FORM 2A QUOTATION STATEMENT

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					              FORM 2A

   QUOTATION STATEMENT

PROVIDENCE DIAMOND CORP.
     Suite 1450, 789 West Pender Street
        Vancouver, British Columbia
             Canada, V6C 1H2
                                                 1.        TABLE OF CONTENTS

1. TABLE OF CONTENTS
2. CORPORATE STRUCTURE .................................................................................................. 1
3. GENERAL DEVELOPMENT OF THE BUSINESS ............................................................ 1
4. NARRATIVE DESCRIPTION OF THE BUSINESS ............................................................2
5. SELECTED CONSOLIDATED FINANCIAL INFORMATION....................................... 17
6. MANAGEMENT’S DISCUSSION AND ANALYSIS ........................................................... 18
7. MARKET FOR SECURITIES ............................................................................................... 19
8. CONSOLIDATED CAPITALIZATION ............................................................................... 19
9. OPTIONS TO PURCHASE SECURITIES........................................................................... 20
10. PRIOR SALES......................................................................................................................... 20
11. ESCROWED SECURITIES ................................................................................................... 21
12. PRINCIPAL SHAREHOLDERS........................................................................................... 22
13. DIRECTORS AND OFFICERS............................................................................................. 22
16. INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS.............................. 28
17. RISK FACTORS...................................................................................................................... 29
18. PROMOTERS......................................................................................................................... 31
19. LEGAL PROCEEDINGS....................................................................................................... 31
20. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS... 31
21. AUDITORS, TRANSFER AGENTS AND REGISTRARS................................................... 32
22. MATERIAL CONTRACTS .................................................................................................... 32
23. INTEREST OF EXPERTS .................................................................................................... 33
24. OTHER MATERIAL FACTS ................................................................................................ 33
25. FINANCIAL STATEMENTS................................................................................................ 33
2.     CORPORATE STRUCTURE

The Issuer was incorporated under the Canada Business and Corporations Act (the “Act”) on
June 20, 2003 under certificate of incorporation number 611021-5 and is subject to the
corporate governance requirements set out in the Act.

The full corporate name of the Issuer is “Providence Diamond Corp.” The Issuer’s head
office, place of business and registered office is Suite 1450, 789 West Pender Street,
Vancouver, British Columbia, Canada, V6C 1H2. The Issuer does not have any subsidiaries.

The Issuer has not undergone a fundamental change, nor is it proposing an acquisition,
amalgamation, merger, reorganization or arrangement and as such, is not re-qualifying for
quotation.

3.     GENERAL DEVELOPMENT OF THE BUSINESS

The Issuer is in the business of exploring and developing natural resource properties. The
Issuer currently has an option to acquire a 70% interest in three mineral claims totalling
3,047 acres located immediately east of Cameron River, within the south-central part of
Northwest Territories, Canada, more particularly known as the Frank Property (the
“Property”). The Issuer is focusing its exploration on this property for gold. The Property
does not have a known commercial body of ore or minerals as it is in a preliminary stage of
exploration.

The Issuer entered into a Property Option Agreement with International Zimtu
Technologies Inc. (“Zimtu”) (the “Agreement”) on July 22, 2003 pursuant to which the
Issuer can acquire a 70% undivided interest in the Property, free and clear of all charges,
encumbrances and claims, except for certain royalties.

In consideration for the interest in the Property, the Issuer paid Zimtu cash consideration of
$17,000, issued Zimtu 200,000 Series “P” Special Warrants (which were subsequently
converted into 200,000 common shares of the Issuer) and must incur exploration
expenditures of $250,000 by July 22, 2006 ($50,000 by July 22, 2004, $50,000 by July 22,
2005 and $150,000 by July 22, 2006). Zimtu will retain a 1% net smelter returns royalty
(“NSR”) on mineral production and a 1% gross production royalty (“GORR”) on diamond
production from the Property. One half of each royalty may be purchased by the Issuer for
$500,000 each. At the time of the Agreement, Zimtu was the sole shareholder of the Issuer
and the Issuer was, at that time, considered to be a party not dealing at arm’s length with
Zimtu.

Zimtu originally acquired the Property pursuant to a Mineral Property Acquisition
Agreement dated June 10, 2003 between Zimtu and Jody Dahrouge (the “Acquisition
Agreement”). Under the terms of the Acquisition Agreement, Mr. Dahrouge was paid
$13,200 for the costs of staking the Property and was granted a 1% NSR and a 1% GOR on
the Property. Zimtu has an option under the Acquisition Agreement to buy half of each of
the NSR royalty and the GOR royalty for $500,000 each. Mr. Dahrouge is a professional
geologist and was subsequently asked to join the board of directors of the Issuer after the


                                             -1-
agreement was entered into with Zimtu, due to his familiarity with the Property. Mr.
Dahrouge became a director of the Issuer on June 20, 2003.

Mr. Gary Vivian of Aurora Geosciences Ltd. was commissioned by Zimtu in June, 2003, to
complete an independent technical report on the Property in accordance with National
Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). Mr. Vivian visited
the Property and surrounding area during May, 2003. Mr. Vivian is a Qualified Person, as
that term is defined in NI 43-101 and has several years experience conducting exploration
for base metals, precious metals and other commodities within the Slave Structural Province
of Northwest Territories. The “Summary Report on the Frank Property” dated August 7,
2003 and updated on January 12, 2004 was prepared for the Issuer and is more particularly
described below in section 4.3 “Narrative Description of the Business”.

The Issuer does not know of any trends, commitment, events or uncertainty that is expected
to have a material effect on its business, financial condition or results of operations other
than as disclosed herein.

4.        NARRATIVE DESCRIPTION OF THE BUSINESS

Business Objectives

The Issuer’s business objective in the next twelve month period is to conduct detailed
exploration on the Property in an effort to further define the mineralization potential of the
Property.

Significant Events and Milestones

The only significant event that is currently planned is the exploration of the Property as
recommended by Mr. Vivian and which is described in further detail below. The Issuer
anticipates having the initial exploration program finished by October 2004. Additional
work on the Frank Property will be contingent upon successful results being obtained from
the preliminary exploration program.

Funds available

As at the year ended January 31, 2004, the Issuer had a working capital surplus in the
amount of $193,673. The funds will be expended on the principal purposes set out below.

Principal Purposes

The principal purposes for which the funds available are intended to be used, in order of
priority, are as follows:

           Description                                                     Proceeds
     1.    To pay the balance of the legal, audit and administrative       $20,000.00
           costs associated with this listing.



                                               -2-
           Description                                                   Proceeds
    2.     To fund the exploration program on the Property.             $70,000.00
    3.     Working capital to fund ongoing operations.                 $103,673.00
           Total                                                       $193,673.00

Since incorporation in June, 2003, the Issuer has not been the subject of a cease trade or
similar order or became bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or
compromise with creditors or had a receiver, receiver manager or trustee appointed to hold
the assets of the Issuer.

Since incorporation, the Issuer has not been the subject of any material reorganization and
does not have asset-backed securities outstanding.

The following information has been taken from the “Summary Report on the Frank
Property” dated August 7, 2003 and updated January 12, 2004, prepared for the Issuer by
Mr. Vivian of Aurora Geosciences Ltd. A full copy of this report is available on
www.sedar.com.

 “PROPERTY DESCRIPTION AND LOCATION

 The Frank Property consists of three mineral claims totalling 3,047 acres (1,233 ha) located
 immediately northeast of Myrt Lake, within the south-central part of Northwest Territories
 (Table 1). The property is within National Topographic System Map Sheets 85I-14 (Figure
 1), about 70 km northeast of Yellowknife. In January 2003 the claims were staked by
 Aurora Geosciences Ltd. on behalf of Jody Dahrouge. Based upon an agreement dated
 June 10, 2003, the Frank Property was purchased by Zimtu from Jody Dahrouge for a cash
 consideration of $13,200.00. Based on a subsequent agreement dated July 22, 2003,
 Providence was granted the option to earn a 70% interest in the property from Zimtu. To
 earn the interest, Providence must spend $250,000 on exploration prior to July 22, 2006,
 pay $17,000 and issue 200,000 special warrants of Providence to Zimtu. Jody Dahrouge
 holds a 1% NSR on mineral production and a 1% GORR on diamond production from
 the property, of which one half of one per cent of the royalty can be repurchased for a
 cash consideration of $500,000.00.

              TABLE 1: LIST OF MINERAL CLAIMS, FRANK PROPERTY

         Claim           Tenure         NTS               Record          Anniversary
         Name            Number      Map Sheet(s)          Date              Date
         Frank 1         F76060         85I/14           2003-02-20        2005-02-20
         Frank 2         F76063         85I/14           2003-02-20        2005-02-20
         Frank 3         F76073         85I/14           2003-02-20        2005-02-20




                                             -3-
PROPERTY ACCESS, LOCAL RESOURCES AND INFRASTRUCTURE

The Frank Property, is located within the south-central part of National Topographic
System Map Sheets 85 I/14; immediately east of Cameron River. The property is
approximately 70 km northeast of Yellowknife, NT. In addition, it is about 35 km east of
the Ingraham Trail and within about 10 km of the winter road to the Diavik and Ekati
diamond mines.

During summer months access to the property is by either float plane or helicopter.
During winter months access is by ski equipped aircraft, helicopter or snowmobile.
Yellowknife is the closest community and offers a complete range of supplies and services
for the mineral exploration industry. Previous exploration of the property has resulted in a
number of camp sites, which can be revitalized as required.

PHYSIOGRAPHY AND CLIMATE

The physiography of the Frank Property is typical of forested Canadian Shield terrain. It is
generally covered by a thick growth of stunted white and black spruce, white birch, poplar
and jack pine with some intervening areas of muskeg. Myrt Lake, just to the southwest of
the Frank claims, is at approximately 270 meters above sea level, while the remainder of
the property is about 50 m above the Cameron River at about 320 meters elevation.
Overall the Cameron River Greenstone Belt, in which the Frank Property lies, is fairly
rugged with a number of shear cliffs and steep hills.

In adjacent areas, underlain by gneisses of the Sleepy Dragon complex and metasediments
of the Burwash Formation, the terrain is less extreme.

Permafrost underlies much of the property. Freeze up is most often in late October and
break-up of a majority of the lakes in the region is most often not until early June.
Temperature extremes are typical sub-arctic Northern Canadian, hot summers; cool to
cold, damp to wet spring and autumn; and cold dry winters. Local temperatures range
from + 30°C to -45°C.

HISTORY

The Cameron River area, within which the Frank Property lies, has a documented history
of exploration of about 70 years. Exploration of the region is considered sporadic, with
long periods of inactivity punctuated by a few months of intense exploration. Much of the
prior work reported here is regarding geological exploration either bordering on, or
partially contained by, the current area of the Frank Property. That exploration which is
site specific is indicated as being so. The summary is not believed to be all inclusive and all
exploration activities may not be documented herein. Documented exploration of the
property and immediate adjacent areas is summarized in Table 2.




