<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>fstext.txt
<DESCRIPTION>AUDITED FINANCIAL STATEMENTS AND AUDITORS REPORT
<TEXT>
Auditors' Report

To the Board of Directors
Taseko Mines Limited

We have audited the  consolidated  balance  sheets of Taseko Mines Limited as at
September  30,  2002 and 2001 and the  consolidated  statements  of  operations,
deficit  and cash  flows for each of the years in the  three-year  period  ended
September 30, 2002.  These financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

With respect to the consolidated  financial  statements for each of the years in
the  two-year  period  ended  September  30,  2002,  we  conducted  our audit in
accordance with Canadian generally accepted auditing standards and United States
generally  accepted  auditing  standards.   With  respect  to  the  consolidated
financial  statements  for the year ended  September  30, 2000, we conducted our
audit 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.

In our opinion,  these consolidated  financial statements present fairly, in all
material  respects,  the  financial  position of the Company as at September 30,
2002 and 2001 and the results of its  operations  and its cash flows for each of
the years in the three-year  period ended  September 30, 2002 in accordance with
Canadian generally accepted accounting principles.

KPMG LLP

Chartered Accountants

Vancouver, Canada
January 29, 2003

Comments by Auditors for U.S. Readers on Canada-U.S. Reporting Difference


In the United States,  reporting  standards for auditors require the addition of
an explanatory  paragraph  (following the opinion  paragraph) when the financial
statements are affected by conditions and events that cast substantial  doubt on
the Company's ability to continue as a going concern, such as those described in
note 1 to the  consolidated  financial  statements.  Our  report to the Board of
Directors  dated  January 29, 2003,  is expressed in  accordance  with  Canadian
reporting  standards  which do not permit a  reference  to such  conditions  and
events in the  auditors'  report  when  these are  adequately  disclosed  in the
financial statements.

KPMG LLP

Chartered Accountants

Vancouver, Canada
January 29, 2003

<PAGE>

                              TASEKO MINES LIMITED
                       CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2002

                        (Expressed in Canadian Dollars)

<PAGE>

TASEKO MINES LIMITED
Consolidated Balance Sheets
(Expressed in Canadian Dollars)

<TABLE>
<S>                                                             <C>              <C>
                                                      September 30     September 30
                                                              2002             2001
                                                     -------------    -------------
Assets

Current assets

Cash and equivalents .............................   $      39,104    $      82,296
Amounts receivable ...............................         336,247          231,432
Supplies inventory ...............................       2,282,954        2,400,000
Prepaid expenses .................................         103,631           27,183
                                                     -------------    -------------
                                                         2,761,936        2,740,911

Property, plant and equipment (note 4) ...........      10,158,525       10,872,590
Reclamation deposits (notes 3, 7(d)(ii) and 11(b))      18,576,524       17,854,892
Mineral property interests (note 5) ..............      28,813,296          602,001
                                                     -------------    -------------
                                                     $  60,310,281    $  32,070,394
                                                     =============    =============

Liabilities and Shareholders' Equity (Deficiency)

Current liabilities

Bank operating loan (note 6) .....................   $   2,000,000    $        --
Accounts payable and accrued liabilities .........       1,569,288        1,644,810
Advances from related parties (note 10) ..........       3,469,168        1,283,779
                                                     -------------    -------------
                                                         7,038,456        2,928,589

Reclamation liability (notes 4 and 11(b)) ........      32,700,000       32,700,000
                                                     -------------    -------------
                                                        39,738,456       35,628,589
                                                     -------------    -------------

Shareholders' equity (deficiency)

Share capital (note 7) ...........................      91,889,200       87,897,199
Convertible debenture (note 7(d)) ................      17,000,000       17,000,000
Tracking preferred shares (note 3) ...............      26,641,948             --
Deficit ..........................................    (114,959,323)    (108,455,394)
                                                     -------------    -------------
                                                        20,571,825       (3,558,195)
Continuing operations  (note 1)
Commitments (note 5)
Subsequent  events (notes 5(e) and 11)
                                                     -------------    -------------
                                                     $  60,310,281    $  32,070,394
                                                     =============    =============
</TABLE>

See accompanying notes to consolidated financial statements.

Approved by the Board of Directors

/s/ Ronald W. Thiessen                                      /s/ Jeffrey R. Mason

Ronald W. Thiessen                                          Jeffrey R. Mason
Director                                                    Director


<PAGE>

TASEKO MINES LIMITED
Consolidated Statements of Operations
(Expressed in Canadian Dollars)

<TABLE>
<S>                                                                                                                <C>
                                                                                             Years ended September 30,
                                                                              -----------------------------------------------------
                                                                                       2002                2001                2000
                                                                              -------------       -------------       -------------
Expenses
   Conference and travel ...............................................      $      44,429       $      72,981       $      36,428
   Consulting ..........................................................            133,672           1,750,662             104,683
   Corporation taxes ...................................................            577,228             211,486              94,836
   Depreciation ........................................................            714,065             714,857             717,002
   Exploration (schedule) ..............................................          2,071,885           3,860,176           4,464,999
   Interest and finance charges ........................................            507,790              73,058                --
   Legal, accounting and audit .........................................            334,492             483,653             199,905
   Office and administration ...........................................            247,061             674,783             795,049
   Refinery project (schedule) .........................................          1,698,826           3,571,942                --
   Shareholder communication ...........................................             90,835              73,523             101,953
   Trust and filing ....................................................             36,802              51,155              72,446
                                                                              -------------       -------------       -------------
                                                                                  6,457,085          11,538,276           6,587,301
                                                                              -------------       -------------       -------------
Other items
   Interest and other income ...........................................            551,842           1,110,431             678,014
   Gain on sale of property, plant and equipment .......................              1,314                --                  --
   Write down of mineral property acquisition costs ....................           (600,000)        (44,224,214)               --
   Write down of supplies inventory ....................................               --            (3,509,465)               --
                                                                              -------------       -------------       -------------
                                                                                    (46,844)        (46,623,248)            678,014
                                                                              -------------       -------------       -------------

Loss for the year ......................................................      $  (6,503,929)      $ (58,161,524)      $  (5,909,287)
                                                                              =============       =============       =============

Basic and diluted loss per common share (note 2) .......................      $       (0.21)      $       (2.32)      $       (0.25)
                                                                              =============       =============       =============
Weighted average number of
   common shares outstanding ...........................................         30,338,098          25,067,697          23,402,726
                                                                              =============       =============       =============
</TABLE>



Consolidated Statements of Deficit
(Expressed in Canadian Dollars)

<TABLE>
<S>                                                                                                                <C>
                                                                                             Years ended September 30,
                                                                              -----------------------------------------------------
                                                                                       2002                2001                2000
                                                                              -------------       -------------       -------------
Deficit, beginning of year .............................................      $(108,455,394)      $ (50,293,870)      $ (44,384,583)
Loss for the year ......................................................         (6,503,929)        (58,161,524)         (5,909,287)
                                                                              -------------       -------------       -------------
Deficit, end of year ...................................................      $(114,959,323)      $(108,455,394)      $ (50,293,870)
                                                                              =============       =============       =============
</TABLE>


See accompanying notes to consolidated financial statements

<PAGE>

TASEKO MINES LIMITED
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)


<TABLE>
<S>                                                                                                                 <C>
                                                                                              Years ended September 30,
                                                                                    -----------------------------------------------
Cash provided by (used for)                                                                  2002             2001             2000
                                                                                     ------------     ------------     ------------
Operating activities
   Loss for the year ............................................................    $ (6,503,929)    $(58,161,524)    $ (5,909,287)
   Items not involving cash
       Accrued interest income on reclamation deposits ..........................        (546,632)        (837,062)        (455,803)
       Depreciation .............................................................         714,065          714,857          717,002
       Write down of mineral property acquisition costs .........................         600,000       44,224,214               --
       Write down of supplies inventory .........................................              --        3,509,465               --
       Gain on sale of property, plant and equipment ............................          (1,314)              --               --
       Acquisition premium paid for Gibraltar Refinery (2002) Ltd. ..............         314,330               --               --
       Shares issued for loan guarantee .........................................         400,000               --               --
   Changes in non-cash operating working capital
       Amounts receivable .......................................................        (104,815)       1,542,111        2,524,523
       Supplies inventory .......................................................         117,046           62,968          244,235
       Prepaid expenses .........................................................         (76,448)         102,702          (69,461)
       Accounts payable and accrued liabilities .................................         764,478         (430,256)        (757,536)
                                                                                     ------------     ------------     ------------
                                                                                       (4,323,219)      (9,272,525)      (3,706,327)
                                                                                     ------------     ------------     ------------

