Part I

Item 1.

Identity of Directors, Senior Management and Advisors

A.

Directors and Senior Management :

James E. Sinclair , Chairman, Chief Executive Officer and Director

93 Benton Hill Road

Sharon, CT  06069

Mr. Sinclair provides the Company with the strategy for its corporate growth and is primarily responsible for providing the leadership necessary for the Company to complete its evolution into a gold royalty company.

Mr. Sinclair became Chairman and CEO of the Company following the Company’s acquisition in April, 2002 of Tanzanian American International Development Corporation 2000 Limited (“Tanzam”), a Tanzanian gold exploration company formerly controlled by the Sinclair family.

Mr. Sinclair is primarily a precious metals specialist and a commodities and foreign currency trader.  His past experience includes that of founder of the Sinclair Group of Companies (1977), which offered full brokerage services in stocks, bonds, and other investment vehicles.  The companies, which operated branches in New York, Kansas City, Toronto, Chicago, London and Geneva, were sold in 1983.  Mr. Sinclair served as a Precious Metal Advisor to Hunt Oil and the Hunt family from 1981 to 1984 for the liquidation of their silver position. Mr. Sinclair was a general partner and member of the executive committee of two New York Stock Exchange firms and also President of Sinclair Global Clearing Corporation (Commodity clearing firm) and Global Arbitrage (derivative dealer in metals and currencies).  Mr. Sinclair was President of James Sinclair Financial Research SARL in Luxembourg. Mr. Sinclair held the position of Chairman of Sutton Resources from 1989 to 1995.

Mr. Sinclair is the author of numerous magazine articles and three books, which deal with a variety of investment subjects, including precious metals, trading strategies and geopolitical events and their relationship to world economics and the markets.

Victoria Luis, M.B.A., CSCPA and AICPA Member , Chief Financial Officer, Secretary and Director

93 Benton Hill Road

Sharon, CT  06069

In addition to being on the Board of Directors, Mrs. Luis acts as Chief Financial Officer and Corporate Secretary for the Company.  Ms. Luis provides the Company with financial guidance in the areas of amalgamation, risk management and financial modeling for new ventures.  As the Company's Chief Financial Officer, she is responsible for the implementation of all operating budgets for exploration and administration.

Prior to her association with the Company, she was a board member of Tanzam in addition to being its Chief Financial Officer, a position she also held with an associated company, Sinclair Financial.

Before joining Tanzam, Mrs. Luis held various management positions with General Electric Capital Corporation where she was part of a team that facilitated the amalgamation of companies acquired by GE.

She earned her Masters of Business Administration with a specialization in Accounting in 1998 and her Bachelors of Science in Finance in 1990.

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Marek J. Kreczmer, M.Sc. (Geol.), B.Sc. (Geol.) , Director

Suite 1730, 355 Burrard Street

Vancouver, B.C., V6C 2G8

Mr. Kreczmer provides the management structure and technical guidance required to advance the exploration projects through the grass roots stage to early development stage.

Mr. Kreczmer was the President of the Company since its inception in 1991until December 31, 2003.  He established the Company's operating subsidiary in Tanzania, Tancan Mining Company Limited (“Tancan”).  Mr. Kreczmer has initiated, formed and operated several exploration joint ventures with senior gold companies.  He is responsible for representing the Company's interests in various management and technical committees required to operate these joint ventures, and is currently the Chairman of the Technical Committee of the Company.

Mr. Kreczmer has a background in the mineral exploration business.  He was a project geologist for two leading Canadian explorers, Cameco and Granges Exploration.  The exploration focus for these companies included base metals, uranium and gold.  His responsibilities included all aspects of administering the exploration budget, on-site field management, and the set-up and establishment of an exploration team to deal with specific project objectives.

Ulrich E. Rath , Director

18 Kilbarry Road

Toronto, Ont.,  M5P 1K5

Mr. Rath provides the Company with advice on geological and technical matters.

Mr. Rath has a wide range of experience in the mining industry, and has specific experience in South Africa and Peru.  Currently a director of Chariot Resources Ltd. since December 2002, he was formerly the CEO and a director of EAGC Ventures Inc. from May 2002 to April 2003, and the CEO and director of Compania Minera Milpo from May 1999 to April 2002.  Mr. Rath was also formerly Vice-President, Corporate Development, for Rio Algom Ltd. from December 1992 to October 1998.  Rio Algom Ltd. was a U.S. reporting issuer, whose common shares were listed on the American Stock Exchange.

Anton Esterhuizen , Director

P.O. Box 85267

Emmarentia 2029, South Africa

Mr. Esterhuizen is responsible for developing new exploration projects for the Company.

Mr. Esterhuizen is based in Johannesburg, South Africa is currently the Managing Director of Pangea Exploration (Pty), a South African company with exploration interests in Africa and South America and not related to Pangea Goldfields Inc.  Mr. Esterhuizen developed the exploration model which led to the discovery of the Tulawaka gold deposit.  He successfully managed Pangea's gold and mineral sands exploration in East Africa until July, 2000 when the company was sold to Barrick.

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Dr. William Harvey, B.A., Ph.D. , Director

97 Amenia Union Road

Sharon, CT  06069

Dr. Harvey reviews the social service impact of the Company’s activities upon the indigenous Tanzanians.

Dr. Harvey is presently a consultant and technical expert to a variety of research centres and state and federal programs in the United States.  He is a consultant to: National Drug Information Centre for Families in Action; American Institute of Research; Office of Juvenile Justice & Delinquency Prevention; National Institute on Drug Abuse; and National Institute on Alcoholism and Alcohol Abuse.  He is involved in the formulation of new programs and policies aimed at the betterment of society.  The Sinclair family has already made a significant donation to a private trust, The Tanzanian Relief Fund, which in turn has funded the hospital at Bulyanhulu.  Dr. Harvey will expand the role which the Company has at the local level to ensure that stakeholder interests are addressed.

Rosalind Morrow , B.A., B.Ed., LL.B ., Director

168 Princess Avenue

Willowdale, ON  M2N 3R9

Ms. Morrow is a corporate and securities lawyer and partner with Borden Ladner Gervais LLP in Toronto, a national Canadian law firm.  Ms. Morrow provides advice to the Company on corporate governance and securities matters.

Ms. Morrow’s practice includes a special emphasis on financings and acquisitions for the financial services and communications industry sectors, project and government financings, and corporate governance.  She advises issuers, underwriters, and investors in connection with debt and equity offerings and investments, including domestic and trans-border public offerings and private placements, capital restructurings and corporate and securities law compliance.

B.

Advisers

Legal Counsel :

C.

Auditors

Years ended August 31, 2003 and 2002

KPMG LLP

Chartered Accountants

P.O. Box 10426, Pacific Centre

777 Dunsmuir Street

Vancouver, B.C., V7Y 1K3

Members of the Canadian Institute of Chartered Accountants.

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Year ended August 31, 2001

PricewaterhouseCoopers LLP

Chartered Accountants

Suite 700, 250 Howe Street
Vancouver, B.C., V6C 3S7

Members of the Canadian Institute of Chartered Accountants.

Item 2.

Offer Statistics and Expected Timetable

Not applicable.

Item 3.

Key Information

A.

Selected Financial Data

The following tables set forth and summarize selected consolidated financial data for the Company prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”).   For each of the last five fiscal years, the tables also summarize certain corresponding information prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).  Canadian GAAP, as applied to the Company, materially differs from U.S. GAAP, as set forth in Note 12 to the consolidated financial statements of the Company.  Unless stated otherwise, reference to dollar amounts shall mean Canadian dollars.

For each of the years in the five year period ended August 31, 2003, the information in the tables was extracted from the more detailed audited financial statements of the Company, and for the interim periods ending November 30, 2003 and 2002, the information in the table was extracted from the unaudited interim financial statements, prepared by the management of the Company.

The selected financial data should be read in conjunction with Item 5, “Operating and Financial Review and Prospects” and in conjunction with the consolidated financial statements of the Company and the notes thereto contained elsewhere in this Registration Statement.  The Company’s fiscal period ends on August 31 of each year.

The following is a summary of certain selected financial information for the Company’s five most recently completed fiscal years and three month interim periods ending November 30, 2003 and 2002 (in Canadian dollars, except number of shares):

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Exchange Rates

The Company’s accounts are maintained in Canadian dollars.  In this Registration Statement, all dollar amounts are expressed in Canadian dollars, except where otherwise indicated.  The following table sets forth information as to the period end, average, the high and the low exchange rate for Canadian Dollars (“CDN”) and

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U.S. Dollars for the periods indicated based on the noon buying rate in New York City for cable transfers in Canadian Dollars as certified for customs purposes by the Federal Reserve Bank of New York (Canadian dollar = US$1):

The following table sets forth the high and low exchange rate for the past six months.  As of January 31, 2004, the exchange rate was CDN $1.33 for each US$1.

B.

Capitalization and Indebtedness

The following table shows the Company’s capitalization (distinguishing between guaranteed and unguaranteed, and secured and unsecured indebtedness) as at November 30, 2003 under Canadian GAAP:

C.

Reasons for the Offer and Use of Proceeds

Not Applicable.

D.

Risk Factors

In addition to other information presented in this Registration Statement, the following should be considered carefully in evaluating the Company and its business.  This Registration Statement contains

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forward-looking statements that involve risk and uncertainties.  The Company’s actual results may differ materially from the results discussed in the forward-looking statements.  Factors that might cause such a difference include, but are not limited to, those discussed below and elsewhere in this Registration Statement.  The management of the Company have identified the following risk factors, listed in the view of management in order from most significant to least significant:

We have incurred net losses since our inception and expect losses to continue.  We have not been profitable since our inception.  For the three months ended November 30, 2003 and the fiscal year ended August 31, 2003, we had a net loss of $553,896 and $3,014,778, respectively,  and an accumulated deficit on November 30, 2003 of $19,784,867.  The Company has not generated revenues from operations during fiscal year 2003 and does not expect to generate revenues from operations until one or more of its properties are placed in production. There is no assurance that any of the Company’s properties will be placed in production or that the Company’s operations will be profitable in the future.

The Mining industry is highly speculative and involves substantial risks.  Even when mining is conducted on properties known to contain significant quantities of ore deposits it is generally accepted in the mining industry that most exploration projects do not result in the discovery of mineable deposits of ore in a commercially economical manner.  There may be limited availability of water, which is essential to milling operations, and interruptions may be caused by adverse weather conditions.  Operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air quality standards, pollution and other environmental protection controls.  Mining activities are subject to substantial operating hazards, some of which are not insurable or may not be insured for economic reasons.