                                            -4-
                         TABLE 2: SUMMARY OF PRIOR WORK*

 Year                                 Description of Work                                   Documented
                                                                                            Expenditures
 1938     Dome mines reconnaissance prospecting along Cameron River following the                 -
          discovery of gold in sheared/folded turbidites (Timler, 1990).
1946-47   Mapping, prospecting, and discovery of the Frank Vein, Murphy Showing,                  -
          1947 Au 2 Showing and 1947 Au 3 Showing by Prospect Street Syndicate.
          About 75 shallow X-ray holes were completed, but assays and location
          records are incomplete. Drilling appears to have focussed on the Frank Vein,
          Murphy showing and north shore of Tea Lake with poor results. Scattered
          boxes of core can still be found in the bush, as well as hundreds of blast pits
          and trenches (Harquail, 1949; Timler, 1990).
 1962     Within claim Frank 1, The Earl-Jack Syndicate conducted an "EM-gun"                     -
          ground geophysical ground survey between Tea Lake and Cameron River
          (Timler, 1990).
1963-64   With the western part of claim Frank 2, Giant Yellowknife Mines Ltd. drilled
          four holes. One returned a sample with 0.08 oz/ton gold and another with
          0.06 oz/ton gold (Normin.db, 2003).
 1967     Giant Yellowknife Mines Ltd. completed nine short drill holes to test the               -
          “Earl-Jack” conductor, results are presumed negative. Only one drill hole log
          was found showing an anomalous quartz-sulphide rich horizon with 0.02
          oz./ton gold (Timler, 1990).
 1968     Anglo Celtic Exploration Ltd./ Cambrian Exploration Ltd. conducted a                    -
          ground magnetic survey. No additional information is available (Timler,
          1990).
 1974     Duke Mining Ltd. check sampled the Frank Vein, to the east of claim Frank 3             -
          and the 1947 Au 3 occurrence north of “VG Island” within claim Frank 3
          (Timler, 1990).
 1975     Precambrian Shield Resources conducted gridding, Mag/EM geophysical                $32,186.88
          survey’s and mapping just south of claim Frank 3. Four drill holes were
          completed. Hole AP-01 intersected 0.126 oz/ton Au across 5.18 m and AP-
          02 intersected 0.14 oz/ton Au across 3.05 m (Curry, 1976).
1980-81   As a follow-up to holes AP-01 and 02, Giant Yellowknife Mines Ltd.                 $22,400.00
          conducted sampling and lithogeochemical sampling along the Curry Grid,
          seven holes drilled with limited success (Perrino, 1980).
 1983     Just east of claim Frank 3, Veerman (1983) examined and sampled the Frank               -
          Vein to confirm previous reported gold grades on behalf of Eldon Resources
          Ltd. A grab sample returned 1.28 oz/ton gold and a 0.60 m chip sample 0.72
          oz/ton.
 1984     A follow-up exploration program at the Frank Vein, by Veerman (1984)               $ 23,611.00
          included detailed sampling and mapping and a VLF-EM Survey. It was
          determined the gold mineralization in the Frank Vein was sporadic and it was
          not economic. However, a strong 400 m north-trending VLF-EM anomaly
          was identified within the northwest part of the property, now within claims
          Frank 1 and 2.


                                                 -5-
   Year                                   Description of Work                                Documented
                                                                                             Expenditures
  1984-85      Aber Resources conducted Mag/EM-VLF surveys, geologic mapping and              $89,253.11
               rospecting along the east side of Cameron River south of Myrt Lake and
               south of claim Frank 3. Three grab samples with 2.4 g/t, 10.3 g/t, and 6.2
               g/t gold were obtained and drilled; the results were disappointing.
  1985-86      Cove Energy Co./Canadian United Minerals Inc. completed a Mag/EM-VLF                -
               survey, eight holes (850m), with one drilled at Tea Lake on Frank 1 and the
               rest near Webb Lake to the north of Frank 1. No significant intersects of
               gold were obtained (Timler, 1990). Details of the work are unavailable.
   1987        Tanqueray Resources (Siddle, 1987) conducted an extensive program              $79,499.32
               encompassing the current Frank Claims. It included a Dighem Airborne
               Survey, ground VLF survey(s), and four AX diameter core holes. The holes
               were located North of a small pond, northeast of Murphy Lake. One hole
               (T87-4) intersected sulphide with low gold.
   1988        Queen’s University Msc. Thesis written based on previous work and two               -
               partial field seasons. Includes new unit descriptions, some structural
               observations and 1:10,000 reconnaissance mapping on claim Frank 3.
   1989        Report by Covello, Bryan, and Associates Ltd. (Vivian, 1989), reviews               -
               previous exploration and indicates future exploration should examine
               lineaments and cross stratigraphic features as potential controls on.
   1990        Pamorex Minerals Inc. completes Mag / EM-VLF survey(s) and prospecting         $94,359.01
               over the AP occurrences, south of Claim Frank 3, and throughout the Frank
               claims. Numerous new gold showings in a variety of settings were
               documented (Timler, 1990).
   1995        A trenching and test mining program was carried out on the Frank Vein, just     $1,212.00
               east of claim Frank 1. An estimated 45 ton of rock was removed, with an
               average grade of 0.64 oz/ton Au (Nickerson, 1995).
*Modified after Timler (1990).

        GEOLOGICAL SETTING

        Regional Geology

        The Frank Property is within the southern portion of the Cameron River Greenstone belt
        and is underlain by rocks of the Burwash Formation, the Cameron River Volcanics and the
        Sleepy Dragon Complex (Figure 3). Henderson (1985) and Lambert (1988) mapped the
        region at respective scales of 1:250,000 and 1:50,000 and each provides detailed reviews of
        the regional geology.

        The Cameron River Volcanic Belt is one of approximately 26 major meta-volcanic systems
        of Archean age located within the Slave Structural Province (Figure 1). It is an arcuate
        homoclinal succession of metavolcanic rocks comprised predominantly of highly
        deformed and metamorphosed pillowed and massive basalts. The belt varies from a
        maximum width of about 4,200 m and tapers to about 50m north of Upper Ross Lake and
        pinches out near Victory Lake. The basalt flows are associated with lesser andesites and


                                                     -6-
minor felsic tuffs, pyroclastics, ryholites, ryholitic breccias and flows. Very few ultramafic
rocks are known within the region and none occur within the vicinity of the Frank
Property.

The Sleepy Dragon Shear zone, a 100 to 200 m wide shear structure (Kusky, 1988) of
intense deformation separates Cameron River Volcanics to the northwest from Sleepy
Dragon Complex to the southeast. The Sleepy Dragon Complex is an approximate 3.0 Ga
basement complex of diorite, tonalite, granodiorite gneisses; with younger
unmetamorphosed granodiorite-granite plutonics that are not considered part of the
Sleepy Dragon Complex (Lambert 1988). The Sleepy Dragon Complex is more than 120
ma older than the unconformably overlying Cameron River metavolcanics. This
metamorphosed and deformed complex of heterogenous granitoid gneisses occupies an
area roughly 25 km wide by about 45 km long, with its northwestern and western margins
laying proximal to Cameron River. The complex extends north and east, beyond the area
of interest.

The Cameron River Volcanic suite is conformably overlain by the Burwash Formation of
the Yellowknife Supergroup. Burwash Formation rocks consist predominantly of
interbedded greywacke-mudstone turbidites, which due to their relative incompetent
nature, are typically complexly folded and faulted. Burwash metasediments are
characteristically uniform and without distinctive stratigraphic marker horizons, thus
making the formation difficult to subdivide stratigraphically. These highly deformed
metasediments exhibit at least three phases of folding. Just west of the property, on the
west side of Cameron River, are rocks of the Burwash Formation, which are host to the
gold mineralization at the Camlaren Mine located approximately 17 km due north of the
Frank Property.

The apparent structural and stratigraphic simplicity of the Cameron River volcanics is
deceiving (Lambert, 1988). Extreme high-strain deformation of the belt against the Sleepy
Dragon Complex produced “pseudo conformable relations within the volcanic belt and
between the eastern side of the volcanic belt and the granitic (gneissic) basement”. The
observed elongate deformation is primarily contact parallel with near vertical attitude.

Within the region, mafic dykes and sills occur as isolated bodies, and more commonly as
extensive complex swarms. Amphibolite dyke and sill swarms intrude Sleepy Dragon
Complex and Cameron River volcanics and are considered probable feeders for the pillow
lavas of the Cameron River volcanics. Regional geology displays pre-volcanic fault
structures, as noted by faults near Webb and Patterson lakes. These faults displace the
Sleepy Dragon Complex but not the Cameron River volcanics. Significant synvolcanic and
extensive postvolcanic-syndeformational faulting and shearing further complicate the
geology of the region. In addition, late faults of probable Proterozoic age, and Proterozoic
diabase and gabbroic dykes cut across basement, supracrustal and plutonic rocks.

Hydrothermal alteration including silicification, quartz veining and silica flooding is a
prominent feature within the Burwash Formation and the Cameron River Volcanics, and
to a lesser extent within the Sleepy Dragon Complex. No apparent comprehensive study
of the regional alteration mineralogy or geochemistry has been completed. Quartz veining
is known to concentrate in areas of significant to subtle changes in large scale regional


                                            -7-
structural trends. Descriptions from property reports of silicification and associated
mineralization are available (Perrino, 1980, Siddle, 1987, and Timler, 1990). Gold
mineralization within the region is associated with shear zones and quartz silica flooding
with local concentrations of carbonate, pyrite, arsenopyrite, chalcopyrite with minor
concentrations of stibnite, sulphosalts, sphalerite and galena.

Property Geology

The Frank Property straddles the north-northwest trending Cameron River Volcanic belt,
with a small portion of the southeastern part of the property underlain by a highly
deformed contact zone between the Cameron River Volcanic Suite and the Sleepy Dragon
Complex (Kusky, 1988). Metasediments of the Burwash Formation are located
immediately west of the property on the west side of Cameron River.

At the Frank Property the Cameron River Volcanic suite is composed primarily of
Cameron River Basalts (about 65%: flows, pillow lavas, volcrudites including the
voluminous syn-post volcanic amphibolitic dykes and sills), Webb Lake Andesites (about
20%: pillowed lavas, breccias and volcaniclastic rocks) and relatively voluminous rhyolitic-
dacitic flows, lentils and breccias in the west-central portions of the Frank claims. All of
these rocks have undergone extreme high-strain deformation with metamorphic grades
ranging from greenschist to amphibolite.

Also included within the Cameron River volcanics are minor intercalated metasediments
which are interpreted to represent deposition in periods of volcanic quiescence. These
sediments include black argillite and slates, quartzose siltstones, mafic tuffs, cherts and
chert bearing or sulfide bearing, argillite-iron formations which overlie and interfinger with
the volcanic rocks (Lambert, 1988).

Detailed property scale geological mapping of portions of the current Frank claims have
previously been completed by Tanqueray Resources Ltd. (Siddle, 1988), and by Pamorex
Minerals Inc. (Timler, 1990).

The volcanic succession (basalts, amphibolites, andesites, rhyolites and minor sediments)
has been deformed and is transected by northeast, generally suture parallel, chloritized,
silicified, weak to high-sulfide bearing shear zones up to 5m wide. Silicification as silica
flooding and quartz veining is a pronounced feature of these rocks. The silica alteration
and associated arsenopyrite mineralization is common to all gold occurrences.

As previously discussed, several generations of faulting and shearing occur within the
region. At the Frank Property, most of the gold mineralization appears structurally
controlled. It is important to note, that at the Frank Vein, due east of claim Frank 3
(Nickerson, 1995, p. 3)

 “The best gold values are to be found close to the transverse faults where the highest
 sulphide concentrations also occur”.

Furthermore (Timler, 1990; p. 37)




                                            -8-
 “There appears to be qualitative correlation between lineaments and occurrences in
 that several showings are spatially close to the intersection of two or more directional
 trends, one of which is usually a stratigraphic trend.”

DEPOSIT TYPE

A vast majority of the known gold deposits within the Northwest Territories are within the
Archean Slave Structural Province, where most metasediments and metavolcanics are
between about 2.6 to 2.7 Ga and have been intruded by slightly younger granitic plutons.
Within the Slave Province “Auriferous quartz veins associated with shear zones,
intersecting metasediments and metavolcanics rocks, host most of the gold deposits”
(Beales et.al. 2002; p. 3). Boyle (1979) provides detailed accounts of these deposit types,
including an encompassing type which he terms: “gold-silver and silver-gold veins,
stockworks, lodes, mineralized pipes and irregular silicified bodies, in fractures, faults,
shear zones, sheeted zones and breccia zones essentially in volcanic terranes.”

These deposits are widespread throughout folded and relatively flat lying volcanic terranes
and are primarily of either Archean (Precambrian) or Tertiary age. The host rocks for
Archean deposits are commonly basalts, andesites, latites, trachytes and rhyolites. This
assemblage is commonly referred to as ‘greenstone’ terrane, such as the Cameron River
Greenstone Belt. Most often the deposits are in tuffs, agglomerates and sediments, iron
formations, interbedded with volcanic units. In Archean terranes the rocks are generally
regionally metamorphosed often exhibiting characteristic regional metamorphic facies
outward from an igneous or granitized centre, such as the Sleepy Dragon Complex. These
greenstones generally show chloritization though ‘unaltered’ rock is often encountered.