Investing activities
   Cash paid on acquisition of Harmony Gold Property ............................      (2,230,000)              --               --
   Cash acquired on business acquisition (note 5(e)) ............................              --               --           52,456
   Mineral property interests, net ..............................................              --               (1)          48,274
   Notes receivable .............................................................              --               --        3,457,213
   Proceeds on sale of mineral property interests ...............................               1               --               --
   Proceeds received on the sale of property, plant and equipment ...............           9,802               --               --
   Reclamation deposit (note 7(d)(ii)) ..........................................              --       (8,500,000)              --
                                                                                     ------------     ------------     ------------
                                                                                       (2,220,197)      (8,500,001)       3,557,943
                                                                                     ------------     ------------     ------------

Financing activities
   Bank operating loan ..........................................................       2,000,000               --               --
   Advances from related parties ................................................       2,185,389        2,663,188       (1,370,389)
   Advances from Gibraltar Engineering Services Limited Partnership .............       1,849,000               --               --
   Common shares issued for cash, net of issue costs ............................         465,835               --        2,421,480
   Convertible debenture (note 7(d)) ............................................              --        8,500,000        4,500,000
                                                                                     ------------     ------------     ------------
                                                                                        6,500,224       11,163,188        5,551,091
                                                                                     ------------     ------------     ------------

Increase (decrease) in cash and equivalents .....................................         (43,192)      (6,609,338)       5,402,707
Cash and equivalents, beginning of year .........................................          82,296        6,691,634        1,288,927
                                                                                     ------------     ------------     ------------
Cash and equivalents, end of year ...............................................    $     39,104     $     82,296     $  6,691,634
                                                                                     ============     ============     ============
</TABLE>

Supplementary cash flow disclosures (note 9)

See accompanying notes to consolidated financial statements.

<PAGE>

TASEKO MINES LIMITED
Consolidated Schedules of Mineral Property Exploration Expenses
(Expressed in Canadian dollars)

<TABLE>
<S>                                                                       <C>             <C>                   <C>    <C>
                                                                                           Property
                                                                          -----------------------------------------
Year ended September 30, 2002                                               Prosperity     Gibraltar      Westgarde           Total
                                                                          ------------    ----------   ------------    ------------
Exploration expenses
   Assays and analysis ................................................   $      7,352    $      367            $ -    $      7,719
   Equipment rentals ..................................................          6,546             -              -           6,546
   Geological .........................................................              -        39,830              -          39,830
   Mine planning ......................................................        (50,800)      215,900              -         165,100
   Site activities ....................................................          1,044     2,081,645              -       2,082,689
   Recovery of exploration expense
       incurred on sale (note 3) ......................................              -             -       (229,999)       (229,999)
                                                                          ------------    ----------   ------------    ------------
Exploration expenses (recovery) during the year .......................        (35,858)    2,337,742       (229,999)      2,071,885
Cumulative expenses, beginning of year ................................     41,523,768     6,650,841        210,976      48,385,585
                                                                          ------------    ----------   ------------    ------------
Cumulative expenses, end of year ......................................   $ 41,487,910    $8,988,583   $    (19,023)   $ 50,457,470
                                                                          ============    ==========   ============    ============



                                                                                           Property
                                                                          -----------------------------------------
Year ended September 30, 2001                                               Prosperity     Gibraltar      Westgarde           Total
                                                                          ------------    ----------   ------------    ------------
Exploration expenses
   Assays and analysis ................................................   $     88,679    $  147,209   $     10,016    $    245,904
   Equipment rentals ..................................................         72,873        18,723              -          91,596
   Geological .........................................................         72,339       546,123        167,392         785,854
   Mine planning ......................................................        149,068        18,700              -         167,768
   Option payment .....................................................              -             -         30,000          30,000
   Site activities ....................................................            626     2,503,963              -       2,504,589
   Transportation .....................................................          3,350        27,547          3,568          34,465
                                                                          ------------    ----------   ------------    ------------
Exploration expenses during the year ..................................        386,935     3,262,265        210,976       3,860,176
Cumulative expenses, beginning of year ................................     41,136,833     3,388,576              -      44,525,409
                                                                          ------------    ----------   ------------    ------------
Cumulative expenses, end of year ......................................   $ 41,523,768    $6,650,841   $    210,976    $ 48,385,585
                                                                          ============    ==========   ============    ============



                                                                                           Property
                                                                          -----------------------------------------
Year ended September 30, 2000                                               Prosperity     Gibraltar      Westgarde           Total
                                                                          ------------    ----------   ------------    ------------
Exploration expenses
   Assays and analysis ................................................   $     13,458    $  249,458            $ -    $    262,916
   Drilling ...........................................................              -       389,671              -         389,671
   Equipment rentals ..................................................         31,225        87,548              -         118,773
   Geological .........................................................         32,808       353,289              -         386,097
   Mine planning ......................................................        812,186       111,308              -         923,494
   Site activities ....................................................        115,388     2,193,138              -       2,308,526
   Transportation .....................................................         71,358         4,164              -          75,522
                                                                          ------------    ----------   ------------    ------------
Exploration expenses during the year ..................................      1,076,423     3,388,576              -       4,464,999
Cumulative expenses, beginning of year ................................     40,060,410             -              -      40,060,410
                                                                          ------------    ----------   ------------    ------------
Cumulative expenses, end of year ......................................   $ 41,136,833    $3,388,576            $ -    $ 44,525,409
                                                                          ============    ==========   ============    ============
</TABLE>



See accompanying notes to consolidated financial statements.



<PAGE>

TASEKO MINES LIMITED
Consolidated Schedule of Refinery Project Expenses
(Expressed in Canadian dollars)

<TABLE>
<S>                                                                                                                     <C>
                                                                                                  Years ended September 30,
                                                                                          ------------------------------------------
Refinery Project Expenses                                                                       2002           2001             2000
                                                                                          ----------     ----------     ------------
Concentrate production ..............................................................     $        -     $  168,381              $ -
Engineering .........................................................................        403,494      1,649,375                -
Environmental and permitting ........................................................         57,988        352,421                -
Interest ............................................................................         73,289        121,011                -
Metallurgy ..........................................................................         10,883        363,098                -
Pilot plant testwork ................................................................        290,680        508,759                -
Support services ....................................................................        548,162        408,897                -
Acquisition premium paid for Gibraltar Refinery (2002) Ltd. .........................        314,330              -                -
                                                                                          ----------     ----------     ------------
Expenses during the year ............................................................      1,698,826      3,571,942                -
Cumulative expenses, beginning of year ..............................................      3,571,942              -                -
                                                                                          ----------     ----------     ------------
Cumulative expenses, end of year ....................................................     $5,270,768     $3,571,942              $ -
                                                                                          ==========     ==========     ============
</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2002
(Expressed in Canadian Dollars)

1.       CONTINUING OPERATIONS

Taseko Mines Limited ("Taseko" or the "Company") is incorporated  under the laws
of the Province of British Columbia.  Its principal business  activities are the
operations of the Gibraltar  Copper Mine, which is currently on standby care and
maintenance,  and  the  exploration  of  the  Company's  100%  owned  Prosperity
Gold-Copper  property.  Both  mineral  properties  are located in south  central
British Columbia,  Canada,  near the City of Williams Lake. On October 16, 2001,
the Company acquired the Harmony Gold Property,  a mineral exploration  property
located  on  Graham  Island,  Queen  Charlotte  Islands - Haida  Gwaii,  British
Columbia, from a company related by way of common directors (note 3).

