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">150,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">July
      22, 2007</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">1.00</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">330,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">June
      25, 2007</p>
    </td>
    <td valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">2.25</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">150,000</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">June
      3, 2007</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">1.16</p>
    </td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">4,780,983</p>
    </td>
    <td valign="bottom" width="192">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Weighted
      average exercise price</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="120.067">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">2.60</p>
    </td>
  </tr>
</table>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:9pt"><b><br>
</b></p>
<p style="margin:0pt; text-indent:36pt; font-family:Arial; font-size:9pt"><b><br>
<br>
</b></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; text-indent:36pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>Consolidated
Notes to Financial Statements</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:14pt; font-family:Arial; font-size:12pt" align="justify"><b>(Stated
in United States dollars) (unaudited)</b></p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:11pt"><b><br>
</b></p>
<p style="margin:0pt; padding-left:27pt; text-indent:-9pt; line-height:13pt; font-family:Arial; font-size:11pt"><b>11.
&nbsp;SHARE CAPITAL (Continued)</b></p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:9pt"><b><br>
</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:11pt; font-family:Arial; font-size:9pt"><b>Summary
of stock option activity:</b></p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="204">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Shares</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Weighted
      Average Price</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">&nbsp;</td>
    <td valign="bottom" width="124.533">&nbsp;</td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>CDN
      $</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Balance
      at January 1, 2005</p>
    </td>
    <td valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">3,603,483</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">2.11</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Granted</p>
    </td>
    <td valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">1,325,000</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">3.73</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Exercised</p>
    </td>
    <td valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(147,500)</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">1.00</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Balance
      at June 30, 2005</p>
    </td>
    <td style="border-top:1pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">4,780,983</p>
    </td>
    <td style="border-top:1pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">2.60</p>
    </td>
  </tr>
</table>
<p style="margin:0pt; font-family:Arial; font-size:9pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:9pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-11pt; padding-left:63pt; text-indent:-27pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify">c)</p>
<p style="margin:0pt; padding-left:63pt; line-height:11pt; font-family:Arial; font-size:9pt" align="justify">Warrants
outstanding on June 30, 2005 are as follows:</p>
<p style="margin:0pt; font-family:Arial; font-size:9pt" align="justify"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Number</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="168">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>&nbsp;Expiry
      Date</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="180">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>&nbsp;Exercise
      Price</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="96">&nbsp;</td>
    <td valign="bottom" width="168">&nbsp;</td>
    <td valign="bottom" width="180">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>&nbsp;CDN
      $</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="96">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">4,555,000</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="168">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">April
      8, 2006</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="180">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">3.50</p>
    </td>
  </tr>
</table>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:9pt"><b><br>
</b></p>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:9pt"><b><br>
</b></p>
<p style="margin:0pt; padding-left:27pt; line-height:11pt; font-family:Arial; font-size:9pt"><b>&nbsp;&nbsp;&nbsp;&nbsp;Summary
of warrant activity:</b></p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="204">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Shares</b></p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>Weighted
      Average Price</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">&nbsp;</td>
    <td valign="bottom" width="124.533">&nbsp;</td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right"><b>CDN
      $</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">&nbsp;</td>
    <td valign="bottom" width="124.533">&nbsp;</td>
    <td valign="bottom" width="120">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="204">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Balance
      at January 1, 2005</p>
    </td>
    <td valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">4,900,000</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">3.50</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Exercised</p>
    </td>
    <td valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">(345,000)</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">3.50</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="204">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt">Balance
      at June 30, 2005</p>
    </td>
    <td style="border-top:1pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="124.533">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">4,555,000</p>
    </td>
    <td style="border-top:1pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="120">
      <p style="margin:0pt; line-height:11pt; font-family:Arial; font-size:9pt" align="right">3.50</p>
    </td>
  </tr>
</table>
<p style="margin:0pt; padding-left:27pt; font-family:Arial; font-size:9pt; color:#FF0000"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Subsequent
to June 30, 2005, 350,000 two-year warrants were granted at an exercise price of
