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<SEC-DOCUMENT>0001137171-04-000263.txt : 20040309
<SEC-HEADER>0001137171-04-000263.hdr.sgml : 20040309
<ACCEPTANCE-DATETIME>20040309171252
ACCESSION NUMBER:		0001137171-04-000263
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040309
FILED AS OF DATE:		20040309

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ELDORADO GOLD CORP                                      /FI
		CENTRAL INDEX KEY:			0000918608
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31522
		FILM NUMBER:		04658083

	BUSINESS ADDRESS:	
		STREET 1:		920 - 1055
		STREET 2:		WEST HASTINGS STREET
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6E 2E9

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ELDORADO CORP LTD                                       /FI
		DATE OF NAME CHANGE:	19960701
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>eldorado6k0309.htm
<TEXT>
<HTML>
<HEAD>
   <TITLE>Filed by Filing Services Canada Inc.  403-717-3898</TITLE>
   <META name="HandheldFriendly" content="true">
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<BODY bgcolor="#ffffff">
<A name="page_1"></A>

<P align="right">
&nbsp;
</P>

<h1 align="center"><font face="Times New Roman, Times, Serif" size="3"><b>FORM
6K</b></font></h1>
<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --><a name="A002"></a>
<p align="center"><font face="Times New Roman, Times, Serif" size="3">UNITED
STATES<br>
SECURITIES AND EXCHANGE COMMISSION<br>
Washington, D.C. 20549</font></p>
<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" --><a name="A004"></a>
<p align="center"><font face="Times New Roman, Times, Serif" size="3"><b>Report
of Foreign Issuer<br>
<br>
<br>
Pursuant to Rule 13a-16 or 15d-16 of<br>
the Securities Exchange Act of 1934</b></font></p>
<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" --><a name="A008"></a>
<p><font face="Times New Roman, Times, Serif" size="2">For the month of&nbsp;<b>January
27, 2004</b></font></p>
<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<p><font face="Times New Roman, Times, Serif" size="2">Commission File
Number&nbsp;<b>001-31522</b></font></p>
<br>
<table cellspacing="0" cellpadding="0" width="100%" border="0">
  <tr>
    <td align="center"><font face="Times New Roman, Times, Serif" size="4"><b>Eldorado
      Gold Corporation</b></font></td>
  </tr>
  <tr>
    <td align="center"><font face="Times New Roman, Times, Serif" size="2">(Translation
      of registrant's name into English)</font></td>
  </tr>
</table>
<br>
<table cellspacing="0" cellpadding="0" width="100%" border="0">
  <tr>
    <td align="center"><font face="Times New Roman, Times, Serif" size="3"><b>Suite
      920 - 1055 West Hasting Street<br>
      Vancouver, British Columbia&nbsp;&nbsp;V6E 2E9</b></font></td>
  </tr>
  <tr>
    <td align="center"><font face="Times New Roman, Times, Serif" size="2">(Address
      of principal executive offices)</font></td>
  </tr>
</table>
<br>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<p><font face="Times New Roman, Times, Serif" size="2">Indicate by check mark
whether the registrant files or will file annual reports under cover Form 20-F
or Form 40-F</font></p>
<table cellspacing="0" cellpadding="0" width="500" border="0">
  <tr>
    <td width="15%"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font></td>
    <td align="right" width="10%"><font face="Times New Roman, Times, Serif"
      size="2">Form 20-F</font></td>
    <td align="middle" width="5%"><font face="Times New Roman, Times, Serif"
      size="2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></td>
    <td align="right" width="10%"><font face="Times New Roman, Times, Serif"
      size="2">Form 40-F</font></td>
    <td align="middle" width="5%"><font face="Times New Roman, Times, Serif"
      size="2"><u>&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;</u></font></td>
  </tr>
</table>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<p><font face="Times New Roman, Times, Serif" 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):&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
<!-- MARKER FORMAT-SHEET="Para Flush Level 1" FSL="Default" -->
<table cellspacing="0" cellpadding="0" width="100%">
  <tr valign="top">
    <td width="5%"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font></td>
    <td width="95%"><font face="Times New Roman, Times, Serif" size="2"><b>Note:</b>&nbsp;&nbsp;Regulation
      S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if
      submitted solely to provide an attached annual report to security holders.</font></td>
  </tr>
</table>
<br>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<p><font face="Times New Roman, Times, Serif" 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):&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
<!-- MARKER FORMAT-SHEET="Para Flush Level 1" FSL="Default" -->
<table cellspacing="0" cellpadding="0" width="100%">
  <tr valign="top">
    <td width="5%"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font></td>
    <td width="95%"><font face="Times New Roman, Times, Serif" size="2"><b>Note:
      </b>Regulation&nbsp;S-T Rule&nbsp;101(b)(7) only permits the submission in
      paper of a Form&nbsp;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 press release, is 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&nbsp;6-K submission
      or other Commission filing on EDGAR.</font></td>
  </tr>
</table>
<br>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<p><font face="Times New Roman, Times, Serif" 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>
<table cellspacing="0" cellpadding="0" width="500" border="0">
  <tr>
    <td width="25%"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font></td>
    <td width="5%"><font face="Times New Roman, Times, Serif" size="2">Yes</font></td>
    <td width="10%"><font face="Times New Roman, Times, Serif" size="2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></td>
    <td width="5%"><font face="Times New Roman, Times, Serif" size="2">No</font></td>
    <td width="15%"><font face="Times New Roman, Times, Serif" size="2"><u>&nbsp;&nbsp;
      X&nbsp;&nbsp;</u></font></td>
  </tr>
</table>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<p><font face="Times New Roman, Times, Serif" 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 ---<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
<br>
<br>
<!-- MARKER PAGE="sheet: 1; page: 1" -->
<hr color="gray" noshade size="5">
<br>
<br>
<!-- MARKER FORMAT-SHEET="H1" FSL="Default" -->
<h1 align="center"><font face="Times New Roman, Times, Serif" size="2"><u>SIGNATURE</u></font></h1>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<p><font face="Times New Roman, Times, Serif" 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>
<table cellspacing="0" cellpadding="0" width="600" border="0">
  <tr>
    <td width="50%"><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font></td>
    <td width="50%"><font face="Times New Roman, Times, Serif" size="2"><b>ELDORADO
      GOLD CORPORATION</b></font></td>
  </tr>
</table>
<br>
<br>
<table cellspacing="0" cellpadding="0" width="600" border="0">
  <tr>
    <td width="50%"><font face="Times New Roman, Times, Serif" size="2">Date:&nbsp;&nbsp;
      January 27, 2004</font></td>
    <td width="50%"><font face="Times New Roman, Times, Serif" size="2"><u>/s/
      Dawn
      Moss&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;</u><br>
      Dawn Moss, Corporate Secretary</font></td>
  </tr>
</table>
<br>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Book Antiqua; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Book Antiqua; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Book Antiqua; font-size:12pt"><B>NEWS RELEASE</B></P>
<B><P style="margin:0pt; text-indent:324pt; line-height:14pt; font-family:Book Antiqua; font-size:12pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ELDORADO No. 04-02</B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-right:-22.5pt; line-height:14pt; font-family:Arial; font-size:12pt"><B>TSX: ELD &nbsp;AMEX: EGO </B></P>
<B><P style="margin-top:0pt; margin-bottom:-14pt; padding-right:-22.5pt; text-indent:252pt; line-height:14pt; font-family:Arial; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-right:-22.5pt; text-indent:288pt; line-height:14pt; font-family:Arial; font-size:12pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
<P style="margin:0pt; padding-right:-22.5pt; text-indent:324pt; line-height:14pt; font-family:Arial; font-size:12pt" align="right"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
<P style="margin:0pt; padding-right:-22.5pt; text-indent:324pt; line-height:14pt; font-family:Arial; font-size:12pt" align="right">&nbsp;</P>
<P style="margin:0pt; padding-right:-22.5pt; text-indent:324pt; line-height:14pt; font-family:Arial; font-size:12pt" align="right">&nbsp;</P>
<P style="margin:0pt; padding-right:-22.5pt; text-indent:324pt; line-height:14pt; font-family:Arial; font-size:12pt" align="right"><B>&nbsp;&nbsp;March 9, 2004</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; font-family:Book Antiqua; font-size:11pt"><BR></P>
<P style="margin:0pt; font-family:Book Antiqua; font-size:11pt"><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Book Antiqua; font-size:11pt" align=center><B>2003 FINANCIAL RESULTS</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Book Antiqua; font-size:11pt" align=center>(all figures in United States dollars)</P>
<P style="margin:0pt; font-family:Book Antiqua; font-size:11pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>VANCOUVER, BC - Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation (&#147;Eldorado&#148; the &#147;Company&#148; or &#147;we&#148;) provides its report on the financial results of the Company for the year ended December 31, 2003.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; padding-right:-22.5pt; line-height:14pt; font-family:Arial; font-size:12pt"><B><I>2003 Highlights</I></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:18pt; text-indent:-18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align=justify></P>
<ul>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">Net loss of $45.0 &nbsp;million or $0.20 &nbsp;cents per common share</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">Year end cash balance $105.5 million</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">Working capital of $107.1 &nbsp;million</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt"><FONT FACE="Times New Roman">Company adopts Canadian Handbook sections 3063 &#147;Impairment of Long-Lived Assets &#148;and section 3110 &#147; Asset Retirement Obligations &#148;</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">95,049 ounces of gold produced &nbsp;at cash cost of &nbsp;$234 &nbsp;per ounce</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">Equity raised &nbsp;$55.3 million to construct Kisladag Mine Project in Turkey</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">Convertible debenture repaid</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">Company remains debt and hedge free</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">Increased reserves to 6.6 million ounces of gold</FONT></li>
  <li>
    <p style="margin:0pt; padding-left:18pt; line-height:14pt; font-family:Symbol; font-size:12pt" align="justify"><FONT FACE="Times New Roman">Agreement with China National Gold Group Corporation (&#147;CNGC&#148;)</FONT></li>
</ul>
<p style="margin:0pt; font-family:Times New Roman; font-size:12pt" align="justify"><BR></p>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>2003 Results</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Eldorado today reported a net loss of $45.0 million or $0.20 cents per common share. $44.6 million of the net loss is a direct result of three significant non-cash write-downs; the S&#227;o Bento Mine $39.5 million; the Kaymaz Gold Project $4.3 million; and obsolete equipment inventories $0.8 million. This compares with a net profit of $1.8 million or $0.01 per common share in 2002. &nbsp;For the year, the Company realized an average gold price of $361 per ounce for 95,544 ounces of gold sold compared to $306 per ounce for 99,659 ounces of gold sold in 2002. &nbsp;Eldorado raised $78.6 million in 2003, repaid its convertible debenture and remains debt free and unhedged.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>For the purposes of calculating the net asset value of S&#227;o Bento, which resulted in a write-down of $39.5 million, the Company used only proven and probable reserves in its calculations. &nbsp;During 2003, 2,500 meters of infill drilling and 15,000 meters of exploration drilling were completed. &nbsp;Deeper drilling (below the 32<SUP>nd</SUP> Level) has identified a metabasite intrusive complicating continuity of mineralization at depth. &nbsp;The Company elected not to use inferred resources in determining the carrying value at S&#227;o Bento. However, the ore body remains open at depth and drilling continues in 2004 with 18,000 meters planned to further extend resources. </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Operating Performance</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:12pt; margin-bottom:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Eldorado&#146;s cash costs in 2003 were $234 per ounce, an increase of $50 per ounce compared to 2002. &nbsp;Production of 95,049 ounces of gold for the year ending December 31, 2003 compares to production of 103,533 per ounces of gold in 2002. &nbsp;The decreased production in 2003 is the result of the S&#227;o Bento Shaft Deepening Project, which is scheduled for completion in 2005. The Shaft Deepening Project will provide the opportunity for the Company to extend the profitable life of the Mine and enable the maximum recovery of the existing resource and provide the infrastructure for extending beyond the existing resource base. &nbsp;Contributing to the higher cash costs are the interference to mining operations caused by the Shaft Deepening Project, an 18% appreciation of the Brazilian Real, higher inflation and increased ore transportation costs as the mining extends further below 
the bottom of the present shaft.</P>
<P style="margin-top:12pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>In &nbsp;2003, the Company generated cash flow from operations of $3.6 million. &nbsp;The total cash cost in 2003 of produced ounces was $241 per ounce, 27.5% or $52 per ounce higher than the total cash cost in 2002.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Accounting Policy</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Consistent with the disclosure contained in the Company&#146;s Notes to the 2002 Audited Financial Statements, effective 2003, the Company has adopted two new sections from the Canadian Institute of Chartered Accountants (&#147;CICA&#148;) Handbook Section 3063, Impairment of Long-Lived Assets (&#147;CICA 3063&#148;) and Section 3110, Asset Retirement Obligations (&#147;CICA 3110&#148;). &nbsp;&nbsp;In addition, the Company has also adopted, effective 2003, the fair value based method of accounting for stock based compensation via the early application of recommendations contained in CICA 3870.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>&#147;2003 was a year of achievement for
Eldorado,&#148; commented Paul Wright, President and Chief Executive Officer. &#147;We&#146;ve strengthened our balance sheet, advanced our Kisladag Project and increased our proven and probable reserves to 6.6 million ounces while increasing our resources to 11.3 million ounces. We have broadened our shareholder base, increased our share value in 2003 by 96% from Cdn$2.07 to Cdn$4.05 and provided added visibility as we continue with our plan of controlled, profitable and sustainable growth.&#148; &nbsp;</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>&#147;In 2004 we look forward to beginning construction of the Kisladag Mine, advancing our new China initiative by continuing our review of CNGC portfolio of assets and advancing our exploration projects in Brazil and Turkey. At S&#227;o Bento we plan to produce 95,000 ounces at cash cost of $245.&#148; &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Eldorado is a gold producing and exploration company with gold assets in Brazil and Turkey; two countries that we believe have enormous geological potential. With our international expertise in mining, finance and project development, together with highly skilled and dedicated staff, we believe that Eldorado is well positioned to grow in value as we create and pursue new opportunities.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ON BEHALF OF</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>ELDORADO GOLD CORPORATION</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B><I>&#147;Earl W. Price&#148;</I></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Earl W. Price</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Chief Financial Officer</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><I>The terms &#147;Mineral Reserve&#148;, &#147;Proven Mineral Reserve&#148; and &#147;Probable Mineral Reserve&#148; used in this release are Canadian mining terms as defined in accordance with National Instrument 43-101 &#150; Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the &#147;CIM&#148;) Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council on August 20, 2000 as may be amended from time to time by the
CIM. &nbsp;These definitions differ from the definitions in the United States Securities &amp; Exchange Commission (&#147;SEC&#148;) Guide 7. &nbsp;In the United States, a mineral reserve is defined as a part of a mineral deposit which could be economically and legally extracted or produced at the time the mineral reserve determination is made</I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=justify><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><I>The terms &#147;Mineral Resource&#148;, &#147;Measured Mineral Resource&#148;, &#147;Indicated Mineral Resource&#148;, &#147;Inferred Mineral Resource&#148; used in this release are Canadian mining terms as defined in accordance with National Instruction 43-101 &#150; Standards of Disclosure for Mineral Projects under the guidelines set out in the CIM Standards. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.</I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><I>For a detailed discussion of resource and reserve estimates and related matters see the Company&#146;s technical reports, including the Annual Information Form and other reports filed under the Company&#146;s name at
www.sedar.com. &nbsp;A qualified person has verified the data contained in this release.</I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=justify><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><I>Note to U.S. Investors. &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 standards in the United States and normally are not permitted to be used in reports and registration statements filed with the SEC. &nbsp;As such, information contained in this news release concerning descriptions of &nbsp;mineralization and resources under Canadian standards may not be comparable to similar information made public by U.S companies in SEC filings. &nbsp;With respect to &#147;indicated mineral resource&#148; and &#147;inferred mineral resource&#148; there is &nbsp;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 a
ll or any part of an &#147;indicated mineral resource&#148; or &#147;inferred mineral resource&#148; will ever be</I> <I>upgraded toa higher category. &nbsp;Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.</I></P>
<P style="margin:0pt; padding-right:-22.5pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><I>Certain of the statements made may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. 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. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward looking statements. &nbsp;Specific reference is made to &#147;Narrative Description of the Business &#150; Risk Factors&#148; in the 
Company&#146;s Annual Information Form. &nbsp;Forward-looking statements in this release include statements regarding the expectations and beliefs of management, the assumed long-term price of gold, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the potential of Eldorado&#146;s properties and expectations of growth. &nbsp;We do not expect to update forward-looking statements continually as conditions change and you are referred to the full discussion of the Company&#146;s business contained in the Company&#146;s reports filed with the securities regulatory authorities.</I></P>
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<P style="margin:0pt; padding-right:-22.5pt; font-family:Times New Roman; font-size:12pt" align=justify>&nbsp;</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Eldorado Gold Corporation&#146;s shares trade on the Toronto Stock Exchange
(TSX: ELD) and the American Stock Exchange (AMEX: EGO). &nbsp;The TSX has neither approved nor disapproved the form or content of this release.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Contact:</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Nancy E. Woo, Manager Investor Relations </P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Eldorado Gold Corporation</P>
<P style="margin:0pt; text-indent:432pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Phone: 604.601.6650 or 1.888.353.8166</P>
<P style="margin:0pt; text-indent:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>&nbsp;920-1055 W. Hastings St., </P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Fax: 604.687.4026</P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Vancouver, BC V6E 2E9</P>
<P style="margin:0pt; text-indent:432pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Email
<FONT COLOR=#0000FF><U>nancyw@eldoradogold.com</U></FONT> </P>
<P style="margin:0pt; text-indent:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Web site: <FONT COLOR=#0000FF><U>www.eldoradogold.com</U></FONT> </P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Request for information packages:
<FONT COLOR=#0000FF><U>info@eldoradogold.com</U></FONT> </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>

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<FONT size=2>
<B>December 31, 2003</B></FONT>
</P>
    </td>
    <td width="50%" height="125" valign="bottom" style="border-left: 1 solid #000000">
      <p style="text-indent: 10pt">
<B><FONT size=2>Report to Shareholders</FONT></B></td>
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    <td width="50%" height="589"></td>
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<B><FONT size=2>Suite 920, Guinness Tower&nbsp; </FONT></B>
</P>
<P style="text-indent: 0; margin: 0">
<B><FONT size=2> 1055 West Hastings Street&nbsp; </FONT></B>
</P>
<P style="text-indent: 0; margin: 0">
<B><FONT size=2> Vancouver, British Columbia&nbsp; </FONT></B>
</P>
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<B><FONT size=2> V6E 2E9&nbsp; </FONT></B>
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&nbsp;
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<B><FONT size=2>Phone: (604) 687-4018&nbsp; </FONT></B>
</P>
<P style="text-indent: 0; margin: 0">
<B><FONT size=2> Fax: (604) 687-4026 </FONT></B>
</P>
    </td>
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<FONT size=2>1</FONT>
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<A name="page_2"></A>

<P>
<B><FONT size=2>Management&#146;s Responsibility for Financial Reporting </FONT></B>
</P>
<P>
<FONT size=2>The financial statements and the information contained in the annual report have been prepared by and are the responsibility of Management of the Company. The financial statements have been prepared in accordance with accounting pr inciples generally accepted in Canada and reconciled to accounting principles generally accepted in the United States as set out in note 16 and, where appropriate, reflect management&#146;s best estimates and judgements based on currently available information. </FONT>
</P>
<P>
<FONT size=2>The Audit Committee of the Board of Directors, consisting of three members, meets periodically with management and the independent auditors to review the scope and results of the annual audit and to review the financial statements and related financial reporting matters prior to submitting the financial statements to the Board for approval. </FONT>
</P>
<P>
<FONT size=2>The Company has developed and maintains a system of control to provide reasonable assurance that financial information is accurate and reliable. </FONT>
</P>
<P>
<FONT size=2>The Company&#146;s independent auditors, PricewaterhouseCoopers LLP were appointed by the shareholders to conduct an audit in accordance with Canadian generally accepted auditing standards and their report follows. </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="38%"><B><I><FONT size=2>&#147;Earl W. Price&#148;</FONT></I></B></TD>
   <TD width="62%"><B><I><FONT size=2>&#147;Paul N. Wright&#148;</FONT></I></B></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="38%"><FONT size=2>Earl Price</FONT></TD>
   <TD width="62%"><FONT size=2>Paul Wright</FONT></TD>
</TR>
<TR>
   <TD width="38%"><FONT size=2>Chief Financial Officer</FONT></TD>
   <TD width="62%"><FONT size=2>President and Chief Executive Officer</FONT></TD>
</TR>
</TABLE><P>
<FONT size=2>February 20, 2004 </FONT>
</P>
<P>
<B><FONT size=2>AUDITORS&#146; REPORT </FONT></B>
</P>
<P>
<B><FONT size=2>To the Shareholders of Eldorado Gold Corporation </FONT></B>
</P>
<P>
<FONT size=2>We have audited the consolidated balance sheets of Eldorado Gold Corporation as at December 31, 2003 and 2002 and the consolidated statements of operations and deficit and cash flows for the years ended December 31, 2003, 2002 and 2001. These consolidated financial statements are the responsibility of the Company&#146;s management. Our responsibility is to express an opinion on these financial statements based on our audits. </FONT>
</P>
<P>
<FONT size=2>We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. </FONT>
</P>
<P>
<FONT size=2>In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2003 and 2002 and the results of its operations and its cash flows for the years ended December 31, 2003, 2002 and 2001 in accordance with Canadian generally accepted accounting principles. </FONT>
</P>
<P>
<B><I><FONT size=2>&#147;PricewaterhouseCoopers&#148;</FONT></I></B>
</P>
<P>
<B><FONT size=2>Chartered Accountants </FONT></B>
</P>
<P>
<FONT size=2>Vancouver, BC Canada February 20, 2004</FONT>
</P>
<P align="center">
<FONT size=2>2</FONT>
</P>
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<A name="page_3"></A>

<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD colspan=2 width="53%"><B><FONT size=2>Eldorado Gold Corporation</FONT></B></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><B><FONT size=2>Consolidated Balance Sheets</FONT></B></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><B><FONT size=2>As At December 31</FONT></B></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=3 width="64%"><B><FONT size=2>(Expressed in thousands of U.S. dollars)</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>2003</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>2002</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><B><FONT size=1>ASSETS</FONT></B></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><FONT size=1>Current Assets</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;&nbsp;&nbsp;<FONT size=1>Cash and cash equivalents</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="17%"><FONT size=1>105,465</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=1>37,627</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;&nbsp;&nbsp;<FONT size=1>Accounts receivable</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>3,213</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>1,380</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;&nbsp;&nbsp;<FONT size=1>Inventories (Note 4)</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>5,623</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>5,866</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>114,301</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>44,873</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><FONT size=1>Property, plant and equipment&nbsp;&nbsp;&nbsp; (Note 3, 5)</FONT></TD>
   <TD width="15%"></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>23,784</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>64,382</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><FONT size=1>Mineral properties and deferred development&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (Note 5)</FONT></TD>
   <TD width="11%"></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>32,287</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>32,958</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><FONT size=1>Investments and advances</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>1,258</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>108</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><FONT size=1>Other assets and deferred charges</FONT></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>90</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="17%"><FONT size=1>171,630</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=1>142,411</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><B><FONT size=1>LIABILITIES</FONT></B></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><FONT size=1>Current Liabilities</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><FONT size=1>Accounts payable and accrued liabilities</FONT></TD>
   <TD width="11%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="17%"><FONT size=1>7,164</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=1>8,225</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>7,164</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>8,225</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><FONT size=1>Asset retirement obligation (Note 3, 6)</FONT></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>7,172</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>6,766</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><FONT size=1>Contractual severance obligation</FONT></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>318</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><FONT size=1>Deferred gain (loss) (Note 7)</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>(329)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>1,957</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;&nbsp;&nbsp;<FONT size=1>Future income taxes (Note 11)</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>3,830</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>196</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;&nbsp;&nbsp;<FONT size=1>Convertible debentures&nbsp;&nbsp;
    (Note 8)</FONT></TD>
   <TD width="15%"></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>6,796</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>18,155</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>23,940</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><B><FONT size=1>SHAREHOLDERS' EQUITY</FONT></B></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;&nbsp;&nbsp;<FONT size=1>Share capital (Note 9)</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>444,665</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>366,046</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;&nbsp;&nbsp;<FONT size=1>Contributed surplus</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>1,094</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><FONT size=1>Stock based compensation (Note 3, 9)</FONT></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>1,418</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><FONT size=1>Equity portion of convertible debentures&nbsp;&nbsp;
    (Note 8)</FONT></TD>
   <TD width="11%"></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>1,094</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;&nbsp;&nbsp;<FONT size=1>Deficit</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>(293,702)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>(248,669)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="17%"><FONT size=1>153,475</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=1>118,471</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="39%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="17%"><FONT size=1>171,630</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=1>142,411</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="53%"><FONT size=1>Commitments and Contingencies (Note 12)</FONT></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><FONT size=2>Approved by the Board</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><B><I><FONT size=2>"Robert Gilmore"</FONT></I></B></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%"><B><I><FONT size=2>"Paul Wright"</FONT></I></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="39%"><FONT size=2>Director</FONT></TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="17%"><FONT size=2>Director</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