The Company's continuing  operations and the underlying value and recoverability
of the amounts shown for the Prosperity and Harmony mineral  property  interests
are entirely  dependent upon the existence of economically  recoverable  mineral
reserves,  the  ability  of the  Company to obtain the  necessary  financing  to
complete the exploration and development of its mineral property interests,  and
upon future  profitable  production  or  proceeds  from the  disposition  of its
mineral  property  interests.  The  recoverability  of the amounts shown for the
Gibraltar  Mine mineral  property  interest and related  plant and equipment and
supplies  inventory is  dependent  upon the ability of the Company to obtain the
necessary  financing to re-start operations of the mine, should metal prices and
other factors warrant it, and upon future profitable production or proceeds from
the disposition of the mine.

These  financial  statements  are  prepared on the basis that the  Company  will
continue as a going concern. As at September 30, 2002, the Company had a working
capital  deficiency of approximately  $4.3 million and had recorded  significant
losses and  operating  cash flow  deficiencies  in each of the last three fiscal
years. Management recognizes that the Company must generate additional financial
resources  in order to meet  liabilities  as they  come due and to  enable it to
continue  operations.  The  Company  and its  financial  advisors  are  actively
targeting  sources of  additional  funding  through  alliances  with  financial,
exploration  and mining  entities or other  business and financial  transactions
which  would  generate  sufficient  resources  to  assure  continuation  of  the
Company's  operations  and  exploration  programs.  However,  there  can  be  no
assurances that the Company will obtain  additional  financial  resources and/or
achieve profitability or positive cash flows. If the Company is unable to obtain
adequate  additional  financing,   the  Company  will  be  required  to  curtail
operations and exploration activities. These financial statements do not reflect
adjustments,  which  could be  material,  to the  carrying  values of assets and
liabilities  which may be required should the Company be unable to continue as a
going  concern.  Subsequent to September 30, 2002, the Company  completed  $4.24
million in equity  financings  and received a $2.5 million  refund in respect of
its reclamation deposits (note 11).


2.       SIGNIFICANT ACCOUNTING POLICIES


BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

     These  financial  statements have been prepared in accordance with Canadian
     generally accepted  accounting  principles  ("GAAP") which conform,  in all
     material  respects,  with those  generally  accepted in the United  States,
     except as  disclosed in note 12. These  consolidated  financial  statements
     include  the  accounts of Taseko,  its  wholly-owned  subsidiaries,  Taseko
     Resources Inc.,  Concentrated  Exploration  Ltd. (note 5(e)),  Concentrated
     Exploration  2000 Ltd. (note 5(e)),  Gibraltar  Refinery  (2002) Ltd. (note
     5(e)) and  Gibraltar  Mines  Ltd.  (note  5(a)),  its 70% owned  subsidiary
     Cuisson  Lake  Mines  Ltd.  (note  5(a)),  and its  interest  in  Gibraltar
     Engineering  Services Limited Partnership ("GESL Partnership") (note 5(a)).
     All material intercompany accounts and transactions have been eliminated.


CASH AND EQUIVALENTS

     Cash and equivalents consist of cash and highly liquid investments,  having
     maturity dates of three months or less from the date of  acquisition,  that
     are readily convertible to known amounts of cash.


SUPPLIES INVENTORY

     Supplies  inventory is reported at the lower of moving average cost and net
     realizable value.


PROPERTY, PLANT AND EQUIPMENT

     Plant and  equipment  are  stated at cost  less  accumulated  depreciation.
     Depreciation is recorded over the estimated  economic life of the plant and
     equipment  on a straight  line basis at annual  rates  ranging from 1.3% to
     16.5%, except for the solvent extraction/electrowinning plant and equipment
     included  in  Gibraltar  Mine  plant  and  equipment  (note  4),  which are
     depreciated on a straight line basis at rates from 20% to 50% per annum.


MINERAL PROPERTY INTERESTS

     The   Company   defers   mineral   property    acquisition   costs   on   a
     property-by-property  basis.  Exploration  expenditures and option payments
     incurred prior to the determination of the feasibility of mining operations
     are charged to operations as incurred.  Development  expenditures  incurred
     subsequent to such determination,  to increase production, or to extend the
     life of existing  production are capitalized,  except as noted below.  Such
     acquisition costs and deferred  development  expenditures are amortized and
     depreciated  over the  estimated  life of the  property,  or written off to
     operations if the property is abandoned,  allowed to lapse,  or if there is
     little  prospect  of further  work being  carried out by the Company or its
     option or joint venture partners.

     All costs incurred by the Company  during the standby care and  maintenance
     period at the Gibraltar Mine are expensed as incurred (note 5(a)).

     Mineral property  acquisition costs include the cash  consideration and the
     fair  market  value of common  shares,  based on the  trading  price of the
     shares at the  agreement  date,  issued  for  mineral  property  interests,
     pursuant to the terms of the  relevant  agreement.  Payments  relating to a
     property  acquired under an option or joint venture  agreement,  where such
     payments are made at the sole  discretion  of the Company,  are recorded in
     the accounts upon payment.

     Costs  related  to  feasibility  work  and the  development  of  processing
     technology  are  expensed as incurred.  Costs  incurred  subsequent  to the
     determination  of the  feasibility  of the  processing  technology  will be
     capitalized and amortized over the life of the related plant.

     Administrative expenditures are expensed as incurred.

     The amount shown for mineral property  interests  represents costs incurred
     to date and the fair value of shares issued to date relating to acquisition
     costs, less write-downs (note 5), but does not necessarily  reflect present
     or future values.


SHARE CAPITAL

     Common shares issued for  non-monetary  consideration  are recorded at fair
     value  based  upon the  trading  price  of the  shares  on the TSX  Venture
     Exchange on the date of the agreement to issue the shares.

     The proceeds,  net of issue costs,  from common  shares issued  pursuant to
     flow-through  share financing  agreements are credited to share capital and
     the tax benefits of these  exploration  expenditures are transferred to the
     purchaser of the shares.


SHARE PURCHASE OPTION COMPENSATION PLAN

     The  Company  has a share  purchase  option  compensation  plan,  which  is
     described in Note 7(e). No compensation expense is recognized for this plan
     when stock options are granted. Any consideration paid on exercise of stock
     options is credited to share capital.


INCOME TAXES

     The Company uses the asset and liability  method of  accounting  for income
     taxes.  Under this method,  future  income tax assets and  liabilities  are
     computed  based on  differences  between the carrying  amount of assets and
     liabilities  on the  balance  sheet and  their  corresponding  tax  values,
     generally  using the  substantively  enacted  income tax rates  expected to
     apply to taxable  income in the years in which those  temporary  difference
     are  expected to be  recovered  or settled.  Future  income tax assets also
     result from unused loss carry forwards,  resource-related  pools, and other
     deductions.  Future tax assets are  recognized  to the extent that they are
     considered  more likely than not to be  realized.  The  valuation of future
     income tax assets is  adjusted,  if  necessary,  by the use of a  valuation
     allowance to reflect the estimated realizable amount.


LOSS PER COMMON SHARE

     In December 2000, the Accounting  Standards Board of the Canadian Institute
     of  Chartered  Accountants  ("CICA')  revised  Section  3500  of  the  CICA
     Handbook,  Earnings per Share ("Section  3500").  Section 3500 requires the
     use of the treasury stock method of calculating  diluted loss per share for
     options  and  warrants,  and  the  use  of  the  "if-converted"  method  of
     calculating diluted loss for convertible  securities.  Basic loss per share
     continues to be calculated by dividing  earnings (loss) available to common
     shareholders by the weighted  average number of shares  outstanding  during
     the year.