CDN$5.80 (see note 14) and 9,000 were exercised at a price of CDN$3.50.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:36pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>12.</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>STOCK-BASED
COMPENSATION</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">The
Company granted incentive stock options to its directors and employees and
officers to purchase up to a total of 1,325,000 common shares in the capital of
Alamos at a price of CDN$3.73 per share. The options granted to directors and
senior officers are exercisable for a five-year period, and options granted to
employees are exercisable for a three-year period.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">The
Company determined the value of the stock-based compensation and allocated it as
follows, depending on the nature of the grant:</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="191.733">
      <p style="margin:0pt; font-family:Arial">Mineral properties</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial">&nbsp;$ &nbsp;151,000</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="191.733">
      <p style="margin:0pt; font-family:Arial">Operations</p>
    </td>
    <td valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;927,000</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="191.733">
      <p style="margin:0pt; font-family:Arial">Total</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="bottom" width="81.133">
      <p style="margin:0pt; font-family:Arial">&nbsp;$1,078,000</p>
    </td>
  </tr>
</table>
<p style="margin:0pt; padding-left:36pt; font-family:Arial" align="justify"><br>
<br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<p style="page-break-before:always; margin:0pt; padding-left:36pt; font-family:Arial; font-size:12pt" align="justify"><br>
<br>
</p>
<table style="font-size:10pt" cellspacing="0">
</table>
<p style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>ALAMOS
GOLD INC.</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:14pt; font-family:Arial; font-size:12pt"><b>Consolidated
Notes to Financial Statements</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:14pt; font-family:Arial; font-size:12pt" align="justify"><b>(Stated
in United States dollars) (unaudited)</b></p>
<p style="margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b><br>
</b></p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:36pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>12.</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>STOCK-BASED
COMPENSATION (continued)</b></p>
<p style="margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b><br>
</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">No
cash is transferred upon the granting of stock options. The Company credits its
contributed surplus account for the total value of the grant.</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">The
fair value of stock options granted in the calculation of compensation expense
is estimated using the Black-Scholes Option Pricing Model with the following
assumptions:</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td valign="bottom" width="370.133">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Three-months
      ended June 30</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="121.867">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">2005</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="120">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">2004</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="370.133">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Risk-free
      rate</p>
    </td>
    <td valign="bottom" width="121.867">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">3.0%</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">3.5%</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="370.133">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Expected
      dividend yield</p>
    </td>
    <td valign="bottom" width="121.867">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">nil</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">nil</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="370.133">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Expected
      stock price volatility</p>
    </td>
    <td valign="bottom" width="121.867">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">50%</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">55%</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="370.133">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify">Expected
      option life, based on term of the grant (months)</p>
    </td>
    <td valign="bottom" width="121.867">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">18-30</p>
    </td>
    <td valign="bottom" width="120">
      <p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="right">18-30</p>
    </td>
  </tr>
</table>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-13pt; padding-left:36pt; text-indent:-18pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>13.</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:13pt; font-family:Arial; font-size:11pt" align="justify"><b>CONTINGENCIES
AND COMMITMENTS</b></p>
<p style="margin-top:3.05pt; margin-bottom:0pt; padding-left:36pt; line-height:11.75pt; font-family:Arial; font-size:11pt" align="justify">The
Company is currently developing the Phase I - Estrella Pit on its Mulatos
deposit at a capital cost of $73 million, as outlined in the June 2004 Estrella
Pit Development Feasibility Study. At June 30, 2005, the Company had committed
expenditures in the amount of $8 million for future procurement and development
at the project out of a total estimate of $25 million cost to complete the
project.</p>
<p style="margin-top:3.05pt; margin-bottom:0pt; padding-left:36pt; line-height:11.75pt; font-family:Arial; font-size:11pt" align="justify">The
Company has commitments to acquire CDN$16 million at a fixed price in 2007.</p>
<p style="margin-top:3.05pt; margin-bottom:0pt; padding-left:36pt; line-height:11.75pt; font-family:Arial; font-size:11pt" align="justify"><br>
</p>
<p style="margin-top:3.05pt; margin-bottom:-13.75pt; padding-left:18pt; line-height:13.75pt; font-family:Arial; font-size:11pt" align="justify"><b>14.</b></p>
<p style="margin:0pt; padding-left:18pt; text-indent:27.8pt; line-height:11.75pt; font-family:Arial; font-size:11pt" align="justify"><b>SUBSEQUENT
EVENT</b></p>
<p style="margin:0pt; padding-left:36pt; line-height:11.75pt; font-family:Arial; font-size:11pt" align="justify">On
July 27, 2005 the Company announced the closing of a line of credit consisting
of a $10 million unsecured one year extendible revolving facility and an
unmargined hedging line. Interest is payable at a rate of 2.75% above applicable
LIBOR on the drawn portion of the facility, and 0.75% on the undrawn portion.