</TABLE><P align="center">
<FONT size=2>3</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_4"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>Eldorado Gold Corporation</FONT></B>
</P>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>Consolidated Statements of Operations and Deficit&nbsp;</FONT></B>
</P>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2> For The Years Ended December 31</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>(Expressed in thousands of U.S. dollars except per share amounts)</FONT></B>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="60%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>2003</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>2002</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>2001</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%"><B><FONT size=1>Revenue</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Gold sales</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>36,814</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>34,051</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=1>34,443</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Interest and other income</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>1,415</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>5,245</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>944</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>38,229</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>39,296</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>35,387</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%"><B><FONT size=1>Expenses</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Operating costs</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>22,604</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>19,027</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>23,446</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Depletion, depreciation and amortization</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>10,321</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>10,699</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>9,353</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>General and administrative</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>4,961</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>3,238</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>3,296</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Exploration expense</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>1,956</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>1,078</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>508</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Interest and financing costs</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>569</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>1,156</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>2,655</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Loss (gain) on settlement of convertible debenture (Note 8)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>227</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(463)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Stock based compensation expense</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>1,418</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Accretion expense</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>406</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>383</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>361</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Foreign exchange loss (gain)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(6,494)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>1,046</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>173</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>35,968</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>36,164</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>39,792</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%"><FONT size=1>Profit (loss) before the undernoted items</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>2,261</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>3,132</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>(4,405)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Writedown of assets</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(44,645)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(415)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>(24)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Reorganization costs</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>(406)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>(Loss) gain on disposals of property, plant and equipment</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(186)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(205)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>74</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%"><B><FONT size=1>(Loss) Profit before income taxes</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(42,570)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>2,512</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>(4,761)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Taxes (Note 11)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Current</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>1,107</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(1,121)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>(155)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Future</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(3,570)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>387</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>465</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>Net (loss) income for the year</FONT></B></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(45,033)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>1,778</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=1>(4,451)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Deficit at the beginning of the year:</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>As previously reported</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(247,649)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(249,785)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>(245,389)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Change in accounting policy (Note 3)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(1,020)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(662)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>(607)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>As restated</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(248,669)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(250,447)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=1>(245,996)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=1>Deficit at the end of the year</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(293,702)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(248,669)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=1>(250,447)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>Weighted average number of shares outstanding</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>221,770,349</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>147,597,481</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=1>99,736,407</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>Basic (loss) Income per share - U.S.</FONT></B></TD>
   <TD align="center" width="1%"><B><FONT size=1>$</FONT></B></TD>
   <TD align="right" width="11%"><FONT size=1>$ (0.20)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=1>(0.04)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>Basic (loss) Income per share - CDN.$ - (yearly avg. rate)</FONT></B></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(0.28)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>0.02</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=1>(0.06)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>Diluted (loss) Income per share - U.S.</FONT></B></TD>
   <TD align="center" width="1%"><B><FONT size=1>$</FONT></B></TD>
   <TD align="right" width="11%"><FONT size=1>$ (0.20)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=1>(0.04)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P align="center">
<FONT size=2>4</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_5"></A>

<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="67%"><B><FONT size=2>Eldorado Gold Corporation</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=2>Consolidated Statements of Cash Flows</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=2>For The Years Ended December 31</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=2>(Expressed in thousands of U.S. dollars)</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>2003</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>2002</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>2001</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=1>Cash flows from operating activities</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><FONT size=1>Net (loss) income for the year</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>(45,033)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>1,778</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>(4,451)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><FONT size=1>Items not affecting cash</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Depletion, depreciation and amortization</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>10,321</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>10,699</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>9,353</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Future income taxes</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>3,570</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(387)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(465)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Writedown of assets</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>44,929</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>415</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>24</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Loss (Gain) on disposals of property, plant and equipment</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>205</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(74)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Loss (Gain) on settlement of convertible debenture (Note 8)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>227</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(463)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Interest and financing costs</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>127</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>249</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>373</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Amortization of hedging gain</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(2,286)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(3,550)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(2,791)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Stock based compensation expense</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>1,418</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Contractual severance expense</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>318</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Accretion expense</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>406</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>383</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>361</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Foreign exchange (gain) loss</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(6,850)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>1,784</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>789</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>7,147</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>11,113</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>3,119</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;<FONT size=1>(Increase) Decrease in accounts receivable</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(1,833)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>1,585</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>277</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;<FONT size=1>(Increase) decrease in inventories</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(607)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(425)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>293</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;<FONT size=1>(Decrease) Increase in accounts payable and accrued liabilities</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(1,061)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(2,985)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>5,250</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;<FONT size=1>Liquidation of hedges</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>4,090</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>3,646</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>9,288</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>13,029</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=1>Cash flow from investing activities</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Property, plant and equipment</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(9,391)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(5,334)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(4,513)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Proceeds from disposals of property, plant and equipment</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>64</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>231</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Mineral properties and deferred development</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(3,604)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(2,285)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(1,231)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Investments and advances</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(1,196)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>37</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>61</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Proceeds from disposals of investments and advances</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>70</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Restricted cash</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>475</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>6,578</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(14,191)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(7,043)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>1,196</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=1>Cash flow from financing activities</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Repayment of long-term debt</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(15,476)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(10,660)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Repayment of convertible debentures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(7,150)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Issue of common shares:</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Voting - for cash</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>78,619</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>47,966</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>5</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Other assets and deferred charges</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(95)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(295)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>71,469</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>32,395</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(10,950)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=1>Foreign exchange gain (loss) on cash held in foreign currency</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>6,914</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(1,765)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>(823)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=1>Net Increase (decrease) in cash and cash equivalents</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>67,838</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>32,875</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>2,452</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><FONT size=1>Cash and cash equivalents at beginning of the year</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>37,627</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>4,752</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>2,300</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=1>Cash and cash equivalents at end of the year</FONT></B></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>105,465</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>37,627</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>4,752</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><B><FONT size=1>Supplemental cash flow information</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><FONT size=1>Interest paid</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>541</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>937</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>1,725</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="67%"><FONT size=1>Income tax paid</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>242</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>382</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>102</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P align="center">
<FONT size=2>5</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_6"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B>1.</B>&nbsp;<B>Nature of operations </B>
</P>
<P>
<FONT size=2>Eldorado Gold Corporation (&#147;Eldorado&#148;, or &#147;Company&#148;) is engaged in gold mining and related activities, including exploration and development, extraction, processing and reclamation. Gold, the primary product, is produced in Brazil. Exploration activities are carried on in Brazil, Turkey and China. </FONT>
</P>
<P>
<FONT size=2>The Company has not determined whether all its development properties contain ore reserves that are economically recoverable. The recoverability of the amount shown for mineral properties and deferred development is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing, licenses and permits to complete the exploration and development of its properties, and upon future profitable production or proceeds from the disposition of the properties. The amounts shown as mineral properties and deferred development represent net costs to date, less amounts amortized and/or written off, and do not necessarily represent present or future values.</FONT>
</P>
<P>
<B>2.</B>&nbsp;<B>Significant accounting policies </B>
</P>
<P>
<B><FONT size=2>Basis of consolidation </FONT></B>
</P>
<P>
<FONT size=2>The consolidated financial statements include the accounts of Eldorado and its subsidiaries. The consolidated financial statements have been prepared using accounting principles generally accepted in Canada. As described in note 16, these principles differ in certain material respects from accounting principles generally accepted in the United States.</FONT>
</P>
<P>
<B><FONT size=2>Foreign currency translation </FONT></B>
</P>
<P>
<FONT size=2>Eldorado&#146;s subsidiaries are integrated operations. The financial statements and other transactions stated in foreign currencies are translated into U.S. dollars using the temporal method, as noted below:</FONT>
</P>
<ul>
  <li>&nbsp;<FONT size=2>Monetary assets and liabilities are translated at the exchange rate at the balance sheet dates;</FONT></li>
  <li>&nbsp;<FONT size=2>Non-monetary assets are translated at historical rates;</FONT></li>
  <li>&nbsp;<FONT size=2>Revenue and expense items are translated at the average rate for the year; and</FONT></li>
  <li>&nbsp;<FONT size=2>Translation gains and losses are included in operations. </FONT>
  </li>
</ul>
<P>
<B><FONT size=2>Cash and cash equivalents </FONT></B>
</P>
<P>
<FONT size=2>Cash and cash equivalents include those short-term money market instruments which on acquisition have a term to maturity of three months. The Company limits its exposure to credit loss by placing its cash with institutions which are believed to be credit-worthy. </FONT>
</P>
<P>
<B><FONT size=2>Inventories </FONT></B>
</P>
<P>
<FONT size=2>In-process inventories, including ore stockpiles when applicable, are valued at the lower of average production costs and net realizable value, after a reasonable allowance for further processing costs. Materials and supplies are valued at the lower of average cost and replacement cost.</FONT><B><FONT size=2> </FONT></B>
</P>
<P>
<B><FONT size=2>Investments </FONT></B>
</P>
<P>
<FONT size=2>Investments in shares of other companies are carried at cost or at cost less amounts written off to reflect an impairment in value that is other than temporary. </FONT>
</P>
<P align="center">
<FONT size=2>6</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_7"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>Property, plant and equipment </FONT></B>
</P>
<P>
<FONT size=2>Property, plant and equipment are carried at cost, including costs associated with properties under development. Assets used in commercial production are subject to depreciation and depletion over their estimated useful lives, on the basis described below: </FONT>
</P>
<P>
<FONT size=2>Mineral properties and capitalized development costs for an underground operation - where the mine operating plan calls for production from well defined ore reserves, the life of mine method is applied. </FONT>
</P>
<P>
<FONT size=2>Buildings, machinery, mobile and other equipment - depreciated on a straight-line basis over the life of the mine. </FONT>
</P>
<P>
<FONT size=2>Management of the Company regularly reviews the net carrying value of each mineral property. Where information is available and conditions suggest impairment, estimated future net cash flows from each property are calculated using estimated future prices, resources including proven and probable reserves, operating capital and asset retirement obligation on an undiscounted basis. If the undiscounted cash flows are less then the net book value, reductions in the carrying value of each property would be recorded to the extent the net book value of the investment exceeds the estimated future cash flows on a discounted basis. </FONT>
</P>
<P>
<FONT size=2>Where estimates of future net cash flows are not available and where other conditions suggest impairment, management considers whether the carrying value should be reduced. </FONT>
</P>
<P>
<FONT size=2>Management&#146;s estimates of mineral prices, recoverable proven and probable reserves, resources, operating capital and reclamation costs are subject to risks and uncertainties, which may affect the assessment of recoverability of mineral property costs. Although management has made its best estimate of these factors, it is possib le that changes could occur in the near term, which could adversely affect management&#146;s estimate of the net cash flow to be generated from its properties. </FONT>
</P>
<P>
<B><FONT size=2>Exploration and development </FONT></B>
</P>
<P>
<FONT size=2>Exploration costs are charged against operations as incurred until a mineral resource is established on a property, from which time exploration expenditures are capitalized.</FONT>
</P>
<P>
<B><FONT size=2>Deferred financing charges </FONT></B>
</P>
<P>
<FONT size=2>Deferred financing charges consist of commissions and expenses related to establishing the related indebtedness and have been amortized to operations over the life of such indebtedness. </FONT>
</P>
<P>
<B><FONT size=2>Asset Retirement Obligation </FONT></B>
</P>
<P>
<FONT size=2>The fair value of liabilities for asset retirement obligations is recognized in the period they are incurred. A corresponding increase to the carrying amount of the related asset is recorded and depreciated over the life of the asset. The amount of the liability is subject to re-measurement at each reporting period.</FONT>
</P>
<P>
<B><FONT size=2>Revenue recognition </FONT></B>
</P>
<P>
<FONT size=2>Revenues from the sale of bullion are recognized when the goods have been delivered and title passes to the purchaser. </FONT>
</P>
<P align="center">
<FONT size=2>7</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_8"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>Use of estimates </FONT></B>
</P>
<P>
<FONT size=2>The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. </FONT>
</P>
<P>
<FONT size=2>The Company, in assessing the carrying value of its properties utilizes several accounting estimates including reserves and resources, gold price, operating costs and foreign currency. </FONT>
</P>
<P>
<B><FONT size=2>Share option plan </FONT></B>
</P>
<P>
<FONT size=2>In 2003, the Company adopted the new recommendations for accounting and reporting for stock-based compensation as required by CICA Handbook section 3870, &#147;Stock-based compensation and other stock-based payments.&#148; (&#147;CICA 3870&#148;) CICA 3870 recommends fair-value accounting for awards of stock options to employees under the share option plans. </FONT>
</P>
<P>
<FONT size=2>Consideration paid for shares on exercise of the share options is credited to share capital. </FONT>
</P>
<P>
<B><FONT size=2>Income taxes </FONT></B>
</P>
<P>
<FONT size=2>Future income taxes are recognized for the future income tax consequences attributable to differences between the carrying values of assets and liabilities and their respective income tax bases. Future income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in rates is included in operations in the period that includes the enactment date. A future income tax asset is recorded when the probability of the realization is more likely than not. </FONT>
</P>
<P>
<B><FONT size=2>Earnings (loss) per share </FONT></B>
</P>
<P>
<FONT size=2>Earnings or loss per share are presented for basic and diluted net income (loss). A basic earnings per share is computed by dividing net income or loss by the weighted average number of outstanding common shares for the year. The computation of diluted earnings per share includes the same numerator but the denominator is increased to include the number of additional common shares that would have been issued if potentially dilutive common shares had been issued.</FONT>
</P>
<P>
<B><FONT size=2>3.</FONT></B>&nbsp;<B><FONT size=2>Changes in Accounting Policy </FONT></B>
</P>
<P>
<B><I><FONT size=2>(a)	Adoption of Impairment of Long-Lived Assets</FONT></I></B>
</P>
<P>
<FONT size=2>In 2003, the Company adopted the new recommendations for accounting and reporting for impairment of long-lived assets as required by CICA Handbook section 3063, &#147;Impairment of Long-Lived Assets&#148; (&#147;CICA 3063&#148;). An impairment loss is recognized only if the carrying amount of a long-lived asset is not recoverable from its undiscounted cash flows and is measured as the difference between the carrying amount and fair value of the asset. As a result of the adoption of CICA 3063 a write down of $3,900 was reported. </FONT>
</P>
<P>
<B><I><FONT size=2>(b)	Adoption of Stock Based Compensation</FONT></I></B>
</P>
<P>
<FONT size=2>The Company has applied CICA 3870 prospectively and has recorded $1,418 of compensation costs based on the fair value at the grant date for those options granted in 2003. </FONT>
</P>
<P align="center">
<FONT size=2>8 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_9"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><I><FONT size=2>(c)	Adoption of Asset Retirement Obligation</FONT></I></B>
</P>
<P>
<FONT size=2>In 2003, the Company adopted the new recommendations for accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs as required by CICA Handbook section 3110, &#147;Asset Retirement Obligations&#148;. (&#147;CICA 3110&#148;) see note 6. CICA 3110 requires that the fair value of a liability for an asset retirement obligation, based on estimated third party costs, be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. This estimate excludes the residual value of the related assets. The associated retirement costs are capitalized as part of the carrying amount of the long-lived assets and depreciated over the life of the asset. The amount of liability is subject to re-measurement at each reporting period. This differs from the prior practice, which involved accruing for the estimated reclamation and closure liability though annual charges to earnings over the estimat
ed life of the mine. The Company has applied the changes retroactively and prior periods have been restated. The effects of the restatement are presented below: </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="65%"><B><FONT size=2>Income Statement</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Depletion, depreciation and amortization before change</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>9,959</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2>10,337</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=2>8,991</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Change in accounting policy</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>362</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>362</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=2>362</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Depletion, depreciation and amortization after change</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>10,321</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2>10,699</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=2>9,353</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Accretion expense before change</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Change in accounting policy</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>406</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>383</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=2>361</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Accretion expense after change</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>406</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2>383</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=2>361</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Future taxes before change</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(3,570)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=2>(203)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Change in accounting policy</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>387</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=2>668</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Future taxes after change</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(3,570)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2>387</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=2>465</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Net (loss) income before change</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(44,265)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2>2,136</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=2>(4,396)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Change in accounting policy</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(768)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>(358)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=2>(55)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Net (loss) income after change</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(45,033)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2>1,778</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=2>(4,451)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Basic (loss) income per share before change - U.S.</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(0.20)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=2>(0.04)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Change in accounting policy</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Basic (loss) income per share after change - U.S.</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(0.20)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=2>(0.04)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P align="center">