The commercial quantities of ores cannot be accurately predicted.   Whether an ore body will be commercially viable depends on a number of factors including the particular attributes of the deposit such as size, grade and proximity to infrastructure, as well as mineral prices and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection.  The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in a mineral deposit being unprofitable.  The Company has no mineral producing properties at this time.  The Company has not defined or delineated any proven or probable reserves or resources on any of its properties.  Although the mineralized material estimates included herein have been carefully prepared by the Company, or, in some instances have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only and no assurance can be given that any particular level of recovery of gold or other minerals from mineralized material will in fact be realized or that an identified mineralized deposit, if any, will ever qualify as a commercially mineable or viable reserve.

There are no assurances that we can produce minerals on a commercially viable basis.  The Company’s ability to generate revenues and profits is expected to occur through exploration of its existing properties as well as through acquisitions of interests in new properties.  Substantial expenditures will be incurred in an attempt to establish the economic feasibility of mining operations by identifying mineral deposits and establishing ore reserves through drilling and other techniques, developing metallurgical processes to extract metals from ore, designing facilities and planning mining operations.  The economic feasibility of a project depends on numerous factors, including the cost of mining and production facilities required to extract the desired minerals, the total mineral deposits that can be mined using a given facility, the proximity of the mineral deposits to a user of the minerals, and the market price of the minerals at the time of sale.  There is no assurance that existing or future exploration programs or acquisitions will result in the identification of deposits that can be mined profitably.

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Competition.  The mining industry is intensely competitive in all its phases.  The Company competes with many companies possessing greater financial resources and technical facilities than itself for the acquisition of mineral interests, as well as for the recruitment and retention of qualified employees.

Mining operations and exploration activities are subject to various federal, state and local laws and regulations.  Laws and regulation govern the development, mining, production, importing and exporting of minerals; taxes; labor standards; occupational health; waste disposal; protection of the environment; mine safety; toxic substances; and other matters.  In many cases, licenses and permits are required to conduct mining operations.  Amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a substantial adverse impact on the Company.  Applicable laws and regulations will require the Company to make certain capital and operating expenditures to initiate new operations.  Under certain circumstances, the Company may be required to close an operation once it is started until a particular problem is remedied or to undertake other remedial actions.

Uninsurable Risks.  Hazards such as unusual or unexpected formations and other conditions are involved in mineral exploration and development.  The Company may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it may elect not to insure.  The payment of such liabilities may have a material, adverse effect on the Company’s financial position.

Dependence on management. The success of the operations and activities of the Company is dependent to a significant extent on the efforts and abilities of its management including James E. Sinclair, Chairman and Chief Executive Officer and Victoria Luis, Chief Financial Officer.  Investors must be willing to rely to a significant extent on their discretion and judgment.

Dependence on consultants and engineers.   The Company has relied on and may continue to rely upon consultants for development, construction and operating expertise.  Substantial expenditures are required to construct mines, to establish ore reserves through drilling, to carry out environmental and social impact assessments, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the exploration infrastructure at any suite chosen for exploration.  No assurance can be given that minerals will be extracted or discovered in sufficient quantities to justify commercial operation or that funds required for development can be obtained on a timely basis.

Volatility of metal and mineral prices.  The economics of developing metal and mineral properties are affected by many factors including, without limitation, the cost of operations, variations in the grade ore or resource mined and the price of such resources.  The market prices of metals are highly speculative and volatile.  Depending on the price of gold or other resources, the Company may determine that it is impractical to commence or continue commercial production.  The price of gold has fluctuated in recent years.  There can be no assurance that the price of gold and other metals and minerals will remain stable or that such prices will be at levels that will make it feasible to continue the Company’s exploration activities, or commence or continue commercial production.

Jurisdiction risks.  Mineral exploration and mining in certain countries may be affected in varying degrees by political stability and government regulations relating to the mining industry and foreign investment.  There can be no assurance that the government of Tanzania will not institute regulatory policies that adversely affect the exploration and development (if any) of the Company’s properties.  Any changes in regulations or shifts in political conditions in this country are beyond the control of the Company and may adversely affect its business.  Investors should assess the political and regulatory risks related to the Company’s foreign country investments.  Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, foreign exchange controls, income taxes, expropriation of property, environmental legislation and mine safety.

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Title matters.  Acquisition of title to mineral properties is a very detailed and time-consuming process.  The Company believes it has investigated title to all of its mineral claims and, to the best of its knowledge, titles to all properties are in good standing.  This should not be construed as a guarantee of title and there is no guarantee that title to such properties will not be challenged or impugned.

Requirements for and uncertainty of access to additional capital.  At November 30, 2003, the Company had cash of approximately $1,169,811 and working capital of $1,901,936.  The Company will continue to incur exploration costs to fund its plan of operations and intends to fund its plan of operations from working capital.  In the future, the Company’s ability to continue its exploration and development activities depends in part on the Company’s ability to commence operations and generate revenues or to obtain financing through joint ventures, debt financing, equity financing, production sharing agreements or some combination of these or other means.

There can be no assurance that the Company will generate sufficient revenues to meet its obligations as they become due or will obtain necessary financing on acceptable terms, if at all.  The failure of the Company to meet its ongoing obligations on a timely basis could result in the loss or substantial dilution of the Company’s interests in its properties.  In addition, should the Company incur significant losses in future periods, it may be unable to continue as a going concern, and realization of assets and settlement of liabilities in other than the normal course of business may be at amounts significantly different from those in the financial statements included in this Registration Statement.

Financing risks. The Company’s current operations do not generate any cash flow.  Any work on the Company’s properties may require additional equity financing.  If the Company seeks funding from existing or new joint venture partners, its project interests will be diluted.  If the Company seeks additional equity financing, the issuance of additional shares will dilute the current interests of the Company’s current shareholders.  Although the Company has raised funds in recent years through share and warrant issuances, there is no assurance that additional funding will be available to allow the Company to fulfill its obligations on existing exploration properties.  Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration or development and the possible partial or total loss of the Company’s potential interest in certain properties or dilution of the Company’s interest in certain properties.

Conflicts of Interest.  Certain directors or officers of the Company are also directors, officers, or shareholders of other companies that are similarly engaged in the business of acquiring, developing, and exploiting natural resource properties.  Such associations may give rise to conflicts of interest from time to time.  The directors of the Company are required to act honestly and in good faith with a view to the best interests of the Company and disclose any interest which they may have in any project or opportunity of the Company.  If a conflict of interest arises at a meeting of the board of directors, any director in a conflict will disclose his interest and abstain from voting on such matter.

Penny stock rules may make it more difficult to trade the Company’s common shares.   The Securities and Exchange Commission has adopted regulations which generally define a “penny stock” to be any equity security that has a market price, as defined, less than US$5.00 per share or an exercise price of less than US$5.00 per share, subject to certain exceptions.  Our securities may be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors such as, institutions with assets in excess of US$5,000,000 or an individual with net worth in excess of US$1,000,000 or annual income exceeding US$200,000 or US$300,000 jointly with his or her spouse. For transactions covered by this rule, the broker-dealers must make a special suitability determination for the purchase and receive the purchaser’s written agreement of the transaction prior to the sale.  Consequently, the rule may affect the ability of broker-dealers to sell our securities and also affect the ability of our investors to sell their shares in the secondary market.

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Item 4.

Information on the Company

Cautionary Note to U.S. Investors

As an Alberta corporation, the Company is subject to certain rules and regulation issued by the Alberta Securities Commission (“Alberta Securities Commission”).  The Company files an Annual Information Form on Form 44-101F1 (“AIF”) with the Alberta Securities Commission via the System for Electronic Document Analysis and Retrieval (“SEDAR”) for Canadian Securities Administrators.  Under the AIF, the Company is required to provide detail information regarding its properties including mineralization, drilling, sampling and analysis, security of samples and mineral resource and mineral reserve estimates.  Further, the Company describes its properties utilizing mining terminology such as “Measured Reserves” and “Indicated Resources” that are required by Canadian regulations but are not recognized by the United States Securities and Exchange Commission (“SEC”).  For clarification, the Company has no properties that contain “reserves” as defined by the SEC and is providing the forgoing, in part,  in order to meet its requirements under National Instrument 44-101 adopted by the Alberta Securities Commissioner.

A.

History and Development of the Company

The Company was originally incorporated under the corporate name “ 4245547 Alberta Ltd .” in the Province of Alberta on July 5, 1990, under the Business Corporations Act (Alberta).  The name was changed to “ Tan Range Exploration Corporation ” on August 13, 1991.  The Company was registered in the Province of British Columbia as an extra provincial company under the Company Act (British Columbia) on August 5, 1994.

The principal executive office of the Company is located at 1730 - 355 Burrard Street, Vancouver, British Columbia, V6C 2G8, and its telephone number is (604) 669-5598.

The Company is a mineral resource company with exploration stage properties, which means that the Company is engaged in the search for mineral deposits and that the properties are not in development or production.

The Company’s Itetemia concession is its most advanced property (the “Itetemia Property”).  This property, located adjacent to the 11.7 million ounce Bulyanhulu Gold Project of Barrick Gold Corporation (“Barrick”), contains an inferred mineral resource of 511,000 tonnes grading 7.09 g/t gold, using a 2.0 g/t gold cut-off.

The Itetemia Property consists of six contiguous prospecting licenses.  Itetemia North, Itetemia Village, Itetemia East, Itetemia Far East, Mwinglo and Ngula. The Itetemia North concession was acquired in exchange for US$35,000 and a 3% net smelter royalty.  The Itetemia Village, Itetemia East, Itetemia Far East, Mwinglo and Ngula concessions were acquired by staking, and minimum work requirements have been completed.  The Company acquired a 90% interest in the Itetemia concession through an agreement with the State Mining Corporation (“Stamico”) dated July 18, 1994 in exchange for US$57,400 in option payments over seven years and a requirement to spend at least US$300,000.  Those requirements have been met.  The Ngula North was acquired through the acquisition of Tanzam in April, 2002.

By an option and joint venture agreement dated May 31, 1999 as amended April 24, 2001 between the Company and Barrick, Barrick was granted the exclusive option to earn an undivided 60% interest in the Itetemia Project.  In exchange for the option, Barrick agreed to provide funding to the Company totalling $4,000,000.  Ongoing drilling continues on this property under the joint venture agreement.

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The Company’s Luhala property also located in Tanzania, consists of four (4) contiguous prospecting licenses:  Luhala, Ngobo, Shilalo and Sima (the “Luhala Property”). The Company was granted a 100% interest in the Luhala prospecting license on July 2, 1992.  To maintain this concession, the Company was required to conduct exploration work of at least US$250,000 before October 25, 1997.  This work commitment was met.