     Under the treasury  stock  method,  the weighted  average  number of common
     shares outstanding for the calculation of diluted earnings (loss) per share
     assumes that the  proceeds to be received on the exercise of stock  options
     or warrants is applied to repurchase  common  shares at the average  market
     price for the period.  Under the "if-converted"  method, the computation of
     diluted  earnings  (loss)  per  share  assumes  conversion  of  convertible
     securities at the earlier of the  beginning of the reporting  period or the
     time of issuance  and adjusts for the  earnings  effect of the  convertible
     securities.  Where there is a loss for the period,  the potential shares to
     be issued are not included in the computation of diluted loss per share.

     During  the  year  ended  September  30,  2002,  the  Company  adopted  the
     recommendations  of Section 3500 with  retroactive  restatement  for fiscal
     2001 and 2000.  However,  there was no effect on reported  basic or diluted
     loss per share  for  fiscal  2001 or 2000,  as the  effect  of  outstanding
     options,  warrants and convertible securities on basic loss per share would
     be anti-dilutive.


FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  carrying  amounts  of  cash  and  equivalents,   amounts   receivable,
     reclamation deposits,  bank operating loan and accounts payable and accrued
     liabilities,  approximate  their fair  values due to their  short  terms to
     maturity.  The fair value of the  convertible  debenture  and the  tracking
     preferred shares are not readily  determinable with sufficient  reliability
     due to the difficulty in obtaining  appropriate market  information.  It is
     not practicable to determine the fair values of the advances due to related
     parties because of the related party nature of such amounts and the absence
     of a secondary market for such  instruments.  Details of the terms of these
     financial   instruments  are  disclosed  in  the  notes  to  the  financial
     statements.


USE OF ESTIMATES

     The  presentation  of financial  statements  in  conformity  with  Canadian
     generally  accepted  accounting  principles  requires  management  to  make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and the disclosure of contingent  assets and liabilities at the
     date of the financial  statements  and the reported  amounts of revenue and
     expenses during the reporting  period.  Significant areas requiring the use
     of management estimates include the determination of impairment, if any, of
     mineral  property  interests  and  plant  and  equipment,  the  balance  of
     reclamation  liability  and rates for  depreciation.  Actual  results could
     differ from those estimates.


SEGMENT DISCLOSURES

     The  Company  operates  in  a  single  reportable  operating  segment,  the
     exploration,  development  and  operation  of mineral  property  interests,
     within the geographic area of British Columbia, Canada.


COMPARATIVE FIGURES

     Certain of the prior  years'  comparative  figures  have been  restated  to
     conform with the presentation adopted for the current year.


<PAGE>

3.       ARRANGEMENT AGREEMENT

Harmony Gold Property

After receiving shareholder and regulatory approval, effective October 16, 2001,
the Company and its subsidiary Gibraltar Mines Ltd. (`Gibraltar")  completed the
acquisition  of the Harmony Gold  Property and related  assets from  Continental
Minerals Corporation  ("Continental")  (formerly Misty Mountain Gold Limited), a
British  Columbia  company  with certain  directors  in common with Taseko,  for
12,483,916  series "A"  non-voting  tracking  preferred  shares of Gibraltar and
$2.23  million  cash.  Subsequent  to  closing,  a  dissenting   shareholder  of
Continental  exchanged his 717,500 Gibraltar preferred shares for 114,800 common
shares of the Company.  The tracking  preferred shares are designed to track and
capture the value of the Harmony Gold Property and will be converted into common
shares of Taseko upon a  realization  event,  such as a sale to a third party or
commercial  production  at  the  Harmony  Gold  Property,  or at the  option  of
Gibraltar,   if  a  realization   event  has  not  occurred  within  ten  years.
Accordingly,   the  tracking   preferred  shares  have  been  classified  within
shareholders' equity on the consolidated balance sheet.

As this acquisition was a related party  transaction not in the normal course of
business that is not the culmination of an earnings process, the acquisition was
recorded by the Company at the net book value of the assets transferred,  net of
cash consideration, as follows:

                                                            Amount
                                                       -----------
Assets acquired
   Property and equipment ..........................   $     8,488
   Reclamation deposit .............................       175,000
   Mineral property interests ......................    28,811,296
                                                       -----------
                                                       $28,994,784
                                                       ===========

Consideration given
   Cash ............................................   $ 2,230,000
   12,483,916 tracking preferred shares of Gibraltar    26,641,948
   114,800 common shares of the Company ............       122,836
                                                       -----------
                                                       $28,994,784
                                                       ===========


The Gibraltar  tracking  preferred  shares issued to Continental  have initially
been  recorded for Canadian tax purposes at a paid up amount of $62.77  million,
but such  amount is  subject  to  adjustment  based on the fair  value of Taseko
common shares  ultimately  received by  Continental.  As previously  noted,  the
Gibraltar  tracking  preferred shares are redeemable for common shares of Taseko
upon the  occurrence  of certain value  realization  events for the Harmony Gold
Property.  The tracking  preferred shares are redeemable at specified prices per
common share of Taseko  starting at $3.39 and escalating by $0.25 per year. If a
realization  event  does not  occur  within  ten  years  from the date of issue,
Gibraltar  has the right to redeem  the  tracking  preferred  shares  for Taseko
common  shares at a deemed  price  equal to the  greater  of the  average 20 day
trading  price of the common  shares of Taseko  and  $10.00.  The Taseko  common
shares to be issued to  Continental  upon a  realization  event  will in turn be
distributed  pro-rata,  after  adjustment  for  any  taxes,  to the  holders  of
redeemable  preferred  shares of  Continental  that were  issued to  Continental
shareholders at the time of the Arrangement Agreement.

In connection with this  acquisition,  Taseko sold its interest in the Westgarde
property  to  Continental  for  $230,000  cash,  which has been  presented  as a
recovery of  exploration  expenses  incurred,  and  exchanged its 5% net profits
interest,  valued at $600,000, in the Harmony Project for a 1% working interest,
valued at  $600,000,  in the  Company's  Prosperity  Property  held by a limited
partnership  beneficially  controlled by  Continental.  In connection  with this
Arrangement  Agreement,  the  Company  undertook  a bank  loan in the  amount of
$2,000,000, which is fully secured by a private company controlled by one of the
directors of Taseko. In consideration for providing  security for this loan, the
Company issued 606,061 common shares (note 6).

4. PROPERTY, PLANT AND EQUIPMENT


<TABLE>
<S>                                   <C>           <C>           <C>           <C>
                                                    Accumulated
                                            Cost   Depreciation         Net book value
                                      -----------   -----------   -------------------------
Prosperity Property                   September 30 September 30  September 30  September 30
Equipment                            2002 and 2001         2002          2002          2001
-----------------------------------   -----------   -----------   -----------   -----------
Field .............................   $    11,879   $     9,426   $     2,453   $     3,504
Computer and office ...............        15,172        13,314         1,858         2,655
                                      -----------   -----------   -----------   -----------
Total Prosperity Property .........   $    27,051   $    22,740   $     4,311   $     6,159
                                      -----------   -----------   -----------   -----------
Gibraltar Mine
Plant and Equipment
-----------------------------------   -----------   -----------   -----------   -----------
Buildings and equipment ...........   $ 5,931,580   $   340,420   $ 5,591,160   $ 5,666,965
Mine equipment ....................     5,454,001     1,591,652     3,862,349     4,331,248
Plant and equipment ...............     1,015,303       441,911       573,392       703,579
Vehicles ..........................       152,854        70,045        82,809       103,444
Computer equipment ................       101,162        56,658        44,504        61,195
                                      -----------   -----------   -----------   -----------
Total Gibraltar Mine ..............   $12,654,900   $ 2,500,686   $10,154,214   $10,866,431
                                      -----------   -----------   -----------   -----------

                                      -----------   -----------   -----------   -----------
Total property, plant and equipment   $12,681,951   $ 2,523,426   $10,158,525   $10,872,590
                                      ===========   ===========   ===========   ===========
</TABLE>


As part of the  acquisition of the Gibraltar  Mine in 1999, the Company  pledged
the Gibraltar Mine plant and equipment as well as reclamation  deposits of $18.4
million, as security for the estimated  environmental liability of $32.7 million
assumed as part of the acquisition.