<FONT size=2>9</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_10"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="58%"><B><FONT size=2>Balance Sheet</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><B><FONT size=2>2001</FONT></B></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Property, plant and equipment before change</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>21,867</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>62,103</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>66,495</FONT></TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Change in accounting policy</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>1,917</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>2,279</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>2,641</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Property, plant and equipment after change</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>23,784</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>64,382</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>69,136</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Asset retirement obligation before change</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>3,467</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>3,467</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>3,467</FONT></TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Change in accounting policy</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>3,705</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>3,299</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>2,916</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Asset retirement obligation after change</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>7,172</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>6,766</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>6,383</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Future income tax liability before change</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>3,830</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>196</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>178</FONT></TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Change in accounting policy</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>387</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Future income tax liability after change</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>3,830</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>196</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>565</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><B><FONT size=2>4. Inventories</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>In process inventory</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>1,584</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>1,480</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Materials and Supplies</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>4,039</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>4,386</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>5,623</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>5,866</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><B><FONT size=2>5. Property, Plant and Equipment</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" colspan=2 width="14%">
    <p align="left"><B><FONT size=2>2002</FONT></B></p>
   </TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Property, plant and equipment</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=13 width="93%"><FONT size=2>S&atilde;o Bento mine 113,488 $ 122,461 $</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Accumulated depreciation and depletion</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>(59,665)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" colspan=2 width="14%"><FONT size=2>(49,473)</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="58%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>62,796</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%"><FONT size=2>64,015</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Write downs</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>(39,758)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%">-</TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>23,038</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%"><FONT size=2>64,015</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Office furniture and equipment</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>2,430</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%"><FONT size=2>2,012</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Accumulated depreciation</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>(1,684)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" colspan=2 width="14%"><FONT size=2>(1,645)</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="58%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>746</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%"><FONT size=2>367</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Total property, plant and equipment</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>23,784</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%"><FONT size=2>64,382</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Mineral properties and deferred development</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>36,562</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%"><FONT size=2>32,958</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Write downs</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>(4,275)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%">-</TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%"><FONT size=2>Total mineral properties and deferred development</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>32,287</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%"><FONT size=2>32,958</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>56,071</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="7%"><FONT size=2>97,340</FONT></TD>
   <TD width="7%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="58%">&nbsp;</TD>
   <TD width="2%"></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
</TR>
</TABLE>
<p align="center"><font size="2">10</font></p>
<HR noshade align="center" width="100%" size=2>
<A name="page_11"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<FONT size=2>For the purposes of calculating the net carrying value of S&atilde;o Bento, which resulted in a total write-down of $39,520, the Company has elected not to use inferred resources in the net asset value calculation. </FONT>
</P>
<P>
<B><FONT size=2>6.</FONT></B>&nbsp;<B><FONT size=2>Asset Retirement Obligation </FONT></B>
</P>
<P>
<FONT size=2>In the current year, the Company obtained an independent study to evaluate the fair value of the expected closure costs of the Company&#146;s S&atilde;o Bento mine. The total undiscounted amount of the estimated closure costs as determined by the study total $9,822. In assessing the carrying amount for the asset retirement obligation management used the following key assumptions in deriving our reported figures. </FONT>
</P>
<P>
<FONT size=2> Mine closure date:	December 31, 2008 Credit adjusted risk-free rate: 6% </FONT>
</P>
<P>
<FONT size=2>At the present time, the Company has concluded that there are no asset retirement obligations associated with the Turkish properties. </FONT>
</P>
<P>
<B><FONT size=2>7.</FONT></B>&nbsp;<B><FONT size=2>Deferred Gain </FONT></B>
</P>
<P>
<FONT size=2>Eldorado recorded a deferred gain of nil in 2003 and 2002, and $4,090 in 2001 as a result of liquidating a portion of its hedging position. The remaining hedging loss of $329 will be taken into income over the first quarter of 2004 when the originally hedged productio n is produced. </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="76%"><B><FONT size=2>8. Convertible Debentures</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="76%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%" align="right"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="76%"><FONT size=2>Debentures</FONT></TD>
   <TD width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%" align="right">-</TD>
   <TD width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>6,796</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="76%"><FONT size=2>Equity portion of convertible debentures</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%" align="right">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>1,094</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="76%"><B><FONT size=2>Debentures maturing November 1, 2004</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%" align="right">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>On September 29, 2003 the balance of the instrument was redeemed for $7,150 resulting in an early redemption loss of $227. As a result of this redemption the equity portion of the convertible debenture was taken into contributed surplus. </FONT>
</P>
<P>
<FONT size=2>On June 20, 2002, the Company agreed, by private contract, to purchase $2,000 of the convertible debentures for a purchase price of 1,597,867 common shares of the Company. These common shares were issued on July 17, 2002. As a consequence of this transaction, the debt and equity components were reduced by $1,863 and $306, respectively, and a gain on settlement of $463 was recognized in earnings, offset by $32 in deferred costs charged to share capital as a share issue cost. </FONT>
</P>
<P>
<FONT size=2>The instrument was accounted for as a debt instrument, at its present value, with an amount recorded in equity to reflect the estimated fair value of the conversion feature. The debt has been accreted to its face value over the term of the debentures. The face value of the convertible debentures is $7,150 at December 31, 2002 (December 31, 2001 - $9,150). </FONT>
</P>
<P align="center">
<FONT size=2>11 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_12"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>9.</FONT></B>&nbsp;<B><FONT size=2>Share Capital </FONT></B>
</P>
<P>
<B><I><FONT size=2>(a)	Authorized and Issued Share Capital </FONT></I></B>
</P>
<P>
<FONT size=2>Eldorado&#146;s authorized share capital consists of an unlimited number of voting and non-voting common shares with no par value. The details of the common shares issued and outstanding are as follows: </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD align="center" width="66%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="19%">
    <p align="right"><B><FONT size=2>Shares Issued</FONT></B></p>
   </TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">
    <p align="right"><B><FONT size=2>Amount</FONT></B></p>
   </TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares at beginning of the year</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>102,320,772</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>316,406</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares for exercised stock options</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>1,450,000</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>468</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares for cash consideration - Financing</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>88,273,810</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>42,536</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares for cash consideration - Warrants</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>12,600,561</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>5,008</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares for conversion of Convertible Debenture</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>1,597,867</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>1,674</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares returned to Treasury</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>(39,000)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(46)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares at December 31, 2002</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>206,204,010</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>366,046</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD align="center" width="66%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="19%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares at beginning of the year</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>206,204,010</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>366,046</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares for exercised stock options</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>3,189,500</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>1,301</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares for cash consideration - Financing</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>25,000,000</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>52,822</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares for cash consideration - Warrants</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>19,567,666</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>24,496</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="66%"><FONT size=2>Shares at December 31, 2003</FONT></TD>
   <TD align="right" width="19%"><FONT size=2>253,961,176</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>444,665</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>On February 15, 2002, the Company completed a private placement of 59,523,810 special warrants at a price of Cdn$0.42 per special warrant to raise gross proceeds of Cdn$25,000,000 (US$15,728). Net proceeds after payments of all expenses relating to the offering were Cdn$22,957,000 (US$14,439). Each special warrant entitled the holder to receive one common share of the Company at no additional cost. In consideration for acting as Eldorado&#146;s Underwriters in respect of the sale of the special warrants, the agents received a cash commission, and compensation warrants exercisable without payment of additional consideration of 5,952,381 special warrants at Cdn$0.49. All compensation options have been exercised at a price of Cdn$0.49. </FONT>
</P>
<P>
<FONT size=2>During 2002 a total of 12,600,561 shares were issued for the above warrants and proceeds of  $5,008 were received. </FONT>
</P>
<P>
<FONT size=2>On December 23, 2002, the Company completed a financing of 28,750,000 units at a price of Cdn$1.60 per unit with a syndicate of underwriters for a gross proceeds of Cdn$46,000,000 (US$29,637). Net proceeds after payments of all expenses relating to the offering were Cdn$43,605,000 (US$28,097). Each unit consists of one common share in the capital of the Company and one-half of one common share&nbsp; </FONT>
</P>
<P align="center">
<FONT size=2> 12 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_13"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P>
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts purchase warrant. Each warrant entitles the holder thereof to acquire one common share at a price of Cdn$2.00 until December 23, 2003.</FONT>
</P>
<P>
<FONT size=2>During 2003 a total of 19,520,416 shares were issued for the above warrants and proceeds of $24,352 were received, 65,950 warrants were not exercised. </FONT>
</P>
<P>
<FONT size=2>On August 25, 2003, the Company completed a financing of 25,000,000 units at a price of Cdn$3.10 per unit with a syndicate of underwriters for a gross proceeds of Cdn$77,500,000 (US$55,320). Net proceeds after payments of all expenses relating to the offering were Cdn$73,999,000 (US$52,822). Each unit consists of one common share in the capital of the Company and one-half of one common share purchase warrant. Each warrant entitles the holder thereof to acquire one common share at a price of Cdn$4.10 until August 25, 2004.</FONT>
</P>
<P>
<FONT size=2>During 2003 a total of 47,250 shares were issued for the above warrants and proceeds of  $144 were received and 12,452,750 warrants remains outstanding. </FONT>
</P>
<P align="center">
<FONT size=2>13</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_14"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>9.</FONT></B>&nbsp;<B><FONT size=2>Share Capital (continued) </FONT></B>
</P>
<P>
<B><I><FONT size=2>(b) Share option plan </FONT></I></B>
</P>
<P>
<FONT size=2>As at December 31, 2003, the Company has a share option plan as described below. The Company accounts for its grants under those plans in accordance with the fair value based method of accounting for stock based compensation. Compensation costs charged against net income in 2003 for the plans was $1,418. </FONT>
</P>
<P>
<FONT size=2>The Company established a share option plan (the &#147;Plan&#148;) in June 1994. Amendments to the Plan were approved in June 1995, June 1996 and May 2000. The Board of Directors administered the Plan whereby from time to time, share option grants were provided for up to a total of 10,200,000 share options to directors, officers, employees, consultants or advisors.</FONT>
</P>
<P>
<FONT size=2>At the Annual Meeting of Shareholders held on April 30, 2003, the Company received approval from the shareholders for the implementation of a share option plan to provide for grants of options to officers and directors of the Company separate from the Plan.</FONT>
</P>
<P>
<FONT size=2>The shareholders resolved that the Plan be amended to remove the eligibility of directors and officers of the Company for grants of share options under the Plan. A separate share option plan for Officers and Directors was established (the &#147;D &amp; O Plan&#148;).</FONT>
</P>
<P>
<FONT size=2>The Plan </FONT>
</P>
<P>
<FONT size=2>The Board of Directors administers the Plan, whereby it may from time to time grant share options to employees, consultants or advisors of the Company.  10,200,000 Common Shares (the &#147;Optioned Shares&#148;) are reserved, set aside and made available for issue under and in accordance with the terms of the Plan provided that in no event shall options be granted entitling any single individual to purchase in excess of one half of one percent (0.5%) of the then outstanding common shares. All share options granted under the Plan shall expire not later than tenth anniversary of the date the options were granted. The exercise price of an option is determined by the Board of Directors, but shall not be less than the</FONT>
</P>
<P>
<FONT size=2>quoted price of the common shares of the Company on the Toronto Stock Exchange on the last business day before the date on which the option is granted. </FONT>
</P>
<P>
<FONT size=2>The D &amp; O Plan </FONT>
</P>
<P>
<FONT size=2>The Board of Directors administers the D &amp; O Plan, whereby it may from time to time grant share options to directors &amp; officers of the Company.  7,000,000 common shares are reserved, set aside and made available for issue under and in accordance with the D &amp; O Plan. The total number of shares that may be reserved for issuance to any one optionee pursuant to options shall not exceed 1% of the shares of the Company outstanding on a non-diluted basis on the grant date of the options. All share options granted under the D &amp; O Plan shall expire not later than tenth anniversary of the date the options were granted. The exercise price of an option is determined by the Board of Directors, but shall not be less than the quoted price of the common shares of the Company on the Toronto Stock Exchange on the last business day before the date on which the option is granted. </FONT>
</P>
<P>
<FONT size=2>A summary of the terms and status of Company&#146;s outstanding options at December 31, 2003 and 2002 and the changes for the years ending on those dates is presented below: </FONT>
</P>
<P align="center">
<FONT size=2>14</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_15"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="75%"><B><FONT size=2>9. Share Capital (continued)</FONT></B></TD>
   <TD width="14%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="5%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><B><FONT size=2>Options (Cdn$)</FONT></B></TD>
   <TD width="14%" align="center"><B><FONT size=2>Outstanding</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="6%"><B><FONT size=2>Weighted Average</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%">&nbsp;</TD>
   <TD width="14%" align="center"><B><FONT size=2>Options</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="6%"><B><FONT size=2>Exercise Price</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="5%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Outstanding options as at January 1, 2002</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>4,479,500</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="5%"><FONT size=2>0.51</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Granted</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>1,992,500</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="5%"><FONT size=2>0.83</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Exercised</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>(1,450,000)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="5%"><FONT size=2>0.51</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Expired/Cancelled</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>(597,000)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="5%"><FONT size=2>1.10</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Outstanding and exercisable options as at December 31, 2002</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>4,425,000</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="5%"><FONT size=2>0.58</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Exercisable options as at December 31, 2002</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>4,198,333</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="5%"><FONT size=2>0.53</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="5%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Outstanding options as at January 1, 2003</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>4,425,000</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="5%"><FONT size=2>0.58</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Granted</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>2,120,000</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="5%"><FONT size=2>2.58</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Exercised</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>(3,189,500)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="center" width="5%"><FONT size=2>0.58</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Outstanding options as at December 31, 2003</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>3,355,500</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="5%"><FONT size=2>1.82</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="75%"><FONT size=2>Exercisable options as at December 31, 2003</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>2,593,833</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="5%"><FONT size=2>1.47</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>The following table summarises information about share options granted during the twelve months ended December 31, 2003: </FONT>
</P>
<TABLE width="900" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="221">&nbsp;</TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><B><FONT size=2>Weighted average</FONT></B></TD>
</TR>
<TR>
   <TD width="221">&nbsp;</TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><B><FONT size=2>exercise price</FONT></B></TD>
</TR>
<TR>
   <TD width="221" align="center"><B><FONT size=2>Shares</FONT></B></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><B><FONT size=2>Cdn$</FONT></B></TD>
</TR>
<TR>
   <TD align="center" width="221"><HR noshade size=1></TD>
   <TD width="219">&nbsp;</TD>
   <TD width="239"><HR noshade size=1></TD>
</TR>
<TR>
   <TD align="center" width="221">&nbsp;</TD>
   <TD width="219">&nbsp;</TD>
   <TD width="239">&nbsp;</TD>
</TR>
<TR>
   <TD align="center" width="221"><FONT size=2>660,000</FONT></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><FONT size=2>1.96</FONT></TD>
</TR>
<TR>
   <TD align="center" width="221"><FONT size=2>100,000</FONT></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><FONT size=2>2.25</FONT></TD>
</TR>
<TR>
   <TD align="center" width="221"><FONT size=2>400,000</FONT></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><FONT size=2>2.13</FONT></TD>
</TR>
<TR>
   <TD align="center" width="221"><FONT size=2>300,000</FONT></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><FONT size=2>1.90</FONT></TD>
</TR>
<TR>
   <TD align="center" width="221"><FONT size=2>275,000</FONT></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><FONT size=2>3.65</FONT></TD>
</TR>
<TR>
   <TD align="center" width="221"><FONT size=2>210,000</FONT></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><FONT size=2>3.53</FONT></TD>
</TR>
<TR>
   <TD align="center" width="221"><FONT size=2>175,000</FONT></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><FONT size=2>4.43</FONT></TD>
</TR>
<TR>
   <TD align="center" width="221"><HR noshade size=1></TD>
   <TD width="219">&nbsp;</TD>
   <TD width="239"><HR noshade size=1></TD>
</TR>
<TR>
   <TD align="center" width="221"><FONT size=2>2,120,000</FONT></TD>
   <TD width="219">&nbsp;</TD>
   <TD align="center" width="239"><FONT size=2>2.58</FONT></TD>
</TR>
</TABLE><P>
<FONT size=2>As at December 31, 2003, options to purchase up to 6,165,358 (December 31, 2002 &#150; 1,285,358) shares remained available to be granted under the Plan. Summaries of the Company&#146;s options outstanding, exercise prices and expiry dates are presented below. </FONT>
</P>
<P align="center">
<FONT size=2>15</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_16"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="3%"><B><FONT size=2>9.</FONT></B></TD>
   <TD colspan=2 width="48%"><B><FONT size=2>Share Capital (continued)</FONT></B></TD>
   <TD width="24%">&nbsp;</TD>
   <TD width="24%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="26%"><B><FONT size=2>Stock Options (Cdn$)</FONT></B></TD>
   <TD width="26%">&nbsp;</TD>
   <TD width="24%">&nbsp;</TD>
   <TD width="24%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="3%">&nbsp;</TD>
   <TD width="23%"><FONT size=2>Range of</FONT></TD>
   <TD width="26%" align="center"><FONT size=2>Number</FONT></TD>
   <TD width="24%" align="center"><FONT size=2>Weighted-Average</FONT></TD>
   <TD width="24%" align="center"><FONT size=2>Weighted</FONT></TD>
</TR>
<TR>
   <TD width="3%">&nbsp;</TD>
   <TD width="23%"><FONT size=2>Exercise Prices</FONT></TD>
   <TD width="26%" align="center"><FONT size=2>Outstanding at</FONT></TD>
   <TD width="24%" align="center"><FONT size=2>Life</FONT></TD>
   <TD width="24%" align="center"><FONT size=2>Average Exercise</FONT></TD>
</TR>
<TR>
   <TD width="3%">&nbsp;</TD>
   <TD width="23%"><FONT size=2>($)</FONT></TD>
   <TD width="26%" align="center"><FONT size=2>December 31, 2003</FONT></TD>
   <TD width="24%" align="center"><FONT size=2>Remaining</FONT></TD>
   <TD width="24%" align="center"><FONT size=2>Price ($)</FONT></TD>
</TR>
<TR>
   <TD width="3%">&nbsp;</TD>
   <TD width="23%">&nbsp;</TD>
   <TD width="26%">&nbsp;</TD>
   <TD width="24%">
    <p align="center"><FONT size=2>(years)</FONT></p>
   </TD>
   <TD width="24%">&nbsp;</TD>
</TR>
</TABLE><TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="26%"><FONT size=2>Less than 0.41</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>160,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>2.77</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.26</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.41 to 0.50</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>208,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.28</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.50</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.51 to 0.60</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>50,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>2.77</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.51</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.61 to 0.70</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>205,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>2.43</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.69</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.71 to 0.80</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>547,500</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>3.07</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.71</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.81 to 1.20</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>1.21 to 1.80</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>255,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>3.73</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>1.43</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>1.81 to 2.70</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>1,270,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>4.14</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>2.02</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>2.71 to 4.05</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>485,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>4.75</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>3.60</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><FONT size=2>Greater than 4.05</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>175,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>4.84</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>3.60</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><FONT size=2>Total</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="22%">
    <p align="center"><FONT size=2>3,355,500</FONT></p>