The Luhala property was the focus of an exploration program under an option agreement dated April 25, 1999 with Newmont Overseas Exploration Limited (“Newmont”).  This property contains an inferred mineral resource of 9,390,000 tonnes, averaging 1.0 g/t gold, using a 0.5 g/t gold cut-off.  Newmont terminated their option on the property during the year 2000, and the Company will now explore the property further itself or enter into a new joint venture with a new mining company.  During the years ended August 31, 2001 and 2000, the Company entered into option agreements to acquire three additional licenses, named Shilalo, Ngobo and Sima.  See “Luhala Property” under Item 4.D for further details.

During the fiscal year ended 2003, the Company has also discovered three new gold occurrences on the Kigosi Property (forming a part of the Company’s Lake Victoria Goldfield Properties held through Tanzam).  Two of the three occurrences are located at the north end of a three kilometre long northwest trending structure that may be responsible for concentrating the mineralization reported at the northern and southern limits of this prominent geological feature (see: “Lake Victoria Goldfield Properties” below for further details).  At the present time the Company is exploring 69 mineral resource properties in the Lake Victoria Greenstone Belt region of Tanzania.  The Company currently has a total of 29 royalty agreements with three industry partners; eleven of these royalty agreements are with Barrick Gold Corporation; nine with Ashanti Goldfields Limited; and nine with Northern Mining Explorations.

Significant Acquisitions and Significant Dispositions

The Company’s principal capital expenditures and divestitures (including interests in other companies and amounts invested) for the last three fiscal years are described as follows:

Fiscal Year Ended August 31, 2001

During the fiscal year ended August 31, 2001, the Company completed $2,228,725 in property acquisition and exploration on its mineral resource properties, including a further $1,242,270 in work on the Itetemia Property, as well as $971,509 on the Luhala Property.  The Company incurred a write-down of $7,553 relating to the Mulehe Property due to uncertainty as to recoverability.

Fiscal Year Ended August 31, 2002

On April 30, 2002, the Company completed the acquisition of 100% of the issued and outstanding shares of Tanzania American International Development Corporation 2000 Limited (“Tanzam”), in exchange for 20,000,000 shares of the Company at a value of CDN$0.35 per share (or a cost of CDN$7,000,000). Tanzam, a privately held mineral investment company, holds an interest in 52 prospecting licenses and reconnaissance licenses in the Lake Victoria Goldfields Belt of north-western Tanzania. The total land area currently held under these licenses is 3480km ² .

By a Prospecting and Mining Option Agreement dated March 31, 1999, as amended March 31, 2000, between Northern Mining & Consultancy Company Limited (“Northern Mining”) and Tanzam, Tanzam  acquired the right to form a joint venture with Northern Mining.  Tanzam will hold a 60% equity interest and Northern Mining a 40% equity interest in the joint venture.  Tanzam has paid US$50,000 on signing and a further US$25,000 to Northern Mining on the first anniversary of the agreement.  In addition, Tanzam is required to complete at least US$35,000 in annual exploration work during the first two years, and depending on

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commercial viability and geological potentials another US$250,000 in exploration work during the fourth, fifth and sixth years.  Until Tanzam is reimbursed for all of its expenses, Tanzam will be entitled to 80% of the net cash flows from production.

On December 14, 2001, Barrick Exploration Africa Limited (“BEAL”) entered into an agreement with Tanzam, wherein BEAL was granted the option to acquire the total rights, titles and interests in thirteen prospecting licenses (now reduced to five licenses under the terms of this agreement) in different properties (called the “BEAL Project”; see “Lake Victoria Goldfields Properties” below for further details).

To exercise the option, BEAL must expend US$250,000 in exploration and development of the BEAL Project within the first year, and thereafter US$50,000 each year for each retained prospecting license.  In addition, BEAL must make the following annual payments for each retained prospecting license:

Within thirty days after commercial production, BEAL must pay US$1,000,000 and an additional US$1,000,000 on each of the next two years of production.  BEAL must also pay the original owner of the licenses a 1.5% net smelter returns royalty.

During the fiscal year ended August 31, 2002, the Company capitalized mineral property acquisition costs of $8,297,805.  Of this amount, $8,166,292 related to the acquisition of Tanzam.  The Company also completed $1,238,635 in exploration work on its mineral resource properties, including $443,603 on the Itetemia Property and $491,724 on the Luhala Property.  The Company wrote-off deferred exploration expenditures of $59,014 in 2002 relating to certain licenses of the Bukwimba, Mbogwe and Tulawaka properties, based on management’s review of the exploration results and uncertainty over recoverability.

Fiscal Year Ended August 31, 2003

The Company’s exploration work for the 2002 fiscal year and up to February 28, 2003 identified two gold-bearing mineralized quartz reefs on the Lunguya Property, located in the Lake Victoria Goldfields area of Tanzania (the “Lunguya Property”), ranging in thickness from 1.3 metres and extending for at least 350 metres along strike.  The two structures, designated as the East and West reefs, are about 50 feet apart and are roughly parallel to the mafic-granite contact (see: “Lunguya Property” under Item 4D for further details).

The Company has also discovered three new gold occurrences on the Kigosi Property (forming a part of the Company’s Lake Victoria Goldfield Properties held through Tanzam).  Two of the three occurrences are located at the north end of a three kilometre long northwest trending structure that may be responsible for concentrating the mineralization reported at the northern and southern limits of this prominent geological feature (see: “Lake Victoria Goldfield Properties” below for further details).

The Company has also signed nine (9) option and royalty agreements on prospecting licenses in the Lake Victoria goldfields area of Tanzania with Northern Mining Explorations/Explorations Minieres du Nord (“MDN”).  Under the agreements, MDN holds the right to earn 100% of the Company’s underlying interest in the licenses for an up-front cash payment of US$80,000, plus US$1.8 million in option payments and US$1.5 million in property expenditures over the five year life of the agreements.  MDN must also complete a feasibility study and make a production decision by December 31, 2008 and achieve production within 18 months or be subject to cash penalties in lieu of royalty payments.  The Company retains the right to escalating net smelter

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royalties on commercial production that are tied to the price of gold and range from 0.5% below US$250 per ounce to a maximum of 2% at US$380 per ounce.  The first year’s commitments call for option payments of US$160,000 and an exploration and development expenditures of US$200,000.

In July, 2003, the Company closed nine (9) royalty agreements with Ashanti Goldfields Company Limited (“Ashanti”) for prospecting licenses in the Ushirombo Belt (also forming a part of the Company’s Lake Victoria Goldfield Properties held through Tanzam).  Under the terms of these royalty agreements, Ashanti has the right to earn 100% of the Company’s underlying interests in the subject prospecting licenses, for staged cash payments totalling US$200,000 in the first year, plus minimum cash payments of US$930,000 over the remaining life of the five year agreement.  Ashanti must also incur aggregate property expenditures of US$800,000 in the first two years of the agreements of which US$300,000 must be expended in the first year.  In years three, four, and five of the agreements, Ashanti must complete 6,000, 8,000, and 10,000 metres of diamond drilling, respectively.

The Ashanti royalty agreements also call for Ashanti to complete a bankable feasibility report and make a positive production decision on or before the fifth anniversary of the effective date of the agreements.  Ashanti is liable for cash penalties should gold output at production not reach a minimum annual threshold of 50,000 ounces per year.

The Company retains the right to escalating net smelter royalties in commercial production that are tied to the price of gold, and range from 0.5% below US$250 per ounce to a maximum of 2% at US$380 per ounce.

All of the above investments have been made abroad and were financed internally.  The Company has not proposed any principal capital expenditures or divestitures which are currently in progress.

During the fiscal year ended August 31, 2003, the Company incurred $1,151,327 in property acquisition costs and exploration work on its mineral resource properties (net of $184,965 in option payments received) of which $450,912 was incurred on the Lunguya Property.  The Company also wrote-off $1,031,436 in exploration expenditures, of which $729,309 related to claims relinquished within the Itetemia Property area.

Three Month Interim Period Ended November 30, 2003

The Company’s exploration office in Tanzania recently formed a new section called the “Regional Studies Group” whose mandate is to acquire new ground based on geologically sound research.  The primary objective in forming this group is to upgrade the Company’s ground position in Tanzania for further exploration. Three new project areas within the Lake Victoria greenstone gold belts have been chosen to date.  One license in the Biharamulo North Project Area was returned to its owner during the quarter, but was written off in the previous fiscal year.

Exploration activity throughout the quarter was spent undertaking a first pass BLEG soils program over the Tanzam licenses in the Lake Victoria Goldfields Properties project area.  This work was conducted on eight licenses within six locations; namely, Geita, Ushirombo West, Biharamulo, Biharamulo North, Shinyanga, and Nyanzaga North.  The Shinyanga and Nyanzaga North project areas returned encouraging results that will require detailed follow-up next quarter.

Heavy mineral indicator sampling and ground magnetic follow-up was conducted during the quarter on aeromagnetic targets identified on the Tanzam properties.  Work was completed on the Kanagele, Lunguya, and Ushirombo project areas, where 34 anomalies were ground proofed and sampled for indicator minerals.  The bulk of this work program is now completed and only eight anomalies remain to be sampled in the next quarter.  The results from the sampling program are being used to further refine exploration methodologies.

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A significant reorganization was undertaken at the Tanzam corporate office in Dar es Salaam during the quarter, mostly to facilitate the heightened level of exploration activity anticipated by the Company in 2004.  Virtually all of the administrative activities associated with Tanzam and Tancan are now being handled by the office in Dar es Salaam, where some of the Company’s most skilled and experienced personnel reside.

During the first quarter ended November 30, 2003, the Company reported a net loss of $553,896.  The largest expense categories being $228,289 for new property investigations.  Another $161,344 was expended for exploration on existing properties.

B.

Business Overview

The Company is a natural resource company, which since its incorporation has engaged in the acquisition of interests in and the exploration of natural resource properties.  The Company commits its own resources to the initial evaluation of mineral properties and in select situations, if and when warranted, the Company will enter into joint venture agreements with other corporations to further the development of such properties, in exchange for annual rental/option payments and post-production royalty payments.  At present, the Company’s natural resource activities do not generate any income from production.

The Company’s general area of interest has been in the exploration of gold properties in regional East Africa.  The Company has explored gold properties in Ethiopia, Tanzania, Zambia, Swaziland and South Africa. At the present time, the Company is exploring 69 mineral resource properties in the Lake Victoria Greenstone Belt region of Tanzania.  Tanzania remains the prime focus of the Company’s activities.  Other corporations, including Barrick Gold Corporation (“Barrick”), Ashanti Goldfields Limited (“Ashanti Goldfields”), Northern Mining Explorations, and Newmont Overseas Exploration Corporation have funded most of the work on the Company’s properties in this area since 1999 under option arrangements, with the exception of properties explored by Tanzania American International Development Corporation 2000 Limited (“Tanzam”) which were privately funded.  The Company currently has a total of 29 royalty agreements with its three industry partners: eleven (11) of the royalty agreements are with Barrick, nine (9) with Ashanti Goldfields, and nine (9) with Northern Mining Explorations.