350,000 two-year warrants were granted to the lender on closing, at a conversion
price of CDN$5.80 per share.</p>
<p style="margin-top:3.05pt; margin-bottom:0pt; padding-left:36pt; text-indent:-27pt; line-height:11.75pt; font-family:Arial; font-size:11pt" align="justify"><br>
<br>
</p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size="1.333">
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=justify><B>ALAMOS GOLD INC.</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=justify><B>MANAGEMENT DISCUSSION AND ANALYSIS</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>This management discussion and analysis (MD&amp;A) of the operating results and financial position of Alamos Gold Inc.<B> </B>and its<B> </B>subsidiaries<B> </B>(the &quot;Company&quot;) is for the three and six month periods ended June 30, 2005 compared with the three and six month periods ended June 30, 2004. Information is current to August 2, 2005. It should be read in conjunction with the Annual Information Form and other information filed by the Company at <FONT COLOR=#0000FF><U>www.sedar.com</U></FONT>. </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Introduction</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company is a development stage mineral exploration company with its Mulatos gold project under construction in Sonora, Mexico, and prospective exploration targets in and around the project. On July 22, 2005, the Company poured its first bar of dore from the Mulatos project.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The MD&amp;A should be read in conjunction with the attached Consolidated Financial Statements of the Company and related Notes (the &#147;Financial Statements&#148;), which have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) for interim reporting (for more complete disclosure see Summary of Significant Accounting Policies Note 2 to the December 31, 2004 Financial Statements) in United States dollars. These principles differ in certain material respects from accounting principles generally accepted in the United States (U.S. GAAP). Significant differences between GAAP and U.S. GAAP applicable to the Company as at December 31, 2004 and described in Note 19 to the December 31, 2004 Financial Statements, do not consider additional GAAP/U.S. GAAP differences which may exist in the treatment of convertible debentures issued in February 2005.<B> <
/B></P>
<P style="margin-top:11pt; margin-bottom:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Note to U.S. Investors</B> </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>All references to mineral reserves and resources contained in this MD&amp;A are determined in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects (&#147;NI 43-101&#148;) of the Canadian Securities Administrators and CIM Standards. &nbsp;While the terms &#147;mineral resource,&#148; &#147;measured mineral resource,&#148; &#147;indicated mineral resource,&#148; and &#147;inferred mineral resource&#148; are recognized and required by Canadian regulations, they are not defined terms under SEC standards in the United States. &nbsp;As such, information contained in this MD&amp;A concerning descriptions of mineralization and resources under Canadian standards may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC. &nbsp;&#147;Indicated mineral resource&#148; and &#147;inf
erred mineral resource&#148; have a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility. &nbsp;It can not be assumed that all or any part of an &#147;indicated mineral resource&#148; or &#147;inferred mineral resource&#148; will ever be upgraded to a higher category of resource. &nbsp;Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. &nbsp;</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR>
</P>
<P style="margin:0pt; font-family:Arial" align="center">1
<BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>In June 2004 the Company completed the Mulatos Feasibility Study Phase One &#150; Estrella Pit. Gold reserves within the Estrella Pit consist of 36.4 million tonnes of ore grading 1.6 grams per tonne (g/t) at varying cutoff grades, beginning at &nbsp;0.8 g/t, yielding 2.0 million ounces of contained gold of which 1.4 million is estimated to be recoverable.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Highlights</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>For the three months ended June 30, 2005:</P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Commenced stacking ore-grade colluvium overliner on leach pad; &nbsp;</FONT></P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Commenced overburden removal at Estrella pit.</FONT></P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Spent $10.8 million on development at Mulatos, plus $3.3 million on mining equipment;</FONT></P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Spent $0.6 million on exploration at El Salto/Mina Vieja adjacent to Phase I Estrella pit and Escondida/El Victor underground drift development;</FONT></P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Loss of $2.3 million ($.03 per share);</FONT></P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Granted 1.3 million incentive stock options;</FONT></P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Mark Wayne and Brian W. Penny elected directors at annual general meeting of shareholders</FONT></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Subsequent to June 30, 2005:</B></P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Poured first 117 ounce gold/silver dore bar at Mulatos mine;</FONT></P>
<P style="margin-top:0pt; margin-bottom:-13pt; padding-left:72pt; padding-right:9pt; text-indent:-18pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify>&#183;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:13pt; font-family:Symbol; font-size:11pt" align=justify><FONT FACE="Arial">Closed $10 million unsecured bank credit agreement.</FONT></P>