   </TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>3.62</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>1.82</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><B><FONT size=2>Stock Options (Cdn$)</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="22%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="21%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="21%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><FONT size=2>Range of</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>Number</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>Weighted-Average</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>Weighted</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><FONT size=2>Exercise Prices</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>Outstanding at</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>Life</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>Average Exercise</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><FONT size=2>($)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>December 31, 2002</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>Remaining</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>Price ($)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="26%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="22%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>(years)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="21%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><FONT size=2>Less than 0.41</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>1,641,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>3.15</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.30</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.41 to 0.50</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>716,500</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>1.63</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.49</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.51 to 0.60</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>50,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>3.15</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.51</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.61 to 0.70</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>445,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>2.67</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.68</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.71 to 0.80</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>1,182,500</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>4.09</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.71</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>0.81 to 1.20</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>50,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.16</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>1.00</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>1.21 to 1.80</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%"><FONT size=2>340,000</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>4.73</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>1.42</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD align="left" width="26%"><FONT size=2>1.81 to 2.70</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><FONT size=2>Greater than 2.71</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="22%">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center">-</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="26%"><FONT size=2>Total</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="22%">
    <p align="center"><FONT size=2>4,425,000</FONT></p>
   </TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="21%">
    <p align="center"><FONT size=2>3.20</FONT></p>
   </TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>0.58</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>Had the Company determined compensation costs for this Plan based on the fair value at the grant dates for those share options consistent with the fair value method of accounting for stock-based compensation, the Company&#146;s net earnings and earnings per share would have been reduced to the pro forma amounts indicated below: </FONT>
</P>
<P align="center">
<FONT size=2>16</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_17"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="3%"><B><FONT size=2>9.</FONT></B></TD>
   <TD width="43%"><B><FONT size=2>Share Capital (continued)</FONT></B></TD>
   <TD width="19%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="30%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="3%">&nbsp;</TD>
   <TD width="43%">&nbsp;</TD>
   <TD width="19%">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="30%" align="center"><B><FONT size=2>December 31, 2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="47%"><FONT size=2>Net earnings for the period</FONT></TD>
   <TD width="19%" align="center"><FONT size=2>As reported</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="30%"><FONT size=2>1,778</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="3%">&nbsp;</TD>
   <TD width="43%">&nbsp;</TD>
   <TD width="19%" align="center"><FONT size=2>Pro forma</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="30%"><FONT size=2>1,302</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="47%"><FONT size=2>Basic and diluted earnings per share</FONT></TD>
   <TD width="19%" align="center"><FONT size=2>As reported</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="30%"><FONT size=2>0.01</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="3%">&nbsp;</TD>
   <TD width="43%">&nbsp;</TD>
   <TD width="19%" align="center"><FONT size=2>Pro forma</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="30%"><FONT size=2>0.01</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>The fair values of options included in the pro forma amounts presented above have been estimated using an option-pricing model. Assumptions used in the pricing model are as follows: </FONT>
</P>
<TABLE width="900" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230"><B><FONT size=2>December 31, 2002</FONT></B></TD>
   <TD width="234">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230">&nbsp;</TD>
   <TD width="234">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230"></TD>
   <TD width="234">&nbsp;</TD>
</TR>
<TR>
   <TD width="412"><FONT size=2>Average risk-free interest rate</FONT></TD>
   <TD align="left" width="230"><FONT size=2>Ranging from4.24% to 4.71%</FONT></TD>
   <TD width="234">&nbsp;</TD>
</TR>
<TR>
   <TD width="412"><FONT size=2>Expected life</FONT></TD>
   <TD align="left" width="230"><FONT size=2>5 years</FONT></TD>
   <TD width="234">&nbsp;</TD>
</TR>
<TR>
   <TD width="412"><FONT size=2>Expected Volatility</FONT></TD>
   <TD align="left" width="230"><FONT size=2>50%</FONT></TD>
   <TD width="234">&nbsp;</TD>
</TR>
<TR>
   <TD width="412"><FONT size=2>Expected dividends</FONT></TD>
   <TD align="left" width="230"><FONT size=2>nil</FONT></TD>
   <TD width="234">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD align="center" width="230">&nbsp;</TD>
   <TD width="234">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230">&nbsp;</TD>
   <TD width="234"></TD>
</TR>
<TR>
   <TD align="right" colspan=3 width="880">
    <p align="left"><FONT size=2>The following table summarizes information about the warrants outstanding as at December 31, 2003 and
    2002.</FONT></p>
   </TD>
   <TD width="16">&nbsp;</TD>
</TR>
<TR>
   <TD width="412"><FONT size=2>2002.</FONT></TD>
   <TD width="230">&nbsp;</TD>
   <TD width="234">&nbsp;</TD>
   <TD width="16">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230">&nbsp;</TD>
   <TD width="234">&nbsp;</TD>
   <TD width="16">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230"></TD>
   <TD align="right" width="234"></TD>
   <TD width="16">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230"></TD>
   <TD align="right" width="234"></TD>
   <TD width="16">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230">&nbsp;</TD>
   <TD align="right" width="234"></TD>
   <TD width="16">&nbsp;</TD>
</TR>
<TR>
   <TD width="412">&nbsp;</TD>
   <TD width="230">&nbsp;</TD>
   <TD align="right" width="234"></TD>
   <TD width="16">&nbsp;</TD>
</TR>
</TABLE><TABLE width="903" border=0 cellspacing=0 cellpadding=0 height="363">
<TR>
   <TD width="673" height="62"></TD>
   <TD align="right" width="62" height="62"><FONT size=2>Outstanding Warrants</FONT></TD>
   <TD width="144" height="62">
    <p style="margin-top: 0; margin-bottom: 0" align="center"><FONT size=2>Weighted</FONT></p>
    <p style="margin-top: 0; margin-bottom: 0" align="center"><FONT size=2>Average</FONT></p>
    <p style="margin-top: 0; margin-bottom: 0" align="center"><FONT size=2>Exercise Price</FONT></p>
    <p style="margin-top: 0; margin-bottom: 0" align="center"><FONT size=2>(Cdn$)</FONT></p>
   </TD>
</TR>
<TR>
   <TD width="673" height="17"><FONT size=2>Warrants outstanding at January 1, 2002</FONT></TD>
   <TD align="right" width="62" height="17"><FONT size=2>13,872,729</FONT></TD>
</TR>
<TR>
   <TD width="673" height="17"><FONT size=2>Granted during - 2002</FONT></TD>
   <TD align="right" width="62" height="17"><FONT size=2>15,287,273</FONT></TD>
</TR>
<TR>
   <TD width="673" height="15"><FONT size=2>Exercised</FONT></TD>
   <TD align="right" width="62" height="15"><FONT size=2>(4,823,634)</FONT></TD>
</TR>
<TR>
   <TD width="673" height="21"><FONT size=2>Expired</FONT></TD>
   <TD align="right" width="62" height="21"><FONT size=2>(4,750,000)</FONT></TD>
   <TD width="144" align="center" height="21">
    <p align="center">&nbsp;<FONT size=2>1.10</FONT></p>
   </TD>
</TR>
<TR>
   <TD width="673" height="21">&nbsp;</TD>
   <TD width="62" height="21"><HR noshade size=1></TD>
   <TD width="144" align="center" height="21"><strike>&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;</strike></TD>
</TR>
<TR>
   <TD width="673" height="21"><FONT size=2>Warrants outstanding and exercisable at December 31, 2002</FONT></TD>
   <TD align="right" width="62" height="21"><FONT size=2>19,586,368</FONT></TD>
   <TD width="144" align="center" height="21">&nbsp;<FONT size=2>1.68</FONT></TD>
</TR>
<TR>
   <TD width="673" height="21">&nbsp;</TD>
   <TD width="62" height="21"><HR noshade size=1></TD>
   <TD width="144" align="center" height="21"><strike>&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;</strike></TD>
</TR>
<TR>
   <TD width="673" height="21">&nbsp;</TD>
   <TD width="62" height="21">&nbsp;</TD>
   <TD width="144" align="center" height="21">&nbsp;</TD>
</TR>
<TR>
   <TD width="673" height="21"><FONT size=2>Warrants outstanding at January 1, 2003</FONT></TD>
   <TD align="right" width="62" height="21"><FONT size=2>19,586,368</FONT></TD>
   <TD width="144" align="center" height="21">&nbsp;<FONT size=2>1.68</FONT></TD>
</TR>
<TR>
   <TD width="673" height="21"><FONT size=2>Granted during - 2003</FONT></TD>
   <TD align="right" width="62" height="21"><FONT size=2>12,500,000</FONT></TD>
   <TD width="144" align="center" height="21">&nbsp;<FONT size=2>4.10</FONT></TD>
</TR>
<TR>
   <TD width="673" height="21"><FONT size=2>Exercised</FONT></TD>
   <TD align="right" width="62" height="21"><FONT size=2>(19,567,668)</FONT></TD>
   <TD width="144" align="center" height="21">&nbsp;<FONT size=2>1.69</FONT></TD>
</TR>
<TR>
   <TD width="673" height="21"><FONT size=2>Expired</FONT></TD>
   <TD align="right" width="62" height="21"><FONT size=2>(65,950)</FONT></TD>
   <TD width="144" align="center" height="21">&nbsp;<FONT size=2>2.00</FONT></TD>
</TR>
<TR>
   <TD width="673" height="21">&nbsp;</TD>
   <TD width="62" height="21"><HR noshade size=1></TD>
   <TD width="144" align="center" height="21"><strike>&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;</strike></TD>
</TR>
<TR>
   <TD width="673" height="21"><FONT size=2>Warrants outstanding and exercisable at December 31, 2003</FONT></TD>
   <TD align="right" width="62" height="21"><FONT size=2>12,452,750</FONT></TD>
   <TD width="144" align="center" height="21">&nbsp;<FONT size=2>4.10</FONT></TD>
</TR>
<TR>
   <TD width="673" height="21">&nbsp;</TD>
   <TD width="62" height="21"><HR noshade size=1></TD>
   <TD width="144" align="center" height="21"><strike>&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;</strike></TD>
</TR>
</TABLE><P align="center">
<FONT size=2>17</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_18"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>9.</FONT></B>&nbsp;<B><FONT size=2>Share Capital (continued)</FONT></B>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="34%" align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>Number</FONT></TD>
   <TD align="center" width="32%"><FONT size=2>Weighted-Average</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="28%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="34%" align="center">&nbsp;&nbsp;&nbsp;<FONT size=2>Outstanding at</FONT></TD>
   <TD align="center" width="32%"><FONT size=2>Remaining</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="28%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="34%" align="center"><FONT size=2>December 31, 2003</FONT></TD>
   <TD align="center" width="32%"><FONT size=2>Contractual Life</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="28%"><FONT size=2>Exercise Price</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="34%" align="center">&nbsp;</TD>
   <TD align="center" width="32%"><FONT size=2>(years)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="28%"><FONT size=2>(Cdn.$)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD align="center"><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="34%" align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>12,452,750</FONT></TD>
   <TD width="32%" align="center"><FONT size=2>0.65</FONT></TD>
   <TD width="3%" align="center">&nbsp;</TD>
   <TD width="28%" align="center"><FONT size=2>4.10</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<B><I><FONT size=2>(c)	Shareholder rights plan</FONT></I></B><B><FONT size=2> </FONT></B>
</P>
<P>
<FONT size=2>On March 8, 1995, the Board of Directors of Eldorado adopted a Shareholder Rights Plan, which was approved by the shareholders at the Annual General meeting on June 5, 1995. Under the terms of the plan, rights are attached to the common shares. The rights become marketable and exercisable only upon the occurrence of certain specified events. If a person or group acting in concert acquires or announces its intention to acquire 20% or more of the outstanding common shares in a non-permitted bid, each right, on exercise, entitles the holders (other than the acquiring person or group) to purchase common shares of Eldorado at half the current market price per common share. </FONT>
</P>
<P>
<FONT size=2>The rights are not triggered by a &#147;permitted bid&#148; which is, in effect, a bid made to all shareholders for all of the voting shares by way of a bid circular. Such an offer must remain outstanding for at least 75 days and must be accepted by shareholders holding at least 50% of the outstanding shares that are not held by the bidder. At any time prior to the rights becoming exercisable, the Board of Directors may redeem all the rights at $.00001 per right. </FONT>
</P>
<P>
<B><I><FONT size=2>(d)	Net income (loss) per share </FONT></I></B>
</P>
<P>
<FONT size=2>Net income (loss) per share was calculated on the basis of the weighted average number of shares outstanding for the year which amounted to 221,770,349 (2002 &#150; 147,597,481, 2001 &#150; 99,736,407). Diluted net income (loss) per share reflects the dilutive effect of the exercise of stock options and warrants outstanding as at year-end using the treasury stock method. The effect of common stock options and warrants on the net loss per share in 2003 and 2001 was not reflected as to do so would be anti dilutive.  The number of shares for the diluted net income per share calculation for 2002 was 149,395,784. </FONT>
</P>
<P>
<B><FONT size=2>10. 	Financial Instruments</FONT></B>
</P>
<P>
<B><I><FONT size=2>Fair value of financial instruments </FONT></I></B>
</P>
<P>
<FONT size=2>At December 31, 2003 and 2002, the fair value of cash, and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their respective carrying values. </FONT>
</P>
<P align="center">
<FONT size=2>18 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_19"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<FONT size=2>The carrying values and estimated fair values of Eldorado&#146;s other recognized financial instruments are as follows: </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="68%">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center"><B><FONT size=2>Carrying</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center"><B><FONT size=2>Estimated</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="68%">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center"><B><FONT size=2>Amount</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center"><B><FONT size=2>fair value</FONT></B></TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD align="center" width="68%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="68%" align="center"><FONT size=2>Financial Assets</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="68%" align="center"><FONT size=2>Investments</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2>108</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>108</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="68%" align="center"><FONT size=2>Financial Liabilities</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="68%" align="center"><FONT size=2>Convertible debentures (including equity portion)</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2>7,890</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>6,184</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
</TR>
<TR>
   <TD align="center" width="68%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="68%" align="center"><FONT size=2>Financial Assets</FONT></TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="11%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="1%" align="center">&nbsp;</TD>
   <TD width="14%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD width="68%" align="center"><FONT size=2>Investments</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="11%"><FONT size=2>1,258</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="14%"><FONT size=2>1,817</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
</TR>
</TABLE><P>
<B><FONT size=2>11. 	Taxes </FONT></B>
</P>
<P>
<FONT size=2>Details of income tax expense related to operations are as follows: </FONT>
</P>
<P>
<B><FONT size=2>Income Taxes</FONT></B>
</P>
<P>
<FONT size=2>Recovery (Expense) Current</FONT>
</P>
<P>
<FONT size=2>Future</FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="21%">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="21%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="15%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="5%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="21%"><FONT size=2>Canada</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="21%" align="center"><FONT size=2>(41)</FONT></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="21%"><FONT size=2>45</FONT></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="15%"><FONT size=2>158</FONT></TD>
   <TD width="5%">&nbsp;</TD>
</TR>
<TR>
   <TD width="21%"><FONT size=2>Foreign</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>1,148</FONT></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>(1,166)</FONT></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="15%"><FONT size=2>(313)</FONT></TD>
   <TD width="5%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="21%"><FONT size=2>Canada</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center">-</TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="21%">-</TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="15%"><FONT size=2>(203)</FONT></TD>
   <TD width="5%">&nbsp;</TD>
</TR>
<TR>
   <TD width="21%"><FONT size=2>Foreign</FONT></TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD width="21%" align="center"><FONT size=2>(3,570)</FONT></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="21%"><FONT size=2>387</FONT></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD width="2%" align="center">&nbsp;</TD>
   <TD align="center" width="15%"><FONT size=2>668</FONT></TD>
   <TD width="5%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="21%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="21%" align="center"><FONT size=2>(2,463)</FONT></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="21%"><FONT size=2>(734)</FONT></TD>
   <TD width="5%" align="center">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="center" width="15%"><FONT size=2>310</FONT></TD>
   <TD width="5%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center">&nbsp;</TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD align="center"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>The reconciliation of the combined Canadian federal and provincial statutory income tax rates to the effective tax rate on earnings before taxes and other items is as follows: </FONT>
</P>
<P align="center">
<FONT size=2>19</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_20"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="63%">&nbsp;</TD>
   <TD align="right" width="10%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="63%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>%</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>%</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>%</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Statutory Rate</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(37.62)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>39.62</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(44.62)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Losses not recognized</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>45.79</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>142.43</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>54.26</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Foreign income subject to different tax rates</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(17.70)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(218.25)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(50.45)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Foreign exchange</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>21.37</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>16.50</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>1.62</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Loss not previously recognized</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(3.72)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Non-deductible expense and other items</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(2.33)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>48.93</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>32.68</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Effective income tax rate</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>5.79</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>29.23</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(6.51)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>Eldorado and its subsidiaries have tax losses from prior years, which are available to offset taxable income of future years. These tax losses expire as follows: </FONT>
</P>
<P>
<B><FONT size=2>2004&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;
2008&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;
2009&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;
2010</FONT></B>
</P>
<P>
<FONT size=2>$</FONT>&nbsp;<FONT size=2>3,726&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;
$</FONT>&nbsp;<FONT size=2>3,770&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;
$</FONT>&nbsp;<FONT size=2>4,493&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;
$4,785</FONT>
</P>
<P>
<FONT size=2>In addition, the Brazilian subsidiaries have losses of $160,054, which can be used to offset taxable income and $144,649 which can be used to offset income for social contribution tax. These losses have no expiry date and can be used to offset 30% of income in any one year.</FONT>
</P>
<P>
<FONT size=2>Significant components of Eldorado&#146;s future income tax assets (liability) at December 31 were as follows:</FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="64%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Tax losses</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>59,010</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>49,658</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Liabilities</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>(3,840)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>1,122</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Mineral properties</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>5,127</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>3,875</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Capital assets</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>12,671</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>61</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Undistributed earnings of a subsidiary</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>(260)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>(196)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Other</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>2,749</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>2,832</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>75,457</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>57,352</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Valuation allowance</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>(79,287)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>(57,548)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Future income tax liability</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>(3,830)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>(196)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<B><FONT size=2>12. 	Commitments and Contingencies </FONT></B>
</P>
<P>
<B><I><FONT size=2>Interest on withholding taxes </FONT></I></B>
</P>
<P>
<FONT size=2>S&atilde;o Bento Minera&ccedil;ao may have a liability relating to interest and penalties on accrued but unpaid withholding tax on gold loans. The Company believes there are no grounds to the claim and will defend</FONT>
</P>
<P align="center">
<FONT size=2>20 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_21"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P>
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts its position vigorously. If an unfavorable ruling were to occur the Company estimates the liability to be a maximum of $1,100. </FONT>
</P>
<P>
<B><FONT size=2>13. 	Guarantee </FONT></B>
</P>
<P>
<FONT size=2>S&atilde;o Bento Minera&ccedil;ao has made a guarantee deposit of approximately $529 relating to a tax case. The Company estimates that this amount will be refunded once the tax case has been settled. </FONT><B><FONT size=2> </FONT></B>
</P>
<P>
<B><FONT size=2>14. 	Segmented Information </FONT></B>
</P>
<P>
<FONT size=2>All of Eldorado&#146;s operations are related to the gold mining industry. In 2003 and 2002 Eldorado had a single producing mine, S&atilde;o Bento with mining and exploration assets located in South America and Turkey. In 2003, the Company began exploration activities in China.</FONT>
</P>
<P align="center">
<FONT size=2>21</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_22"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="57%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><B><FONT size=2>Twelve months</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=2>ended</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><B><FONT size=2>ended</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=2>ended</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=2>December 31</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><B><FONT size=2>December 31</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=2>December 31</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Gold sales</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="13%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>S&atilde;o Bento Mine</FONT></B></TD>
   <TD align="center" width="1%"><B><FONT size=1>$</FONT></B></TD>
   <TD align="right" width="11%"><FONT size=1>36,814</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=1>$</FONT></B></TD>
   <TD align="right" width="13%"><FONT size=1>34,051</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=1>$</FONT></B></TD>
   <TD align="right" width="11%"><FONT size=1>34,443</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=1>36,814</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><B><FONT size=1>34,051</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=1>34,443</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Operating costs</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="13%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>S&atilde;o Bento Mine</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>22,604</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>19,027</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>23,446</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Accretion expense</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>406</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>383</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>361</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=1>23,010</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><B><FONT size=1>19,410</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=1>23,807</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Depletion, depreciation and amortization</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="13%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>S&atilde;o Bento Mine</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>10,192</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>9,396</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>8,777</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=1>10,192</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><B><FONT size=1>9,396</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=1>8,777</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Corporate expenses, net of interest and other income</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>2,250</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>(1,498)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(5,756)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>(Loss) gain on settlement of convertible debenture</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(227)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>463</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Stock based compensation expense</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(1,418)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Exploration expense</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(1,956)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>(1,078)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(508)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Writedown of assets</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(44,645)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>(415)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(24)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Reorganization costs</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(406)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>(Loss) gain on disposals of property, plant and equipment</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(186)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>(205)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>74</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>(Loss) profit before income taxes</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=1>(42,570)</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><B><FONT size=1>2,512</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=1>(4,761)</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Taxes</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="13%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>Current</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>1,107</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>(1,121)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(155)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="57%">&nbsp;&nbsp;&nbsp;<B><FONT size=1>Future</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>(3,570)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="13%"><FONT size=1>387</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=1>465</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="57%"><B><FONT size=1>Net (loss) income for the year</FONT></B></TD>
   <TD align="center" width="1%"><B><FONT size=1>$</FONT></B></TD>
   <TD align="right" width="11%"><B><FONT size=1>(45,033)</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=1>$</FONT></B></TD>
   <TD align="right" width="13%"><B><FONT size=1>1,778</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=1>$</FONT></B></TD>
   <TD align="right" width="11%"><B><FONT size=1>(4,451)</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P align="center">