In the Company’s view, this royalty strategy offers investors leverage to gold prices with lower risk and shareholder dilution.  Future production royalties from any producing properties discovered by the Company’s joint venture partners would provide the Company with a direct interest in the mine’s cash flow, with exposure to any benefits from new discoveries and production growth, but without the capital obligations, and environmental and social liabilities, associated with direct ownership.

Plan of Operations

Exploration and Development Activities

All of the properties in which the Company holds an interest are in the exploration stage only.  Mineral exploration and development involves a high degree of risk and few properties, which are explored, are ultimately developed into producing mines.  There is no assurance that the Company’s mineral exploration activities will result in any discoveries of commercial bodies of ore.  The long-term profitability of the Company’s operations will be in part directly related to the cost and success of its exploration programs, which may be affected by a number of factors beyond the control of the Company.

By way of general description of the Company’s operating activities, the Company’s business operations involve using known or published geological and geophysical data to locate mineral resource properties meriting

20

further exploration or development.  Once identified, the Company must stake and apply for registration to title of the mineral properties, or negotiate the acquisition of such properties from any third party owners.  Upon registration or acquisition of title, the Company then develops a program of preliminary exploration which can involve grid mapping, geophysical and magnetic surveys, geological sampling, grab sampling, assaying and other forms of prospecting as circumstances may require.  Based on the preliminary results, mineral properties are ranked according to merit for further exploration work, which may involve further mapping, more detailed geophysical and geochemical surveys, and trenching to identify potential drill targets.  If mineralization is indicated which merits further investigation, drill targets are selected, and a diamond drilling program for underground sampling and assaying will commence.

Based on the drilling program results, the Company will develop models of the underlying geology and mineralized zones for more detailed testing.  After further drilling, some mineralized zones may be classified as inferred or indicated mineral resources.  With sufficient infill drilling, these mineral resources can be confirmed as probable or proven reserves, upon which a pre-feasibility study can be prepared by a qualified, independent mining engineer or geologist to determine whether mining activities are economic in the circumstances of the particular property.  If the study is favourable, the Company can then use the pre-feasibility study to seek out the necessary financing from a merchant banker or other financial institution for mine construction and development. A further mine feasibility study would be prepared to confirm the appropriate mining method based on the metallurgical studies of the ore, and to develop a mining plan.

At any point along this plan of operation, the Company may seek to interest larger mining companies in its mineral properties, which show potential for further development.  It is highly unlikely that the Company would pursue any particular property through to mineral production by itself.  By exploring and developing properties to a point where major mining companies are interested, the Company will leave the risk of mine development and operations to those companies, while retaining a carried interest or royalty from any future production.

During 2004 calendar year, the Company plans to complete evaluation of all prospecting licenses in its portfolio with a view of offering some of them for royalty agreements to other mining companies.  The evaluation of their potential comprises geological mapping, soil sampling and geophysical interpretations.  Currently, prospecting licenses which have potential diamond targets are being prospected using ground magnetic surveys, followed by loam sampling and analysis for indicator minerals.

The Company’s plans for the first six months of 2004 is to continue efforts for the “farming-out” of identified properties for royalty agreements with other mining companies, and continue to examine and review other exploration opportunities in Tanzania.

Exploration and Business Development

The Company’s principal exploration properties are currently all located in the United Republic of Tanzania, Africa.  The government of Tanzania is a stable, multi-party democracy.  Mineral exploration in Tanzania is affected by local climatic, political, and economic conditions.  The Company’s properties have year round access, although seasonal winter rains from December to March may result in flooding in low lying areas, which are dominated by mbuga (black organic rich laustrine flood soils).  Further, most lowland areas are under active cultivation for corn, rice, beans and mixed crops by subsistence farmers.  As a result, the area has been deforested by local agricultural practices for many years.

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Competition

The mining industry in which the Company is engaged is in general, highly competitive.  Competitors include well-capitalized mining companies, independent mining companies and other companies having financial and other resources far greater than those of the Company.  The Company competes with other mining companies in connection with the acquisition of gold and other precious metal properties.  In general, properties with a higher grade of recoverable mineral and/or which are more readily minable afford the owners a competitive advantage in that the cost of production of the final mineral product is lower.  Thus, a degree of competition exists between those engaged in the mining industries to acquire the most valuable properties.  As a result, the Company may eventually be unable to acquire attractive gold mining properties.

Dependence on Customers and Suppliers

The Company is not dependent upon a single or few customers or supplier for revenues or its operations.

Governmental Regulations

Mineral interests in Tanzania are initially held under prospecting licenses granted pursuant to the Mining Act, 1998 (Tanzania) for a period of up to three years, and are renewable two times for a period of up to two years each.  The annual rental fees for prospecting licenses are based on the total area of the license measured in square kilometres, multiplied by US$20.00 per sq. km.  There is also an initial one-time “preparation fee” of US$200.00 per license.  Upon renewal, there is a renewal fee of US$200.00 per license.  All prospecting licenses in Tanzania also require the holder to expend funds in the employment and training of Tanzanian personnel, which expenditures typically amount to US$5,000 per year, and in exploration expenditures, which are set out in the Mining Act, 1998 (Tanzania).  At each renewal, at least 50% of the licensed area must be relinquished.  A mining license must be held to carry on mining activities, and a mining license will only be granted to the holder of a prospecting license over the area.  A mining license is granted for a period of 25 years or the life of the mine.  It is renewable for a period not exceeding 15 years.  Prospecting and mining license holders must submit regular reports in accordance with mining regulations.  Upon commercial production, the government of Tanzania imposes a royalty on the gross value of all production at the rate of 3% of all gold produced.  The applicable regulatory body in Tanzania is the Ministry of Energy and Minerals.

In July 1999, environmental management and protection regulations under the Mining Act, 1998 (Tanzania) came into force.  An environmental impact statement and an environmental management plan must accompany special mining license, mining license and gemstone mining license applications for mineral rights.  In addition to the establishment of environmental regulations, the Tanzanian Government has improved management procedures for effective monitoring and enforcement of these regulations by strengthening the institutional capacity, especially in the field offices.  The Government has provided rules for the creation of reclamation funds to reinstate land to alternative uses after mining and it has developed guidelines for mining in restricted areas, such as forest reserves, national parks, sources of water and other designated areas.

C.

Organization Structure

The Company has the following five subsidiaries:

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D.

Property, Plant and Equipment

The Company’s business is the acquisition, exploration and development of mineral properties, with a primary focus on exploring for gold properties in Tanzania.  The Company funds its activities by way of the sale and issuance of its securities to accredited investors or investor located outside the United States.  The Company also obtains operating funds through sales of and options to sell its various mineral property interests to other parties, retaining a royalty interest.  The Company’s properties are without a known body of commercial ore, with no established plant or equipment, and the Company’s activities to date on such properties have been exploratory in nature.

Itetemia Property

The following discussion regarding the geological information on the Itetemia Property is summarized from a technical report prepared in accordance with the requirements of NI 43-101F1 dated May 2, 2001 entitled, “Independent Review of the Itetemia Project, Lake Victoria Greenstone Region, Tanzania” by Michael J. Michaud, M.Sc. P. Geo. of Steffen Robertson and Kirsten Consulting (Canada) Inc. (the “Itetemia Report”).  The reader is referred to the complete text of the Itetemia Report, which is available online at www.sedar.com .

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*

While the license has expired, the Company has applied for a renewal and has no reason to believe that such application renewal will not be granted in the ordinary course.  None of these licenses are presently the focus of exploration work by the Company.

**

This license is in dispute, and the Company is attempting to renew it, but renewal may be in doubt.

The Itetemia and Ngula prospecting licenses may be renewed twice, each time for a period of two years.  The Company has one right of renewal with regard to the Itetemia East prospecting license for a further period of two years and must thereafter apply for a mining license or retention license in order to preserve any rights therein.  The rental payments and minerals permitted to be pursued under such licenses are summarized below:

*

These requirements are unknown at this time, because application has been made for the renewal of the relevant license, which renewal is pending at this time.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Itetemia Property is located in the Mwanza Region of the Lake Victoria Greenstone Region, Tanzania, approximately 90 kilometres by air southwest of the city of Mwanza, situated on the south shore of Lake Victoria.   The property is accessed via local roads from Geita or by plane from Mwanza to an airstrip accommodating the neighbouring Bulyanhulu Mine, owned by Barrick.  The Barrick airstrip is 3.75 km west of the western boundary of the Itetemia prospecting license and 9 km southwest of Tancan’s permanent exploration camp established on the Itetemia prospecting license, approximately 4 km northeast of the Nyamykonze village. Local resources are available at Mwanza, located on the southern shore of Lake Victoria.

The topography in the region and on the property consists of large flat-lying areas surrounded by numerous small hills. The hills have elevations of up to 100 m above local terrain.  The hills are thickly vegetated and access is only possible along cut lines.  Little outcrop exists on the property. The climate is similar to the rest of the region.  The rainy season starts in November and lasts to the middle of April, but precipitation is irregular from one season to another. The dry seasons are usually hot. Mwanza, located along the southern shore of Lake Victoria, can, and has, provided limited supplies for mining and exploration operations in the area.  Dwellers in the area of the Itetemia Project, such as the neighbouring Nyamykonze village, are traditionally subsistence farmers and ranchers, and have limited mining experience from the Bulyanhulu operation and numerous small scale activities.  Water for the purpose of mining and processing is not readily available in the region; however, a pipeline from Lake Victoria built by Barrick for its Bulyanhulu Mine, provides an adequate supply.

The large, relatively flat terrain surrounding the known gold mineralization may be suitable for potential tailings and waste rock storage and for heap leach pads and a potential processing plant. Electric power is available via the national grid within 5 km; due to the unreliability of such power, alternative forms of residual or

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back-up power would be necessary for mining or processing operations, such as diesel power generation used by Barrick at its Bulyanhulu mine.

Ownership

Prior Ownership

Only two of the prospecting licenses comprising the Itetemia Property, namely, Itetemia and Itetemia North, were previously held by third parties.  With respect to the Itetemia prospecting license, the interest of the Company was acquired from State Mining Corporation of Tanzania (“Stamico”) pursuant to a joint venture agreement dated July 12, 1994 (the “Stamico Venture Agreement”).  The Stamico Venture Agreement obligated the Company to make two initial payments of Tsh1,000,000 and US$7,200, both of which were satisfied. With respect to the Itetemia North prospecting license, the interest of the Company was acquired from RSR (Tanzania) Limited by agreement dated April 20, 1995 (the “RSR Royalty Agreement”). The RSR Royalty Agreement obligated the Company to pay a sum of US$35,000, which payment was made.