<P style="margin:0pt; padding-right:9pt; text-indent:50802.435pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:18pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Assessment of Gold Market</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Gold continued to trade in a narrow band in the second quarter of 2005, between $415 and $440 per ounce and was at $430 on August 2, 2005. The price of gold is attractive for the Company, which prepared its feasibility study and reserves using a base case of $350 per ounce. At these levels, the price of gold has had and may continue to have a positive impact on the economics of the feasibility study for Phase I development of the Mulatos deposit. However, it is not possible to forecast future gold price trends and their impact on future results from operations.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Projects</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company&#146;s major asset is its 21,300-hectare Salamandra group of concessions in Sonora, Mexico, which includes the Mulatos deposit and nine other exploration targets identified to date. The Mulatos deposit consists of several contiguous mineralized zones which contain gold resources of approximately 62.2 million tonnes of ore grading 1.5 g/t at a 0.6 g/t gold cutoff, measured and indicated, excluding resources contained in the Gap, El Victor and San Carlos zones. In June 2004, a feasibility study was completed on the Estrella zone of the Mulatos deposit, which contained gold reserves of 36.4 million tonnes of ore grading 1.6 g/t at varying cutoff grades, beginning with 0.8 g/t in the early years and declines to the internal cutoff in later years to enhance economics. Reserves are 2.0 million ounces of contained gold, of which 1.4 </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR>
<BR></P>
<P style="margin:0pt; font-family:Arial" align="center"><BR>2</P>
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<P style="page-break-before:always; margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>million ounces are recoverable, based on metallurgical testing. The reserves were prepared using a gold price assumption of $350 per ounce. Total projected capital cost, including a $7.7 million contingency, was set at $72.3 million. The feasibility study projects cash operating costs at $174 per ounce. Production is subject to a sliding scale net smelter royalty, which at current gold prices above $400, is set at a rate of 5% of the value of gold and silver, less certain allowed refining and transportation costs. </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Construction of the mine at Mulatos began in the third quarter of 2004 and operations commenced in the third quarter of 2005 with the pouring of its first dore bar of gold and silver weighting 117 ounces. Pre-stripping of waste has commenced atop Cerro Estrella. Feasibility level rates of production at 10,000 tonnes of ore per month and 150,000 ounces of gold per year are not expected until year end.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company has completed drilling at Southeast Extension Zone and is currently drilling at El Salto and with the goal of adding to its mineral reserve base around the Estrella pit. Twenty-four holes (2,769 meters) have been completed at Mina Vieja. The Company intends to issue a new reserve report after all drilling at Mina Vieja and El Salto has been incorporated into a new reserve model. The Company has also advanced a development program which involves underground drifting through the Escondida, Gap and El Victor zones to a total of 432 meters distance from portals and has currently established two drill locations underground to test ore continuity and high-grade structures. &nbsp;Drifting and additional drill locations will extend over a 1,700 meter strike length.</P>
<P style="margin:0pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Total planned exploration and development expenditures around the Estrella Zone, for the Excondida &#150; El Victor underground development and regional targets is budgeted at $6.0 million for 2005, which includes expenditures contingent on follow-up work, if warranted.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Operating Activities</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company recorded net loss for the three months ended June 30, 2005 of $2.3 million ($0.03 per share), compared with $1.4 million ($0.02 per share) in the corresponding period in 2004. Increased costs partly relate to the issuance of convertible debentures in February 2005 for interest and financing expenses and debenture accretion, offset in part by increased interest income from the cash on hand obtained from the debentures. Stock-based compensation, reflecting the value of incentive stock options granted in the period, amounted to $0.9 million compared with $0.5 million in the corresponding period in 2004. Certain corporate operating costs were also higher in the current period, including $0.4 million in bonus compensation granted in the quarter. Loss for the six month period ended June 30, 2005 was $3.5 million ($.04 per share) compared with $1.9 million ($.03 per share) for t
he corresponding period in 2004.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company received C$50 million ($40.3 million) from the issuance of convertible debentures, before related financing costs in February 2005. The debentures are classified as a liability, with the exception of the portion relating to their conversion feature, which is classified as an equity component, </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR>
<BR></P>
<P style="margin:0pt; font-family:Arial" align="center">3</P>
<P style="margin:0pt; font-family:Arial"><BR></P>
<P style="margin:0pt; font-family:Arial"><BR></P>
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<P style="page-break-before:always; margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>resulting in the carrying value of the debentures being less than their face value. The discount is being accreted over the term of the debentures &#150; in the second quarter of 2005 the amount of accretion of the debenture discount charged to operations was $207,867. Interest expense accrued mainly on the debenture amounted to $557,566, of which $253,750 was capitalized to mineral properties and $303,816 (2004 - $64,434, relating to the H. Morgan loan, repaid in December 2004) was charged to operations. $0.1 million in deferred financing costs associated with the debenture and bank credit agreement which became effective in July 2005was allocated to the debt portion of the debenture and capitalized. This amount is being amortized on a straight line basis over the term of the related debt; financing costs, which includes amortization expense for the second 