<FONT size=2>22</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_23"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>14. 	Segmented Information (continued) </FONT></B>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="45%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>Year ended</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>Year ended</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>Year ended</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>December 31,</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>December 31,</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>December 31,</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%"><FONT size=2>Segment assets</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>S&atilde;o Bento Mine - Brazil</FONT></TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>42,952</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>75,685</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%"><FONT size=2>Total assets for reportable segments</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>42,952</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><B><FONT size=2>75,685</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>Turkey</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>32,287</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>32,958</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>Other</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>96,391</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>33,768</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>171,630</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>142,411</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%"><FONT size=2>Revenues by geographic area</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>North America</FONT></TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>1,216</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>108</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>218</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>South America</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>36,993</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>39,184</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>35,156</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>Turkey</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>20</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>4</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>13</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>38,229</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>39,296</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>35,387</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%"><FONT size=2>Net (loss) income by geographic area</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>North America</FONT></TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>1,427</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>(4,886)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>(6,292)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>South America</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>(40,628)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>7,279</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>2,166</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>Turkey</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>(5,678)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>(530)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>(222)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>Australia</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>(154)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>(85)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>(103)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>(45,033)</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>1,778</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>(4,451)</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%"><FONT size=2>Assets by geographic area</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>North America</FONT></TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>91,372</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><FONT size=2>33,023</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>South America</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>43,079</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>75,916</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>Turkey</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>37,174</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>33,468</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;&nbsp;&nbsp;<FONT size=2>Australia</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>5</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="15%"><FONT size=2>4</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="45%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>171,630</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="15%"><B><FONT size=2>142,411</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="15%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P align="center">
<FONT size=2>23</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_24"></A>

<P style="word-spacing: 0; margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="word-spacing: 0; margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="word-spacing: 0; margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>15. Supplementary cash flow information </FONT></B>
</P>
<P>
<FONT size=2>The Company conducted non-cash investing and financing activities as follows: </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="65%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%"><FONT size=2>Financing activities</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>Long term debt fee accrual</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>(56)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%" align="right"><FONT size=2>(494)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>Increase in long term debt</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>56</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right"><FONT size=2>494</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>Interest accrual on convertible debentures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>177</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right"><FONT size=2>179</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;&nbsp;&nbsp;<FONT size=2>Settlement of convertible debentures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>1,686</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right"><FONT size=2>(179)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;&nbsp;&nbsp;<FONT size=2>Gain on conversion of convertible debentures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(463)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;&nbsp;&nbsp;<FONT size=2>Shares issued for convertible debentures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(1,674)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;&nbsp;&nbsp;<FONT size=2>Share issue costs for convertible debentures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(32)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;&nbsp;&nbsp;<FONT size=2>Equity portion of convertible debentures</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>306</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="7%" align="right">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD align="right"><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="65%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="7%" align="right">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P align="center">
<FONT size=2>24</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_25"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B>16. 	Significant differences from United States accounting principles </B>
</P>
<P>
<FONT size=2>Canadian generally accepted accounting principles (Canadian GAAP) vary in certain significant respects from the principles and practices generally accepted in the United States (U.S. GAAP). The effect of the principal measurement differences on the Company&#146;s consolidated financial statements are quantified below and described in the accompanying notes: </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="71%">&nbsp;</TD>
   <TD align="right" colspan=5 width="29%"><B><FONT size=2>Twelve months ended December 31,</FONT></B></TD>
</TR>
<TR>
   <TD width="71%">&nbsp;</TD>
   <TD width="9%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><B><FONT size=2>2001</FONT></B></TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD width="71%">&nbsp;</TD>
   <TD width="9%"><B><FONT size=2>$</FONT></B></TD>
   <TD width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><B><FONT size=2>$</FONT></B></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><B><FONT size=2>Net (loss) earnings for the period</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>reported under Canadian GAAP</FONT></B></TD>
   <TD width="9%"><FONT size=2>(45,033)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>1,778</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(4,451)</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Add (deduct)</FONT></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Property, plant and equipment costs (a)</FONT></TD>
   <TD width="9%"><FONT size=2>14,915</FONT></TD>
   <TD align="right" colspan=2 width="10%">
    <p align="left"><FONT size=2>(14,915)</FONT></p>
   </TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Exploration costs (a)</FONT></TD>
   <TD width="9%"><FONT size=2>671</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(2,285)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(1,231)</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Deferred gain amortization - Canadian GAAP (b)</FONT></TD>
   <TD width="9%">-</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(2,395)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(903)</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Forward gold sales contracts - U.S. GAAP (b)</FONT></TD>
   <TD width="9%">-</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>1,869</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>1,429</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Accretion on convertible</FONT></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<FONT size=2>debentures (c)</FONT></TD>
   <TD width="9%"><FONT size=2>127</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>177</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>179</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Accretion on asset retirement obligation - U.S. GAAP (d)</FONT></TD>
   <TD width="9%">-</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>383</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>361</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Depletion, depreciation and amortization (d)</FONT></TD>
   <TD width="9%">-</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>362</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>362</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Future income tax</FONT></TD>
   <TD width="9%">-</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(387)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(668)</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Loss (gain) on settlement of convertible</FONT></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<FONT size=2>debentures - Canadian GAAP (c)</FONT></TD>
   <TD width="9%"><FONT size=2>227</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(463)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><B><FONT size=2>Net (loss) earnings before change in accounting policy</FONT></B></TD>
   <TD width="9%"><FONT size=2>(29,093)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(15,876)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(4,922)</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Cumulative effect adjustment - asset retirement obligation (d)</FONT></TD>
   <TD width="9%"><FONT size=2>(1,020)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><B><FONT size=2>Net (loss) earnings for the period</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>under U.S. GAAP before extraordinary items</FONT></B></TD>
   <TD width="9%"><FONT size=2>(30,113)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(15,876)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(4,922)</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Gain on settlement of convertible</FONT></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<FONT size=2>debentures - U.S. GAAP (c)</FONT></TD>
   <TD width="9%">-</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>294</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><B><FONT size=2>Net (loss) earnings for the period after</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>extraordinary items but before comprehensive</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>income adjustments</FONT></B></TD>
   <TD width="9%"><FONT size=2>(30,113)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(15,582)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(4,922)</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><B><FONT size=2>Net (loss) earnings per common</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>share - U.S. GAAP before and after</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>extraordinary items</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Basic and diluted</FONT></TD>
   <TD width="9%"><FONT size=2>(0.14)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(0.10)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(0.04)</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><B><FONT size=2>Other comprehensive income</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Opening balance</FONT></TD>
   <TD width="9%"><FONT size=2>1,957</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>5,195</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Gold sales contracts (b)</FONT></TD>
   <TD width="9%"><FONT size=2>(2,286)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>(3,238)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>5,195</FONT></TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Unrealized gain on investments (f)</FONT></TD>
   <TD width="9%"><FONT size=2>562</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="71%"><FONT size=2>Closing balance</FONT></TD>
   <TD width="9%"><FONT size=2>233</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="left" width="9%"><FONT size=2>1,957</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>5,195</FONT></TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
</TR>
</TABLE><P align="center">
<FONT size=2>25</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_26"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="64%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD colspan=4 width="23%"><B><FONT size=2>Year ended December 31,</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="11%" align="right"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;</TD>
   <TD width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><B><FONT size=2>Shareholders&#146; equity reported under</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>Canadian GAAP</FONT></B></TD>
   <TD align="right" colspan=2 width="10%"><FONT size=2>153,475</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>118,471</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>67,359</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Cumulative adjustments to shareholders&#146; equity</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>add (deduct)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Property, plant and equipment costs (a)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(14,915)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Exploration costs (a)</FONT></TD>
   <TD align="right" colspan=2 width="10%"><FONT size=2>(15,365)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(16,036)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>(13,751)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Forward gold sales contracts (b)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>100</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Deferred gain (loss) on gold sales contracts (b)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>(329)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>1,957</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>5,621</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Accretion on convertible debentures (c)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>1,036</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>909</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>732</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Contributed surplus</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>(1,094)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Equity portion of convertible debentures (c)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(1,094)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>(1,400)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Loss (gain) on settlement of convertible</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>debentures - Canadian GAAP (c)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>(236)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(463)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Gain on settlement of convertible</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>debentures - U.S. GAAP (c)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>294</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>294</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Asset retirement obligation (d)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>1,020</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>275</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Unrealized gain on investments (f)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>562</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Future income tax</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>387</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><B><FONT size=2>Shareholders&#146; equity under U.S. GAAP</FONT></B></TD>
   <TD align="right" colspan=2 width="10%"><FONT size=2>138,343</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>90,143</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>59,323</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><B><FONT size=2>Total assets reported under</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>Canadian GAAP</FONT></B></TD>
   <TD align="right" colspan=2 width="10%"><FONT size=2>171,630</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>142,411</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>115,525</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Add (deduct)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Property, plant and equipment costs (a)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(17,194)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>(2,641)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Exploration costs (a)</FONT></TD>
   <TD align="right" colspan=2 width="10%"><FONT size=2>(15,365)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(16,036)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>(13,751)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Forward gold sales contracts (b)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>100</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Investments (f)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>562</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><B><FONT size=2>Total assets under U.S. GAAP</FONT></B></TD>
   <TD align="right" colspan=2 width="10%"><FONT size=2>156,827</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>109,181</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>99,233</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><B><FONT size=2>Total liabilities reported under</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>Canadian GAAP</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>18,155</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>23,940</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>48,166</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><FONT size=2>Add (deduct)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Deferred gain on gold sales contracts (b)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>329</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(1,957)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>(5,621)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Convertible debentures (c)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>354</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>668</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Asset retirement obligation - net (d)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>(3,299)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>(2,916)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="64%">&nbsp;&nbsp;&nbsp;<FONT size=2>Future income tax</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>(387)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="64%"><B><FONT size=2>Total liabilities under U.S. GAAP</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>18,484</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>19,038</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="8%"><FONT size=2>39,910</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P align="center">
<FONT size=2>26</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_27"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="61%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD colspan=4 width="24%"><B><FONT size=2>Year ended December 31,</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%" align="right"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="2%" align="right">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="10%" align="right"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;</TD>
   <TD width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%"><B><FONT size=2>$</FONT></B></TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Cash flows from operating activities</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Net earnings (loss) under Canadian GAAP</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>3,646</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>9,288</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="9%"><FONT size=2>13,029</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><FONT size=2>Exploration costs</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(3,604)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(2,285)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="9%"><FONT size=2>(1,231)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Cash flows from operating activities</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>under U.S. GAAP</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>42</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>7,003</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="9%"><FONT size=2>11,798</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Cash flows from investing activities under</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>Canadian GAAP</FONT></B></TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>(14,191)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(7,043)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>1,196</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><FONT size=2>Exploration costs</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>3,604</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>2,285</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>1,231</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Cash flows from investing activities</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>under U.S. GAAP</FONT></B></TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>(10,587)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(4,758)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>2,427</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Cash flows from financing activities</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>under Canadian and U.S. GAAP</FONT></B></TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>71,469</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>32,395</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="9%"><FONT size=2>(10,950)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Foreign exchange loss on cash</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>held in foreign currency</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>6,914</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(1,765)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>(823)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Increase (decrease) in cash and</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>cash equivalents</FONT></B></TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>67,838</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>32,875</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>2,452</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Cash and cash equivalents -</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>Beginning of period</FONT></B></TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>37,627</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>4,752</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>2,300</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Cash and cash equivalents -</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>End of period</FONT></B></TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>105,465</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>37,627</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>4,752</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><B><FONT size=2>Additional supplementary cash</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>flow information</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="61%"><FONT size=2>Forward gold sales contracts</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>100</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=2>(100)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<B><FONT size=2>a) 	Property, plant and equipment and exploration costs </FONT></B>
</P>
<P>
<FONT size=2>Exploration costs are accounted for in accordance with Canadian GAAP as disclosed in note 2. For U.S. GAAP purposes, the Company expenses all exploration costs incurred relating to unproven mineral properties. When proven and probable reserves are determined for a property and upon completion of a feasibility study, subsequent exploration and development costs on the property are capitalized.</FONT>
</P>
<P>
<FONT size=2>As disclosed in Note 5 the Company reported a write-down under Canadian GAAP and accordingly there is no difference to report for 2003 in the carrying value. In 2002 the Company recorded a write down at its S&atilde;o Bento mine of $14,915 due to the exclusion of inferred resources per SFAS 144.</FONT>
</P>
<P align="center">
<FONT size=2>27 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_28"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS </FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>b) 	Forward gold sales contracts and foreign exchange purchase commitments </FONT></B>
</P>
<P>
<FONT size=2>Derivative instruments </FONT>
</P>
<P>
<FONT size=2>For U.S. GAAP, the Company adopted Statement of Financial Accounting Standards No. 133 (SFAS No. 133) effective January 1, 2001. SFAS No. 133 requires that all derivatives be recorded on the balance sheet as either assets or liabilities at their fair value. Changes in a derivative&#146;s fair value are recognized in the earnings of the current period unless specific hedge accounting criteria are met. Management has currently not designated any of the Company&#146;s financial instruments as hedges for U.S. GAAP purposes under SFAS No. 133. Gains from hedges previously closed out are cla ssified in other comprehensive income on transition to SFAS No. 133. </FONT>
</P>
<P>
<FONT size=2>A similar guidance has been introduced in Canada, Accounting Guideline 13, &#147;Hedging Relationships&#148;, (AcG 13) which is effective for the years beginning July 1, 2003. AcG 13 addresses the identification, designation, documentation, and effectiveness of hedging transactions for the purposes of applying hedge accounting. It also establishes conditions for applying or discontinuing hedge accounting. Under the new guideline, the Company will be required to document its hedging transactions and explicitly demonstrate that the hedges are sufficiently effective in order to continue accrual accounting for positions hedged with derivatives. The effect of adopting this guideline has not yet been dete rmined. </FONT>
</P>
<P>
<B><FONT size=2>c) 	Convertible debentures </FONT></B>
</P>
<P>
<FONT size=2>Canadian GAAP requires that a portion of the convertible debentures be classified as equity. The difference between the carrying amount of the debentures and their face value is accreted over the life of the debt and charged to earnings (loss) for the year. Under U.S. GAAP the debentures would be classified as a liability at their face value. </FONT>
</P>
<P>
<FONT size=2>As described in note 8, a portion of the convertible debentures was settled during 2002, resulting in a gain of $463 under Canadian GAAP. Under U.S. GAAP, the gain on settlement would have been $294 and would be classified as an extraordinary item. During 2003 the outstanding balance was paid resulting in a loss of $227 under Canadian GAAP. Under US GAAP there would be no gain or loss on repayment of the outstanding convertible debentures. </FONT>
</P>
<P>
<B><FONT size=2>d) 	Asset retirement obligation </FONT></B>
</P>
<P>
<FONT size=2>SFAS No. 143, &#147;Accounting for Asset Retirement Obligations&#148; was issued in June 2001. This statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. It requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. FAS 143 requires no restatement of prior year balances and the cumulative effect is included in the net loss for the year. Under SFAS 143, the cumulative effect for the change in accounting policy is recorded into loss for the period. </FONT>
</P>
<P>
<B><FONT size=2>e) 	Stock based compensation </FONT></B>
</P>
<P>
<FONT size=2>For US GAAP purposes, the Company has prospectively adopted the fair based method of accounting for stock based compensation in accordance with FAS 148. This application is consistent with the early application of CICA 3870 under Canadian GAAP (note 3). Accordingly there is no difference on accounting for stock based compensation under Canadian and US GAAP. </FONT>
</P>
<P align="center">
<FONT size=2>28 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_29"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share amounts </FONT>
</P>
<P>
<B><FONT size=2>f) 	Investments</FONT></B><FONT size=2> </FONT>
</P>
<P>
<FONT size=2>Under US GAAP, marketable securities would be divided between held-to-maturity securities and available -for-sale securities. These securities classified as available -for-sale would be recorded at market value and the unrealized gain or loss would be recorded as a separate component of shareholders equity. </FONT>
</P>
<P>
<B><FONT size=2>g) 	New accounting pronouncements </FONT></B>
</P>
<P>
<B><FONT size=2>Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity </FONT></B>
</P>
<P>
<FONT size=2>In May 2003, the FASB issued Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS No. 150), which addresses how to classify and measure certain financial instruments with characteristics of both liabilities (or assets in some circumstances) and equity SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Adoption of SFAS No. 150 on July 1, 2003 had no impact on the Company&#146;s financial position and results of operations. </FONT>
</P>
<P>
<B><FONT size=2>Consolidation of Variable Interest Entities</FONT></B><FONT size=2> </FONT>
</P>
<P>
<FONT size=2>In January 2003, the FSAB issued Interpretation No. 46 Consolidation of Variable Interest Entities (FIN No. 46) (revised December 2003). FIN No. 46 clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to only certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN No. 46 applies immediately to variable interest entities created after January 31, 2003, and the variable interest entities obtained after that date. It applies at the end of the first annual reporting period beginning after June 15, 2003, to variable interest in which an enterprise holds a variable interest which was acquired before February 1, 2003. Adoption of FIN No. 46 on January 1, 2004 will not materially impact the Company&#146;s financial position or results of operations.