Archean gold deposits often occur as veins or irregular mineralized masses, lodes, pipes
and stockworks within highly fractured and sheared host rocks. With Archean deposits,
the veins and lodes are generally compact and the mineralogy is intergrown with
recrystallization and replacement features including book and ribbon structures. Quartz is
the most prevalent gangue mineral, often displaying recrystallization features and a
schistose to gneissic appearance. The quartz is generally colourless, but may exhibit a wide
range of colours from milky white to white; with grey or black varieties often associated
with carbonate alteration including calcite, dolomite and ankerite.

Within Archean lode systems of this type, a gold to silver ratio of between 1 and 12 is
common (Boyle, 1979). Associated metallic minerals may include arsenopyrite, pyrite,
argentiferous galena, sphalerite and chalcopyrite. Pyrrhotite is common to Archean
deposits. As has been documented for the Allan Lake showings, wall rock alteration,
common to Boyles classification includes: chloritization, carbonatization, sericitization,
pyritization, arsenopyritization and silicification. Also worth noting is that the Archean
systems are characterized by remarkably little vertical elemental zonation though it has
been noted at depth these Archean deposits can pass into barren quartz-carbonate with
pyrite, pyrrhotite and minor base metal sulphide mineralization. Deposits commonly
retain the gold and silver grades observed at or near surface, to depth.

There are numerous examples of this type of deposit in the greenstone belts of the
Canadian Shield, including the Districts of Yellowknife, NT and other historic regions in


                                           -9-
Ontario, such as Crow River, Lake of the Woods, Red Lake, Porcupine and Kirkland Lake.
In the Yellowknife district, the Con and Giant Mines which are hosted by the Yellowknife
Greenstone Belt, have produced approximately 14 million ounces of gold since 1938
(Miramar, 2002). These deposits occur as “lenses, veins, stockworks and silicified zones in
extensive chlorite schist shear zones that intersect meta-andesites, basalts and dacites with
interbedded pyritiferous slates and tuffs” (Boyle 1979, p.253). Elemental concentration
commonly includes: Cu, Ag, Zn, Cd, Hg, B, Tl, Pb, As, Sb, Bi, V, Se, Te, S, Mo, W, Mn, Fe
Co, Ni, CO2 and SiO2. The author is of the opinion that this deposit type best represents
the geology and elemental characteristics identified to date at the Allan Lake Property.

MINERALIZATION

A commonality of most auriferous showings at and near the Frank Claims is quartz
veining, silica flooding or stockworks with wallrock or vein margin arsenopyrite
disseminations or massive mineralization. Similarities of mineralization characteristics with
occurrences at the Allan Lake area several kilometers to the north, Myrt Lake to the south,
and the Frank Vein to the east imply some form of regional mineralizing event or events.
Other characteristics which the mineralized showings hold in common are proximity to
lineaments. Furthermore, Timler (1990; p. 37)

 “Mapping suggests less potential for a stratabound, carbonate-sulphide (arsenide)
 iron formation hosted gold deposit, than for a quartz vein shear type deposit”

and as previously noted (Timler, 1990; p. 37)

 “There appears to be qualitative correlation between lineaments and occurrences in
 that several showings are spatially close to the intersection of two or more directional
 trends, one of which is usually a stratigraphic trend.”

In addition to the descriptions of mineralized showings contained in the following
sections, several additional sulfide occurrences, and/or quartz veins are present throughout
the area (Figure 4).

Murphy Lake South

Located about 200 m southwest of the south end of Murphy Lake within claim Frank 3,
the showing is along a north-south lineament that marks the contact between felsic and
mafic volcanics (Figure 4). Two sites about 30m apart have anomalous gold values.

The north site is associated with an east-west trending quart stockwork-shear zone at the
boundary between a north facing scarp and muskeg. It is exposed for a width of 5 m and
a strike of 20 m. It contains quartz lenses up to ¾ m across, and up to 10 per cent
disseminated to locally massive, euhedral arsenopyrite and minor pyrite (Timler, 1990).
Sulphide appears concentrated at the margins of the wall rock. Composite grab samples
returned 1.72 g/t gold (Timler, 1990). The north site has very good potential, as it is
associated with a recessive, east-west trending structure that offsets the local stratigraphy;
and is only exposed along its southern margin.




                                           - 10 -
The south site consists of a thin 40 cm, north striking, east dipping (45°) rusty quartz vein
and stringers within sheared wallrock. The zone contains less than 2 per cent disseminated
arsenopyrite and pyrite. A thin quartz stringer from the zone contained 5.90 g/t gold
(Timler, 1990).

Murphy Lake North (T87-4)

Located immediately north of Murphy Lake within claim Frank 2, the showing was
intersected in hole T87-4, which was designed to test a VLF-EM conductive horizon
(Figure 4 and 5). It consists of abundant quartz-carbonate veins with pyrrhotite, pyrite and
minor arsenopyrite hosted by felsic volcanics and intermediate tuffs. Siddle (1987, p. 12)
interprets this as an “exhalite horizon”. Gold values ranged from 0.017 oz/ton across 2
feet to 0.022 oz/ton across 5 feet.

S2 (Vaydik Option)

The S2 showing is about 500 m due north of Murphy Lake. It consists of cherty, thin
layered, quartz-sericite schist hosted by pillowed andesitic lavas with some felsic fragmental
and tuffaceous components. Some quartz veins and stringers parallel schistocity, while
mineralization is predominately pyrite and pyrrhotite with minor chalcopyrite, sphalerite
and galena. Total sulfide content varies from 10 to 40 per cent (Normin.db, 2003). A
historic sample contained 0.08 oz/ton gold and another 0.06 oz/ton gold.

Au3 (Strongman Lake, 1947)

Multiple mineralized showings and trenches are located near and about the north shore of
Strongman Lake, about 500m east of Murphy Lake. Two sub-parallel shear zones about
100m apart contain disseminated arsenopyrite, and quartz veins and stringers. The west
shear returned a grab sample with 4.90 g/t gold and the east shear returned only one
anomalous sample with 385 ppb gold (Timler, 1990).

Tea Lake South

Tea Lake South consists of multiple gold showings on the east peninsula of Tea Lake.
Significant gold values are associated with quartz veins and stockworks with arsenopyrite
mineralization in locally sheared massive to pillowed mafic volcanics (Timler, 1990). At
one location a grab sample of massive arsenopyrite returned 26.75 g/t gold, one of
wallrock returned 1.48 g/t gold, and a 1.5 m chip returned 4.85 g/t. About 15 m further
north, a second chip returned 24.0 g/t gold (Timler, 1990).

Tea Lake North (Arab 53)

Multiple gold showings are located near the north shore of Tea Lake (Figures 4 and 6). All
consist of quartz veins and stockworks with arsenopyrite and minor pyrite mineralization.
The occurrences include a north trending zone, up to 6.5 m wide, of brecciation and
shearing with significant quartz, pyrite, pyrrhotite and arsenopyrite. A grab sample of
massive arsenopyrite at this location returned 18.4 g/t gold (Timler, 1990).




                                           - 11 -
EXPLORATION

Geophysical Surveys

Work on the Frank Property and surrounding area through the 1970's and 1980's included
significant geophysical surveys which identified a number of magnetic anomalies and
resistivity-conductivity highs, lows and breaks. The first recorded geophysical survey of
the property was, as previously noted in the section entitled “History” an “EM-Gun”
geophysical ground survey of a north trending conductor located between Tea Lake and
Cameron River.

In 1984 Veerman completed a VLF-EM survey that straddled the eastern boundary of
claim Frank 3. The survey identified a significant, more than 400 m long, north to
northeasterly trending VLF response about 400 m northeast of Strongman Lake. Veerman
(1994; p. 7) postulated the anomaly could be caused by sulphide and proposed two
drillholes to test it. The author is unaware of any follow-up exploration on the anomaly.

Pamorex Minerals Inc in 1989 contracted Covello, Bryan and Associates Ltd. for 15.95 km
of VLF-EM / Magnetometer ground survey with results that correspond well to geological
features. Unfortunately the ground geophysical work was completed at a location about 1
km south of Murphy Lake and does not assist directly with current Frank Property
geological interpretation.

Tanqueray Resources Ltd. flew the property in 1987 (Siddle, 1987) with a Dighem Survey.
Follow-up work included cutting a total of 16.8 line-km of grid and surveying part of the
grid with VLF-EM techniques. Siddle (1987) provides few details on the results of either
survey.

During 1989 Timler (1990) completed approximately 15.95 line-km of magnetometer and
VLF-EM surveys southeast of Myrt Lake along Cameron River.

Geochemical

Most early analysis from the property consisted of analyses for precious metals (gold and
silver), with occasional analysis for base metals. This includes most of the results from
drilling and surface sampling completed pre-late 1970's, when Perrino (1980) assayed a
number of samples from the Myrt Lake area for silver and zinc.

During 1989 Pamorex Mineral Inc. collected 451 (rock) samples which were analyzed for
gold by Barringer Laboratories by a fire preconcentrate atomic absorption method (Timler,
1990). Those samples returning values of 1000 ppb were re-analyzed by fire assay and
were analyzed for silver, arsenic, copper and zinc.

Hence, little comprehensive work has been completed on the geochemistry of the known
zones of mineralization at the Frank Property.




                                         - 12 -
DRILLING SUMMARY

Only a limited amount of drilling has occurred within the Frank Property. During the late
1940's, Hardquail (1949) completed about 75 shallow X-ray core holes at the Frank claims
and proximal there to. Some core logs and assays are available; however, information
pertaining to locations is incomplete.

In 1964 or 65, within the western part of Frank 2, Giant Yellowknife mines completed
four core holes (NORMIN.DB, 2003). Nine additional holes may have been completed
within the area between Tea Lake and Cameron River in about 1967. As with the earlier
program, scant information is available (Timler, 1990).

In about 1985 or 1986 Cove Energy Co. and Canadian United Minerals Inc. completed
one hole beneath historic workings on the northeast shore of Tea Lake. No further details
of the drilling are available (Timler, 1990).

Also in 1985, Tanqueray Resources Ltd. completed four AX diameter core holes. One was
completed just to the north of Murphy Lake and the remainder north of a small pond,
northeast of Murphy Lake. Hole T87-4 (330.0 ft at 045°along 290° azimuth), which was
designed to test a VLF-EM conductive horizon, intersected quartz-carbonate veins with
pyrrhotite, pyrite and minor arsenopyrite hosted by felsic volcanics and intermediate tuffs.
Siddle (1987, p. 12) interprets this as an “exhalite horizon”. Gold values ranged from
0.017 oz/ton across 2 feet to 0.022 oz/ton across 5 feet. The other three holes failed to
intersect any significant gold mineralization (Figure 5):

 - DDH T-87-1 (451.5 ft at 045°along 270° azimuth),

 - DDH T-87-2 (407.5 ft at 060°along 270° azimuth), and

 - DDH T-87-3 (350.6 ft at 045°along 270° azimuth).

The author is unaware of any other drilling on the Frank Property.

SAMPLING METHOD, SECURITY AND ANALYSES

Work to date by Providence Diamond Corp., the current owner of the Frank Property, has
been restricted to a review of historic property workings and literature. These reviews
include government geological reports (Henderson, 1985 and Lambert, 1988), company
assessment reports completed by professional geologists and engineers (Veerman, 1984;
Siddle, 1987; Timler, 1990), reports for submission to the British Columbia Superintendent
of Brokers (Veerman, 1983), and reports by others.

Although the author was not directly involved in the prior exploration of the property and
cannot comment on sample security, he is of the opinion that past exploration by H.
Veerman, P.Eng. (1984), J.E. Siddle (1987), and Boyd Timler, P.Geol. (1990) is of a very
high quality. Furthermore, Timler (1990) provided detailed accounts as to the sampling
methodology for rock samples collected.