quarter of 2005 was $33,561 (2004 - $nil). A portion of deferred financing costs incurred in the first quarter of 2005, $416,000, was netted against the equity segment of the debenture.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Salaries and management compensation increased to $629,999 in the second quarter of 2005, which included bonus compensation in the amount of $407,600, up from $351,577 in 2004 (bonus $216,000). &nbsp;</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company incurred a loss on foreign exchange of $85,437 in 2005 (2004 &#150;$115,916) resulting from a loss on Canadian dollar accounts (mainly relating to its Canadian dollar debenture liability) offset in part by a gain on Mexican peso accounts (mainly relating to its sales tax recoverable account). Interest income of $323,523 (2004 - $54,297) was up due to the increase in cash balances from a $23 million equity financing in November 2004 and a $40.3 million convertible debenture financing in February 2005, less development expenditures and equipment purchases relating to the development of the Mulatos deposit. </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>There were 1.3 million stock option grants during the second quarter of 2005, compared with 1.2 million in the corresponding period in 2004. Total computed value of the stock option grants in the second quarter of 2005 was $1.1 million, (2004: $0.7 million) of which $0.2 million was capitalized to mineral properties and $0.9 million was expensed (2004: &nbsp;$0.5 million)</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt"><B>Summary of Quarterly Results</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt"><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The following table shows consolidated loss by quarter for the previous eight quarters, on a dollar and per share basis. As the Company is still in the exploration and development stage, it has no sales or revenue. Per share figures are basic and fully diluted.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=bottom width=123.733 colspan=2><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt"><B>Loss by quarter </B></P>
</TD><TD valign=bottom width=91.667>&nbsp;</TD><TD valign=bottom width=91.667>&nbsp;</TD><TD valign=bottom width=79.467>&nbsp;</TD><TD valign=bottom width=81.467>&nbsp;</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=108>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>Q1</B></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>Q2</B></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=79.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>Q3</B></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=bottom width=81.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>Q4</B></P>
</TD></TR>
<TR><TD valign=bottom width=108>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>$</B></P>
</TD><TD valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>$</B></P>
</TD><TD valign=bottom width=79.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>$</B></P>
</TD><TD valign=bottom width=81.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>$</B></P>
</TD></TR>
<TR><TD valign=bottom width=108><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>2005</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>1,138,479</P>
</TD><TD valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>2,326,551</P>
</TD><TD valign=bottom width=79.467>&nbsp;</TD><TD valign=bottom width=81.467>&nbsp;</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=108><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>Per share</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>0.01</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>0.03</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=79.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.467>&nbsp;</TD></TR>
<TR><TD valign=bottom width=108><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>2004</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>457,407</P>
</TD><TD valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>1,437,139</P>
</TD><TD valign=bottom width=79.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>400,458</P>
</TD><TD valign=bottom width=81.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>1,477,220</P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=108><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>Per share</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>0.01</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=91.667><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>0.02</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=79.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>0.01</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>0.02</P>
</TD></TR>
<TR><TD valign=bottom width=108><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>2003</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=91.667>&nbsp;</TD><TD valign=bottom width=91.667>&nbsp;</TD><TD valign=bottom width=79.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>520,575</P>
</TD><TD valign=bottom width=81.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>980,701</P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=108><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>Per share</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=91.667>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=91.667>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=79.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>0.01</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>0.02</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR>
<BR></P>
<p style="font-family: Arial; margin: 0pt" align="center">4</p>
<P style="margin:0pt; font-family:Arial"><BR></P>
<P style="margin:0pt; font-family:Arial"><BR></P>
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<P style="page-break-before:always; margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Significant variations in charges to expense in each quarter include: non-cash compensation recorded in the amount of $403,989 in Q4 2003 and $82,775, $469,190 and $392,000 in Q1, Q2 and Q4 respectively of 2004, and $927,000 in Q2 2005, reflecting the value of the grant of incentive stock options to personnel. &nbsp;Q1 and Q2 -2005 contains charges for debenture accretion, interest and financing expense relating to convertible debentures issued in February 2005. Bonus compensation was granted in the amount $407,600 in Q2-2005 and $216,000 in Q2-2004.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Financial and Other Instruments</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Company&#146;s financial assets and liabilities consist of cash and cash equivalents, receivables, accounts payable and accrued liabilities and the debt portion of a convertible debenture, some of which are denominated in Canadian dollars or Mexican pesos. These accounts are recorded at cost, except for the convertible debentures, which approximates their fair value at each reporting period value in United States dollars. The convertible debenture is recorded at the discounted value of future cash flows, using the Company&#146;s risk adjusted discount rate of 12.6% and is adjusted quarterly for changes in the Canadian dollar to United States dollar exchange rate. The amount of debenture discount is accreted to the carrying value of the debenture on a quarterly basis. The Company is vulnerable to financial gain or loss as a result of foreign exchange movements against the United State