<PAGE>

5.       MINERAL PROPERTY INTERESTS

                                             September 30  September 30
                                                     2002          2001
                                              -----------   -----------
Gibraltar Copper Mine (note 5(a)) .........   $     1,000   $     1,000
Prosperity Gold-Copper Property (note 5(b))         1,000         1,000
Harmony Gold Property (note 5(c)) .........    28,811,296       600,000
Westgarde Property (note 5(d)) ............             -             1
                                              -----------   -----------
                                              $28,813,296   $   602,001
                                              ===========   ===========

(a)      Gibraltar Copper Mine

In 1999, the Company,  through Gibraltar Mines Ltd., acquired a 100% interest in
the Gibraltar Copper Mine mineral property,  located near Williams Lake, British
Columbia, Canada from Boliden Westmin (Canada) Limited ("BWCL"), for $3,324,844.
This acquisition  included 100% of NGMT Resources  Limited and 70% of the shares
of Cuisson Lake Mines Ltd., companies with mineral property interests within the
Gibraltar  mine  property.  The Company  subsequently  entered into an agreement
whereby a party  purchased a 7.5%  interest in the  Gibraltar  mine property for
$352,500,  which was subsequently reacquired in fiscal 2000 (note 5(e)). As part
of its  operating  permits,  Gibraltar  Mines  Ltd.  agreed  to incur a total of
$4,000,000 on reclamation and environmental  programs during the six year period
July 1999 to July 2005,  of which a total of  $2,131,650  had been  incurred  to
September 30, 2002.

In fiscal 2001,  Gibraltar Mines Ltd.,  Gibraltar  Engineering  Services Limited
Partnership  (the "GESL  Partnership")  (see note 5(e)) and Cominco  Engineering
Services Ltd.  ("CESL")  concluded a Memorandum of Agreement  ("MOA") to jointly
complete an evaluation for a potential hydrometallurgical copper refinery at the
Gibraltar mine. The parties initially agreed to complete a $2.7 million detailed
investigation  of the feasibility of the refinery,  including the production and
bulk testing of six tonnes of concentrate  through CESL's  existing pilot plant.
CESL and  GESL  Partnership  were  each  responsible  for  funding  50% of these
evaluation costs.

GESL  Partnership  is a limited  partnership  formed  under the laws of  British
Columbia,  which  commenced  business  on October 1, 2000.  The  Company was the
initial limited partner of the GESL Partnership. The principal business activity
of the GESL  Partnership  is to conduct an integrated  engineering  and contract
services  business.  It has  implemented a defined work program,  the results of
which  will  contribute  to  a  final   determination   of  the  feasibility  of
commercializing a hydrometallurgical technology developed by CESL for extracting
copper from  concentrates in a proposed  refinery to be located at the Gibraltar
Mine (the "Gibraltar Refinery").

The GESL  Partnership  has the right, in the event that a final decision is made
to proceed with the construction of the Gibraltar Refinery on or before June 30,
2003,  to provide  necessary  engineering  services  relating  to a start-up  of
operations  at  the  Gibraltar  Mine,  and  for  the  final  design,  tendering,
procurement and construction of the Gibraltar Refinery,  as well as the right to
become contract  operator of the Gibraltar Mine, the Gibraltar Mine concentrator
and the Gibraltar Refinery.  In each case, the GESL Partnership will provide its
services for a fixed fee equal to industry standard rates for such services, and
such services will be provided pursuant to a definitive consulting and operating
agreement  negotiated in good faith between the parties and containing customary
industry terms and conditions.

If Gibraltar Mines Ltd. does not proceed with the  construction of the Gibraltar
Refinery,  the GESL  Partnership  has the right to construct,  own and operate a
refinery  utilizing the CESL  technology at the Gibraltar mine site,  subject to
the approval by CESL of satisfactory  licensing  arrangements for the use of the
CESL technology.  In addition, if Gibraltar Mines Ltd. does not proceed with the
construction  of the Gibraltar  Refinery,  the GESL  Partnership  has the right,
until July 1, 2006, to provide  engineering and contract  operation  services to
Gibraltar Mines Ltd. or any other party, for the construction and operation of a
refinery  using the CESL  technology on the Gibraltar  property,  subject to the
approval by CESL of satisfactory  licensing arrangements for the use of the CESL
technology.

To September 30, 2002, the GESL Partnership incurred project costs of $4,956,438
(September 30, 2001 - $3,571,942),  including expenses  originally  contemplated
under the MOA but excluding  the premium on  acquisition  of Gibraltar  Refinery
(2002) Ltd. (see note 5(e)).  Expenses  incurred in excess of the amounts agreed
to in the original MOA were funded by Taseko and the GESL Partnership.

The Company retained Procorp Services Limited Partnership ("Procorp") to provide
technical, financial, management and marketing services related to all facets of
the start-up,  expansion and  development of the Gibraltar Mine and the proposed
hydrometallurgical  refinery.  Procorp  is  a  mining  services,  financing  and
marketing   partnership  comprised  of  experienced,   specialized   independent
contractors  as well as  members  who are also  directors  and  officers  of the
Company.  Compensation to Procorp  included an initial payment of US$900,000 for
services  rendered  in  fiscal  2001 and 2002  (paid)  and a second  payment  of
US$900,000  upon  successful  recommencement  of  commercial  production  of the
Gibraltar Mine. In addition, the Company agreed, subject to regulatory approval,
to issue to Procorp  3.4  million  warrants  to  purchase  common  shares of the
Company  at  a  price  of  $1.70  per  share  for  five  years  upon  successful
recommencement of commercial production at the Gibraltar Mine.

The  Gibraltar  Mine has been on care and  maintenance  since being  acquired in
1999. Due to continued  uncertainty  regarding start-up and an extended cycle of
depressed metal prices, the Company wrote down the accumulated  mineral property
interest acquisition costs of $5,936,568 to a nominal $1,000 during fiscal 2001.

(b)      Prosperity Gold-Copper Property

The Company owns 100% of the  Prosperity  Gold-Copper  Property,  located in the
Clinton Mining Division,  British Columbia,  Canada, which was acquired prior to
1995 for total cash and share consideration of $28,660,010.  During fiscal 1999,
the Company  entered into an  agreement  that allowed a party to earn up to a 5%
working interest in the Prosperity Property,  which was subsequently  reacquired
in fiscal  2000 (note  5(e)),  and entered  into an  agreement  that  allowed an
exploration limited  partnership  controlled by Continental to earn a 1% working
interest in the  property for  $600,001,  which was  reacquired  in October 2001
(note 3).

During fiscal 2001, the Prosperity  Project was written down to a nominal $1,000
to reflect  the  extended  depressed  conditions  in the metal  markets  and the
Company's  intention to defer  significant work on the project until a sustained
recovery of metal prices had occurred.  The working interest  previously held by
Continental was written down to a nominal amount when it was reacquired.

(c) Harmony Gold Property (note 3)

In February 1999, the Company  acquired a 5% net profits  royalty on the Harmony
Gold Property  located in the Skeena  Mining  Division on Graham  Island,  Queen
Charlotte Islands - Haida Gwaii,  British Columbia,  Canada,  for $600,000,  and
purchased  for $1,  an  exclusive  farm-out  right  to earn up to a 10%  working
interest in the Harmony  Property,  by  expending  $600,000  for each 1% working
interest  prior to January 1,  2001.  The  Harmony  Gold  Property  was owned by
Continental,  a public  British  Columbia  company  with certain  directors  and
officers in common with the Company.  During  fiscal 2001,  the Company  allowed
this working interest option to expire, unexercised.

Under the terms of an  Arrangement  Agreement  (note 3), the Company  acquired a
100% interest in the Harmony Gold Property in fiscal 2002.