                                          - 13 -
Samples collected by Siddle (1987) were analyzed for gold by Kamloops Research & Assay
Laboratory Ltd. of Kamloops, B.C. and Chemex Labs Ltd. of Vancouver, by standard Fire
Assay. Certified assay results are available. Samples collected by Timler (1990) were
analyzed for gold by Barringer Laboratories by a fire pre-concentrate atomic absorption
method. Those samples returning values of 1000 ppb were reanalyzed by fire assay and
were evaluated for silver and arsenic as well.

DATA VERIFICATION

As was previously discussed in the section entitled “Sampling Method, Security and
Analyses” the author did not verify the results obtained by previous operators of the
property.

ADJACENT PROPERTIES

As some of the information and geological knowledge regarding the Frank Property
includes the review of adjacent properties, specifically to the south, near and about various
historic claim groups and to the east at the Frank Vein. It is important to recognize that
this information is within the public domain and readily available. Mineralization
encountered on the adjacent properties is not necessarily indicative of the mineralization
on the Frank Property and that an attempt has been made to clearly indicate that the
mineralization (gold occurrences) presented herein are site specific within the confines of
the Frank Property.

INTERPRETATION AND CONCLUSIONS

Exploration of the Frank Property is considered sporadic, with periods of inactivity
punctuated by a few months of intense exploration. Since the discovery of the auriferous
Frank Vein to the east of the property in about 1946, four small drill programs were
completed in the 1940's, 1960's, and 1980's. In addition, geophysical programs and rock
sampling in the 1980's resulted in the discovery of several auriferous zones that indicate
the Frank Property has good potential for the discovery of significant gold mineralization.
Other anomalies, such as the VLF-EM anomaly northeast of Strongman Lake remain
untested.

The property remains under explored for Archean greenstone-hosted gold deposits and is
of sufficient merit to warrant further exploration.

In addition, Timler (1990; p. 36) noted

 “numerous small, circular lake-ponds throughout the property, generally 200 m or
 less in diameter. These do not have a lithological origin; some however, mark the
 intersection of prominent lineaments.”

The foregoing observations were made prior to the discovery of the prolific Lac De Gras
Kimberlite Field, and although these lakes are unlikely to be of kimberlitic origin, they
should be investigated with several till samples for diamond indicator minerals. Even
though the property is within the south-central part of the Archean Slave Structural



                                           - 14 -
Province, very few diamond indicator samples have been collected from the region
(Armstrong and Chatman, 2001).

RECOMMENDATIONS

Based on the exploration of the property to date, and its favorable geologic setting, the
property is of sufficient merit to warrant further exploration. A first stage exploration
program (Table 3) is proposed as follows:

a)        Complete a detailed compilation of existing property information combined with a
          review of aerial photographs to identify folds, breaks in structures, and structural
          trends. Complete detailed 1:10,000 scale mapping and sampling of the property
          with an emphasis on the known mineralized showing, trend, and untested
          geophysical anomalies. During mapping and sampling, particular attention should
          be given to lithology, alteration and structure. All sample analyses should include
          elements known to be associated with gold in these environments, and those
          previously documented from the property.

b)        Additional effort should be directed at exploring recessive horizons and shear
          zones such as the Murphy Lake South Zone, exploration should include
          biogeochemical methods.

c)        In addition, hand-held or backpack GPS units should be used to accurately locate
          known showings, grids, drill holes and sample sites, and

d)        Several diamond indicator samples should be collected from the property

                        TABLE 3: BUDGET FOR THE PROPOSED
                       EXPLORATION OF THE FRANK PROPERTY

     BUDGET ITEM                                            ESTIMATED COST ($)
     Project preparation and aerial photographic review           $6,000.00
     Mobilization and Demobilization (4-persons)                     $14,000.00
     Field Work, Geologic Mapping, Sampling, Diamond                 $40,000.00
     Indicator Sampling (4-persons; 2 weeks)
     Reporting                                                        $5,000.00
     Contingency                                                      $5,000.00
     Total Estimated Cost (Includes G.S.T.)                          $70,000.00

A second phase of exploration would be contingent upon receiving successful results upon
the completion of the first phase of exploration. The second phases should include
geophysical surveying (mag, IP, possibly EM) and include drill testing of the better
showings identified during the first stage of exploration.”




                                              - 15 -
 The following Appendix was prepared in January, 2004 in order to provide updated
 information on the Property, specifically regarding drill results.

   “APPENDIX 1: SUMMARY OF DRILL RESULTS FOR THE FRANK
   PROPERTY

   The majority of holes drilled on the Frank Property, for which information is available,
   have encountered gold mineralization. As most of the holes drilled on and in the vicinity
   of the present day Frank claims have been to shallow depths and in the case of the 1946
   drill program at seemingly arbitrary locations, the full potential of the Frank Property has
   gone unrecognized. Much of the drilling on and proximal to the Frank Property was
   completed between 1945 and 1967, hence some of the assay data could not be located.

   Information pertaining to drill holes is summarized below.

                                   Table 1: Drill Hole Summary

                                                               Number of             Number of Holes
 Year            Company             Drilling Location        Holes Drilled         with Data Available
 1946         Prospect Street        Frank Vein to East             75                       38*
                Syndicate             of Murphy Lake
1967-68      Giant Yellowknife       Approx. 500m East               9                        5
                Mines Ltd.           of Cameron River
 1987      Tanqueray Resources        North of Murphy                5                        4
                                           Lake
 * 21 holes were drilled in the south-central area of the present day Frank Property, 9 holes were drilled
 immediately east of the present day Frank Property on the Frank vein, and the locations of 8 holes are
 unknown.

   In the late 1940's, approximately 21 shallow X-ray core holes were drilled in the south-
   central area of the Frank claims and 9 on the Frank vein, which is adjacent to and east of
   the Frank Property (McDonald, 1946). Core records for 38 holes were obtained, with the
   average hole depth being less than 25 metres. It appears that samples were collected from
   only eight holes with assay results indicated for only one hole, E-43 (Table 2). However,
   locations of these eight holes are not indicated in the core records. Assay results from hole
   E-43 varied from 0.01 oz/ton Au (0.33 g/ton Au over 1.8 metres) over a maximum of 6.0
   feet to .38 oz/ton Au (12.35 g/ton Au over .9 metres) over 3 feet (Table 2). In the other
   seven holes, samples were collected from horizons of banded sulphide and dacite (where
   50% sulphides were recorded for 18.5 feet in hole X-6); mineralized, brecciated andesite;
   well mineralized, silicified andesite; and mineralized, silicified greenstone. Of the
   completed holes for which records were available, all holes except one encountered
   massive or disseminated sulphides. As well, visible gold was reported in holes X-30 and E-
   43, but no analytical information is available (Table 2, McDonald, 1946). Although exact
   locations of all holes were not indicated, it appears no discernable model was applied in
   placement of the drill holes. Approximate areas where these holes were drilled are shown
   in Figure 7.



                                                  - 16 -
     Giant Yellowknife Mines completed four core holes in 1964. Although no information
     relating to the 1964 holes is available, an additional nine holes were completed in 1967;
     with drill records and assays available for five holes (Giant Yellowknife Ltd, 1967). The
     1967 holes were drilled approximately 500 metres to the east of Cameron River and west
     of Tea Lake, within the current Frank 1 claim. Samples were collected in three of the five
     holes, with sample results of at least 0.02 oz/ton Au (0.65 g/ton Au), and up to 0.08
     oz/ton Au (2.6 g/ton Au; Table 2, Figure 7).

     In 1985 or 86, one hole was completed by Cove Energy Co. and Canadian United Minerals
     Inc. beneath historic workings on the northeast shore of Tea Lake, which is equivalent to
     the northcentral portion of the Frank 1 claim. No information regarding results or assays
     are available (Timler, 1990), however, grab samples in the Tea Lake area have returned
     values as high as 26.75 g/ton Au (Vivian, 2003).

     In 1987, Tanqueray Resources Ltd. completed 5 AX diameter core holes within the current
     Frank 2 claim. One was completed just to the north of Murphy Lake, three were
     completed north of a small pond northeast of Murphy Lake, and no information
     pertaining to the fifth hole is available (Siddle, 1987). In these holes, tuffs, argillites, and
     intermediate volcanics averaging 10% sulphides were sampled. Gold values of at least
     0.002 oz/ton Au (0.07 g/ton Au) over an average of 1.5 metres were returned in the three
     holes with available information. Hole T87-4, near Murphy Lake, which was drilled to test
     showing 182 (Fig 4; Vivian, 2003) contained anomalous gold values of 0.74 g/ton over 1.5
     metres and 0.55 g/ton Au over 0.6 and 1.5 metres, warranting follow-up work to identify
     the full potential of the showing. The three holes northeast of Murphy Lake appear to be
     concentrated around showing 93 (Fig 4; Vivian, 2003). Hole T87-3 returned gold values of
     0.004 oz/ton Au (0.13 g/ton Au) over 0.9 and 1.5 metres, validating the showing and
     justifying further exploration in the area.”

The Issuer does not have any oil and gas operations.

5.         SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following is a summary of the financial data of the Issuer from the date of incorporation
to the mostly recently completed fiscal year of the Issuer:

                                                                Audited for the period from incorporation
                                                                  on June 20, 2003 to January 31, 2004
 Total Revenues                                                                   Nil
 Income from continuing operations                                                Nil
 Income from continuing operations (per share)                                    Nil
 Income from continuing operations (per share, fully diluted)                     Nil
 Net Income (loss) from continuing operations                                  ($120,927)
 Net Income (loss) from continuing operations (per share)                         N/A
 Net Income (loss) from continuing operations                                     N/A
 (per share, fully diluted)
 Total assets                                                                   $224,173



                                                   - 17 -
 Total long term financial liabilities                                    Nil
 Cash dividend declared per share                                         Nil

As the Issuer has recently declared January 31 as its fiscal year end, it has yet to complete its
first quarter.

The Issuer has not paid dividends in the past and does not anticipate paying dividends in the
near future. The Issuer expects to retain its earnings to finance future growth and, when
appropriate, retire debt.

The Issuer’s financial statements were not prepared using foreign GAAP.

6.       MANAGEMENT’S DISCUSSION AND ANALYSIS

The following is a summary of the results of operations, liquidity and capital resources of the
Issuer.

Results of Operations

From Incorporation to January 31, 2004

During the period from incorporation on June 20, 2003 to the financial period ended
January 31, 2004, the Issuer did not generate any revenue.

Expenses during this period were $121,161 and include management fees of $36,400 and
rent and administration fees of $32,760, legal fees of $21,450 and accounting/audit fees of
$6,400.

During the period ended January 31, 2004, the Issuer pre-paid administration and
management fees totaling $47,500.

During the period ended January 31, 2004, the Issuer incurred cash expenditures of $17,000
and issued Series “P” Special Warrants with a deemed value of $10,000 for the acquisition of
the Frank Property. The Series “P” Special Warrants were converted on March 15, 2004
following the Issuer receiving a receipt for its final prospectus from the B.C., Alberta and
Ontario Securities Commissions (the “Commissions”).

Liquidity and Capital Resources

Since incorporation, the Issuer’s capital resources have been limited. The Issuer has had to
rely upon the sale of equity securities for the cash required for capital acquisitions,
exploration and development, and administration, among other things.

The Issuer will continue to require funds to meet its obligations under the Property
Agreement and as a result, will have to continue to rely on equity and debt financing during
such period. There can be no assurance that financing, whether debt or equity, will always
be available to the Issuer in the amount required at any particular time or for any particular


                                              - 18 -
  period or, if available, that it can be obtained on terms satisfactory to the Issuer. Other than
  as described under “Use of Proceeds”, the Issuer must expend a total of $250,000 on the
  Frank Property over a period of 3 years ($50,000 on or before July 22, 2004, $50,000 on or
  before July 22, 2005 and $150,000 on or before July 22, 2006). The Issuer does not have any
  other commitments for material capital expenditures over either the near or long term and
  none are presently contemplated other than as disclosed above and or over normal operating
  requirements.