 </FONT>
</P>
<P>
<FONT size=2>A similar guideline has been introduced in Canada, Accounting Guideline 15 &#147;Consolidation of variable Interest Entities&#148;. This guideline applies to annual and interm periods beginning on or after November 1, 2004. The Company is continuing to evaluate the potential impact of Accounting Guideline 15. </FONT>
</P>
<P>
<B><FONT size=2>Other</FONT></B><FONT size=2> </FONT>
</P>
<P>
<FONT size=2>In July 2003, the CICA released Section 1100 &#147;Generally Accepted Accounting Principals&#148;. This new Section establishes standards for financial reporting in accordance with generally accepted accounting principals. It describes what constitutes Canadian GAAP and its sources replacing &#147;Financial Statement Concepts&#148; paragraph 1000.59-61. Also in July 2003, the CICA released Section 1400, &#147;General Standards of Financial Statement Presentation&#148;. This section clarifies what constitutes fair presentation in accordance with the generally accepted accounting principles. Both these Sections are effective for fiscal years beginning on or after October 1, 2003 and the Company is currently evaluating their impact.</FONT>
</P>
<P align="center">
<FONT size=2>29</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_30"></A>

<P style="word-spacing: 0; margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="word-spacing: 0; margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="word-spacing: 0; margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<FONT size=2>Please review this report with the Consolidated Financial Statements and accompanying Notes. All monetary amounts are in United States dollars unless otherwise noted. </FONT>
</P>
<P>
<FONT size=2>The Management&#146;s Discussion and Analysis (&#147;MD&amp;A&#148;) contains certain &#147;Forward-Looking Statements&#148; within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Eldorado Gold Corporation (&#147;Eldorado&#148;, the &#147;Company&#148;, &#147;we&#148; or &#147;our&#148;) are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.</FONT>
</P>
<P>
<FONT size=2>The MD&amp;A is comprised of ten key sections.  The Overview provides a high level summary of Eldorado&#146;s financial results, operating performance and financial condition.  The Critical Accounting Policy section details the Company&#146;s key accounting policies. The Critical Estimate section details the key estimates the Company utilizes in determining key financial information.  The financial Results of Operations section provides a detailed analysis of key financial components. The Review of Operations section provides a detailed analysis of our operating results at the S&atilde;o Bento mine.  The Summary of Quarterly Results and 4</FONT><SUP><FONT size=2>th</FONT></SUP><FONT size=2> Quarter Discussion details the revenue and net income (loss) figures for the past eight reporting quarters with a brief discussion summarizing the 4 </FONT><SUP><FONT size=2>th</FONT></SUP><FONT size=2> quarter results. The Liquidity and Capital Resources section describes the Company&#146;s cash position and
 details the significant factors affecting our operating, investing and financing results. In the Risks and Uncertainties section, the risks associated with the business are identified, and the risk management programs in place to manage and mitigate exposures are discussed. The Outlook section outlines Eldorado&#146;s key financial and operating plans for 2004.  Finally the Non-GAAP Measures sections provides definitions for non-GAAP performance measures to reported GAAP measures. </FONT>
</P>
<P>
<B><FONT size=2>MANAGEMENT&#146;S DISCUSSION &amp; ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </FONT></B>
</P>
<P>
<B><FONT size=2>Introduction </FONT></B>
</P>
<P>
<FONT size=2>The MD&amp;A reviews the business of Eldorado Gold Corporation and compares its financial results for 2003 with those of the previous two years. In order to obtain a comprehensive understanding of the Company&#146;s financial condition and results of operations, it is best to read the MD&amp;A together with the consolidated financial statements and accompanying Notes starting on page 3. The auditors&#146; report to shareholders is on page 2.</FONT>
</P>
<P>
<FONT size=2>Eldorado&#146;s consolidated financial statements are expressed in United States (&#147;U.S.&#148;) dollars. All monetary amounts in this report are in U.S. dollars except where otherwise indicated. </FONT>
</P>
<P>
<FONT size=2>The Company&#146;s consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles (&#147;GAAP&#148;) and filed with appropriate regulatory authorities in Canada and the United States. Application of accounting principles generally accepted in the United States does not have a significant impact on our results of operations and financial position except as described in Note 16 to the consolidated financial statements (page 24 through 27). </FONT>
</P>
<P align="center">
<FONT size=2>30</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_31"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<B><FONT size=2>1.</FONT></B>&nbsp;<B><FONT size=2>Overview </FONT></B>
</P>
<P>
<FONT size=2>Eldorado is a North American based gold producer. We own and operate a gold mine in Brazil, develop gold mineralized properties into mines, explore for and/or acquire precious mineral properties for exploration. 2003 was a year in which the Company continued to strengthen its balance sheet, substantially advanced the</FONT>
</P>
<P>
<FONT size=2>Kisladag Gold Project (&#147;Kisladag Project&#148;) in Turkey, increased the Company&#146;s reserves and resources and created a new initiative in China.</FONT>
</P>
<P>
<FONT size=2>We are focused on delivering value to our shareholders, and our share price increased 96% in 2003, beginning the year at Cdn$2.07 and ending the year at Cdn$4.05.</FONT>
</P>
<ul>
  <li><FONT size=2>The consolidated net loss under Canadian GAAP for 2003 was $45,033 or ($0.20) per share compared with net earnings of $1,778 or $0.01 per share in 2002 and a loss of $4,451 or ($0.04) per share in 2001. The loss in 2003 is due to three significant non-cash write-downs as follows:</FONT><BR>   </li>
</ul>
<P>
&nbsp;
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="85%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="85%"><FONT size=2>Impairment of long-lived assets, Sao Bento Mine</FONT></TD>
   <TD width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=2>39,520</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="85%"><FONT size=2>Kaymaz Gold Project write-down</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>4,275</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="85%"><FONT size=2>Inventory spare-parts write-down</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="11%"><FONT size=2>850</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="85%">&nbsp;</TD>
   <TD width="2%"><B><FONT size=2>$</FONT></B></TD>
   <TD align="right" width="11%"><B><FONT size=2>44,645</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>The Company booked a significant write-down in 2003 on its S&atilde;o Bento Mine (&#147;S&atilde;o Bento&#148; or &#147;the Mine&#148;), Minas Gerais, Brazil.  Forecasted increase in cash costs, unfavorable drilling results, and the adoption of Canadian Institute of Chartered Accountants (&#147;CICA&#148;) Handbook Section 3063 &#147;Impairment of Long-Lived Assets&#148; contributed to the total non-cash write-down of $39,520.  A strengthening Brazilian Real (the &#147;Real&#148; or &#147;$R&#148;) combined with rising inflation rates prompted the Company to increase its forecasted cash cost. This increase alone translates to a write-down of approximately $17,000 using an average gold price of U.S. $365/oz. over a projected 5 year mine life. The Company has elected not to use inferred resources in the net asset value calculation at Sao Bento. However, the ore body is open at depth and drilling continues in 2004 with 18,000 meters planned to further extend resources. The exclusion of the inferred
 resources combined with the effect of discounting the Mine&#146;s projected cash flows accounts for the remainder of this significant write-down. </FONT>
</P>
<ul>
  <li><FONT size=2>In 2003, the Company wrote-off its Kaymaz Gold Project (&#147;Kaymaz&#148;) from $4,275 to nil as at present Kaymaz is no longer technically viable as an onsite mine and gold recovery operation.</FONT><BR></li>
  <li><FONT size=2>An additional write-down of obsolete equipment inventories at the S&atilde;o Bento Mine of $850 combined to give the Company a net non-cash write-off of $44,645.</FONT><BR></li>
  <li><FONT size=2>On January 23, 2003 Eldorado&#146;s common shares began trading on the American Stock Exchange. Effective March 21, 2003 Eldorado was added to the Standard and Poors/Toronto Stock Exchange (&#147;S&amp;P/TSX&#148;) Composite Index and the Global Industry Classification Standard Sector &#150; Material, Gold. We believe these milestones will broaden our shareholder base and provide added visibility as we continue with our plan of controlled, profitable and sustainable growth.</FONT><BR></li>
</ul>
<P align="center">
<FONT size=2>31</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_32"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts</FONT>
</P>
<ul>
  <li>
    <p style="margin: 0"><FONT size=2>On April 1, 2003 the Company announced the
    results of the feasibility study for its 100% owned Kisladag Gold Project.
    The study prepared by Hatch Associates, Vancouver reported 4,532,000 ounces
    of proven and probable reserves. By the year-end, additional drilling
    efforts determined a 17% increase in reserves increasing proven and probable
    reserves to 5,310,900 ounces.</FONT><BR></li>
  <li>
    <p style="margin: 0"><FONT size=2>In 2003 Kisladag received two significant permits from the Turkish Government, the Environmental</FONT>
    <FONT size=2>Positive Certificate (the &#147;Certificate&#148;) and the Establishment Permit.