(d)      Westgarde Property

The Westgarde  Property consists of 27 contiguous  mineral claims that contain a
copper prospect covering an area of 6000 hectares located 63 kilometres south of
Smithers, British Columbia.

Revelation  Exploration Limited Partnership  ("Revelation"),  of which Gibraltar
Mines Ltd.  is the  original  limited  partner,  arranged  for the staking of 13
claims and  signed an option  agreement  dated  December  7, 2000,  on behalf of
Gibraltar Mines Ltd.,  whereby  Revelation may earn a 100% interest in 14 claims
known as the Star and CL claims.  In order for the option to be exercised,  cash
payments totaling $870,000, plus share issuances of total value of not less than
$1,290,000 were to be made on or before January 1, 2010. An initial cash payment
of $30,000 was paid on December  7, 2000.  During  fiscal  2002,  the  Westgarde
Property, including the Star and CL claims, was sold to Continental for $230,000
(note 3).

(e) Farm-out, joint venture and acquisition agreements

In  February  1999,  the  Company   entered  into  a  farm-out   agreement  with
Concentrated  Exploration 1999 Limited  Partnership  ("CELP99"),  whereby CELP99
could earn up to a 5% working interest in the Prosperity Property project on the
basis of a 1.5% working interest for each $900,000 expended.  Pursuant to a July
1999 acquisition and joint venture  agreement,  CELP99 purchased a 7.5% interest
in the Gibraltar mineral lands for $352,500 by way of a note receivable due July
31,  2001 which bore  interest  at 8% per  annum,  and agreed to use  reasonable
efforts to expend up to $4.5  million on the  Gibraltar  Project by January  31,
2000. CELP99 was a private British Columbia based resource  exploration  limited
partnership that raised approximately $4.7 million for the purposes of incurring
exploration  expenditures  on the  Company's  Prosperity  and  Gibraltar  mining
projects. The Company had a call right to repurchase both of CELP99's Prosperity
and Gibraltar  working  interests by issuing  shares of the Company for CELP99's
investment in each project, at 122% and 135% of the earn-in  expenditures of the
respective projects.

On January 31, 2000,  the Company  reached an agreement  with CELP99 whereby the
Company  made a takeover  bid offer to acquire,  for Taseko  shares,  all of the
shares of CELP99's  subsidiary,  Concentrated  Exploration 2000 Ltd. ("CEL2000")
for  $5,484,574,  which had acquired the 7.5% interest in the Gibraltar  mineral
lands owned by CELP99 and the 3.61% working  interest in the Prosperity  mineral
property earned by CELP99. In February 2000, the Company issued 2,492,988 common
shares at a value of $2.20 per share to CELP99 to complete the  acquisition.  In
addition to the Prosperity and Gibraltar property interests, CEL2000 had working
capital deficiency of $661,624,  which included cash of $52,456, and held 34,620
common shares of the Company, at the time of completion of the acquisition.

In December 2001, the GESL Partnership  completed a private placement of limited
partnership units for aggregate proceeds of $1.85 million. In February 2002, the
Company issued  4,966,659  Taseko common shares at a value of $0.44 per share to
complete the acquisition of Gibraltar  Refinery (2002) Ltd.,  which had acquired
the private  placement  units of the GESL  Partnership.  The Company also issued
50,000 Taseko common  shares to its  financial  adviser in connection  with this
acquisition.

A further $3 million of  expenditures  were  incurred  by the GESL  Partnership,
which were financed by a separate partnership, the GESL Refinery Process ("GRP")
Partnership,  for a total  financing  amount of $4,850,000.  In December 2002, a
general partnership interest in the GRP Partnership was acquired and financed by
a third party for $3,000,000. Pursuant to a call option agreement dated December
27, 2002, the Company has an exclusive option, until August 31, 2003, to acquire
the third party's general  partnership  interest in the GRP Partnership for $3.5
million, at the Company's sole discretion, in either cash or through an issuance
of Taseko common  shares,  valued at the  prevailing  ten-day  weighted  average
closing  price of the  Company's  common  shares as  quoted  on the TSX  Venture
Exchange for the period ending  immediately prior to the Company's delivery of a
letter to exercise its option.

<PAGE>

6.       BANK OPERATING LOAN

During fiscal 2002,  the Company  negotiated a $2 million bank operating line of
credit  with a Canadian  chartered  bank at an interest  rate of prime,  with no
fixed terms of  repayment.  A private  company  affiliated  with a director  has
provided a fully collateralized  guarantee and received 606,061 common shares of
the Company in exchange for the guarantee. The market value of the shares issued
has  been  included  in  interest  expense  in  the  consolidated  statement  of
operations.

<PAGE>

7.       SHARE CAPITAL

(a)      Authorized

Authorized  share capital of the Company  consists of 100,000,000  common shares
without par value.

(b) Issued and outstanding

<TABLE>
<S>                                                                    <C>          <C>
                                                                            Number
Common shares                                                            of Shares         Amount
                                                                      ------------   ------------
  Balance, issued and outstanding, September 30, 2000 and 2001 ....     25,067,697   $ 87,973,363
     Less: 34,620 shares of the Company held by CEL2000 (note 5(e))              -        (76,164)
                                                                      ------------   ------------
  Balance, September 30, 2000 and 2001 ............................     25,067,697     87,897,199
  Issued during the period
     To a dissenting Continental shareholder in exchange for
       Gibraltar preferred shares at $1.07 per share (note 3) .....        114,800        122,836
     Loan guarantee at $0.66 per share (note 6) ...................        606,061        400,000
     Private placement at $0.50 per share, net of issue costs .....        414,850        185,835
     Private placement at $0.47 per share .........................        276,596        130,000
     Private placement at $0.40 per share .........................        375,000        150,000
     For the acquisition of Gibraltar Refinery (2002) Ltd. ........
        at $0.44 per share, net of issue costs (note 5(e)) ........      4,966,659      2,163,330
     For debt settlement at $0.40 per share (note 7(c)) ...........      2,100,000        840,000
                                                                      ------------   ------------
Balance, September 30, 2002 .......................................     33,921,663   $ 91,889,200
                                                                      ============   ============
</TABLE>


(c) Debt settlement with shares

In  April  2002,  the  Company  settled  $840,000  of  accounts  payable  due to
arm's-length  creditors by issuing 2.1 million  common shares,  which  reflected
their market value at settlement date.

(d)      Convertible debenture

                                                    September 30  September 30
                                                            2002          2001
                                                     -----------   -----------
Convertible debenture ............................   $17,000,000   $17,000,000
Price per common share of the unexercised
   conversion right ..............................   $      3.89   $      3.64
                                                     -----------   -----------
Number of common shares potentially issuable
   under unexercised conversion right ............     4,370,180     4,670,330
                                                     ===========   ===========



(i) On July 21, 1999, in connection  with the acquisition of the Gibraltar Mine,
the Company issued a $17 million  interest-free  debenture to BWCL, which is due
on July 21, 2009, but is convertible into common shares of the Company over a 10
year period  commencing at a price of $3.14 per share in year one and escalating
by $0.25 per share  per year  thereafter.  BWCL's  purchase  of the  convertible
debenture was payable as to  $4,000,000 in July 1999,  $1,000,000 on October 19,
1999,  $3,500,000 on July 21, 2000,  and $8,500,000 by December 31, 2000, all of
which were received.  BWCL has the right to convert, in part or in all from time
to time,  the  debenture  into fully paid common shares of the Company from year
one to year ten.

From the  commencement  of the sixth year to the tenth year, the Company has the
right  to  automatically  convert  the  debenture  into  common  shares  at  the
then-prevailing  market price. Since the Company has the right and the intention
to settle the  convertible  debenture  through the  issuance  of common  shares,
notwithstanding  the Company's  right to settle the debenture  with cash, it has
been included as a separate component of shareholders' deficiency on the balance
sheet.

(ii) In connection  with the acquisition of the Gibraltar Mine assets from BWCL,
the Company agreed to place  $8,500,000  debenture  payment received on December
29,  2000 as a  reclamation  deposit to replace an  $8,500,000  letter of credit
previously posted by BWCL.