  From incorporation to the year ended January 31, 2004, the Issuer completed private
  placement offerings of Series “A”, “B”,“F” and “O” Special Warrants, for total proceeds of
  $321,500. Each Special Warrant was converted into one common share of the Issuer when
  the Commissions issued a receipt for the Issuer’s final prospectus. No additional
  consideration was payable on the conversion. Each Series “O” Special Warrant was
  converted into a unit of the Issuer, each unit consisting of one common share and one non-
  transferable share purchase warrant, entitling the holder to purchase one additional common
  share at a price of $0.20 per share until March 15, 2005. Upon the exercise of the share
  purchase warrants, the Issuer may receive additional proceeds of $80,000.

  The Issuer issued 200,000 Series “L” Special Warrants, at a deemed price of $0.05 per Series
  “L” Special Warrant, to Bruce Bragagnolo Law Corporation, in satisfaction of accrued legal
  fees provided to the Issuer. The Issuer also issued 200,000 Series “P” Special Warrants, at a
  deemed price of $0.05 per Series “P” Special Warrant, to Zimtu in consideration for the
  Property. Both the Series “L” and the Series “P” Special Warrants were converted into
  common shares of the Issuer on the receipt from the Commissions for its final prospectus.
  No additional consideration was payable on the conversion.

  7.         MARKET FOR SECURITIES

  The Issuer does not have its securities listed and posted for trading or quoted on any
  exchange or quotation system.

  8.         CONSOLIDATED CAPITALIZATION

  The following table details materials changes to the share and loan capital of the Issuer from
  the date of incorporation to the date of this Quotation Statement:

          Designation                 Number                   Outstanding as at          Outstanding as at
          of Security                authorized                January 31, 2004           March 19, 2004
        Common shares                Unlimited                       100                      6,300,100
       Special Warrants(1)           6,300,000                    6,300,000                      Nil
          Warrants(2)                 400,000                      400,000                     400,000
(1)     A total of 6,300,000 Special Warrants were issued from July, 2003 to January, 2004. The Special Warrants
        were qualified and converted into common shares of the Issuer by the filing of a prospectus with the
        British Columbia, Alberta and Ontario securities commissions.
(2)     400,000 share purchase warrants were issued in connection with a private placement offering of units in
        January, 2004. Each share purchase warrant is exercisable into one common share of the Issuer until
        March 15, 2005 at a price of $0.20 per share.



                                                      - 19 -
9.      OPTIONS TO PURCHASE SECURITIES

The Issuer has not granted any options to purchase the Issuer’s common shares to its
executive officers, directors, employees, consultants and certain other persons.

10.     PRIOR SALES

The Issuer has one class of securities outstanding, common shares, of which 6,300,100
common shares are issued and outstanding. All of the common shares of the Issuer rank
equally as to voting rights, participation in a distribution of the assets of the Issuer on a
liquidation, dissolution or winding-up of the Issuer and the entitlement to dividends. The
holders of the common shares are entitled to receive notice of all meetings of shareholders
and to attend and vote the shares at the meetings. Each common share carries with it the
right to one vote.

In the event of the liquidation, dissolution or winding-up of the Issuer or other distribution
of its assets, the holders of the common shares will be entitled to receive, on a pro rata basis,
all of the assets remaining after the Issuer has paid out its liabilities. Distribution in the form
of dividends, if any, will be set by the board of directors.

The following table sets out the prices at which the Issuer’s common shares have been sold
within the last twelve months:

                       Number of issued securities       Price per security   Total consideration
 Common shares                    100                          $1.00               $100.00
 Special Warrants:
   Series “A”                  1,400,000                       $0.01               $14,000
   Series “B”                  3,250,000                       $0.05              $162,500
   Series “F”                   850,000                        $0.10               $85,000
   Series “L”                   200,000                        $0.05          $10,000 (deemed)
   Series “O”                   400,000                        $0.15               $60,000
   Series “P”                   200,000                        $0.05          $10,000 (deemed)

The Issuer issued a total of 6,300,000 Special Warrants between July, 2003 and January,
2004. Of these Special Warrants, 1,400,000 Series “A” Special Warrants were issued in
September, 2003 pursuant to a private placement, 3,250,000 Series “B” Special Warrants
were issued from September through December 2003 pursuant to a private placement,
850,000 Series “F” Special Warrants were issued in October of 2003 pursuant to a private
placement, 200,000 Series “L” Special Warrants were issued in September of 2003 pursuant
to an agreement for services, 400,000 Series “O” Special Warrants were issued in January of
2004 pursuant to a private placement and 200,000 Series “P” Special Warrants were issued in
September of 2003 pursuant to the agreement to acquire the Frank Property.

All of the Special Warrants were qualified by the issuance of a receipt for a final prospectus
by the Commissions and were subsequently converted into common shares.

The Issuer does not currently have its securities listed and posted for trading or quoted on
any exchange or quotation system.


                                                - 20 -
11.     ESCROWED SECURITIES

Securities held by principals of the Issuer are held in escrow pursuant to National Policy 46-
201 Escrow for Initial Public Offerings (the “Escrow Policy”) for a period of time following the
Issuer’s offering as an incentive for the principals to devote their time and attention to the
Issuer’s business while they are securityholders. Principals include all persons or companies
that, on the completion of the Issuer’s offering, fall into one of the following categories:

  a)      Directors and senior officers or the directors and senior officers of a material
          operating subsidiary;

  b)      Promoters during the two years preceding the offering;

  c)      Those who own and/or control more than 10% of the Issuer’s voting securities
          immediately after completion of the offering if they also have appointed or have
          the right to appoint one or more of the Issuer’s directors or senior officers or one
          or more of the directors or senior officers of a material operating subsidiary;

  d)      Those who own and/or control more than 20% of the Issuer’s voting securities
          immediately after completion of the offering; and

  e)      Associates and affiliates of any of the above.

The following table sets out the number of common shares of the Issuer held in escrow as at
January 31, 2004:

          Designation of class                Number of securities               Percentage of class
            held in escrow                      held in escrow
            Common shares                          1,772,599                            28%

The common shares are held in escrow pursuant to an Escrow Agreement dated January 5,
2004 between the Issuer, Pacific Corporate Trust Company and the shareholders.

As the Issuer will be considered an ‘emerging issuer’ as that term is defined under the
Escrow Policy, a principal’s escrowed securities will be released according to the following
schedule:

         On _______, 2____, the date the Issuer’s              1/10 of the escrowed securities
         securities are listed on a Canadian exchange (the
         listing date)
         6 months after the listing date                       1/6 of the remaining escrowed securities
         12 months after the listing date                      1/5 of the remaining escrowed securities
         18 months after the listing date                      1/4 of the remaining escrowed securities
         24 months after the listing date                      1/3 of the remaining escrowed securities
         30 months after the listing date                      1/2 of the remaining escrowed securities
         36 months after the listing date                      the remaining escrowed securities



                                                   - 21 -
                      *In the simplest case, where there are no changes to the escrow securities initially
                      deposited and no additional escrow securities, the release schedule outlined above
                      results in the escrow securities being released in equal tranches of 15% after completion
                      of the release on the listing date.

           12.      PRINCIPAL SHAREHOLDERS

           The following table sets out the principal shareholders of the Issuer, the number of common
           shares held of record as well as held beneficially, and the percentage of common shares held,
           as at the date of this Quotation Statement:

           Name of Principal Shareholder                  Number and class of securities held         Percentage of class
           International Zimtu Technologies Inc.                277,501 common shares                        4.40%
           Patrick Power                                      1,372,599 common shares(1)                    21.79%
           Jody Dahrouge                                       200,000 common     shares(1)                  3.17%
           Christopher Grove                                   200,000 common shares(1)                      3.17%
           (1)      Held in escrow.

           13.      DIRECTORS AND OFFICERS

           The following table sets out information regarding the directors and executive officers of the
           Issuer, including their respective positions and offices held and their respective principal
           occupations within the five preceding years:

Name, Municipality of
Residence and Position held                           Principal Occupation for the last 5 years                      Date Appointed
Patrick Power                         Director of the Issuer since June 20, 2003; Director and President of           June 20, 2003
Vancouver, British Columbia           Arctic Star Diamond Corp., December 2000 to present; Director of
                                      Penteco Resources Ltd., April 2003 to present; Secretary of Penteco
                                      Resources Ltd., June 2003 to present; Director of International Samuel
Chief Executive Officer,
                                      Exploration Corp., December 2001 to present; Director of Austin
President and Director
                                      Developments Corp., August 2001 to present; Director of Montello
                                      Resources Ltd., November 1993 to present.
Jody Dahrouge, P.Geol.                Director of the Issuer since June 20, 2003; Director of International           June 20, 2003
Spruce Grove, Alberta                 Arimex Resources Inc., May 2002 to present; Director of Trivello
                                      Ventures Inc., May 2001 to present; Director of Commerce Resources
                                      Corp., January 28, 2000 to present; Director, Consolidated Excellerated
Director
                                      Resources Inc., January 2001 to January 2003; Director, Solitaire Minerals
                                      Corp., April 2000 to January 2001; Geologist, Dahrouge Geological
                                      Consulting Ltd., March 1998 to present; Geologist, Halferdahl &
                                      Associates, May 1994 to March 1998.
Glenn Greig                           Self-employed accounting consultant since July, 1993; Chief Financial          January 14, 2004
Vancouver, British Columbia           Officer of Arctic Star Diamond Corp. since August, 2001; Chief
                                      Financial Officer and Secretary of Austin Developments Corp. since
                                      November, 2002; Secretary of Montello Resources Ltd. since July, 2002;
Chief Financial Officer and
                                      Secretary of Goldnev Resources Inc. since September, 2001; Secretary of
Director
                                      Consolidated Odyssey Exploration Inc. since January, 2002; Secretary of
                                      Bonaventure Enterprises Inc. from February, 2003 to February, 2004;
                                      Secretary of Birchwood Ventures Ltd. from August, 1995 to August
                                      1997; Secretary of Blackwater Gold Corp. from June, 2000 to October



                                                                  - 22 -
Name, Municipality of
Residence and Position held                    Principal Occupation for the last 5 years                 Date Appointed
                               2000; Secretary of Caesars Explorations Inc. from November 1998 to
                               June 2001; President and Secretary of Canadian Reserve Inc. from May,
                               1995 to June 1999; Secretary of Christina Gold Resources Ltd. from
                               June, 1997 to June 1999; Secretary of Iciena Ventures Inc. from January
                               1996 to September, 2000.
J. Christopher Grove           Director of the Issuer since June 20, 2003; Self-employed consultant in    June 20, 2003
                               the field of communications.
Surrey, British Columbia
Director
Raymond Szeto                  Secretary of the Issuer since June 20, 2003; Secretary of SiegeSoft        June 20, 2003
                               Internet Solutions Inc., October 1999 to January 2001. Independent
Burnaby, British Columbia      technology and administrative consultant.
Secretary

          Directors of the Issuer hold office are elected annually at the annual general meeting of the
          shareholders of the Issuer, and hold office until the next annual general meeting or until
          their successors are appointed. Glenn Greig, Jody Dahrouge and J. Christopher Grove are
          members of the Issuer’s audit committee.

          As a group, the directors and executive officers of the Issuer beneficially own, directly or
          indirectly, or exercise control or direction over, 1,772,599 common shares, which is 28.2% of
          the total issued and outstanding share capital of the Issuer.

          Corporate Cease Trade Orders, Bankruptcies, Penalties, Sanctions and Conflicts of Interest

          The Issuer does not have any directors, officers or shareholders holding a sufficient number
          of securities of the Issuer to affect materially the control of the Issuer who were the subject
          of a cease trade or similar order, or an order that denied the other Issuer access to any
          exemptions under applicable securities law, for a period of more than 30 consecutive days.

          The Issuer does not have any director, officers or shareholders holding a sufficient number
          of securities of the Issuer to affect materially the control of the Issuer who within the 10
          years before the date of this Quotation Statement, become bankrupt, made a proposal under
          any legislation relating to bankruptcy or insolvency, or been subject to or instituted any
          proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager
          or trustee appointed to hold the assets of the director or officer.