    The acceptance of the Environmental Impact Assessment report and the issuance of the Certificate was a major achievement in the permitting process and the receipt of the Establishment Permit provides approval for water use and effluent discharge plans, as well as defining the health protection zone and medical treatment facilities for the Kisladag Mine operation.</FONT><BR>&nbsp;&nbsp;</li>
  <li>
    <p style="margin: 0"><FONT size=2>On April 2, 2003 the Company announced its intention to deepen its shaft at S&atilde;o Bento (the &#147;Shaft &#150;Deepening Project&#148;). The Shaft Deepening Project will deepen the shaft by approximately 370 meters at an estimated cost of $12,000 and will be funded through internally generated cash flows
    from the S&atilde;o Bento Mine.  The Shaft Deepening Project began in the 2</FONT><SUP><FONT size=2>nd</FONT></SUP><FONT size=2> quarter of 2003 and completion is expected in 2005. This Shaft Deepening Project gives the Company the opportunity to extend the profitable life of the Mine, enable the maximum recovery of the existing reserve and will provide infrastructure for possibly extending beyond the existing reserve base. </FONT>
    </p>
  </li>
  <li><FONT size=2>On July 29, 2003 Eldorado announced the results of the Optimization Study for its Kisladag Project. The Optimization Study, prepared by Hatch successfully demonstrated the opportunities to both improve the financial performance of the Kisladag Project and accelerate the expansion of the Kisladag Project to full production levels.</FONT></li>
</ul>
<ul>
  <li><FONT size=2>On August 25, 2003 the Company closed a $55,320 (Cdn$77,500) dollar financing. The Company received net proceeds after payments of all expenses relating to the offering of $52,822 (Cdn$73,999). These funds will be used to complete the construction of the Kisladag Mine and for other general corporate purposes.</FONT>&nbsp;&nbsp;</li>
</ul>
<ul>
  <li><FONT size=2>On September 29, 2003 the Company eliminated its outstanding Convertible Debenture debt leaving the Company in a debt free position.</FONT>&nbsp;&nbsp;</li>
</ul>
<ul>
  <li><FONT size=2>In October 2003 the Company signed an agreement with the China National Gold Group Corporation (&#147;CNGC&#148;) for the exclusive right to review their portfolio of operating mines, development projects and exploration projects for a period of 5 months. The Company continues with this review which has been expanded to include joint reviews of other identified opportunities in China external to CNGC. Subsequent to the fiscal year-end the parties have agreed to extend this perio d of review to May 31, 2004.</FONT>&nbsp;&nbsp;</li>
</ul>
<ul>
  <li><FONT size=2>Eldorado is in excellent financial condition. The Company&#146;s cash flow from operating activities is positive and at December 31, 2003 had $105,465 in cash and short-term deposits. We are debt free and our production currently remains
    un-hedged. This will allow our shareholders to participate fully in the rising gold price environment forecast to continue in 2004.</FONT><BR></li>
</ul>
<B><FONT size=2>2.</FONT></B><BR>&nbsp;&nbsp;
<p><B><FONT size=2>Critical Accounting Policies</FONT></B><BR>   </p>
<P>
<FONT size=2>Eldorado&#146;s accounting policies are described in Note 2 to the consolidated financial statements. Management considers the following policies to be the most critical in understanding the judgments that are involved in preparing Eldorado&#146;s consolidated financial statements and the uncertainties that could impact its results of operations, financial condition and cash flows. </FONT>
</P>
<P align="center">
<FONT size=2>32 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_33"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<B><FONT size=2>Use of Estimates </FONT></B>
</P>
<P>
<FONT size=2>The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates are related to the physical and economic lives of mineral assets, their recoverability, site restoration costs and related obligations. </FONT>
</P>
<P>
<B><FONT size=2>Revenue Recognition </FONT></B>
</P>
<P>
<FONT size=2>Eldorado recognizes revenue under the sales method.  The sales method recognizes gold sales when delivery is made and title to the refined gold passes to the purchaser. </FONT>
</P>
<P>
<B><FONT size=2>Property, Plant and Equipment / Exploration and Development </FONT></B>
</P>
<P>
<FONT size=2>In accordance with its accounting policies in these areas, Eldorado capitalizes costs incurred on properties after it has been established that there is a mineral resource on a property.  Upon commencement of production, capitalized costs for assets in use are subject to depreciation and depletion over their estimated useful lives. </FONT>
</P>
<P>
<FONT size=2>In 2003 the Company adopted the recommendation of CICA 3063.</FONT>
</P>
<P>
<FONT size=2>Management&#146;s estimates of mineral prices, recoverable proven and probable reserves, resources, operating capital and reclamation costs are subject to risks and uncertainties, which may affect the assessment of recoverability of mineral property costs. Although management has made its best estimate of these factors, it is possible that changes could occur in the near term, which could adversely affect management&#146;s estimate of the net cash flow to be generated from its properties. </FONT>
</P>
<P>
<B><FONT size=2>Asset Retirement Obligations </FONT></B>
</P>
<P>
<FONT size=2>In 2003 the Company adopted a new accounting standard, CICA Handbook section 3110 (&#147;CICA 3110&#148;), &#147;Asset Retirement Obligations&#148; which requires that the fair value of liabilities for an asset retirement obligation be recognized in the period in which they are incurred.</FONT>
</P>
<P>
<B><FONT size=2>Stock Based Compensation </FONT></B>
</P>
<P>
<FONT size=2>In 2003 the Company adopted the fair value accounting based method for stock options.</FONT>
</P>
<P>
<B><FONT size=2>3.</FONT></B>&nbsp;<B><FONT size=2>Critical Accounting Estimates </FONT></B>
</P>
<P>
<FONT size=2>The Company, in assessing the carrying values of its properties, utilizes three critical accounting estimates as follows: </FONT>
</P>
<P>
<B><FONT size=2>Reserves and Resources </FONT></B>
</P>
<P>
<FONT size=2>The Company utilizes only proven and probable reserves in its carrying value calculations. Proven and probable reserves are determined in accordance with National Instrument 43-101 (&#147;NI 43-101&#148;). </FONT>
</P>
<P align="center">
<FONT size=2>33</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_34"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts</FONT>
</P>
<P>
<B><FONT size=2>Gold Price </FONT></B>
</P>
<P>
<FONT size=2>The Company estimates the future price of gold based on historical trends and published forecasted estimates. Presently the Company&#146;s five year plan assumes the following prices: </FONT>
</P>
<P>
<FONT size=2>Gold price (US$/oz)</FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD align="center" width="14%"><FONT size=2>2004</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="14%"><FONT size=2>2005</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="14%"><FONT size=2>2006</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD align="center" width="14%"><FONT size=2>2007</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD align="center" width="14%"><FONT size=2>2008</FONT></TD>
   <TD width="6%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD align="center" width="14%"><FONT size=2>400</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="14%"><FONT size=2>375</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="14%"><FONT size=2>350</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD align="center" width="14%"><FONT size=2>350</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD align="center" width="14%"><FONT size=2>350</FONT></TD>
   <TD width="6%">&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>The resulting average price is U.S. $365/oz. </FONT>
</P>
<P>
<B><FONT size=2>Operating Costs </FONT></B>
</P>
<P>
<FONT size=2>The Company determines its future operatin g costs in accordance with the Gold Institute Standard. Future operating costs however include estimates of currency foreign exchange and inflation trends. </FONT>
</P>
<P>
<B><FONT size=2>4. Consolidated Financial Results of Operations Net income (loss) </FONT></B>
</P>
<P>
<B><FONT size=2>2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2001</FONT></B>
</P>
<P>
<FONT size=2>$</FONT>&nbsp;<FONT size=2>(45,033)&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;
$</FONT>&nbsp;<FONT size=2>1,778&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;
$</FONT>&nbsp;<FONT size=2>(4,451)</FONT>
</P>
<P>
<FONT size=2>Net income (loss)</FONT>
</P>
<P>
<FONT size=2>The net loss reported in 2003 is a direct result of the significant non-cash write-downs of the S&atilde;o Bento Mine, the Kaymaz Gold Project, and obsolete equipment inventories. Write-downs of $39,520, $4,275 and $850 were booked respectively. </FONT>
</P>
<P>
<FONT size=2>Gold operating earnings increased by 3.9% in 2003 to $11,924 compared with 2002 due primarily to a higher realized price per ounce which was offset by higher cash costs per ounce and lower sales volumes. Gold sales revenue was $34,528 in 2003 compared with $30,501 in the prior year reflecting a 4% decline in sales volume and a $55/oz. increase in the average realized price.  Consolidated gold production decreased by 8.2% from 2002 levels due primarily to the commencement of the Shaft Deepening Project that began in 2003. The completion of the Shaft Deepening Project will facilitate mining both above and below the Mine&#146;s 30</FONT><SUP><FONT size=2>th</FONT></SUP><FONT size=2> level. Consolidated total cash and production costs per ounce for the year were $241 and $356, respectively, compared with $189 and $282 respectively, in 2002. Increase in cash costs is a direct result of the strengthening Real, higher inflation rates and increased transportation costs as the mining is conducted beneath
 the present shaft bottom. </FONT>
</P>
<P>
<B><FONT size=2>Revenues </FONT></B>
</P>
<P>
<FONT size=2>The Company&#146;s revenues consist of sales of gold bullion. Gold bullion was sold in 2003 to a number of large financial institutions.</FONT>
</P>
<P align="center">
<FONT size=2>34</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_35"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts</FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="50%"><B><FONT size=2>Revenue</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%"><FONT size=2>2003</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%"><FONT size=2>2002</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="left" width="12%"><FONT size=2>2001</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Gold</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="12%"><FONT size=2>34,528</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="12%"><FONT size=2>30,501</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="left" width="12%"><FONT size=2>31,498</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Effects of Hedging</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%"><FONT size=2>2,286</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%"><FONT size=2>3,550</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="left" width="12%"><FONT size=2>2,945</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Total Gold Sales</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="12%"><FONT size=2>36,814</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="12%"><FONT size=2>34,051</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="left" width="12%"><FONT size=2>34,443</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Interest and other income</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%"><FONT size=2>1,415</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%"><FONT size=2>5,245</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="left" width="12%"><FONT size=2>944</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="12%"><FONT size=2>38,229</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="12%"><FONT size=2>39,296</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="left" width="12%"><FONT size=2>35,387</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>The increase in this year&#146;s gold revenue is due to higher realized price per ounce of gold sold by S&atilde;o Bento. This was offset by lower sales volumes and a lower hedging gain amortization. S&atilde;o Bento sold 95,544 ounces of gold in 2003 at a realized price of $361/oz. compared to 99,659 ounces in 2002 at a realized price of $306/oz. and 105,349 ounces in 2001 at a realized price of $299/oz.</FONT>
</P>
<P>
<FONT size=2>In 2001, the Company liquidated its gold hedge position and we currently remain unhedged. The Company continues to sell its gold production at spot prices and anticipates higher gold prices in 2004. We are forecasting an average gold price of $400/oz. in 2004. </FONT>
</P>
<P>
<FONT size=2>In 2004 the Company may consider a hedge position by entering into put option contracts that clearly benefit the Company&#146;s position. Put options purchased by the Company establish a minimum sales price for the production covered by such put options and permit the Company to participate in any price increases above the strike price of such put options but do not limit the Company&#146;s ability to benefit from a rising gold price. </FONT>
</P>
<P>
<FONT size=2>Revenue includes a hedging gain for 2003 of $24/oz. compared to $36/oz. in 2002 and $28/oz. in 2001. The hedging gain results from the liquidation of a portion of the Company&#146;s hedge book in the years 1998 through 2001. The funds obtained from these liquidations were used to reduce bank debt and fund working capital needs during the extended period of depressed gold prices. Canadian GAAP requires that gains or losses earned on liquidated gold hedges prior to the original scheduled delivery dates be recorded on the balance sheet and amortized to the Profit and Loss statements as originally scheduled. In 2003 a gain of $2,286 was amortized to the Profit and Loss statement. We will report a remaining hedging loss amortization of $329 in 2004. </FONT>
</P>
<P>
<B><FONT size=2>Interest and Other Income</FONT></B><FONT size=2> </FONT>
</P>
<P>
<FONT size=2>Interest and other income for 2003 were $1,415, compared with $5,245 in 2002 and $944 in 2001. The significant other income of $5,405 for 2002 and $500 for 2001 represent insurance funds received from Brasil Resseguros S.A. (the &#147;IRB&#148;) to repair the #2 autoclave at S&atilde;o Bento and for business interruption insurance during the repair offset by other expenses of $160.  Interest income in the current year is a reflection of earnings on our substantial cash holdings. The Company is committed to continue to invest its unused funds in the most beneficial manner. </FONT>
</P>
<P align="center">
<FONT size=2>35</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_36"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts</FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="60%"><B><FONT size=2>Expenses</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=2>Operating costs</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="11%"><FONT size=2>22,604</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="9%"><FONT size=2>19,027</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>23,446</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=2>Depletion, depreciation and amortization</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%"><FONT size=2>10,321</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%"><FONT size=2>10,699</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>9,353</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=2>General and administrative</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%"><FONT size=2>4,961</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%"><FONT size=2>3,238</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>3,296</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=2>Exploration expense</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%"><FONT size=2>1,956</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%"><FONT size=2>1,078</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>508</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=2>Foreign exchange loss (gain)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%"><FONT size=2>(6,494)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%"><FONT size=2>1,046</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>173</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;&nbsp;&nbsp;<FONT size=2>Other</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="11%"><FONT size=2>2,620</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%"><FONT size=2>1,076</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>3,016</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="60%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="11%"><FONT size=2>35,968</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="9%"><FONT size=2>36,164</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>39,792</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>Operating expenses at S&atilde;o Bento were $22,604 for 2003 compared with $19,027 for 2002 and $23,446 for 2001. The Company&#146;s operating expenses are derived from the total cash cost of production at S&atilde;o Bento that increased in 2003.</FONT>
</P>
<P>
<FONT size=2>Increase in cash costs in 2003 is a direct result of a strengthening Real, the commencement of the Shaft Deepening Project and higher inflation rates. </FONT>
</P>
<P>
<FONT size=2>Depreciation, depletion and amortization expenses of $10,321 are largely recorded on the life-of-mine method.</FONT>
</P>
<P>
<FONT size=2>Corporate administration expense for 2003 were $4,961 compared to 2002 of $3,238 and $3,296 for 2001. Higher corporate administration expense in 2003 is a reflection of management&#146;s commitment to provide value-added growth to the Company. Increased corporate activity dedicated to growth initiatives required additional staffing.  Also contributing to higher administration expense was the strengthening of the Canadian dollar against the U.S. dollar.  With most of our administration expenses based in Canadian dollars a strengthening of the Canadian dollar has a negative impact in the Company&#146;s U.S. dollar</FONT>
<FONT size=2>expenses.  Included</FONT>
<FONT size=2>in the</FONT>
<FONT size=2>general administration</FONT>
<FONT size=2>expense for</FONT>
<FONT size=2>2003 are</FONT>
<FONT size=2>fees paid</FONT>
<FONT size=2>to</FONT>
<FONT size=2>PricewaterhouseCoopers totaling $475. These include audit services of $121, audit related activities of $33 and taxation services of $321.  For 2004 the Company is forecasting an average exchange rate Cdn$/U.S.$ of 75 cents (Cdn$1.00= US$0.75).  As a consequence of the continued strength of the Canadian dollar combined with the Company&#146;s initiative to provide value added growth the Company is forecasting increased general and administrative expenses for 2004.</FONT>
</P>
<P>
<FONT size=2>Exploration expenses for 2003 were $1,956 compared to $1,078 in 2002 and $508 in 2001. Prior to 2003 the Company had been severely limited by cash availability to pursue greenfield exploration opportunities. Most of our exploration expenditures during these years were in payment of landholding and care and maintenance costs in Brazil and Turkey. With the elimination of our debt and the substantial increase in our cash position, we are actively pursing new exploration targets in Brazil, Turkey and China. The Company intends to further increase its exploration budget in 2004. </FONT>
</P>
<P>
<FONT size=2>In 2003 the Company recorded a substantial foreign exchange gain that resulted directly from Management&#146;s decision to keep a substantial portion of the equity raised in Canadian dollars.  The strengthening of the Canadian dollar vs. the U.S. dollar during the year created the realized gain. Management is forecasting a continued strengthening of the Canadian dollar in 2004 at present the Company continues to hold 52.5% of the total cash balance in Canadian dollars.</FONT>
</P>
<P align="center">
<FONT size=2>36</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_37"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts</FONT>
</P>
<P>
<B><FONT size=2>Income Taxes </FONT></B>
</P>
<P>
<FONT size=2>Current tax recovery for 2003 was $1,107 compared to current tax expense of $1,121 in 2002 and $155 in 2001. The significant recovery in 2003 is a direct result of a partial reversal of the Brazilian withholding taxes on inter-company loans, resulting from the restructuring of our inter-company debt. We expect to complete the restructuring in 2004, which will result in the reversal of the remaining withholding tax liability. </FONT>
</P>
<P>
<FONT size=2>Future income tax expense of $3,570 in 2003 relates to a future tax liability recorded due to the Real appreciation. The appreciation of the Real results in a gain on inter-company debt and therefore creates a future income tax liability. If the Real weakens in the future this deferred tax liability will be reversed. </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="53%"><B><FONT size=2>Related Party Transactions</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="54%"><FONT size=2>The Company has no related party transactions to report.</FONT></TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><B><FONT size=2>5. Review of Operations</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><B><FONT size=2>S&atilde;o Bento Mine</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Operating Data</FONT><SUP><FONT size=2>1</FONT></SUP></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Gold Production</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Ounces</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>95,049</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>103,533</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>102,841</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Cash Operating Costs ($/oz)</FONT><SUP><FONT size=2>5</FONT></SUP></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>234</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>184</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>216</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Total Cash Costs ($/oz)</FONT><SUP><FONT size=2>2,5</FONT></SUP></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>241</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>189</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>221</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Total Production Costs ($/oz)</FONT><SUP><FONT size=2>3,5</FONT></SUP></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>356</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>282</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>306</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Realized Price ($/oz sold)</FONT><SUP><FONT size=2>4</FONT></SUP></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>361</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>306</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>299</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>S&atilde;o Bento Mine</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Tonnes to Mill</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>374,130</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>381,295</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>417,609</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Average Mill Grade (grams/tonne)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>8.50</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>8.93</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>8.60</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="53%"><FONT size=2>Average Recovery Rate (%)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>92.00</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>92.60</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>91.40</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
</TABLE><TABLE>
<TR>
   <TD valign="top" width="5%"><FONT size=1>1</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT size=1>Cost figures calculated in accordance with Gold Institute Standard</FONT><BR></TD>
</TR>
<TR>
   <TD valign="top" width="5%"><FONT size=1>2</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT size=1>Cash Operating Costs plus royalties and the cost of off-site administration.</FONT><BR></TD>
</TR>
<TR>
   <TD valign="top" width="5%"><FONT size=1>3</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT size=1>Total Cash Cost plus depreciation and amortization.</FONT><BR></TD>
</TR>
<TR>
   <TD valign="top" width="5%"><FONT size=1>4</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT size=1>Excludes amortization of deferred gain.</FONT><BR></TD>
</TR>
<TR>
   <TD valign="top" width="5%"><FONT size=1>5</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT size=1>Cash operatin g, total cash and total production costs are non-GAAP measures that do not have any standardized meaning as prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other entities. Please see section &#147;Non-GAAP measures&#148; of this MD&amp;A.</FONT><BR>   </TD>
</TR>
</TABLE>
<P>
<FONT size=2>Cash and total production cost per ounce of gold are presented above in accordance with the Gold Institute Standard for the years ended December 31, 2003, 2002 and 2001. Consolidated cash and total production cost per ounce for gold mining operations have been derived from amounts included in sales revenues, cost of sales, and depreciation and depletion in the consolidated statements of earnings. </FONT>
</P>
<P align="center">
<FONT size=2>37</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_38"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<FONT size=2>Average total cash costs for S&atilde;o Bento in 2003 were $241/oz. compared to $189/oz. in 2002 and $221/oz. in 2001. Total production costs were $356 /oz. in 2003 compared to $282 /oz. in 2002 and $306/oz. in 2001.</FONT>
</P>
<P>
<FONT size=2>In 2003, as the Mine deepened and the ore body dipped away from the existing shaft bottom at the 23</FONT><SUP><FONT size=2>rd </FONT></SUP><FONT size=2>level, it became necessary for the Company to deepen the shaft at S&atilde;o Bento in order to sustain production levels and operating costs. In April 2003 the Company announced its intention to deepen the shaft down to the 28</FONT><SUP><FONT size=2>th</FONT></SUP><FONT size=2> level. The shaft deepening will provide the Mine with a bottom working elevation approximately 1,300 meters below surface. The Shaft Deepening Project is estimated to cost $12,000 and commissioning is forecast in the 2</FONT><SUP><FONT size=2>nd</FONT></SUP><FONT size=2> quarter of 2005. During the period required for the completion of the Shaft Deepening Project the Company announced its gold production would remain at a rate of approximately 95,000 ounces per year. </FONT>
</P>
<P>
<FONT size=2>During 2003 2,500 meters of infill drilling and 15,000 meters of exploration drilling were completed at the Mine. Deeper drilling (below 32</FONT><SUP><FONT size=2>nd</FONT></SUP><FONT size=2> level) has identified a metabasite intrusive complicating continuity of mineralization at depth. Drilling will continue through 2004 with 18,000 meters designed to further quantify the extent of the disruption caused by the intrusive and extend and upgrade resources. As of December 31, 2003 S&atilde;o Bento reported Proven and Probable Reserves of 506,190 ounces and Inferred Resources of 265,211 ounces. </FONT>
</P>
<P>
<FONT size=2>During 2003 the Company&#146;s two autoclaves at S&atilde;o Bento operated at normal conditions. In 2002, S&atilde;o Bento completed a major repair of the #2 autoclave. The cost of the repair was covered by the Company&#146;s insurance policy with the IRB. To settle the claim, the IRB paid S&atilde;o Bento $3,224 in the 4</FONT><SUP><FONT size=2>th</FONT></SUP><FONT size=2> Qtr of 2001 and $3,223 in the 1 </FONT><SUP><FONT size=2>st</FONT></SUP><FONT size=2> Qtr of 2002 for a total of $6,447 for repairs. Eldorado completed the repairs in March 2002 at a cost of $2,919 and $127 for taxes on parts. A difference of $3,401 was recorded to other income in 2002. During the shutdown of the #2 autoclave for repair the Company also received business interruption insurance of $3,497. Of this, $440 was credited to operating costs in 2001 and $1,053 in 2002 and the remainder $2,004 was recorded to other income in 2002. </FONT>
</P>
<P>