The Company’s Interest

Prior to the Barrick Venture Agreement (defined below), four of the prospecting licenses comprising the Itetemia Property, namely, Itetemia Village, Mwingilo, Ngula and Itetemia East, were indirectly 100% held by the Company; in the case of the Itetemia North prospecting license, the Company held an indirect 100% interest therein, through Tancan, subject only to the 2% NSR Royalty payable pursuant to the RSR Royalty Agreement. In the case of the Itetemia prospecting license, Tancan acquired its interest pursuant to the Stamico Venture Agreement, as amended June 18, 2001, which provides, among other things, that:

1.

Tancan had to pay Stamico, on execution of the Stamico Venture Agreement, the sum of US$7,200 (as an advance against the 2% gross revenue royalty) and TS1,000,000.

2.

Tancan and Stamico were to form a joint venture company for the purpose of holding the prospecting license that shall be held 10% by Stamico (with no obligation to contribute) and 90% by Tancan, which was effected through the formation of Itetemia Mining Co.

3.

Stamico is entitled to acquire an additional 20% interest in the joint venture company by paying a sum equal to 20% of the cost of placing the property into commercial production based on the feasibility study submitted to the Government of Tanzania for such purpose.

4.

Tancan shall assist Stamico in raising the required capital to exercise the right referred to in (3) above.

5.

Tancan was to expend the sum of US$25,000 in the first year and US$50,000 annually thereafter in relation to the training of Tanzanian personnel.

6.

Upon commencement of commercial production, Stamico shall receive a 2% gross revenue royalty, which shall be increased to a 2.5% gross revenue royalty should a mine on the Itetemia prospecting license produce recoverable gold in excess of 12 grams per tonne.

7.

Tancan shall pay to Stamico, as an advance against the 2% gross revenue royalty, the sum of US$7,200 on or before every anniversary of the Stamico Venture Agreement up until the development phase, upon and after which the annual sum of US$10,000 shall be paid as an advance against such royalty.

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8.

Tancan shall show preference to Stamico for the provision of local materials and services during the period of mining operations.

9.

Tancan shall pay to Stamico the sum of US$20,000 on or before July 12 of each year beginning in 2001 and ending upon commercial production, provided that commercial production commences by December 31, 2007, failing which the aforementioned payment shall be revisited.

10.

Tancan may assign its rights under the agreement, subject to the prior written consent of Stamico.

By an option and joint venture agreement dated May 31, 1999 as amended April 24, 2001 between the Company and Barrick (the “Barrick Venture Agreement”), Barrick agreed to provide funding to the Company totalling $4,000,000 in the form and amounts, and on or before the dates, set out as follows:

Barrick made the first three payments to the Company and requested an extension of the date to exercise the warrants from April 30, 2001 to June 14, 2001, which was then exercised at that date.  Pursuant to the terms of the Barrick Venture Agreement, the Company was required to use 80% of the Barrick payments to advance the exploration and development of the Itetemia Property.  To date, the Company has expended the funds received from the Barrick payments.  The Company has spent at least 80% of these funds on the exploration of the Itetemia Property in accordance with its commitment to Barrick, and has therefore met its expenditure requirements.  Barrick retains the right to participate in any sale or issue of further securities by the Company, provided it holds at least 10% of the outstanding common shares of the Company, subject to certain exceptions.  At present, Barrick does not hold 10% of the total issued common shares.

Until a decision is made by Barrick to place the property into commercial production, Barrick is required to advance funds for the purpose of furthering exploration and development activities in respect of the Itetemia Property.  On or before the fourth anniversary of April 30, 2005, Barrick may deliver a production notice and feasibility report; in such event:

1.

Barrick shall acquire an undivided 60% interest in the Itetemia Property; and

2.

Barrick must commence commercial production within 12 months of such notice at a rate of 100,000 ounces of gold production per annum (18 months where it chooses to process the ore on site) or make payments to the Company equal to:

(a)

US$500,000 on or before the first anniversary of such 12 (or 18) month deadline;

(b)

US$750,000 on or before the second anniversary thereof;

(c)

US$1,000,000 on or before the third anniversary thereof;

(d)

US$1,200,000 on or before the fourth anniversary thereof; and

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US$1,200,000 on or before the fifth anniversary thereof;

and a further sum of US$1,200,000, after adjusting for inflation, every anniversary thereafter.  Barrick may acquire the 10% interest held by Stamico and cause the Stamico Venture Agreement to be terminated, in which event it shall obtain a 70%, in lieu of a 60%, undivided interest in the Itetemia Property; otherwise, the Company is required to assume responsibility for the Stamico 10% interest.

Upon a production notice, Barrick is obligated to arrange financing to bring the Itetemia Property into production, which it may arrange through the use of internal funds or external funds, with the Company to repay its portion of the costs from its share of the net proceeds of production.  The costs of arranging the financing are required to be paid by the Company in proportion to its interest in the Itetemia Property.  In addition, should Barrick provide a completion guarantee to a third party lender, then the Company is obligated to pay to Barrick, on a monthly basis, 1/12 of 1% of the amount attributable to the Company that is contingently liable under the guarantee.  Neither Barrick nor the Company may assign any interest in the Barrick Venture Agreement without the prior consent of the other.  Tancan obtained the written consent of Stamico to its execution of the Barrick Venture Agreement on November 17, 1999.

History

The Lake Victoria Greenstone Belt has been exploited for gold by local artisans and interested companies for over a century; however, very little modern exploration was carried out prior to the 1980’s. During the period from 1988 to 1992, BRG, a Tanzanian-German Corporation, carried out the first modern exploration for gold in the region and identified several targets for detailed mapping, including the Itetemia area where a north-south trending gossan was discovered.  This work consisted of geological mapping, ground geophysics, including magnetometer, horizontal loop electromagnetic (“HLEM”), pulse electromagnetic, and induced polarization (“IP”) surveys, trenching and sampling.

In 1993, Stamico was granted the Itetemia prospecting license. Stamico compiled all of BRG’s work and completed an air photo interpretation of the region resulting in the identification of a northerly trending gold bearing structure on the license. In 1994, Stamico completed regional geological mapping on a scale of 1:50,000 and geochemical soil sampling in the northern and southwestern portions of the Itetemia license area where appropriate soils and more abundant outcrop exists.  In the northern portion of the Itetemia prospecting license, the survey grid was oriented east-west with grid lines established at 1,000 m intervals and stations identified at 50 m intervals.  Fill-in grid lines were established over gold soil anomalies ranging from 0.4 g/t Au to 5.7 g/t Au and where selected grab samples of quartz/breccia returned 5.4 g/t Au to 3.6 g/t Au.  In the southwestern portion of the license, the survey grid was oriented northeast-southwest.  Grid lines were established at 500 m intervals and survey stations established at 50 m intervals on all grid lines.

Following the Stamico surveys completed in 1994, Tancan carried out detailed soil sampling in several small areas on the Itetemia and Itetemia North prospecting licenses at 25 m to 50 m intervals. A total of 2,900 samples were analyzed for gold using the fire assay method.  Strong gold anomalies were identified which confirmed the northwest trend. A 100 m long trench, trending northwesterly, was dug to test a 4 to 46 ppb gold anomaly detected east of the Golden Horseshoe Reef over granite.  Sixteen samples were collected and analyzed for gold by MMI assay.  One sample returned 8.8 ppb Au, three samples ranged from 1.3 to 1.5 ppb Au and the remaining samples reported grades ranging from 0.33 to 0.97 ppb Au.

In 1996, Geodass of South Africa was contracted by the owner of the Bulyanhulu Mine and Tancan to complete an airborne magnetic and radiometric surveys over the Bulyanhulu, Itetemia, Itetemia North and Ngula prospecting licenses.  Over the Tancan licenses the flight line direction was northeasterly and the flight line spacing was 200 m. The magnetic survey confirmed the northerly trending structure.  The radiometric survey

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highlighted the south-southeasterly trending linear structures and two separate granite intrusions. A HLEM survey was completed over the established grids on the license areas. Several northwesterly trending conductors were identified. A magnetic survey was conducted over the established grid on the Golden Horseshoe Reef.  The magnetics further defined the reef and extended the reef for more than one kilometre.  The reef appears to be folded and faulted. Twenty five kilometres of IP were completed over the Golden Horseshoe Reef, which further defined the reef. Selected IP profiles were also completed in the southwestern portion of the Itetemia license covered by conductive overburden.

In January 1995, Pangea was mistakenly granted a prospecting license partially overlapping the southwest corner of Itetemia prospecting license.  During the time it took to rectify the error Pangea drilled six reverse circulation (“RC”) holes (BR-1 to BR-6), totalling 375 m, over gold soil anomalies in the southwest corner of the Itetemia license to test the southeast extension of the Bulyanhulu deposit.  Gold mineralization grading up to 3.3 g/t Au was obtained. The first RC drilling program carried out by Tancan also began in 1995.  A fence of four holes (TR-1 to TR-4), totalling 374 m, was completed in the southwest corner of the Itetemia license in the area previously tested by Pangea. Subeconomic intersections were intersected with a maximum of 0.31 g/t Au over 0.5 m being intersected in hole TR-3.

The next phase of RC drilling continued with 39 holes, totalling 3,596 m, drilled between October 1995 and July 1996 (ITRC-1 to 39) covering the main HLEM anomalies.  Most of the conductors were explained by the presence of argillite horizons containing 1-50% sulphides (pyrrhotite ± pyrite and chalcopyrite).  Anomalous gold values are directly associated with these horizons.  Massive to semi-massive sulphides, mostly composed of pyrrhotite were intersected in hole ITDD-06.  The best gold intersection was cut in hole RC-18 which returned 0.9 g/t Au over 3.0 m, including 2.1 g/t Au over 1.0 m associated with semi-massive sulphides containing 10-40% pyrrhotite logged at the contact with dacite.  Hole RC-26 intersected anomalous copper (2,080 ppm), arsenic (3,950 ppm) and silver (8.5 g/t) over one metre in three separated samples.