s dollar. In the second quarter 2005, the Company recorded a net loss of $85,437, with a loss on Canadian dollar translation of its net monetary liabilities offset in part by a gain on Mexican peso accounts. The Company minimizes its foreign exchange risk by maintaining low net account balances in Canadian dollars and Mexican pesos, to the extent possible. The Company has entered into agreements to acquire $16 million Canadian dollars at fixed future prices to offset a portion of its Canadian dollar debenture liability which is not offset by Canadian dollars on deposit.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company has placed its cash and cash equivalents in short-term liquid deposits or investments which provide a revised rate of interest upon maturity. </P>
<P style="margin:0pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Investment in Mineral Exploration and Development</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Net investments in mineral properties for the first six months of 2005 was $14.3 million of which $13.3 million related to the development of Phase I of the Mulatos deposit, which is projected in its June 2004 feasibility study to cost $72.3 million. Approximately $1.6 million in sales taxes were reclassified as currently recoverable; in prior years, refundable sales taxes in Mexico were often difficult to recover, but Mexican tax authorities are now more diligent in responding to refund claims.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>At the end of June 2005 the Company had spent to date an estimated $50.0 million on construction and procurement at Mulatos. Emphasis in the second quarter 2005 was placed on completing the process systems at Mulatos and prepare for gold production. Major expenditures included $2.6 million on the leach pad, $1.7 million on power facilities, $1.0 million on equipment refurbishing and maintenance, $1.0 million on mine access and haul roads, and $0.3 million on water systems. Phase I of the leach pad was completed, and at June 30, 2005 approximately 100,000 tonnes of gold bearing material was </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR>
<BR></P>
<p style="font-family: Arial; margin: 0pt" align="center">5</p>
<P style="margin:0pt; font-family:Arial"><BR></P>
<P style="margin:0pt; font-family:Arial"><BR></P>
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<P style="page-break-before:always; margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>placed as an overliner. There is an additional 300,000 tonnes of gold-bearing material adjacent to the pad awaiting screening before being loaded to the pad. Solution ponds are in place and have been lined. Plant construction is substantially completed and is in commissioning phase. Power is currently being supplied by on site generators.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>In the three months ended June 30, 2005, equipment purchases and installations amounted to $3.3 million and included $2.5 million on the three-stage crusher and conveyor system.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>&nbsp;In the second quarter of 2005, the Company recorded an increase of $114,000 in its valuation of asset retirement obligations (AROs), based on ongoing development work at Mulatos. This valuation reflects the discounted cash flows anticipated for future removal and site restoration and is added to the cost of the relevant mineral property. </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Capital Resources and Liquidity</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>In February &nbsp;2005, the Company issued $40.3 million (C$50 million) 5.5% convertible unsecured subordinated debentures maturing on February 15, 2010, net of a 3.5% underwriters&#146; fee. The debentures bear interest at an annual rate of 5.5%, payable semi-annually in arrears on February 15 and August 15 of each year. The debentures are convertible into common shares at a rate of 188.6792 common shares for each C$1,000 principal amount of debentures. In certain circumstances, the debentures may be redeemed in whole or in part at the option of the company after February 15, 2008.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The debentures are classified as a liability, with the exception of the portion relating to their conversion features, which are classified as an equity component, resulting in the carrying value of the debentures being less than their face value.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company ended June 30, 2005 with $35.7 million in cash and cash equivalents compared with $28.1 million (which includes short-term investments) at December 31, 2004. The Company also had $2.3 million in funds set aside to pay the first year estimated interest on the convertible debentures, in accordance with the terms of the trust indenture. At June 30, 2005 the estimated cost to complete the Mulatos project construction and procurement was approximately $25 million.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>At June 30, 2005, the Company had $44.1 million in working capital, an increase from working capital of $29.0 million at December 31, 2004. Cash, &nbsp;cash equivalents and short-term investments increased by $7.4 million from December 2004 balances. &nbsp;The increase in cash and short-term investments resulted primarily from funds received from the $40.3 million convertible debenture issue in February 2005, and from the receipt of $1.1 million from the exercise of warrants and stock options. Payables increased from $1.0 million at December 2004 to $2.5 million at June 2005 (unchanged from March 2005) in response to increased construction activities at Mulatos. The other significant changes in working capital resulted from: the increase in contractor advances, to support equipment mobilization and deposits, from $1.7 million to $4.1 million; classification of sales tax recoverable o
f $3.4 million as a current asset </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR>
<BR></P>
<p style="font-family: Arial; margin: 0pt" align="center">6</p>
<P style="margin:0pt; font-family:Arial"><BR></P>
<P style="margin:0pt; font-family:Arial"><BR></P>