          The Issuer does not have any directors, officers or shareholders holding a sufficient number
          of securities of the Issuer to affect materially the control of the Issuer who have been subject
          to any penalties or sanctions imposed by a court relating to Canadian securities legislation or
          by a Canadian securities regulatory authority or has entered into a settlement agreement with
          a Canadian securities regulatory authority.

          The Issuer does not have any directors, officers or shareholders holding a sufficient number
          of securities of the Issuer to affect materially the control of the Issuer who have been subject



                                                         - 23 -
to any other penalties or sanctions imposed by a court or regulatory body that would be
likely to be considered important to a reasonable investor making an investment decision.

There are no existing or potential material conflicts of interest between the Issuer or a
subsidiary or the Issuer and a director or officer of the Issuer or subsidiary of the Issuer.

Management of the Issuer

We have a total of 3 persons performing management functions. The persons forming our
management team and our outside directors and their resumes are described briefly below.

Patrick Power
Mr. Power, age 40, is President and Director of the Issuer. In his role as President, Mr.
Power will be responsible for all aspects of the Issuer’s activities. These including financing
and mineral project management and evaluation. With his extensive experience with public
companies, Mr. Power will be an important leader in accomplishing the corporate objectives.
Mr. Power will be an independent contractor of the Issuer. There is no non-competition or
non-disclosure agreement between Mr. Power and the Issuer.

Jody Dahrouge, P. Geol.
Mr. Dahrouge, age 37, received a Bachelor of Science (Geology) and SpC (Computer
Science) from the University of Alberta in 1988 and is the owner and President of Dahrouge
Geological Consulting Ltd., prior to which he was a Geologist for Halferdahl & Associates.
Mr. Dahrouge has over 12 years of experience in the mineral exploration industry and is also
the Vice-President of Exploration and a director of the Issuer as well as a director of
Commerce Resources Corp. In his role as VP and director, Mr. Dahrouge will supervise all
exploration programs carried out by the Issuer and evaluate properties for potential
acquisition. He works full time in the mineral exploration industry and will devote as much
time as required on an ongoing basis for the Issuer. Mr. Dahrouge will be an independent
contractor of the Issuer. There is no non-competition or non-disclosure agreement between
Mr. Dahrouge and the Issuer.

Core Development Corp. (beneficially owned by Shaun Ledding)
Core Development Corp. (“Core”) is a management company which will be providing
managerial services, including corporate maintenance, continuous disclosure and corporate
compliance services to the Issuer. Shaun Ledding, age 28, is the principal of Core. Mr.
Ledding received a Bachelor of Commerce (Finance) from the University of British
Columbia in 1998. Mr. Ledding works full time in the public mineral exploration industry
and is a Director of two TSX Venture Exchange listed companies: International Zimtu
Technologies Inc. and Commerce Resources Corp. Core will be an independent contractor,
and it will devote as much time as is required on an ongoing basis for the Issuer. There is no
non-competition or non-disclosure agreement between Core and the Issuer.




                                             - 24 -
            14.      CAPITALIZATION

            The following table sets out the certain information regarding the share capitalization of the
            Issuer. The Issuer has one class of security: common shares.

                                                                         Number of            Number of            % of                 % of
                                                                          Securities           Securities         Issued               Issued
                           Issued Capital                               (non-diluted)        (fully diluted)   (non-diluted)       (fully diluted)

Public Float
Total outstanding (A)                                                     6,300,100            6,700,100          100%                 100%
Held by Related Persons or employees of the Issuer or Related             3,322,599            3,322,599         52.74%               49.59%
Person of the Issuer, or by persons or companies who
beneficially own or control, directly or indirectly, more than a
5% voting position in the Issuer (or who would beneficially own
or control, directly or indirectly, more than a 5% voting position
in the Issuer upon exercise or conversion or other securities
held) (B)
Total Public Float (A-B)                                                  2,977,501            3,377,501         47.26%               50.40%


Freely-Tradable Float
Number of outstanding securities subject to resale restrictions,          1,772,600            1,772,600         28.14%               26.46%
including restrictions imposed by pooling or other arrangements
or in a shareholder agreement and securities held by control
block holders (C)
Total Tradable Float (A-C)                                                4,527,500            4,927,500         71.86%               73.54%


Public Securityholders (Registered)
Class of Security
Size of Holding                                                               Number of Holders                 Total Number of Securities
1-99 securities                                                                         0                                      0
100-499 securities                                                                      0                                      0
500-999 securities                                                                      27                                 13,945
1,000-1,999 securities                                                                  19                                 20,250
2,000-2,999 securities                                                                  5                                  12,000
3,000-3,999 securities                                                                  2                                  6,000
4,000-4,999 securities                                                                  0                                      0
5,000 or more securities                                                                73                                2,925,306




                                                                     - 25 -
                                                                    Number of              Number of            % of                    % of
                                                                     Securities             Securities         Issued                  Issued
                           Issued Capital                          (non-diluted)          (fully diluted)   (non-diluted)          (fully diluted)
Public Securityholders (Beneficial)
Class of Security
Size of Holding                                                         Number of Holders                     Total Number of Securities
1-99 securities                                                                     0                                        0
100-499 securities                                                                  0                                        0
500-999 securities                                                                  0                                        0
1,000-1,999 securities                                                              0                                        0
2,000-2,999 securities                                                             62(1)                               232,888(1)
3,000-3,999 securities                                                              0                                        0
4,000-4,999 securities                                                              0                                        0
5,000 or more securities                                                            0                                        0
Unable to confirm                                                                  0(1)                                     0(1)


Non-Public Securityholders (Registered)
Class of Security
Size of Holding                                                         Number of Holders                     Total Number of Securities
1-99 securities                                                                     0                                        0
100-499 securities                                                                  0                                        0
500-999 securities                                                                  0                                        0
1,000-1,999 securities                                                              0                                        0
2,000-2,999 securities                                                              0                                        0
3,000-3,999 securities                                                              0                                        0
4,000-4,999 securities                                                              0                                        0
5,000 or more securities                                                            6                                  3,322,599

(1)    Based on information received from intermediaries as of the date of this Quotation Statement.


            The Issuer has the following securities exchangeable or convertible into common shares:

                Description of Security (include                 Number of                                 Number of quoted
              conversion/exercise terms, including        convertible/exchangeable                      securities issuable upon
                  conversion/exercise price)                securities outstanding                        conversion/exercise
                     Share Purchase Warrants                       400,000                                     400,000

            There are a total of 400,000 common shares reserved for issuance on the exercise of the
            share purchase warrants.




                                                               - 26 -
               15.      EXECUTIVE COMPENSATION

               Compensation of Directors

               Set out below are particulars of the compensation paid to the Named Executive Officers of
               the Issuer. Named Executive Officers are:

               (a)      the Issuer’s Chief Executive Officer, despite the amount of compensation of that
                        individual;

               (b)      each of the Issuer’s four most highly compensated executive officers, other than the
                        CEO, who were serving as executive officers at the end of the most recently
                        completed financial year and whose total salary and bonus exceeds $100,000 per year;
                        and

               (c)      any additional individuals for whom disclosure would have been provided under (b)
                        but for the fact that the individual was not serving as an executive officer of the
                        Issuer at the end of the most recently completed financial year.

               As at January 31, 2004, the end of the most recently completed fiscal period of the Issuer,
               the Issuer had one Named Executive Officer, Patrick Power. His position within the Issuer
               is set out in the summary of compensation table below.

               Summary of Compensation

               The following table is a summary of compensation paid to the Named Executive Officer for
               each of the Issuer’s three most recently completed fiscal years.

                                       Annual Compensation                           Long Term Compensation

Name and                                                                               Awards                    Payouts
principle position     Fiscal                           Other           Securities Under     Restricted Shares                  All
of Named               Year                            Annual           Options / SARs(2)      or Restricted      LTIP(3)      Other
Executive Officer     Ending(1)   Salary   Bonus     Compensation           Granted            Share Units       Pay-Outs   Compensation
 Patrick Power          2004       Nil       Nil          Nil                  Nil                 Nil             Nil          Nil
 CEO, President         2003       Nil       Nil          Nil                  Nil                 Nil             Nil          Nil
(1) From the date of incorporation of the Issuer on June 20, 2003.
(2) Stock Appreciation Rights.
(3) Long term incentive plans.

               Long-Term Incentive Plans, Options and SARs
               Awards in Most Recently Completed Fiscal Year

               During the most recently completed fiscal year, there were no incentive stock options and
               SARs (stock appreciation rights) granted to the Named Executive Officer. The Issuer has
               no long-term incentive plans in place and therefore there were no awards made under any
               long-term incentive plan to the Named Executive Officer during the Issuer’s most recently
               completed fiscal year. A "Long-Term Incentive Plan" is a plan under which awards are made


                                                                     - 27 -
           based on performance over a period longer than one fiscal year, other than a plan for
           options, SARs (stock appreciation rights) or restricted share compensation.

 Name               Securities Under      % of Total Options/SARs           Exercise or      Market Value of Securities     Expiration
                     Options/SARs         Granted to Employees in            Base Price    Underlying Options/SARs on         Date
                      Granted (#)               Fiscal Year                 ($/Security)   the Date of Grant ($/Security)
 Patrick Power            Nil                           Nil                       Nil                   Nil                    Nil

           Aggregated Option/SAR Exercises During the Most Recently
           Completed Fiscal Year and Fiscal Year End Option/SAR Values

           During the most recently completed fiscal year, there were no incentive stock options or
           SARs exercised by the Named Executive Officer.

 Name                Securities          Aggregate                Unexercised options              Value of Unexercised In-the-Money
                    Acquired on        Value Realized              at Fiscal Year End                Options at Fiscal Year End ($)
                    Exercise (#)           (#)(1)             Exercisable/Unexercisable (#)            Exercisable/Unexercisable
 Patrick Power          Nil                 Nil                             Nil                                    Nil
(1) Based on the difference between the option exercise price and the closing market price of the Issuer’s shares, on the date of
    exercise.
(2) In-the-Money Options are those where the market value of the underlying securities as at the most recent fiscal year end exceeds
    the option exercise price.

           Termination of Employment, Change in Responsibilities and Employment Contracts

           There are no other compensatory plans or arrangements with respect to the Named
           Executive Officer resulting from the resignation, retirement or other termination of
           employment or from a change of control of the Issuer.

           Compensation of Directors

           Compensation for the Named Executive Officer has been disclosed above. No cash
           compensation was paid to any director of the Issuer for the director’s services as a director
           during the fiscal period ended January 31, 2004.

           The Issuer has no standard arrangement pursuant to which directors are compensated by the
           Issuer for their services in their capacity as directors, except for the granting from time to
           time of incentive stock options. During the most recently completed financial year, the
           Issuer did not grant any incentive stock options to directors

           16.      INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

           None of the Issuer’s directors, executive officers or their associates were indebted to the
           Issuer during the most recently completed financial year.




                                                                   - 28 -
Name and       Involvement      Largest Amount           Amount           Financially Assisted Securities    Security for
Principal       of Issuer or   Outstanding [fiscal   Outstanding as at    Purchases During [fiscal year     Indebtedness
 Position        Subsidiary      year end] ($)       [current date] ($)              end] (#)                    (f)
   (a)               (b)              (c)                   (d)                        (e)
  N/A

        17.     RISK FACTORS

        The following is a summary of risk factors that are material to the Issuer:

        Exploration and Development: The Property is in the exploration stage only and is
        without a known body of commercial ore. Development of the Property will only follow
        upon obtaining satisfactory results. Exploration and development of natural resources
        involve a high degree of risk and few properties which are explored are ultimately developed
        into producing properties. There is no assurance that the Issuer’s exploration and
        development activities will result in any discoveries of commercial bodies of ore. The long
        term profitability of the Issuer’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.

        Substantial expenditures are required to establish reserves through drilling, to develop
        processes to extract the resources and, in the case of new properties, to develop the
        extraction and processing facilities and infrastructure at any site chosen for extraction.
        Although substantial benefits may be derived from the discovery of a major deposit, no
        assurance can be given that resources will be discovered in sufficient quantities to justify
        commercial operations or that the funds required for development can be obtained on a
        timely basis.