During the same period, a fence of 66 RC holes, totalling 2,188 m, were drilled to test several geochemical gold anomalies on line 20+00S in the southern portion of the Itetemia prospecting license.  The best gold value was intersected in hole GA-57 and returned 1.28 g/t Au over the first metre of laterite.  This grade may be related to the contamination due to archival crushing activities in this area. The gold soil anomalies in this area may also be due in part to these activities. From August to November 1998, two additional RC drilling campaigns were completed. Fourteen holes RC-40 to RC-54, totalling 1,350 m, were drilled in the southwest corner of the Itetemia prospecting license to test several I.P. anomalies. Tancan believes one of the anomalies could be a reflection of the southeastern extension of the Bulyanhulu Reef 2.  The best results were intersected in holes RC-43 and RC-45, returning 0.65 g/t Au over 9.0 m and 1.1 g/t Au over 8.0 m, respectively.  The second phase of drilling was conducted in the area of the Golden Horseshoe Reef.  Fourteen holes, RC-55 to 68, totalling 831 m, were drilled to test I.P. anomalies and the southeastern extension of the reef near the granite contact.  The holes RC-61 and RC-62 intersected the reef and holes RC-65 and RC-66 intersected 0.7g/t Au over 3.0 m and 0.5g/t Au over 5.0 m respectively, west of the reef. Strong silicification was noted during the logging of the chips recovered from holes north of the Golden Horseshoe Reef.

The two first phases of diamond drilling were completed from May to June and from September to October 1996.  Twelve holes, totalling 3,584 m, were drilled to test HLEM conductors, the Pangea gold anomalies, the southeastern extensions of the Reefs 1 and 2 of Bulyanhulu and the Cycle 2 rhyolite.  The holes drilled in the southwest corner of the Itetemia license, along the Cycle 2 rhyolite, intersected thick sequences of felsic crystal lapilli tuff.  The other holes intersected numerous argillite horizons, in contact with felsic and mafic volcanic rocks, which explains most of the conductors.  Hole DD-06 intersected massive to semi-massive sulphides composed of 30-80% pyrrhotite, less than 5% pyrite, chalcopyrite and sphalerite, and what appears to be a felsic/quartz breccia material with sulphide breccia fillings.  Weak copper, arsenic and silver anomalies were associated with these sulphides and/or argillite exhibiting low gold content.

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The next phases of diamond drilling focused on the Golden Horseshoe Reef.  From August 1997 to May 1998, 21 holes, totalling 2,032 m, were drilled to test the gold showing at a vertical depth of 50 m (ITDD-12 to 21, 23, 24, 27, 29, 30) and the depth extension at -100 m (ITDD-22, 28, 31 to 34).  The holes were drilled at a spacing ranging from 15 m to 50 m over a distance of 500 m. Within the mineralized zone, good intersections were obtained. The Golden Horseshoe Reef appears to be terminated to the southeast by an intrusion and seems to be pinching to the northwest. The reef appears to be open at depth. Two additional holes, ITDD-25 and 26, totalling 282 m, were drilled in the southwest corner of the Itetemia license during this period.  Both holes were collared to test the gold anomalies intersected in RC-43 and RC-45.  Results were disappointing but a strong carbonatization was noted in hole ITDD-26.

In February-March 1999, Tancan completed a rotary air blast (“RAB”) drilling program of 151 holes, totalling 6,660 m, in seven fences.  One fence was located south of the Golden Horseshoe Reef.  Three fences, spaced 350 to 400 m apart, were completed in the northwest portion of the license.  Three other fences were drilled west of the Golden Horseshoe Reef, along what is called the Cycle 2 rhyolite.  The two areas drilled represent different felsic to intermediate packages.  The northwestern extension of the Golden Horseshoe Reef has been intersected on line 14+00 E with an intersection of 0.28 g/t Au over 33 m.

During the period from 1992 to 2000, Tancan carried out exploration of the Ngula prospecting license. This work included prospecting and mapping, ground magnetometer and HLEM surveys, soil geochemical surveys and RC drilling.  The initial phase of exploration was encouraging and Tancan initiated an RC drilling program consisting of 12 RC holes (NRC-01 to NRC-12), totalling 837 m, to test the best geophysical anomalies typically associated with gold soil anomalies.  No economic mineralization and/or veins were intersected.  The best results were intersected in hole NRC-10 which returned 0.85 g/t Au and 0.25 g/t Au over 1.0 m and hole NRC-01B which intersected 0.15 g/t Au and 0.12 g/t Au over 1.0 m.  The conductors were explained by a northerly trending and northwesterly dipping (20-30°) argillite horizon. At present, no work is ongoing on the Ngula prospecting license.

Very little exploration work has been carried out on the Itetemia East, Itetemia Village and Mwingilo prospecting licenses. Only limited mapping and soil sampling have been carried out.

Recent Exploration (Including Drilling)

2000 Exploration Program

Barrick provided the funds for the 2000 program to the Company through share subscriptions, as provided in the Barrick Venture Agreement.  Pursuant to the Barrick Venture Agreement, 80% of the funds subscribed for are required to be incurred in respect of the Itetemia Property. The total cost of the 2000 program, including support services was $809,148.

On behalf of Barrick, the Company carried out the following exploration program in 2000: A total of 211 geochemical soil samples were collected on 21 line segments utilizing a 50 m sample interval. Twenty-eight samples came from Itetemia, 90 from Itetemia North, 9 from Itetemia Village and 84 from Mwingilo.  This soil survey confirmed most of the main anomalies, and some secondary and isolated anomalies interpreted from the earlier survey.  Some of the confirmed anomalies are large and have locally high gold values. Others are extensions of soil anomalies detected during earlier surveys.  Some of the anomalies can be correlated to HLEM conductors.

A RAB drilling program, comprising 448 holes and totalling 9,862 m was undertaken on the Itetemia and Ngula licenses during the period from May 23 to June 19, 2000.  The main targets of this drilling were gold

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soil anomalies, HLEM conductors, I.P. anomalies and mafic/felsic contacts. With respect to the Ngula prospecting license, two fences, NA and NB, were drilled to test HLEM conductors located in the central part of the license. These conductors are thought to reflect a north-northwest shear zone.  The fences intersected the shear zone, but did not encounter any significant gold mineralization. On the Itetemia prospecting license, three areas were designated for RAB drilling during the 2000 program, namely, (i) the Golden Horseshoe Reef area, (ii) the southwest corner area and (iii) the southeast corner area.  In total, 440 holes were drilled for an aggregate total of 9,286 m.

Five main trends and isolated gold anomalies were targeted by 5 fences of various lengths ranging from 0.2 km to 1.2 km.  Two fences 1A and 1B reported holes with anomalous gold values.  Fence 1A tested an isolated gold anomaly on Line 22500E.  Holes ITRB-154 and ITRB-155 returned 0.54 g/t Au over 10 m and returned 0.47 g/t over 9 m, respectively. Fence 1B tested two trends on Line 23000E.  Four holes ITRB-222, 227, 229, and 230 returned anomalous gold values ranging from 0.34 g/t Au over 6 m in Hole ITRB-222 to 0.46 g/t Au over 13 m intersected in hole ITRB-227.  The gold anomalies intersected in the RAB drilling confirmed that most of the gold soil anomalies can be correlated to structures and/or contacts.

Four fences 1E, 1F, 1G and 1H, being 250 to 400 m long, were drilled on the Golden Horseshoe Reef grid. Fences 1E and 1F tested the northwest extension of the Reef on lines 660E and 1000E and 1H tested the southeast extension of the reef in the granite on line 31000E.  Fences 1E and 1F targeted the felsic volcanic/basaltic contact correlated to the reef where discordant north-northeast to northeast structures were interpreted.  Hole ITRB-445 on fence 1E returned  0.74 g/t Au over 14 m, including 2.2 g/t Au over 3 m in a feldspar crystal tuff possibly the Golden Horseshoe Reef structure.  Hole ITRB-460 on fence 1F also returned very encouraging results being 2.97 g/t Au over 8 m, including 6.63 g/t Au over 3 m in saprolite (quartz crystal tuff).  Holes on fence 1G and 1H returned geochemically anomalous gold values.

Three fences 1I, 1J and 1L, being 150 to 400 m long, were drilled in the southwest corner of the Property. Several of the holes drilled on these fences returned anomalous gold values.  All of the holes encountered essentially the same sequence of carbonatized mafic volcanics.  The felsic volcanic horizon initially interpreted in the area are absent or thinner than expected. In addition, one fence, 1K, being 200 m. long, was drilled in the southeast corner of the property.  This area of the property is essentially unexplored.  The fence unexpectedly intersected a thick argillite horizon and felsic crystal tuff similar to those intersected northwest along strike.

A multi-purpose drilling program, consisting of a combination of RC and diamond drilling in the same hole, was carried out during the period from June 28 to August 5, 2000 on the Itetemia prospecting license.  Four holes were drilled for an aggregate total of 1,558.2 m comprising 526.0 m of RC drilling and 1,032.2 m of diamond drilling.  Two holes ITDD-69 and 70 tested the “QFP/Reef 2” located in the southwest corner of the license, targeting the lateral and depth extensions of the QFP intersected in diamond drill hole ITDD-37, grading 0.40 g/t Au over 40.1 m.  Holes ITRC-71 and 72 holes tested the northwest extension of the Golden Horseshoe Reef. A subsequent diamond drilling program was carried out during the period from August 17 to October 20, 2000 and consisted of 12 holes totalling 2,376.8 m. The objective of this program was to test the Golden Horseshoe Reef at depth and along strike to the west, the southwest corner area and 7 anomalies identified during the 1999 soil sampling program.  The significant assays greater than 0.1 g/t Au and greater than 1,000 ppm CuZnPb are summarized in the table below:

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2001 Exploration Program

During 2001, the Company carried out, on behalf of Barrick, the following exploration program.  Barrick provided the funds for the 2001 program to the Company through share subscriptions, as provided in the Barrick Venture Agreement.  Pursuant to the Barrick Venture Agreement, 80% of the funds subscribed for are required to be incurred in respect of the Itetemia Property.  The total cost of the 2001 program, including support services was $554,046.

In May 2001, the Company reported that two NQ core holes, totalling approximately 1,100 meters, were drilled to evaluate the down dip potential of gold mineralization in the Golden Horseshoe Reef deposit. The results of this drilling are summarized in the following table:

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The recent deep core drilling of the Golden Horseshoe has confirmed that gold mineralization over widths of approximately 50 meters has been traced from surface to a vertical depth of 440 meters. The gold mineralization occurs primarily within two discrete gold zones, the South and North zones, and appears to plunge 55° to the northwest. Gold mineralization intersected in Hole GHDD-26 indicates that the geologic structure hosting the gold mineralization of the Golden Horseshoe Reef deposit may transect the felsic package of rocks. This suggests that the gold mineralization may extend further to the west, beyond the basaltic rocks that were previously thought to represent the western limit of the gold mineralization.

The Company is of the opinion that the drill results correlate well with the geology and gold mineralization identified by previous surface trenching and shallow core drilling. Additional drilling is required to provide adequate information of the continuity of the geometry and grade of the gold mineralization for updating the current resource estimate.

2002 and 2003 Exploration Programs

During the 2002 fiscal year, the Company has carried out only minor surface work on the Itetemia Property at a cost of $250,364.  No drilling was conducted and no significant new results were reported.  During the 2003 fiscal year, the Company incurred only minor geochemical and geophysical work of $13,910 on the Itetemia Property.