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<P style="page-break-before:always; margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>reflecting a more timely collection outlook; and inventory of gold-in-process of $0.5 million reflecting the cost of pad-loading and stockpiling of gold-bearing material undergoing processing into a gold/silver dore product.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company is adequately funded to carry out further development work at Mulatos. It has an exploration budget of $6 million for the year (of which $1.0 million has been spent to date) and expects to have a working capital requirement of up to $5 million or more throughout 2005, depending on the level of gold in-process inventory, inventory of spare parts, and the timing of recovery of refundable sales taxes, down from the current level of $8 million which includes short-term contractor advances. First gold pour was achieved on July 20 2005, although sustained production at the feasibility rate is expected before year end. The Company expects to generate some cash flow from operations prior to completing construction at Mulatos.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Strategic Outlook</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>In the second quarter of 2005 the Company focused on completing the processing systems at the Mulatos mine, and continued development drilling adjacent to the Mulatos deposit at El Salto and Mina Vieja and in the adjoining Escondida-El Victor mineralized areas. The Company expects to have a revised reserve model in the third quarter 2005 which will incorporate drilling results at El Salto and Mina Vieja.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company continues to advance the Escondida-El Victor underground drift development to a total of 1,700 meters and to develop drill sites along the drift. As results warrant, Escondida-El Victor will be incorporated into a revised reserve model some time in the first half of 2006.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>At Los Bajios, the site of exploration drilling in 2004, the Company completed a 3D IP survey. Targets are being developed for drill testing. The Company also plans to test targets at El Jaspe in the third quarter 2005.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Off-Balance Sheet Arrangements</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company has entered into agreements to acquire $16.0 million Canadian dollars in 2007 at a fixed price to offset a portion of its Canadian dollar debenture liability which is not offset by Canadian dollars on deposit. As at June 30, 2005, the Company has recorded an unrealized gain of $325,000 on these contracts. Subsequent to the end of the second quarter 2005, the Company entered into an agreement to acquire an additional $6 million Canadian dollars at a fixed price.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR>
<BR></B></P>
<p style="font-family: Arial; margin: 0pt" align="center">7</p>
<P style="margin:0pt; font-family:Arial"><BR></P>
<P style="margin:0pt; font-family:Arial"><BR></P>
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<P style="page-break-before:always; margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Commitments Table (by period) </B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The following table lists as at June 30, 2005 information with respect to the Company&#146;s contractual obligations.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=169.867>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=418.133 colspan=5><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>Payments due by period</B></P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=169.867><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt"><B><BR>
<BR>
Contractual Obligations ($)</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=91.733><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>Total</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=82.333><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>Less than 1 year</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>1- 3 <BR>
years</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>3 &#150; 5 years</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=71.133><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=center><B>More than 5 years</B></P>
</TD><A NAME="OLE_LINK3"></A><A NAME="OLE_LINK4"></A></TR>
<TR><TD valign=top width=169.867><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt"><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Long-Term Debt Obligations<A NAME="OLE_LINK1"></A><A NAME="OLE_LINK2"></A><FONT FACE="Times New Roman Bold"><B><SUP>(1)</SUP></B></FONT></P>
</TD><TD valign=bottom width=91.733><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;52,030,000 </P>
</TD><TD valign=bottom width=82.333><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;2,240,000 </P>
</TD><TD valign=bottom width=86.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>4,490,000 </P>
</TD><TD valign=bottom width=86.467><P style="margin:0pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>&nbsp;45,300,000 </P>
</TD><TD valign=top width=71.133><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD></TR>
<TR><TD valign=top width=169.867><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Purchase Obligations<FONT FACE="Times New Roman Bold"><B><SUP>(2)</SUP></B></FONT></P>
</TD><TD valign=top width=91.733><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>8,000,000</P>
</TD><TD valign=top width=82.333><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>8,000,000</P>
</TD><TD valign=top width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD valign=top width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD valign=top width=71.133><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD></TR>
<TR><TD valign=top width=169.867><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Future currency purchases</P>
</TD><TD valign=top width=91.733><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>13,000,000</P>
</TD><TD valign=top width=82.333><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD valign=top width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>13,000,000</P>
</TD><TD valign=top width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD valign=top width=71.133><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD></TR>
<TR><TD valign=top width=169.867><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Liabilities reflected on the Company&#146;s Balance Sheet under the GAAP of the primary financial statements <FONT FACE="Times New Roman Bold"><B><SUP>(3)</SUP></B></FONT> </P>
</TD><TD valign=top width=91.733><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>700,000</P>
</TD><TD valign=top width=82.333><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD valign=top width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD valign=top width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD valign=top width=71.133><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; font-family:Arial; font-size:9pt" align=right><BR></P>