        Operating Hazards and Risks: Exploration for natural resources involves many risks,
        which even a combination of experience, knowledge and careful evaluation may not be able
        to overcome. Operations in which the Issuer has a direct or indirect interest will be subject
        to all the hazards and risks normally incidental to exploration, development and production
        of resources, any of which could result in work stoppages, damage to persons or property
        and possible environmental damage. Although the Issuer has or will obtain liability
        insurance in an amount which it considers adequate, the nature of these risks is such that
        liabilities might exceed policy limits, the liabilities and hazards might not be insurable against,
        or the Issuer might not elect to insure itself against such liabilities due to high premium costs
        or other reasons, in which event the Issuer could incur significant costs that could have a
        material adverse effect upon its financial condition.

        Fluctuating Prices: The Issuer’s revenues, if any, are expected to be in large part derived
        from the extraction and sale of base and precious metals such as gold. The price of those
        commodities has fluctuated widely, particularly in recent years, and is affected by numerous
        factors beyond the Issuer’s control including international, economic and political trends,
        expectations of inflation, currency exchange fluctuations, interest rates, global or regional
        consumptive patterns, speculative activities and increased production due to new extraction
        developments and improved extraction and production methods. The effect of these factors




                                                      - 29 -
on the price of base and precious metals, and therefore the economic viability of any of the
Issuer’s exploration projects, cannot accurately be predicted.

Environmental Factors: All phases of the Issuer’s operations are subject to environmental
regulation in the various jurisdictions in which it operates. Environmental legislation is
evolving in a manner which will require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of proposed
projects and a heightened degree of responsibility for companies and their officers, directors
and employees. There is no assurance that future changes in environmental regulation, if
any, will not adversely affect the Issuer’s operations.

Competition: The resource industry is intensely competitive in all of its phases, and the
Issuer competes with many companies possessing greater financial resources and technical
facilities than itself. Competition could adversely affect the Issuer’s ability to acquire suitable
properties for exploration in the future.

Options and Joint Ventures: The Issuer may, in the future, be unable to meet its share of
costs incurred under option or joint venture agreements to which it is a party and the Issuer
may have its interest in the properties subject to such agreements reduced as a result.
Furthermore, if other parties to such agreements do not meet their share of such costs, the
Issuer may be unable to finance the cost required to complete recommended programs.

Title to Assets: Although the Issuer has or will receive title options for any concessions in
which it has or will acquire a material interest, there is no guarantee that title to such
concessions will be not challenged or impugned. In some countries, the system for
recording title to the rights to explore, develop and mine natural resources is such that a title
opinion provides only minimal comfort that the holder has title. Also, in many countries,
claims have been made and new claims are being made by aboriginal peoples that call into
question the rights granted by the governments of those countries.

Political and Economic Instability: The Issuer may be affected by possible political or
economic instability. The risks include, but are not limited to, terrorism, military repression,
extreme fluctuations in currency exchange rates and high rates of inflation. Changes in
resource development or investment policies or shifts in political attitude in certain countries
may adversely affect the Issuer’s business. Operations may be affected in varying degrees by
government regulations with respect to restrictions on production, price controls, export
controls, income taxes, expropriation of property, maintenance of claims, environmental
legislation, land use, land claims of local people, water use and mine safety. The effect of
these factors cannot be accurately predicted.

Management: The Issuer is dependent on a relatively small number of key employees, the
loss of any of whom could have an adverse effect on the Issuer.

Exchange Rate Fluctuation: The profitability of the Issuer may be adversely affected by
fluctuations in the rate of exchange of Canadian dollars into U.S. dollars. The Issuer does
not currently take any steps to hedge against currency fluctuations.




                                              - 30 -
Requirement of New Capital: As an exploration company without revenues, the Issuer
typically needs more capital than it has available to it or can expect to generate through the
sale of its products. In the past, the Issuer has had to raise, by way of debt and equity
financing, considerable funds to meet its capital needs. There is no guarantee that the Issuer
will be able to continue to raise funds needed for its business. Failure to raise the necessary
funds in a timely fashion will limit the Issuer’s growth.

Dividends: The Issuer has not paid dividends in the past and does not anticipate paying
dividends in the near future. The Issuer expects to retain its earnings to finance further
growth and, when appropriate, retire debt.

Value of Issuer: The Issuer’s assets are of indeterminate value. For further particulars see
the financial statements scheduled hereto.

Liquidity: The common shares of the Issuer are subject to certain trade restrictions, which
may include a one year hold period.

18.    PROMOTERS

The Issuer does not have any written or verbal contracts or any other arrangement in effect
with any person to provide promotional or investor relations services. Mr. Christopher
Grove may be considered a promoter of the Issuer as he is responsible for the Issuer’s
corporate communication activities. Mr. Grove owns 200,000 common shares of the Issuer
(see “Principal Shareholders”).

19.    LEGAL PROCEEDINGS

There are no legal proceedings or pending legal proceedings to which the Issuer or the
Property is or is likely to be a party to is subject.

20.    INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL
       TRANSACTIONS

The following is a description and approximate amount of any transaction between the
Issuer and any director or senior officer of the Issuer, any principal shareholder, and their
associates or affiliates since the date of incorporation of the Issuer:

1.     Zimtu currently holds 277,501 common shares for 4.4% of the issued and
       outstanding common shares of the Issuer. The directors of Zimtu are David Hodge,
       Shaun Ledding and Bruce Bragagnolo.

2.     Zimtu sold the Issuer the option to earn the 70% interest in the Property. To earn
       the interest, the Issuer must spend $250,000 on exploration prior to July 22, 2006.
       The Frank Property was originally purchased by Zimtu from Jody Dahrouge, in
       which Mr. Dahrouge was granted a 1% NSR on mineral production and a 1%
       GORR on diamond production from the property, of which one half of one per cent
       of the royalty can be repurchased for a cash consideration of $500,000. In addition,
       Zimtu holds a 1% NSR on mineral production and a 1% GORR on diamond


                                             - 31 -
           production from the property, of which one half of one per cent of the royalty can
           be repurchased for a cash consideration of $500,000.
3.         Zimtu and the Issuer entered into an Administrative and Services Agreement dated
           July 1, 2003 pursuant to which the Issuer agreed to pay rent and administration fees
           of $4,500 per month to Zimtu. The agreement was renewed for an additional six
           month term on January 1, 2004.

4.         Core Development Corp. and the Issuer entered into a Management Services
           Agreement dated July 1, 2003. Core Development Corp. is wholly owned by Shaun
           Ledding, a director of Zimtu. Pursuant to the Management Services Agreement,
           Core Development Corp. is obligated to provide management services to the Issuer
           in consideration of the payment of $5,000 per month. The agreement is for one year
           and may be renewed for a further one year term. The agreement has been prepaid
           up to July 1, 2004. Shaun Ledding and Jody Dahrouge are also directors of
           Commerce Resources Corp.

5.         Bruce Bragagnolo Law Corporation and the Issuer entered into a letter agreement in
           September, 2003 regarding professional services. Pursuant to the letter agreement,
           Bruce Bragagnolo Law Corporation agreed to limit its fees for the preparation and
           filing of the Prospectus to a further $10,000 plus PST and GST and to accept
           200,000 Series “L” Special Warrants as consideration for such fees. Bruce
           Bragagnolo, the principal of Bruce Bragagnolo Law Corporation is also a director of
           Zimtu.

21.        AUDITORS, TRANSFER AGENTS AND REGISTRARS

The auditor of the Issuer is Amisano Hanson, Chartered Accountants, located at Suite 604,
750 West Pender Street, Vancouver, British Columbia.

The transfer agent and registrar of the common shares of the Issuer is Pacific Corporate
Trust Company, located at 66 Wellington Street West, 52nd Floor, Suite 5210, TD Centre,
Toronto, Ontario, M5K 1J3.

22.        MATERIAL CONTRACTS

The following are the material contracts that the Issuer entered into within the previous two
years:

     (a)    The Management Services Agreement dated July 1, 2003 between Core
            Development Corp. and the Issuer.

     (b)    The Administrative Services & Rental Agreement dated July 1, 2003 between the
            Issuer and International Zimtu Technologies Inc.;

     (c)    The Transfer Agent, Registrar and Dividend Disbursing Agent Agreement dated
            July 17, 2003 between the Issuer and Pacific Corporate Trust Company;



                                              - 32 -
 (d)     The Property Option Agreement dated July 22, 2003 between the Issuer and
         International Zimtu Technologies Inc. regarding the Frank Property (see:
         “Narrative Description of the Business”);

 (e)     Letter Agreement dated September 29, 2003 between the Issuer and Bruce
         Bragagnolo Law Corp.

 (f)     Escrow agreement dated January 5, 2004 between the Issuer, Pacific Corporate
         Trust Company and the shareholders, which provide that certain common shares
         issued in their name is to be held in escrow, and released from escrow on various
         dates. The schedule is a 15% release from escrow each 6 months until
         extinguished.

The material contracts described above may be inspected at the offices of our solicitors,
Bruce Bragagnolo Law Corp., Suite 950, 1055 West Georgia Street, Vancouver, British
Columbia during normal business hours during the period of the distribution of the shares
being distributed hereunder and for a period of thirty days thereafter.

The Issuer is not party to any co-tenancy, unitholders’ or limited partnership agreements.

23.    INTEREST OF EXPERTS

Bruce Bragagnolo Law Corporation is the legal counsel for the Issuer. Bruce Bragagnolo
Law Corporation currently holds 400,000 common shares of the Issuer which is equal to
6.34% of the issued and outstanding common shares of the Issuer.

There is no direct or indirect interest in the property of the Issuer or of a Related Party of
the Issuer received or to be received by a person or company whose profession or business
gives authority to a statement made by the person or company and who is named as having
prepared or certified a part of this Quotation Statement or a report or valuation included in
this Quotation Statement.

24.    OTHER MATERIAL FACTS

There are no other material facts relating to the Issuer or its securities that have not been
previously disclosed elsewhere in this Quotation Statement.

25.    FINANCIAL STATEMENTS

The audited financial statements of the Issuer for the fiscal year ended January 31, 2004 are
attached hereto as Schedule “A”.




                                            - 33 -
           Schedule “A”




  PROVIDENCE DIAMOND CORP.

REPORT AND FINANCIAL STATEMENTS

         January 31, 2004
TERRY AMISANO LTD.                                                           AMISANO HANSON
                                              Schedule “A”
KEVIN HANSON, CA                                                           CHARTERED ACCOUNTANTS




                                       AUDITORS’ REPORT

To the Directors of
Providence Diamond Corp.

We have audited the balance sheet of Providence Diamond Corp. as at January 31, 2004 and the
statements of loss and deficit and cash flows for the period from June 20, 2003 (Date of Incorporation)
to January 31, 2004. These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those
standards require that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position
of the Company as at January 31, 2004 and the results of its operations and cash flows for the period
from June 20, 2003 (Date of Incorporation) to January 31, 2004 in accordance with Canadian generally
accepted accounting principles.