(e) Share purchase option compensation plan

The  Company  has a share  purchase  option  compensation  plan  approved by the
shareholders  that allows it to grant up to 4,400,000  share  purchase  options,
subject to regulatory terms and approval, to its employees,  officers, directors
and  consultants.  The  exercise  price of each  option  can be set  equal to or
greater than the closing  market  price of the common  shares on the TSX Venture
Exchange  on the day  prior to the date of the  grant  of the  option,  less any
allowable  discounts.  Options have a maximum term of ten years and terminate 30
to 90 days following the  termination  of the  optionee's  employment or term of
engagement,  except  in  the  case  of  retirement  or  death.  In the  case  of
retirement,  they terminate 30 to 90 days following retirement,  at management's
discretion.  In the case of death,  they  terminate  at the  earlier of one year
after the event or the expiry of the options.  Vesting of options is done at the
discretion of the Board of Directors at the time the options are granted.

The continuity of share purchase options is as follows:

<TABLE>
<S>                                                 <C>                    <C>                     <C>
                                                    2002                   2001                    2000
                                           --------------------   ----------------------   ---------------------
                                               Number   Average       Number     Average      Number     Average
                                            of shares     Price    of shares       Price   of shares       Price
                                           ----------    ------   ----------    --------   ---------    --------
Opening balance ........................      657,000    $ 1.56    2,242,500    $   2.31   1,931,500    $   2.43
   Granted during the year .............    4,042,500      0.50      218,500        1.07     351,500        1.88
   Expired/cancelled during year .......     (554,500)     1.38   (1,804,000)       2.43     (40,500)       2.39
                                           ----------    ------   ----------    --------   ---------    --------
Closing balance ........................    4,145,000    $ 0.50      657,000    $   1.56   2,242,500    $   2.31
                                           ==========    ======   ==========    ========   =========    ========

Contractual remaining life in years ....                   1.96                     1.21                    1.79
                                           --------------------   ----------------------   ---------------------

Range of exercise prices ...............                 $ 0.50               $1.65-3.64             $1.65-$3.64
                                           --------------------   ----------------------   ---------------------
</TABLE>



During the year ended  September 30, 2002,  the Company  repriced  317,500 share
purchase options with an average price of $1.21 per share to $0.50 per share. In
addition,  the expiry date was changed on 35,000  share  purchase  options  from
September 27, 2002 to September  24, 2004;  on 15,000  options from February 12,
2003 to September  24, 2004;  on 72,000  options from June 11, 2003 to September
24, 2004; and on 35,000 options from September 27, 2002 to September 24, 2004.

(f) Share purchase warrants

The continuity of share purchase warrants is as follows:

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                 Outstanding                               Outstanding
                      Exercise     September                                 September
Expiry dates             price      30, 2001        Issued       Expired      30, 2002
                       -------    ----------    ----------    ----------    ----------
March 3, 2002 ......   $  1.30       138,089            --      (138,089)           --
March 3, 2002 ......   $  2.35       407,877            --      (407,877)           --
December 31, 2000/01   $  1.38     1,245,000            --    (1,245,000)           --
October 19, 2003 ...   $  0.58            --       276,596            --       276,596
December 27, 2003 ..   $  0.55            --       414,850            --       414,850(1)
January 8, 2006 ....   $  0.40            --       375,000            --       375,000
                       -------    ----------    ----------    ----------    ----------
                                   1,790,966     1,066,446    (1,790,966)    1,066,446
                                  ==========    ==========    ==========    ==========
</TABLE>

----------
(1) The  414,850  warrants  expiring  December  23, 2003 are subject to a 45-day
    accelerated  expiry if the closing price of the Company's common shares,  as
    traded on the TSX Venture  Exchange,  is at least $0.83 for ten  consecutive
    trading days.

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                 Outstanding                               Outstanding
                      Exercise     September                                 September
Expiry dates .......     price      30, 2000        Issued       Expired      30, 2001
                       -------   -----------    ----------    ----------    ----------
March 3, 2002 ......   $  1.30       138,089            --            --       138,089
March 3, 2002 ......   $  2.35       407,877            --            --       407,877
December 31, 2001 ..   $  1.38     1,245,000            --            --     1,245,000
                       -------   -----------    ----------    ----------    ----------
                                   1,790,966            --            --     1,790,966
                                 ===========    ==========    ==========    ==========
</TABLE>

<PAGE>

8.       INCOME TAXES

Substantially  all of the  difference  between  the actual  income  tax  expense
(recovery) of $nil (2001 - $nil) and the expected statutory corporate income tax
recovery  relates to losses not  recognized.  As at September 30, 2002 and 2001,
the tax effect of the  significant  components  within the Company's  future tax
assets are as follows:

                                                   2002           2001
                                           ------------   ------------
Resource pools ........................    $  1,555,000   $  7,041,000
Loss carry forwards ...................       3,211,000      4,452,000
Other tax pools .......................       1,556,000        864,000
                                           ------------   ------------
                                              6,322,000     13,357,000
Valuation allowance ...................      (6,322,000)   (13,357,000)
                                           ------------   ------------
Net future income tax asset (liability)    $         -    $         -
                                           ============   ============


At September 30, 2002, the Company's tax attributes  include  non-capital losses
for income tax purposes in Canada totaling approximately $7.5 million,  expiring
at various times from 2003 to 2009, and certain  resource  related and other tax
pools.  The  Gibraltar  tracking  preferred  shares issued to  Continental  have
initially  been recorded for Canadian tax purposes at a paid up amount of $62.77
million,  but such  amount is subject to  adjustment  based on the fair value of
Taseko common shares ultimately received by Continental (note 3).

<PAGE>

9. SUPPLEMENTARY CASH FLOW DISCLOSURES

In  addition to the  non-cash  operating,  financing  and  investing  activities
primarily disclosed,  the Company's non-cash operating,  financing and investing
activities were as follows:

<TABLE>
<S>                                                                      <C>            <C>           <C>
                                                               September 30   September 30  September 30
                                                                       2002           2001          2000
                                                               ------------  -------------  ------------
Issuance of tracking preferred shares of Gibraltar Mines Ltd.
   on acquisition of Harmony Gold Property (note 3) .........  $ 26,764,784   $          -  $          -
Issuance of common shares on acquisition of Gibraltar
   Refinery (2002) Ltd. (note 5(e)) .........................     2,163,330              -             -
Issuance of common shares on redemption of Gibraltar
   tracking preferred shares held by a dissenting Continental
   shareholder (note 3) .....................................       122,836              -             -
Issuance of common shares for loan guarantee (note 6) .......       400,000              -             -
Issuance of common shares settlement of debt (note 7(c)) ....       840,000              -             -
Acquisition of mineral properties for shares (note 5) .......             -              -     5,484,574
Notes receivable proceeds used to redeem preferred shares
   of subsidiary ............................................             -              -   (19,000,000)
                                                               ------------  -------------  ------------
    .........................................................  $ 30,290,950   $          -  $(13,515,426)
                                                               ============  =============  ============
</TABLE>



<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Supplemental cash flow information
                                                               September 30   September 30  September 30
                                                                       2002           2001          2000
                                                               ------------  -------------  ------------
Cash paid during the period for
  Interest ..................................................  $    107,790   $         -    $        -
  Taxes .....................................................  $    117,333   $   150,888    $   94,836
                                                               ------------  -------------  ------------
</TABLE>



<PAGE>

10. RELATED PARTY TRANSACTIONS AND ADVANCES
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                                            September 30  September 30  September 30
Transactions                                                        2002          2001          2000
-----------------------------------------------------------  -----------   -----------   -----------
Hunter Dickinson Inc.
  Services rendered to the Company and its subsidiaries and
     reimbursement of third party expenses (a) ............  $   574,892   $   768,710   $   874,541
  Services rendered to GESL Partnership (b) ...............  $ 1,384,496   $ 3,571,9$             --
-----------------------------------------------------------  -----------   -----------   -----------


                                                            September 30  September 30  September 30
Advances                                                            2002          2001          2000
-----------------------------------------------------------  -----------   -----------   -----------
Advances to (from) (d)
  Hunter Dickinson Inc. (a) ...............................  $  (468,168)  $(1,283,779)  $ 1,379,409
  Hunter Dickinson Group Inc. (c) .........................  $(3,001,000)  $        --   $        --
-----------------------------------------------------------  -----------   -----------   -----------
Advances to (from) related parties ........................  $(3,469,168)  $(1,283,779)  $ 1,379,409
                                                             ===========   ===========   ===========
</TABLE>


(a) Hunter Dickinson Inc. ("HDI") is a private company with certain directors in
common that  provides  geological,  corporate  development,  administrative  and
management  services  to, and incurs third party costs on behalf of, the Company
and its  subsidiaries  on a full cost  recovery  basis  pursuant to an agreement
dated December 31, 1996.