<B><FONT size=2>Sao Bento Mine Gold Production Cost per Ounce</FONT></B>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="62%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Direct mining expenses</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>227</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>186</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>190</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Currency hedging</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>25</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Inventory change</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>1</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>4</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(5)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Refining and selling costs</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>5</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>3</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>5</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Vancouver costs</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>1</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>1</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>2</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>By-product credits</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(1)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Business Interruption credit</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>(10)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%">-</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Cash operating cost per ounce</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>234</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>184</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>216</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Royalties and Production taxes</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>7</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>5</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>5</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Total cash costs per ounce</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>241</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>189</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>221</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Depreciation/Depletion</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>103</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>87</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>82</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Foreign Exchange (Gain)/ Loss</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>12</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>6</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="8%"><FONT size=2>3</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="62%"><FONT size=2>Total production costs per ounce</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>356</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>282</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD width="8%"><FONT size=2>306</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>On May 25, 2001, the Brazilian government issued a decree reducing electricity usage. Effective June 1, 2001, S&atilde;o Bento was subject to electrical power rationing of 80% of the Mine&#146;s normal usage. On March</FONT>
</P>
<P align="center">
<FONT size=2>38 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_39"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<FONT size=2>1, 2002, the Brazilian government lifted the restriction on the consumption of electrical power. With these lifted power restrictions and the completion of the #2 autoclave repair, S&atilde;o Bento returned to full production during the second quarter of 2002. In 2003 S&atilde;o Bento faced no power restrictions. For 2004 we do not anticipate a power restriction. </FONT>
</P>
<P>
<FONT size=2>The continued weakening of the Real from an average of 2.35 in 2001 and an average of 2.92 in 2002 benefited the Company with lower cash costs. 70% of S&atilde;o Bento&#146;s cash cost profile is denominated in the Real, with the remaining 30% in U.S. dollars. A 10% weakening of the Real without corresponding inflation translates into approximately a $13 /oz. reduction in cash cost on 100,000 ounces of production. However, in 2003 the Real strengthened significantly, from 3.52 per U.S. dollar on January 1</FONT><SUP><FONT size=2>st</FONT></SUP><FONT size=2> 2003 to 2.88 per U.S. dollar on December 31, 2003. The appreciation of the Real by approximately 18% in 2003 plus higher than anticipated inflation rates in local currency and increased transportation costs as the ore body dipped away from the existing shaft had a negative impact in our cost structure, hence our higher cash costs per ounce in 2003. Lower gold production also contributed to higher cash costs per ounce. </FONT>
</P>
<P>
<B><FONT size=2>6.</FONT></B>&nbsp;<B><FONT size=2>Summary of Quarterly Results and 4</FONT></B><B><SUP><FONT size=2>th</FONT></SUP></B><B><FONT size=2> Quarter Review </FONT></B>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD align="center" width="51%"><B><FONT size=1>2003</FONT></B></TD>
   <TD colspan=2 width="12%"><B><FONT size=1>4th Quarter</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="11%"><B><FONT size=1>3rd Quarter</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="9%"><B><FONT size=1>2nd Quarter</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="8%"><B><FONT size=1>1st Quarter</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="51%"><FONT size=1>Revenue</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>9,592</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=1>9,841</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>9,348</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=1>9,448</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="51%"><FONT size=1>Net income (loss)</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(47,241)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=1>(1,323)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>1,640</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=1>1,891</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="51%"><FONT size=1>Basic (loss) Income per share - U.S.</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(0.21)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=1>(0.01)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=1>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="51%"><FONT size=1>Diluted (loss) Income per share - U.S.</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(0.21)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=1>(0.01)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=1>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD align="center" width="51%"><B><FONT size=1>2002</FONT></B></TD>
   <TD colspan=2 width="12%"><B><FONT size=1>4th Quarter</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="11%"><B><FONT size=1>3rd Quarter</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="9%"><B><FONT size=1>2nd Quarter</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="8%"><B><FONT size=1>1st Quarter</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="51%"><FONT size=1>Revenue</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>10,180</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=1>10,609</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>12,352</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=1>6,155</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="51%"><FONT size=1>Net income (loss)</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(1,651)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=1>1,374</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="8%"><FONT size=1>2,348</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="7%"><FONT size=1>(293)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="51%"><FONT size=1>Basic (loss) Income per share - U.S.</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(0.02)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=1>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>0.02</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=1>0.00</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="51%"><FONT size=1>Diluted (loss) Income per share - U.S.</FONT></TD>
   <TD align="center" width="1%"><FONT size=1>$</FONT></TD>
   <TD align="right" width="11%"><FONT size=1>(0.02)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=1>0.01</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="8%"><FONT size=1>0.02</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%"><FONT size=1>0.00</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>In the 4</FONT><SUP><FONT size=2>th</FONT></SUP><FONT size=2> quarter of 2003 the Company reported three significant non-cash write-downs relating to the S&atilde;o Bento Mine, the Kaymaz Gold Project, and obsolete equipment inventories. Write-downs of $39,520, $4,275 and $850 were booked respectively. </FONT>
</P>
<P>
<B><FONT size=2>7.</FONT></B>&nbsp;<B><FONT size=2>Liquidity and Capital Resources </FONT></B>
</P>
<P>
<B><FONT size=2>Cash from Operations </FONT></B>
</P>
<P>
<FONT size=2>Eldorado&#146;s cash from operation for 2003 was $3,646 compared to $9,288 in 2002 and $13,029 in 2001. The decrease in cash is due to increased general and administrative expense and exploration expense in the current year. The increase is reflective of the Company&#146;s initiative to grow and expand its operations in countries where we believe there is substantial geological potential.  We are budgeting increases in both these areas in 2004. </FONT>
</P>
<P>
<B><FONT size=2>Cash and Financial Conditions </FONT></B>
</P>
<P>
<FONT size=2>Eldorado&#146;s cash position including term deposits increased from $37,627 at December 31, 2002 to $105,465 at December 31, 2003. The Company&#146;s working capital was $107,137 as at December 31, 2003 compared with a working capital of $36,648 as at December 31, 2002. In September 2003 Eldorado redeemed in advance $7,150 in Convertible Debenture debt due on November 4, 2004. Currently the Company is in a debt and hedge free position with no off balance sheet financing structures in place. This 39 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_40"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<FONT size=2>positions the Company to continue with its strategy for value added growth. Cash is available to fund construction of the Kisladag Mine and to continue with greenbelt exploration in Brazil, Turkey and China.</FONT>
</P>
<P>
<FONT size=2>In addition, operating costs year on year increased at the S&atilde;o Bento Mine by approximately 5.5%. The increase in operating costs is a direct result of a strengthening Real and increased inflation. </FONT>
</P>
<P>
<FONT size=2>Finally in 2002 additional cash was generated due to the receipt of funds on the settlement of the IRB insurance claim.</FONT>
</P>
<P>
<FONT size=2>We are forecasting in 2004 $14,000 cash from operations at S&atilde;o Bento before sustaining capital, at a gold price of $400 per ounce. </FONT>
</P>
<P>
<B><FONT size=2>Investing Activities </FONT></B>
</P>
<P>
<FONT size=2>During 2003, Eldorado spent $14,191 on investing activities, of which $8,973 were on property, plant and equipment at S&atilde;o Bento, $3,604 on mineral properties and deferred development in Turkey and $1,196 on investments.</FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD colspan=9 width="96%"><FONT size=2>In 2003 S&atilde;o Bento commenced the Shaft Deepening Project presently scheduled for completion in 2005.</FONT></TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=9 width="96%"><FONT size=2>The completion of the Shaft Deepening Project will facilitate mining both above and below the Mine&#146;s</FONT></TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD width="47%"><FONT size=2>30</FONT><SUP><FONT size=2>th </FONT></SUP><FONT size=2>level.</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="47%">&nbsp;&nbsp;&nbsp;<B><FONT size=2>Capital Expenditures</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD width="47%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="12%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="12%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="12%"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="47%">&nbsp;&nbsp;&nbsp;<FONT size=2>S&atilde;o Bento Mine</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>8,973</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>5,334</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>4,513</FONT></TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="47%">&nbsp;&nbsp;&nbsp;<FONT size=2>Kisladag Development</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>3,494</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>2,213</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>1,131</FONT></TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD width="47%">&nbsp;&nbsp;&nbsp;<FONT size=2>Others</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>528</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>72</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="12%"><FONT size=2>100</FONT></TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="47%">&nbsp;&nbsp;&nbsp;<FONT size=2>Total</FONT></TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>4,022</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>2,285</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="2%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2>1,231</FONT></TD>
   <TD width="4%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="47%"><B><FONT size=2>Financing Activities</FONT></B></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="12%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>In 2003, the Company repaid its outstanding Convertible Debenture debt of $7,150.</FONT>
</P>
<P>
<FONT size=2>In August of 2003 the Company completed a financing for a total of $52,822 net of fees. In December 2003 a total of 19,520,416 shares were issued for warrants issued as a result of the December 2002 financing generating an additional $24,352 of cash. Over the past three years we have raised $126,590, net of fees, in public financing, which has been used to eliminate debt and fund Eldorado&#146;s ongoing operations and development.</FONT>
</P>
<P align="center">
<FONT size=2>40</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_41"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts</FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="63%"><B><FONT size=2>Proceeds from the Issue of Common Shares</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="9%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="63%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="6%" align="right"><B><FONT size=2>2001</FONT></B></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD align="right">&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Public Financing</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>52,822</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>42,536</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="6%" align="right">-</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Warrants Conversion</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>24,496</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>5,008</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="6%" align="right">-</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Options Exercised</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>1,301</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>468</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="6%" align="right"><FONT size=2>5</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Return to Treasury</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%">-</TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="9%"><FONT size=2>(46)</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD width="1%" align="right">&nbsp;</TD>
   <TD width="6%" align="right">-</TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD width="63%"><FONT size=2>Total Cash Raised</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>78,619</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2>47,966</FONT></TD>
   <TD width="3%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="6%" align="right"><FONT size=2>5</FONT></TD>
   <TD width="3%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><P>
<B><FONT size=2>8.</FONT></B>&nbsp;<B><FONT size=2>Risks and Uncertainties </FONT></B>
</P>
<P>
<B><FONT size=2>Gold Price </FONT></B>
</P>
<P>
<FONT size=2>Eldorado&#146;s profitability is linked to the price of gold as its revenues are derived primarily from gold mining. Gold prices are affected by numerous factors beyond our control, including central bank sales, producer hedging activities, the relative exchange rate of the U.S. dollar with other major currencies, global and regional demand, political and economic conditions and production costs. Worldwide gold production levels also affect gold prices. In addition, the price of gold has on occasion been subject to rapid short-term changes due to speculative activities.</FONT>
</P>
<P>
<B><FONT size=2>Exploration and Development </FONT></B>
</P>
<P>
<FONT size=2>The costs and results of Eldorado&#146;s exploration and development programs affect its profitability and value. As mines have limited lives based on proven reserves, Eldorado actively seeks to replace and expand its reserves, primarily through exploration and development of its existing operation and, in the future, construction of operatin g gold mines in Turkey at the Company&#146;s wholly owned properties of Kisladag and Efem&ccedil;ukuru. Exploration for minerals involves many risks and may not result in any new economically viable mining operations or yield new reserves to replace and expand current reserves.</FONT>
</P>
<P>
<FONT size=2>Based on current production rates, S&atilde;o Bento can sustain production from its current reserves and resources for approximately five years. </FONT>
</P>
<P>
<FONT size=2>The acquisition of title to mineral properties is a detailed and time-consuming process. The Company has taken steps, in accordance with industry standards, to verify mineral properties in which it has an interest. Although the Company has taken every precaution to ensure that legal title to its properties is properly recorded in the name of the Company, there can be no assurance that such title will ultimately be secured. </FONT>
</P>
<P>
<B><FONT size=2>Operational</FONT></B>
</P>
<P>
<FONT size=2>The Company&#146;s S&atilde;o Bento operation is located in Brazil and incurs medium political risks. The business of gold mining involves many operational risks and hazards. Through high operational standards, emphasis on training and continuous improvement, Eldorado works to reduce the mining risks at S&atilde;o Bento. The Company maintains adequate insurance to cover normal business risk. The S&atilde;o Bento Mine currently accounts for all of Eldorado&#146;s gold production and revenue. Any adverse development affecting S&atilde;o Bento would have an adverse effect on the Company&#146;s financial performance. </FONT>
</P>
<P>
<B><FONT size=2>Environmental </FONT></B>
</P>
<P>
<FONT size=2>Eldorado&#146;s activities are subject to extensive federal, provincial, state and local laws and regulations governing environmental protection and employee health and safety. Eldorado is required to obtain</FONT>
</P>
<P align="center">
<FONT size=2>41 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_42"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<FONT size=2>governmental permits and provide associated financial assurance to carry on certain activities. Eldorado is also subject to various reclamation-related conditions imposed under federal, state or provincial air, water quality and mine reclamation rules and permits. </FONT>
</P>
<P>
<FONT size=2>While Eldorado has budgeted for future capital and operating expenditures to maintain compliance with environmental laws and permits, there can be no assurance that these laws will not change in the future in a manner that could have an adverse effect on the Company&#146;s financial condition, liquidity or results of operations. </FONT>
</P>
<P>
<B><FONT size=2>Laws and Regulations </FONT></B>
</P>
<P>
<FONT size=2>Eldorado&#146;s mining operations and exploration activities are subject to extensive federal, provincial, state and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters. Such laws and regulations are subject to change and can become more stringent and costly. Eldorado draws on the expertise and commitment of its Management team, their advisors, its employees and contractors to ensure compliance with current laws and foster a climate of open communication and co-operation with regulatory bodies. </FONT>
</P>
<P>
<B><FONT size=2>Currency Fluctuations </FONT></B>
</P>
<P>
<FONT size=2>Eldorado&#146;s operating results and cash flows are affected by changes in the U.S.$/Real exchange, the U.S$./Turkish Lira (&#147;Lira&#148;) exchange rate, and the U.S.$/Canadian dollar exchange rate as substantially all revenues are earned in U.S. dollars but the majority of the operating and capital expenditures are in Reals, Lira or Canadian dollars.</FONT>
</P>
<P>
<B><FONT size=2>Political Risk </FONT></B>
</P>
<P>
<FONT size=2>Eldorado conducts operations in a number of countries, namely Brazil, Turkey and China.  These operations are potentially subject to a number of political, economic and other risks. Eldorado is not able to determine the impact of political, economic or other risks on its future financial position. </FONT>
</P>
<P>
<B><FONT size=2>9.</FONT></B>&nbsp;<B><FONT size=2>Outlook </FONT></B>
</P>
<P>
<FONT size=2>The Company anticipates continuing operations at S&atilde;o Bento for 2004 and beyond. In 2004, we are planning to produce 95,000 ounces of gold at a cash cost of $245/oz. The Shaft Deepening Project at S&atilde;o Bento continues according to plan, which will provide access to reserves and resources at the deeper levels of the Mine. The Company expects to complete the Shaft Deepening Project in 2005. </FONT>
</P>
<P>
<FONT size=2>The Company is in the process of completing land acquisitions for its Kisladag Project in Turkey. Construction permitting is anticipated to be completed in the 2 </FONT><SUP><FONT size=2>nd</FONT></SUP><FONT size=2> Qtr of 2004, which will enable the Company to begin construction of the Kisladag Mine in the 2</FONT><SUP><FONT size=2>nd</FONT></SUP><FONT size=2> Qtr of 2004 as planned. The Company is forecasting gold production to begin in 2005. </FONT>
</P>
<P>
<FONT size=2>The Company is currently proceeding with completing an Environmental Impact Assessment for its Efemcukuru Gold Project. Upon receipt of a positive certificate from the Minister of Environment, the Company plans to commence additional drilling on the property, in preparation of completing a feasibility study in 2005. </FONT>
</P>
<P>
<FONT size=2>By the end of June 2004 the Company will have completed its review of CNGC&#146;s portfolio and may begin to pursue activities to establish a permanent operating base in China to forward its intention to become a gold producer in China. </FONT>
</P>
<P align="center">
<FONT size=2>42 </FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_43"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<B><FONT size=2>10. Non &#150; GAAP Measures </FONT></B>
</P>
<P>
<FONT size=2>Eldorado Gold Corporation has included certain non-GAAP performance measures throughout this document. These non-GAAP performance measures do not have any standardized meaning prescribed by GAAP and, therefore, are unlike ly to be comparable to similar measures presented by other companies. Eldorado believes that, in addition to conventional measures, prepared in accordance with Canadian</FONT>
</P>
<P align="center">
<FONT size=2>43</FONT>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_44"></A>

<P style="margin-top: 0; margin-bottom: 0">
<B>Management&#146;s Discussion and Analysis </B>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Year ended December 31, 2003, 2002 and 2001 </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2>Expressed in thousands of U.S. dollars except per share and per ounce amounts </FONT>
</P>
<P>
<FONT size=2>GAAP, certain investors use this information to evaluate Eldorado&#146;s performance. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP. Set out below are definitions for these performance measures and reconciliation&#146;s of the non-GAAP measures to reported GAAP measures. </FONT>
</P>
<P>
<B><FONT size=2>Unit costs: </FONT></B>
</P>
<P>
<FONT size=2>A reconciliation of costs per ounce of gold produced; calculated in accordance with the Gold Institute Standard to the cost of sales and depletion, depreciation and amortization is included below: </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD align="center" width="50%"><B><FONT size=2>2003</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>Cash Operating</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>Total Cash</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>Total Production</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>Cost</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>Cost</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>Cost</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Operating Cost (Income Statement)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>22,604</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>22,604</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>22,604</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Royalties &amp; Production Taxes</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(652)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Depreciation &amp; Amortization</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>9,830</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Foreign Exchange (gain) loss</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>1,101</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Reconciliation adjustment (Note 1)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>300</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>300</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>300</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Operating cost base for calculation</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>22,252</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>22,904</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>33,835</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Gold Produced</FONT></TD>
   <TD colspan=2 width="5%"><FONT size=2>Oz</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>95,049</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>95,049</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>95,049</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Operating cost base / Gold Produced</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="4%"><FONT size=2>/oz</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>234</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>241</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>356</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD align="center" width="50%"><B><FONT size=2>2002</FONT></B></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>Cash Operating</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>Total Cash</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" colspan=2 width="11%"><FONT size=2>Total Production</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>Cost</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>Cost</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>Cost</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Operating Cost (Income Statement)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>19,027</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>19,027</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>19,027</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Royalties &amp; Production Taxes</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>(555)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Depreciation &amp; Amortization</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>9,034</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Foreign Exchange (gain) loss</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>536</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Reconciliation adjustment (Note 1)</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>573</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>573</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>573</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Operating cost base for calculation</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>19,045</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>19,600</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>29,170</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Gold Produced</FONT></TD>
   <TD colspan=2 width="5%"><FONT size=2>Oz</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>103,533</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="14%"><FONT size=2>103,533</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="10%"><FONT size=2>103,533</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Operating cost base / Gold Produced</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD width="4%"><FONT size=2>/oz</FONT></TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>184</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="14%"><FONT size=2>189</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2>$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2>282</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="50%"><FONT size=2>Note:</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="14%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="10%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
</TABLE><P>
<FONT size=2>1) Reconciliation adjustment is a result of refining losses, the difference between gold produced and gold sold, and inventory change adjustments.</FONT>
</P>
<P align="center">
<FONT size=2>44</FONT>
</P>
<HR noshade align="center" width="100%" size=2>

<P style="margin:0pt; font-family:Book Antiqua; font-size:12pt"><BR></P>

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