Vancouver, Canada                                                                “Amisano Hanson”
February 10, 2004, except as to Note 9 which is                                Chartered Accountants
as of March 5, 2004




750 WEST PENDER STREET, SUITE 604                                               TELEPHONE: 604-689-0188
VANCOUVER CANADA                                                                FACSIMILE: 604-689-9773
V6C 2T7                                                                         E-MAIL:    amishan@telus.net
                             PROVIDENCE DIAMOND CORP.
                                   BALANCE SHEET
                                    January 31, 2004


                                             ASSETS
Current
 Cash                                                      $       144,131
 GST receivable                                                      5,542
 Prepaid expenses – Note 5                                          47,500

                                                                   197,173
Resource property – Notes 3 and 5                                   27,000

                                                           $       224,173

                                            LIABILITIES
Current
 Accounts payable and accrued liabilities                  $         3,500

                                    SHAREHOLDERS’ EQUITY
Share Capital
Authorized:
  Unlimited number of common shares
Issued:
  100 common shares                                                    100
Special warrants – Note 4                                          341,500
Deficit                                                        (   120,927)

                                                                   220,673

                                                           $       224,173

Nature and Continuance of Operations – Note 1
Commitments – Notes 3, 4 and 6
Subsequent Event – Note 9




                                 SEE ACCOMPANYING NOTES
                             PROVIDENCE DIAMOND CORP.
                            STATEMENT OF LOSS AND DEFICIT
         for the period from June 20, 2003 (Date of Incorporation) to January 31, 2004



Administrative Costs
 Accounting                                                                      $         6,400
 Bank charges and interest                                                                   270
 Consulting                                                                               10,401
 Filing fees                                                                              12,180
 Legal                                                                                    21,450
 Management fees – Note 5                                                                 36,400
 Office and miscellaneous                                                                    950
 Rent and administration fees – Note 5                                                    32,760
 Transfer agent fees                                                                         350

Loss for the period before other income                                              (   121,161)

Interest income                                                                             234

Net loss for the period and deficit end of period                               $ (      120,927)




                                   SEE ACCOMPANYING NOTES
                             PROVIDENCE DIAMOND CORP.
                               STATEMENT OF CASH FLOWS
         for the period from June 20, 2003 (Date of Incorporation) to January 31, 2004



Operating Activities:
 Net loss for the period                                                         $(      120,927)
 Changes in non-cash working items related to operations:
   GST receivable                                                                    (     5,542)
   Prepaid expenses                                                                  (    47,500)
   Accounts payable and accrued liabilities                                                3,700

Cash used in operating activities                                                    (   170,269)

Financing Activities
  Issue of common shares                                                                     100
  Special warrants subscribed                                                            331,300

                                                                                         331,400

Investing Activity
  Acquisition of resource property                                                   (    17,000)

Increase in cash during the period and cash, end of the period                   $       144,131

Non-cash Transactions – Note 8




                                     SEE ACCOMPANYING NOTES
                         PROVIDENCE DIAMOND CORP.
                      NOTES TO THE FINANCIAL STATEMENTS
                                 January 31, 2004

Note 1   Nature and Continuance of Operations

         Providence Diamond Corp. (the “Company”) was incorporated on June 20, 2003 under the
         Canada Business Corporation Act and is in the business of acquiring, exploring and
         evaluating mineral resource properties. At January 31, 2004, the Company was in the
         exploration stage and had interests in resource properties located in the Northwest
         Territories.

         The recoverability of amounts shown for resource properties is dependent upon the
         discovery of economically recoverable reserves, continuation of the Company’s interest in
         the underlying mineral claims, the ability of the Company to obtain financing to complete
         their development, and future profitable production or disposition thereof.

         The financial statements have been prepared using Canadian generally accepted
         accounting principles applicable for a going concern which assumes that the Company will
         realize its assets and discharge its liabilities in the ordinary course of business. The
         Company has accumulated losses of $120,927 since its inception. Its ability to continue as
         a going concern is dependent upon the ability of the Company to obtain the necessary
         financing to meet its obligations and pay its liabilities arising from normal business
         operations when they come due.

Note 2   Summary of Significant Accounting Policies

         The financial statements of the Company have been prepared in accordance with generally
         accepted accounting principles in Canada. Because a precise determination of many assets
         and liabilities is dependent upon future events, the preparation of financial statements for a
         period necessarily involves the use of estimates which have been made using careful
         judgement. Actual results could vary from these estimates.

         The financial statements, have in management’s opinion, been properly prepared within
         reasonable limits of materiality and within the framework of the significant accounting
         policies summarized below:

         a) Financial Instruments
             The carrying value of the Company’s financial instruments, consisting of cash,
             accounts receivable, due from related party and accounts payable and accrued
             liabilities approximate their fair value due to the short-term maturity of such
             instruments. Unless otherwise noted, it is management’s opinion that the Company is
             not exposed to significant interest, currency or credit risks arising from these financial
             instruments.
Providence Diamond Corp.
Notes to the Financial Statements
January 31, 2004 – Page 2


Note 2      Summary of Significant Accounting Policies – (cont’d)

            b) Resource Properties
                The Company defers the cost of acquiring, maintaining its interest, exploring and
                developing mineral properties until such time as the properties are placed into
                production, abandoned, sold or considered to be impaired in value. Costs of producing
                properties will be amortized on a unit of production basis and costs of abandoned
                properties are written-off. Proceeds received on the sale of interests in mineral
                properties are credited to the carrying value of the mineral properties, with any excess
                included in operations. Write-downs due to impairment in value are charged to
                operations.

                The Company is in the process of exploring and developing its mineral properties and
                has not yet determined the amount of reserves available. Management reviews the
                carrying value of mineral properties on a periodic basis and will recognize impairment
                in value based upon current exploration results, the prospect of further work being
                carried out by the Company, the assessment of future probability of profitable
                revenues from the property or from the sale of the property. Amounts shown for
                properties represent costs incurred net of write-downs and recoveries, and are not
                intended to represent present or future values.
            c) Income Taxes
                The Company follows the asset and liability method of accounting for income taxes.
                Under this method, current income taxes are recognized for the estimated income taxes
                payable for the current period. Future income tax assets and liabilities are recognized
                for temporary differences between the tax and accounting basis of assets and liabilities
                as well as for the benefit of losses available to be carried forward to future years for
                tax purposes only if it is more likely than not that they can be realized.

Note 3      Resource Property

            Pursuant to a property option agreement dated July 22, 2003 between the Company and
            International Zimtu Technologies Inc. (“Zimtu”) a public company, the Company has the
            option to earn a 70% undivided interest in certain mineral claims (the “Property”), located
            in the Cameron River area of the Northwest Territories. Consideration is $17,000 cash,
            exploration expenditures of $250,000 and the issue of 200,000 Special Warrants as
            follows:

            a) $17,000 cash at the inception of the agreement (paid);
            b) incurring exploration expenditures as follows:
                i)   $50,000 on or before July 22, 2004;
                ii) a further $50,000 on or before July 22, 2005; and
                iii) a further $150,000 on or before July 22, 2006.
Providence Diamond Corp.
Notes to the Financial Statements
January 31, 2004 – Page 3


Note 3      Resource Property – Note 5 – (cont’d)

            c) the issue of 200,000 Series “P” Special Warrants within 10 days of signing the
               agreement (issued).

            The Company, upon exercise of its option, shall pay to the optionor upon commencement
            of commercial production, a royalty equal to 1% of the net smelter returns on minerals
            other than diamonds and 1% of the gross production of diamonds from the Property. The
            Company may purchase one half of each of the net smelter return royalty or the gross
            production diamond royalty at any time for $500,000 for each ½ interest.

Note 4      Special Warrants – Note 9

            Series “A” Special Warrants
            The Company has issued 1,400,000 Series “A” Special Warrants at $0.01 per warrant for
            proceeds of $14,000.

            Series “B” Special Warrants
            The Company has issued 3,250,000 Series “B” Special Warrants at $0.05 per warrant for
            proceeds of $162,500.

            Series “F” Special Warrants
            The Company has issued 850,000 Series “F” Special Warrants at $0.10 per warrant for
            proceeds of $85,000.

            Series “L” Special Warrants
            The Company has issued 200,000 Series “L” Special Warrants at $0.05 per warrant for a
            total of $10,000 pursuant to legal fees performed for the Company.

            Series “O” Special Warrants
            The Company has issued 400,000 Series “O” Special Warrants at $0.15 per warrant for
            proceeds of $60,000.

            Series “P” Special Warrants
            The Company has issued 200,000 Series “P” Special Warrants at $0.05 per warrant for
            proceeds of $10,000 pursuant to a mineral property option agreement.

            Each Series “A”, Series “B”, Series “F”, Series “L” and Series “P” Special Warrant is
            exchangeable into one common share of the Company on or before the fifth day after a
            final receipt for a prospectus is issued by the regulatory authorities of British Columbia,
            Alberta and Ontario.
Providence Diamond Corp.
Notes to the Financial Statements
January 31, 2004 – Page 4


Note 4      Special Warrants – Note 9 – (cont’d)

            Each Series “O” Special Warrant is exchangeable into one unit of the Company on or
            before the fifth day of the final receipt for a prospectus is issued by the regulatory
            authorities of British Columbia, Alberta and Ontario. Each unit consists of one common
            share and one common share purchase warrant entitling the holder thereof to purchase an
            additional common share at $0.20 for up to one year from the final receipt of the
            prospectus.

Note 5      Related Party Transactions

            During the period ended January 31, 2004, the Company incurred charges with a company
            who is a significant shareholder and with a company whose director acts as a manager of
            the Company as follows:

            Management fees                                                           $     36,400
            Rent and administration fees                                                    32,760

                                                                                      $     69,160


            These charges were measured by the exchange amount, which is the amount agreed upon
            by the transacting parties.

            During the period ended January 31, 2004, the Company prepaid a total of $47,500 in
            respect of management services and administration services agreements (Note 6) to a
            company whose director acts as manager for the Company and a company which is a
            significant shareholder.

            During the period ended January 31, 2004, the Company entered into a resource property
            option agreement with a public company who is a significant shareholder, to which it paid
            cash of $17,000 and issued 200,000 Series “P” Special Warrants valued at $10,000.

Note 6      Commitments

            a) By agreement dated July 1, 2003, the Company has agreed to pay management fees of
               $5,000 per month to a company whose director acts as manager for the Company. The
               agreement is for one year and may be renewed for a further one year term.
            b) By agreement dated July 1, 2003, the Company has agreed to pay rent and
               administration fees of $4,500 per month to a public company which is a significant
               shareholder. The agreement is for six months and has been renewed for a further six
               month term.
Providence Diamond Corp.
Notes to the Financial Statements
January 31, 2004 – Page 5


Note 7      Corporation Income Taxes

            The Company has accumulated a total of $137,927 in Canadian Development and
            Exploration Resource Expenditures. This amount is available to carry forward and offset
            future taxable income at various rates per year.

            The significant components of the Company’s future income tax assets are as follows:

            Canadian development and exploration expenditures                             $     56,212
            Less: valuation allowance                                                         ( 56,212)

                                                                                          $           -


            The Company has recorded a valuation allowance against its future income tax assets
            based on the extent to which it is unlikely that sufficient taxable income will be realized in
            the future to utilize all the future tax assets.

Note 8      Non-cash Transactions

            Investing and financing activities that do not affect cash flows are excluded from the
            statement of cash flows. The following transactions have been excluded:

            During the period ended January 31, 2004, the Company:
            –   issued 200,000 Series “P” Special Warrants at $0.05 per special warrant for a total of
                $10,000 pursuant to a Resource Property agreement.
            –   Issued 200,000 Series “L” Special Warrants at $0.05 per warrant for a total of $10,000
                pursuant to settlement of accounts payable.
            –   Issued 20,000 Series “A” Special Warrants at $0.01 per warrant for a total of $200
                pursuant to settlement of accounts payable.

Note 9      Subsequent Event

            The Company has filed a preliminary prospectus with the securities regulatory authorities
            in the Provinces of Alberta, British Columbia and Ontario to qualify for the public
            distribution of 6,300,000 common shares and 400,000 warrants to be issued upon the
            exercise of special warrants (Note 4). A preliminary receipt for the preliminary prospectus
            has been issued but a final receipt for the final prospectus has not yet been issued.
                           CERTIFICATE OF THE ISSUER

Pursuant to a resolution duly passed by its Board of Directors, Providence Diamond Corp.
hereby applies for the quotation of the above mentioned securities on CNQ. The foregoing
contains full, true and plain disclosure of all material information relating to Providence
Diamond Corp. It contains no untrue statement of a material fact and does not omit to
state a material fact that is required to be stated or that is necessary to prevent a statement
that is made from being false or misleading in light of the circumstances in which it was
made.

Dated at Vancouver, British Columbia this 19th day of March, 2004


“Patrick Power”                                        “Glenn Greig”

Patrick Power                                          Glenn Greig
Chief Executive Officer                                Chief Financial Officer


“Jody Dahrouge”                                        “J. Christopher Grove”

Jody Dahrouge                                          J. Christopher Grove
Director                                               Director