<P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>700,000</P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=169.867><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Others </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=91.733><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=82.333><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt" align=right>-</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=71.133>&nbsp;</TD></TR>
<TR><TD valign=top width=169.867><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt"><B>Total</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=91.733><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Times New Roman Bold; font-size:9pt" align=right><B>73,730,000</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=82.333><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Times New Roman Bold; font-size:9pt" align=right><B>10,240,000</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Times New Roman Bold; font-size:9pt" align=right><B>17,490,000</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=86.467><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Times New Roman Bold; font-size:9pt" align=right><B>45,300,000</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=71.133><P style="margin-top:0.75pt; margin-bottom:0.75pt; padding-right:9pt; line-height:11pt; font-family:Times New Roman Bold; font-size:9pt" align=right><B>700,000</B></P>
</TD></TR>
</TABLE>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin-top:4.5pt; margin-bottom:0pt; padding-left:36pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Contractual obligations exclude expenses, except as noted, of a fixed nature expected to be incurred in the normal course of operations.</P>
<P style="margin-top:4.5pt; margin-bottom:-11pt; padding-left:72pt; padding-right:9pt; text-indent:-36pt; line-height:11pt; font-family:Arial; font-size:9pt">(1)&nbsp;</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Based on June 30, 2005 USD/CDN exchange rate. The Company issued CDN$50 million ($40.3 million) in convertible debentures due in February, 2010, unless converted into common shares of the Company at the option of the holder, with an annual interest rate of 5.5%. </P>
<P style="margin-top:2.25pt; margin-bottom:-11pt; padding-left:72pt; padding-right:9pt; text-indent:-36pt; line-height:11pt; font-family:Arial; font-size:9pt">(2)</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Based on contracts entered into as at June 30, 2005, out of a total estimated cost to completion of $25 million. </P>
<P style="margin-top:2.25pt; margin-bottom:-11pt; padding-left:72pt; padding-right:9pt; text-indent:-36pt; line-height:11pt; font-family:Arial; font-size:9pt">(3)</P>
<P style="margin:0pt; padding-left:72pt; padding-right:9pt; line-height:11pt; font-family:Arial; font-size:9pt">Estimated asset retirement obligations, presented on a non-discounted cash-flow basis.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Related Party Transactions</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company received consulting services from one director on a fee for services plus retainer basis, resulting in an ongoing commitment. Total contractual fees paid were $34,260 (2004 - $309,700 to a director and officer of the Company). In 2004, consulting services were subject to the terms of an annual renewable services contract for an officer and director &#150; the form of this services contract was discontinued in the fourth quarter of 2004. These transactions have occurred in the normal course of operation and are measured at their fair value.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Outstanding Share Data</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company has one class of common shares: as of August 2, 2005, there were 77,297,418 common shares outstanding.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company has a stock option plan: as of August 2, 2005, there were 4,780,983 stock options granted and outstanding, all of which have vested.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR>
<BR></P>
<p style="font-family: Arial; margin: 0pt" align="center">8</p>
<P style="margin:0pt; font-family:Arial"><BR></P>
<P style="margin:0pt; font-family:Arial"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company has outstanding as of August 2, 2005, 4,896,000 share purchase warrants. </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The Company has outstanding as of August 2, 2005, face value of CDN$50,000,000 convertible debentures. </P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><B><BR></B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify><B>Risk and Uncertainties</B></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Except for historical information contained in this discussion and analysis, disclosure statements contained herein are forward-looking, as defined in the United States <U>Private Securities Litigation Reform Act of 1995</U>. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those in such forward-looking statements. </P>
<P style="margin-top:11pt; margin-bottom:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>This MD&amp;A contains forward-looking statements concerning the Company's plans for its properties and other matters. &nbsp;These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.</P>
<P style="margin-top:11pt; margin-bottom:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>Statements concerning reserves and mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of mineral resources or mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. &nbsp;Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as &quot;expects&quot; or &quot;does not expect&quot;, &quot;is expected&quot;, &quot;anticipates&quot; or &quot;does not anticipate&quot;, &quot;plans&quot;, &quot;estimates&quot; or &quot;intends&quot;, or stat
ing that certain actions, events or results &quot;may&quot;, &quot;could&quot;, &quot;would&quot;, &quot;might&quot; or &quot;will&quot; be taken, occur or be achieved) are not statements of historical fact and may be &quot;forward-looking statements.&quot; &nbsp;Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements.</P>
<P style="margin-top:11pt; margin-bottom:0pt; padding-left:36pt; padding-right:9pt; line-height:13pt; font-family:Arial; font-size:11pt" align=justify>The nature of risks and uncertainties are discussed more fully in the Annual Information Form filed by the Company and in the December 31, 2004 MD&amp;A and apply to this period under review.</P>
<P style="margin-top:11pt; margin-bottom:0pt; padding-left:36pt; padding-right:9pt; font-family:Arial; font-size:11pt" align=justify><BR>
<BR></P>
<p style="font-family: Arial; margin: 0pt" align="center">9</p>
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