Sampling, Analysis, and Security of Samples

Soil Sample Preparation, Analyses and Security of Samples

A typical soil geochemical sample consists of 0.5 to 1 kg of soil collected at the bottom of a 0.5 m deep hole.  The samples are bagged and analyzed for gold using either mobile metal ion (“MMI”) or fire assay techniques.  The MMI method is a geochemical analysis based on soluble element concentrations in the sample.  This method provides a very fast and cost effective way to analyse a large number of reconnaissance soil samples.  Samples selected for fire assay are analysed by the SGS Laboratory, an ISO approved facility in Mwanza. The soil sampling was carried out by a technician under the supervision of the project manager to ensure quality control.

RAB and Diamond Drilling Sampling

Sampling of RAB and diamond drill core was completed by Company personnel under the supervision of the project manager to ensure quality control.  Samples are sent to the SGS Laboratory, an ISO approved laboratory in Mwanza, for fire assay.  Every 10 to 15 samples, SGS Laboratory took a second split from the pulp for a check assay.  Tancan has traditionally taken the second assay value (second split) and averaged this value with the first assay value.  The assay data was compared against the original drill logs to ensure that any anomalous values could be explained based on the reported geology. Steffen, Robertson and Kirsten Consulting (Canada) Inc. (“SRK”) has reviewed the data and believes the quality of the data is good and that the sample preparation, analysis and security was carried out in accordance with best industry standards. Nevertheless, SRK suggests that averaging the sample assays is inappropriate because an averaging approach leads to a larger sample size for assay and, therefore, a different grade distribution (i.e., larger samples have less volatility in grade values).

Data Verification

SRK examined the spilt core from several drill holes on the Itetemia Property and identified 11 sections of core to be re-split for independent analysis.  At all times, the samples were under the care and control of SRK,

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until they were submitted for analysis to SGS Laboratories, an ISO approved laboratory in Mwanza. Although only a limited number of samples were taken, the assays results correlate well with the typical grades and metal ratios reported by Tancan.

Geology

Regional

The Lake Victoria area contains 12 Archean Nyanzian greenstone belts which are surrounded by and have been interrupted by numerous granitic intrusions.  The Nyanzian belts comprise a volcano-sedimentary sequence composed of mafic to felsic volcanics (lavas and tuffs), BIF and shales. The greenstone belts have been grouped into locally distinct geographic regions.  One of these regions is the Southwest Mwanza Region which includes a large area south of town of Mwanza, located on the south shore of Lake Victoria.  There are five greenstone belts in the Southwest Mwanza Region, one of which is the Ushirombo belt. The Ushirombo belt is an east-west trending belt, the eastern end of which is located approximately 25 km west of the southern end of Smith Sound on Lake Victoria. The eastern end of the belt is arcuate in shape and trends northerly tangential to the northwestern flank of the Siga Hills.  The Bulyanhulu Mine and the Itetemia Property are located on the northern trending portion of the Ushirombo greenstone belt.  Approximately 25 km west of the northern tip of the Ushirombo greenstone belt is the Sarama-Rwamagaza belt which hosts numerous gold occurrences including the Buck Reef deposit.

The Bulyanhulu Mine is owned by Barrick and has been developed as an underground mine.  Construction of the US$280 million mine began in the 3 ^rd quarter of 1999.  The mine entered into production in 2001 and produced 241,575 oz of gold in 2001 and 356,319 oz of gold in 2002.  Production is expected to increase to 415,000 oz of gold in 2003.  Total cash cost was US$197 per oz in 2001 and US$198 per oz in 2002, but is expected to decrease to US$151 per oz over the 21 year life of the mine.

Property

The Itetemia Property is underlain by the northerly trending eastern portion of the Ushirombo Nyanzian greenstone belt.  Granite underlies the eastern and northern portions of the property.  The greenstone/granite contact trends northerly through the east-central portion of the Itetemia prospecting license and through the central portion of the Itetemia East prospecting license onto the Itetemia Village license; at which point, the contract tends westerly through the Mwingilo license cutting the northeast corner of the Ngula license. Sixty percent of the Itetemia, Itetemia North and Ngula licenses are underlain by the Nyanzian greenstone belt.  The remaining 40% is underlain by granite.  Granite variably underlies 90 to 100% of the Itetemia East, Itetemia Village and Mwingilo prospecting licenses. The mbuga soil covers 10 to 40% of the property.

Lithology

The lithologies encountered on the Itetemia and Itetemia North prospecting licenses can be divided into three volcano-sedimentary domains: (i) Northeast Domain, (ii) Central Domain and (iii) Southwest Domain. The granite truncates these domains to the east. The Northeast Domain is composed of basalt, felsic flows, thick to thin sequences of argillite and dykes/sill of gabbro.  The domain is up to 3 km thick, exhibits a north to north-northeasterly trend and has numerous extensive HLEM conductors.  The conductors are related to argillite dominantly located in one horizon at the top of the sequence.  A massive sulphide unit/zone is situated at the bottom of this horizon marking change in the volcanism.

West of the Northeast Domain, the Central Domain is dominantly composed of a thick sequence of basalt. Based on the previous RC drilling, three mafic cycles can be defined in this domain.  The middle cycle,

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characterized by higher contents in chlorite reflecting probably a magnesium composition, separates the two cycles. However, it is not clear if the MgO increase is an alteration product or a primary composition.  North-northwest to north trending conductors are associated with and define the trend of this domain.  Dykes/sills of gabbro/diabase/pyroxenite are also interpreted in this sequence.

The main characteristic of the Southwest Domain is the presence of felsic crystal tuffs and felsic crystal lapilli tuff.  Four horizons (cycles) have been identified which are usually separated by mafic to intermediate flows and or the argillite beds.  These units exhibit a well defined northwest to north-northwest trend. The first basal cycle, crystal tuff (tops to the west) is dacitic in composition exhibiting feldspar crystals and thin interbeds of dacite and argillite. The base of this unit defines the boundary with the Central Domain. The Golden Horseshoe Reef is hosted by a dacitic unit within the first crystal tuff near the contact with the granite.  The second cycle, commences with a felsic crystal tuff exhibiting quartz crystals.  This unit is reported to be more felsic in composition than the first cycle crystal tuff.  The third cycle, felsic crystal tuff is separated from the second cycle by an andesite/basalt sequence. The fourth cycle, felsic tuff is a crystal lapilli tuff and is separated from the third by a carbonatized basaltic sequence; the matrix, appears to have the same composition as the second and third quartz crystal tuff.  This cycle corresponds to the stratigraphic sequence reported in the footwall of the Reefs 1 and 2 at Bulyanhulu.  The Bulyanhulu Reef 1 is hosted by an argillite horizon at the top of the sequence.

Alteration

At the property scale, the main alterations observed are sericitization, carbonatization, silicification and hematization.  A weak to strong sericitization affects the felsic volcanic rocks intersected in the holes drilled in the southwest corner of the Itetemia prospecting license. These units are white cream to yellowish in color.  The carbonatization, mostly observed in the basalt and andesite, has also been observed in certain intermediate/felsic tuffs.  The rock appears lighter in colour and has a reaction to the 10% hydrochloric acid.  The strongest carbonatization is observed in the southwest corner.  The silicification and hematitization are sporadic and appear in the vicinity of the granite contact.  A moderate to strong silicification is observed in mafic units and the hematitization appears in the quartz feldspar porphyry and the granite.  Finally the epidotization is locally noted in the pillowed mafic flows.

On the Golden Horseshoe Reef, the albitization and the silicification are the most important alterations. The yellowish to brownish color alteration and a strong hardness suggests albitization.  The lithogeochemical analysis should confirm this type of alteration.  Albitization appears in the felsic crystal tuffs and dacite at different intensity.  The silicification may be related to the albitization, but is difficult to identify when this alteration is too strong.  Otherwise the silicification appears along crosscutting fractures in both felsic units.  The silicification has also been identified in the basalt located to the North of the Golden Horseshoe Reef.  The basalt is dark green and has a very strong hardness. Other types of alteration like epidotization, chloritization and ankeritization are observed but they are limited and/or weak to very weak.  The epidotization is associated with pillowed mafic flows, the chloritization affects some basalt and felsic/intermediate tuffs, and the ankeritization is noted in felsic crystal tuffs located in the southwest corner of the Itetemia license.

A sericitic hydrothermal alteration is characterized by a sodium depletion (<1%) and a gain in potassium corresponding to <0.1% Na2O and >2.5% K2O in felsic volcanic rock (>60% SiO2).  It could be outlined by the Sericitic Index being (K2O/ (K2O +Na2O)) x 100.  Sericitic index greater than 70% is considered anomalous for felsic rock.  The sericitic alteration visually observed in the felsic rocks of the holes ITDD-01 and 11 is not confirmed by the lithogeochemistry.  The Sericitic index is generally less than 40% with four samples ranging 52-61%.  However, the carbonatization is confirmed in the mafic units.  Additionally, high contents in CaO (9-12%) and high loss on ignition (8 to 16%) were noted.

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Structure

The volcanic and sedimentary rocks have a northwest to north-northwest trend and typically dip 85 to 90° to the northeast.  The known polarity was to the southwest for all the units but a northeast polarity for the area of the Golden Horseshoe Reef is possible.  This change in the polarity may be explained by folding. Evidence of folding has been observed in the field and in the diamond drill holes.  Some outcrops showed “S” folds in argillite horizons with axial plan parallel to the main schistosity which follows the NW-NNE trend.  Also, numerous argillite horizons intersected in the diamond drill holes, exhibit micro folding. Two phases of deformation can be identified.  On outcrop CB99-05, the first phase (S1) is very well developed oriented at around 300°/70-90°. The second phase schistosity (S2) less developed characterized by crenulations (kink bands) at 320°/40°.  Generally the schistosity S1 is weakly to moderately developed in all the volcanic and sedimentary units.  Locally, S1 appears more developed when related to shearing.

Mineralization

The sulphide mineralization encountered on the Itetemia Property comprise massive to semi-massive, stringers, veins and veinlets, disseminated and nodular mineralization.  The types of mineralization are (i) sulphides associated with volcanism activity; (ii) remobilized sulphides associated with deformation (shear hosted); and (iii) sulphides associated with sedimentation.  The gold and metallic contents associated with this mineralization are variable and the relation between the grades and the mineralized type is not well known at this stage.