(b) During fiscal 2001 and 2002, Hunter Dickinson Inc. provided  engineering and
other services to the GESL Partnership at industry standard rates (note 5(a)).

(c) Hunter  Dickinson  Group  Inc.  ("HDG") is a private  company  with  certain
directors in common that provides  consulting services to the Company, at market
rates.  The  balance  payable to HDG has  resulted  from a series of  agreements
between  Taseko,  HDI, HDG, GESL  Partnership and GRP  Partnership,  whereby HDI
assigned to HDG the balance payable owed to it by Taseko.

(d) Advances are non-interest bearing and due on demand.

(e) Bank operating loan (see note 6).

<PAGE>

11.      SUBSEQUENT EVENTS

(a)      Share issuances

On December 31, 2002, the Company closed three equity private  placements of its
securities, as follows:

(i)      2,185,000 common shares at $0.30 per share;

(ii)     4,232,001  units at $0.30 per unit.  Each unit  consisted of one common
         share  and  one   non-transferable   common  share   purchase   warrant
         exercisable  at $0.50 per share until  December 31,  2004.  The warrant
         shares are subject to a regulatory  four month hold period expiring May
         1,  2003,   and  thereafter  the  warrants  are  subject  to  a  45-day
         accelerated expiry in the event that the closing price of the Company's
         common shares, as traded on the TSX Venture Exchange, is at least $0.75
         for ten consecutive trading days.

(iii)    5,787,500  flow-through units at $0.40 per unit. Each unit consisted of
         one flow-through common share and one-half of a non-transferable common
         share  purchase  warrant.  Each whole  common  share  purchase  warrant
         entitles  the holder to purchase  one common  share at a price of $0.50
         per share until  December 31, 2004. The warrant shares are subject to a
         regulatory  four month hold period expiring May 1, 2003, and thereafter
         the  warrants are subject to a 45-day  accelerated  expiry in the event
         that the closing price of the Company's common shares, as traded on the
         TSX Venture  Exchange,  is at least $0.75 for ten  consecutive  trading
         days.

On certain portions of the financings,  the following finders' fees and brokers'
fees, units and warrants were paid and issued:

(i)      Cash of $126,876;

(ii)     302,250 warrants,  exercisable at $0.40 per common share until December
         31, 2003,  subject to a regulatory four month hold period expiring May
         1, 2003; and

(iii)    268,000  units,  consisting  of one common share and one warrant.  Each
         warrant is  exercisable  at $0.50 per common  share until  December 31,
         2004.  The shares and warrant  shares are subject to a regulatory  four
         month hold period expiring May 1, 2003, and thereafter the warrants are
         subject to a 45-day  accelerated  expiry in the event that the  closing
         price of the  Company's  common  shares,  as traded on the TSX  Venture
         Exchange, is at least $0.75 for ten consecutive trading days.

(b)      Reclamation deposit refund

In December 2002, the British Columbia  Ministry of Energy and Mines accepted an
application  made by the  Company to reduce  the  security  for its  reclamation
liability,  and accordingly,  released $2.5 million of the Company's reclamation
deposits in connection with the Gibraltar Mine.

<PAGE>

12.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP

As  disclosed  in note 2,  these  financial  statements  have been  prepared  in
accordance with Canadian GAAP which, for purposes of the Company conform, in all
material respects with those of the United States, except as described below.

(a)      Under the asset and liability  method of tax allocation  required under
         United  States  Statement of  Financial  Accounting  Standards  No. 109
         ("SFAS  109"),  future income tax assets and  liabilities  are measured
         using  enacted  tax  rates  for  the  future  income  tax  consequences
         attributable to differences  between the financial  statement  carrying
         amount of existing  assets and  liabilities  and their  respective  tax
         bases,  which is  comparable to Canadian GAAP for fiscal 2001 and 2002.
         For the year ended  September 30, 2000,  there is no effect of adopting
         the provisions of SFAS 109 on the Company's financial statements as the
         recognition criteria for future tax assets has not been met.

(b)      United States  Statement of Financial  Accounting  Standards 123 ("SFAS
         123") requires that stock-based  compensation be accounted for based on
         a  fair  value  methodology,  although  it  allows  the  effects  to be
         disclosed in the notes to the financial  statements  rather than in the
         statement of operations.  SFAS 123 also allows an entity to continue to
         measure compensation costs for stock-based compensation plans using the
         intrinsic value based method of accounting as prescribed by APB Opinion
         No. 25 ("APB 25"). The Company has elected to measure compensation cost
         for those plans using APB 25.

         Under US GAAP,  stock  options  granted to  non-employees  for services
         rendered to the Company are required to be  accounted  for based on the
         fair value of the services  provided or the consideration  issued.  The
         compensation  cost is to be  measured  based on the fair value of stock
         options  granted,   with  the   compensation   cost  being  charged  to
         operations.  The stock-based  compensation  expense in respect of stock
         options granted to  non-employees,  under US GAAP,  based upon the fair
         value of the options using a Black Scholes option pricing model,  would
         be  $546,000  for the year ended  September  30, 2002 (2001 - $109,000,
         2000 - $280,000).

(c)      In June 2001, the Financial  Accounting Standards Board ("FASB") issued
         SFAS No. 143, "Accounting for Asset Retirement  Obligations" ("SFAS No.
         143"). SFAS No. 143 requires the Company to record the fair value of an
         asset  retirement  obligation  as a liability in the period in which it
         incurs a legal  obligation  associated  with the retirement of tangible
         long-lived  assets  that  result  from the  acquisition,  construction,
         development and/or normal use of the assets. The Company also records a
         corresponding  asset  which is  amortized  over the life of the  asset.
         Subsequent  to  the  initial   measurement  of  the  asset   retirement
         obligation,  the obligation  will be adjusted at the end of each period
         to reflect the passage of time and changes in the estimated future cash
         flows underlying the obligation.  The Company is required to adopt SFAS
         No. 143 on October 1, 2002.

(d)      In August  2001,  the FASB  issued  SFAS No.  144  "Accounting  for the
         Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"). SFAS No.
         144 addresses financial  accounting and reporting for the impairment or
         disposal of long-lived assets.  This statement requires that long-lived
         assets  be  reviewed  for  impairment  whenever  events or  changes  in
         circumstances  indicate that the carrying amount of an asset may not be
         recoverable.  Recoverability  of assets to be held and used is measured
         by a comparison  of the carrying  amount of an asset to future net cash
         flows expected to be generated by the asset.  If the carrying amount of
         an asset exceeds its estimated future cash flows, an impairment  charge
         is recognized  in the amount by which the carrying  amount of the asset
         exceeds  the fair value of the asset.  SFAS No. 144 also  broadens  the
         definition of  discontinued  operations to include all  distinguishable
         components  of  an  entity  that  will  be   eliminated   from  ongoing
         operations. The Company is required to adopt SFAS No. 144 on October 1,
         2002, on a prospective basis.


</TEXT>
</DOCUMENT>