The massive to semi-massive sulphide mineralization seems to be related to volcanism.  It occurs in two areas on the Property.  One area is located in the northern part of the licenses and has been intersected by the hole ITDD-06.  More than 30 m. of sulphides were intersected at the contact between a QFP and an argillite horizon separating two pillowed basalts.  The sulphide content ranges from 10 to 90% pyrrhotite, 2 to 5% pyrite, trace to 5% sphalerite, trace to 1% copper.  Five to twenty percent of felsic material (ash tuff/quartz) and less than 3% argillite are associated with and brecciated by the sulphides.  The pyrite-sphalerite-chalcopyrite appears in stringers and/or blebs in the pyrrhotite and ash tuff.  The massive sulphides have also been intersected by RC holes, but the relation with the other units is less evident. Massive to semi-massive sulphides were also mapped in the Golden Horseshoe Reef where a 1 to 4m thick sulphide zone, containing 20 to 80% pyrite-pyrrhotite, was intersected in a number of holes.  Most of these zones are located close to or at the northeastern contact.  Furthermore, hole ITDD-33 intersected a sulphide zone having 15 to 30% pyrite from 204.7 to 205.15 m. These sulphides, presenting laminations that suggest a possible exhalite environment, are also located to the northeastern contact.  Along the southwest contact, argillite, brecciated by stringers of sulphides, has been intersected by drilling.

The stringer, vein and veinlet sulphides may be related to the volcanism and to remobilization.  They appear in quantities ranging generally from trace amounts to 5% and can reach 10-20%.  The pyrite and the pyrrhotite are the most usual sulphides.  Chalcopyrite-sphalerite-arsenopyrite and rare galena are present in weak quantities, generally less than 1%.  This type of mineralization can be found in the felsic volcanic rocks and in argillite. The Golden Horseshoe Reef mineralization occurs as massive sulphide veins locally ranging from 15-30 cm wide.  Sulphides dominantly appear in veins/veinlets less than 5 cm wide in felsic volcanic rocks.  Five to thirty percent pyrite-pyrrhotite is common over sections of 1 to 15 m along the holes.  They are sub-concordant and parallel to the schistosity.  The strong shearing at the Golden Horseshoe Reef probably represents a remobilization of the sulphides.  Those parallel to the schistosity may represent, in part, that type of mineralization. Argillite units are generally affected by a strong deformation associated with at least two folding phases, S1 and S2.  The sulphides (pyrite-pyrrhotite) along the schistosity, S1, may represent remobilized and/or primary sulphides affected by a second deformation.  Massive to semi-massive veins (mm to cm) are also

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reported in the argillite.  They appear parallel to sub-parallel to the schistosity and are probably related to the volcanism since, as the stringers observed, they give a breccia aspect to the hosted rock.

Disseminated sulphides, fine grained, coarse grained or in blebs of less than 1 cm can be related to the three types of mineralization.  They appear in all lithologies, including mafic dykes and granite.  The main sulphide encountered is pyrite.  It is common to see trace to 1% disseminated pyrite in altered and unaltered units.  At the Golden Horseshoe Reef, 5% to 15% disseminated sulphides are reported.  They are composed of pyrite and pyrrhotite and are associated with the other sulphides.  The nodular sulphides are related with a sedimentation period indicated by argillite horizons.  Up to 5% of the sulphides in the argillites appear nodular.  It corresponds to  less than 3% of the total sulphide content in rock.  Mostly composed of pyrite, the sulphides exhibit a nodular shape, generally less than 1 cm, and elongated along the schistosity.  The nodular sulphides are associated with quartz-carbonate material, which fills the cavities around the nodules.

Mineral Processing and Metallurgical Testing

Preliminary mineral processing and metallurgical test work has been completed by International Metallurgical and Environmental Inc. (“IME”) under the direction of Minestart Management Inc. (“Minestart”).  The metallurgical samples were prepared by IME from assay laboratory rejects.  The samples tested ranged in grade from 0.87 g/t Au to over 4.0 g/t Au; however, most of the samples ranged from 3 to 4 g/t Au.  A majority of the test work focused on determining the gold extraction from coarsely crushed material.  The leach tests of crushed material resulted in low gold extractions, due to non-liberation of the contained gold, as a result of poor exposure to the leach solution.  The gold recovery in these tests ranged from 25% to 47%.  The particle size distribution was shown to be very significant in determining the overall gold extraction from the mineralized material.  A standard bottle roll test was also carried out on this material.  A composite sample, grading 3.67 g/t Au, was crushed and finely ground as feed for the test.  Following the test, the residue assayed 0.06 g/t Au, which yields an overall gold recovery of 98%.

The material was shown to contain fresh sulphide mineralization and consideration was given to pre-concentrating the gold, through a bulk sulphide flotation stage.  Using an industry standard bulk sulphide flotation process in a laboratory flotation test, the sulphur recovery was very good, in excess of 94% of the available sulphur. Gold recovery, however, was shown to be much less than the sulphur recovery, indicating that the gold appears to be contained in silicate minerals. The results of the metallurgical work indicate that grinding and agitated tank cyanide leaching of the material will be required to maximize gold recovery. Additional test work will be required as the deposit is further explored and defined.

Mineral Resource Estimation

In 1998, Minestart was retained by Tancan to prepare a mineral resource estimation for the Golden Horseshoe Reef.  The mineral resource was calculated based on 13 diamond drill holes which were drilled at 25 m. intervals along strike for approximately 300 m. and to a depth of approximately 50 m. The mineral resource was calculated using polygons on cross-sections incorporating a 2.0 g/t gold cutoff and a constant bulk density of 2.7 tonnes/cubic meter. Minestart estimated the mineral resource for the Golden Horseshoe Reef to be 511,000 tonnes grading 7.09 g/t gold.  As an integral part of its review, the Company hired Steffen, Robertson and Kirsten Consulting (Canada) Inc. (“SRK”) to review the mineral resource estimate prepared by Minestart, and SRK provided the following observations:

• SRK believes there is a need for more near-surface and down-dip information in order to better define the controls on the mineralization and the geometry of the mineralized horizon. With respect to the density, SRK notes that the bulk density was used for estimating the bulk tonnage. Given the climate and the weathering environment, the density of sulfide rich rocks and volcanics could vary considerably and based on their

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experience it may be required to weigh the assays during compositing and estimating the bulk tonnage of the

mineralized and unmineralized zones.

• With respect to the 2.0 g/t cutoff grade used in the estimation, SRK believes that initially, it might be possible to mine the reef by way of a very narrow and shallow open pit.  However, it is more likely that given the higher grade mineralization, narrow widths and current limited strike length the Golden Horseshoe Reef would be more amenable to underground mining methods.  As such, the cutoff grade of 2.0 g/t gold initially used to estimate the mineral resource may be too low.

• With respect to the diamond drilling core recovery, SRK considers the NQ size to be appropriate and that it has been appropriately split using a diamond saw.  The split core remains in good condition and is stored on-site in a proper facility. The rock quality is very good. The core recovery is excellent.

SRK believes the mineral resource estimation prepared by Minestart to be an inferred mineral resource as defined by standards set by the Canadian Institute of Mining, Metallurgy and Petroleum.

Luhala Property

The following discussion regarding both the Luhlala and Lunguya Properties below is summarized from a technical report prepared in accordance with the requirements of NI 43-101F dated February 28, 2003 entitled, “Report on the 2002 Exploration of the Luhala Concessions and the Lunguya Concessions, Lake Victoria Goldfields District, North-Central Tanzania” by Dr. Jim L. Oliver, Ph.D., P. Geo. (the “Luhlala and Lunguya 2002 Report”).  The reader is referred to the complete text of the Luhala and Lunguya 2002 Report, which is available at www.sedar.com .

Property Description and Location

The Luhala property is located in Misungwi District of Mwanza Region of Tanzania. It lies approximately 70 kilometres south of the city of Mwanza.  The Luhala property consists of four (4) prospecting licenses (namely, the Luhala PL 1450/00, Shilalo PL 1303/99, Ngobo PL 1559/00 and Sima PL 1560/00).  These prospecting licenses are in good standing with respect to required filings and payments with the Government of Tanzania, although the Shilalo is currently under application for renewal.

The Company has a 100% interest in the Luhala prospecting license, and has the right to acquire a 100% interest in the Ngobo and Sima prospecting licenses by making a series of payments to the property holder, Widescope Promotion Ltd. (“Widescope”), totaling US$120,000 over six years for the Ngobo license and US$84,000 over six years for the Sima license.  Widescope retains a 2% net smelter returns royalty on both the Ngobo and Sima licenses, which the Company may buy back, in each case, one-half (i.e. 1%) for US$1,000,000. For the Shilalo license, the Company has the right to acquire a 100% interest by making a series of payments to the property owner totaling US$16,000.  The Shilalo property owner retains a 2% net smelter return royalty, of which the Company may buy back one-half (i.e.1%) for US$ 250,000.

Each of the prospecting licenses forming the Luhala property has the following mandatory annual work and rental payments:

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*These requirements are unknown at this time because application has been made for the renewal of the relevant license, which renewal is pending at this time.

The Luhala property covers an area of approximately 129.5 square kilometers.  The target on the Luhala property is gold stockwork mineralization associated with felsic rock units in dilational structures.  There is widespread gold mineralization on the property over a 6.25 square kilometer area.  Grab samples of rock from the property have run up to 7.8 grams per tonne gold.  Trench samples have run up to 22.1 grams per tonne gold over 2.5 meters.  One diamond drill intersection on the property ran 1.76 grams per tonne gold over 27 meters.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Access to the Luhala Property is via the main Mwanza – Shinyanga road, which is a single lane, good to excellent quality, asphalt highway.  Approximately 45 kms south of Mwanza, a dirt road from a junction at the settlement of Manawa, leads southwest to the town of Misasi.  The property has year round access, although seasonal winter rains, December to March, may result in flooding in low lying areas which are dominated by mbuga (black organic rich laustrine flood soils).  Most lowland areas are under active cultivation, corn, rice, beans and mixed crops, by subsistence farmers.  Low scrub and thorn bushes cover the small hills.  The area has been, for many years, deforested by local agricultural practices.

At Luhala, the mean elevation is approximately 1,200 m above sea level, with a series of small sub-rounded hills, rising up to one hundred metres above the surrounding plain.  These hills are typically formed by either resistive iron formations or felsic volcanic rocks.  Mafic volcanic rocks weather recessively and are typically only exposed in trenches through well formed laterite profiles.  Laterite development is extensive with brick-red laterites overlying weak mottled zones and saprolites at a depth of approximately 3-5 m’s.  Deep weathering penetrates 45 - 60 m’s vertically within the subsurface.

An enthusiastic and competent labor force is available through the surrounding villages, and local people have been routinely hired during the trenching, drilling and soil sampling programs conducted on this property.  However, no other significant infrastructure is available.

History

Luhala has had a significantly more protracted exploration history than Lunguya, beginning with the initial exploration by the then Tanganyikan Geological Survey in 1947.  The exploration history of Luhala may be summarized as: