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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

Indicate the number of outstanding shares of each of the Company’s classes of capital or Common Stock as of the close of the period covered by this registration statement 43,546,112 common shares.

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark which financial statement Item the Company has elected to follow

This Annual Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements by forward-looking words such an “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will,” and “would” or similar words. Forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. We believe that it is important to communicate our future expectations to our shareholders. However, there may be events in the future that we are not able to predict accurately or control. Therefore, these statements should not be regarded as a representation by us that any of our objectives or plans will be achieved or that any of our operating expectations will be realized. Our revenues and results of operations are difficult to forecast and could differ materially from those projected in the forward-looking statements contained in this Annual Report.

The factors listed below in the section captioned “Risk Factors,” as well as any cautionary language in this Annual Report, provide examples of risks, uncertainties, and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should be aware that the occurrence of the events described in these risk factors and elsewhere in this Annual Report could have a material adverse effect on our business, results of operations and financial position. The risk factors should not be considered to be complete; we undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events after the date hereof, or to reflect the occurrence of unanticipated events.

Unless otherwise indicated, all references to “Cusac”, the “Company”, “we”, “us”, and “our” refer to Cusac Gold Mines Ltd. and its subsidiaries.

The financial data found herein for the years ended December 31, 2004 to 2000 and elsewhere in this Annual Report are taken from our financial statements, which have been prepared according to Canadian Generally Accepted Accounting Principles (“Canadian GAAP”) and have been examined by BDO Dunwoody LLP, independent chartered accountants.

You should read the attached Consolidated Financial Statements and refer to the Item 5 captioned “Operating and Financial Review and Prospects”.

As discussed below and in Note 13 to our consolidated financial statements provide descriptions of the principal differences between Canadian GAAP and United States Generally Accepted Accounting Principles (“US GAAP”) as they relate to us and reconciliation of US GAAP to our consolidated financial statements.

Unless otherwise indicated, all financial data presented below is in Canadian dollars.

Selected Financial Data in accordance with Canadian GAAP for Five Years Ended December 31^st 2004

As further discussed below and in the audited financial statements hereto, the Company’s 2004 and 2003 results reflect the expensing of stock options in accordance with generally accepted accounting principles in Canada promulgated during 2002.

As further discussed below and in the audited financial statement hereto, the Company’s 2000 through 2003 have been retroactively restated in accordance with generally accepted accounting principles in Canada relating to asset retirement obligations.

Differences Between Canadian and United States Generally Accepted Accounting Principles

As discussed in the Summary of Significant Accounting Policies to our consolidated financial statements, these consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles.

Differences in Canadian and United States accounting principles as they pertain to these financial statements are summarized as follows:

Canadian generally accepted accounting principles (“Canadian GAAP”) require long term investments to be recorded at cost and written down to reflect permanent impairments in value. Writedowns are recorded in the Statement of Operations. United States generally accepted accounting principles (“US GAAP”) would require the Company’s long-term investments (available-for-sale securities) to be recorded at fair value in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. Unrealized gains and losses are recorded as other comprehensive income which is a separate component of shareholders’ equity, except for declines in fair value that are determined to be other than temporary. These declines in value are charged to the Statement of Operations. The gross unrealized losses of $33,053 as described in Note 2 to our consolidated financial statements are, in management’s opinion, temporary.

Writedowns recorded under Canadian GAAP reflect those that are believed to be permanent in nature.

Under Canadian GAAP, no value was assigned to the 250,000 fully exercisable warrants granted to directors in connection with the issuance of 250,000 shares for the settlement of amounts due to directors for consulting services in 2002.

Under US GAAP, the warrants were valued on the date of the settlement agreement at $17,288 using the Black-Scholes option pricing model with the following assumptions:

Under Canadian GAAP, prior to the accounting change in 2004 the Company accounted for all stock-based compensation issued on or after January 1, 2002 to non-employees using the fair value based method and the intrinsic method for stock-based awards to employees. Under the intrinsic method, no compensation expense is recognized for awards granted to employees when the exercise price of the options equals or exceed the market value of the stock on the date of grant. The effect of retroactively applying the fair value based method of stock-based compensation to options granted to employees and restating the consolidated financial statements rather than the previously noted intrinsic method was to increase the net loss for 2002 by $15,343 for options granted in 2002, to increase the net loss for 2003 by $8,025 for options granted in that year, and to increase the accumulated deficit as of December 31, 2003 by $23,368.

Effective January 1, 2004, the Company adopted the Canadian GAAP fair-value-based method for all stock-based awards granted on or after January 1, 2004 and retroactively applied this method and restated all prior period consolidated financial statements.

On December 16, 2004, the Financial Accounting Standards Board (“FASB”) issued (“SFAS”) No. 123 (revised 2004), “Share-Based Payment.” SFAS No. 123(R) requires the Company to measure all employee stock-based compensation awards using a fair value method and record such expense in its consolidated financial statements. In addition, SFAS No. 123(R) requires additional accounting related to the income tax effects and additional disclosure regarding the cash flow effects resulting from share-based payment arrangements. For public entities that do not file as a small business issuer, SFAS No. 123(R) is effective for the first annual reporting period beginning after June 15, 2005. Effective January 1, 2004, the Company has also early adopted, using modified prospective method as allowed under US GAAP, SFAS No. 123R. Accordingly, there is no difference between the financial position, results of operations, and cash flows under Canadian GAAP and US GAAP arising from the accounting of stock-based compensation for periods beginning after January 1, 2004.

Prior to January 1, 2004, under US GAAP, the Company applied Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees”, and related Interpretation No. 44 in accounting for all stock options granted to employees and directors for director services. Under APB 25, compensation expense is only recognized for stock options granted with exercise prices below the market price of the underlying common shares on the date of grant. Stock options that have been modified to reduce the exercise price are accounted for as variable.

Statement of Financial Accounting Standard (“SFAS”) No. 123, “Accounting for Stock-Based Compensation”, requires the Company to record compensation to “non-employees” using the fair value based method prescribed therein similar to accounting principles in effect in Canadian GAAP for the years ended December 31, 2003 and 2002.

Under Canadian GAAP, no value was assigned to the warrants granted to agents in connection with the private placement of 2,669,231 (2003 - 3,430,000) units which were issued in December 2004 and 2003 as described in Note 8 to our consolidated financial statements. Under US GAAP, the 226,923 (2003 - 514,500) agent warrants were valued on the closing date of the private placement using the Black-Scholes option pricing model with the following weighted average assumptions:

The value of the warrants was approximately $11,126 (2003 - $80,835) which was charged against share capital as share issuance costs. The net effect on the Company’s shareholder’s equity is $Nil (2003 -$Nil).

The agent warrants issued during the year ended December 31, 2004 once issued provide the agent with a unit which consists of one common share and warrants as outlined in Note 8. The value of the additional warrants is not determinable and thus not measured until they are issued at which time the value will be charged against share capital as share issuance costs, such that the net effect will be $Nil on the Company’s shareholder’s equity.

Under Canadian income tax regulations, a company is permitted to issue shares whereby the company agrees to incur qualifying expenditures and renounce the related income tax deductions to the investors. The Company has accounted for the issuance of flow-through shares using the deferral method in accordance with EIC No. 146 under Canadian GAAP. At the time of issue, the funds received are recorded as share capital and upon renunciation to the shareholders, the Company reduces share capital and records a temporary future income tax liability for the amount of tax reduction renounced to the shareholders. In instances where the Company has sufficient available tax loss carryforwards or other deductible temporary differences available to offset the renounced tax deduction, the realization of the deductible temporary differences is credited to income in the period of renunciation. As at December 31, 2004, the Company renounced $720,000 in expenses and recorded, under Canadian GAAP, an income tax recovery of $256,464.

For US GAAP, the proceeds of the sale of flow-through shares should be allocated between the offering of shares and the sale of tax benefits. The allocation is calculated based on the difference between the quoted market value of the Company’s shares and the proceeds received and a liability is recognized for this difference. The liability is reversed upon renunciation and a deferred tax liability is recognized. The difference between the liability recognized at the time of issuance and the deferred tax liability will be included as income tax expenses. As the flow-through units were sold for proceeds equal to the quoted market value of the Company’s common shares, no liability was recognized for the all periods presented.

Also under US GAAP, as the flow-through units, which consisted of one flow-through share and one warrant, were issued to the Company’s President and certain directors, compensation expense of $50,199 based on the fair value of the warrants and the renounced tax benefit should be recognized in the Statement of Operations. The fair value of the warrants was calculated using the Black-Scholes option pricing model with the following assumptions: risk free rate – 2.51%; dividend yield – Nil%; expected volatility of 96%; and weighted average expected life of 1 year.

The Company adopted CICA 3110, “Asset Retirement Obligations” under Canadian GAAP effective January 1, 2004. For US GAAP, the Company adopted SFAS No. 143, “Accounting for Asset Retirement Obligations” as at January 1, 2003. At that time, the Company estimated that the costs of the reclamation of the Table Mountain Mine site would be covered by the bonds held by the Company for such purposes. As a result, no asset retirement liability was accrued as at December 31, 2003. During 2004, the Company received additional information regarding the required reclamation, decommission and clean-up activities and increased their estimated costs by approximately $500,000. This change in estimate resulted in the recognition of additional asset retirement obligations and a corresponding capitalization to the resource property as at December 31, 2004 under US GAAP of $342,288, being the discounted present value of the approximated reclamation costs. At the end of the year, the Company evaluated the future recoverability of its resource property and wrote down the carrying amount of the resource property by the full amount of the additional asset retirement obligations of $342,288.

Also, notwithstanding whether there is a specific requirement to segregate the funds, the flow-through funds which are unexpended at the consolidated balance sheet dates are considered to be restricted and are not considered to be cash or cash equivalents under US GAAP. As at December 31, 2004, unexpended flow-through funds were $649,147 (2003 - $1,050,000).

US GAAP requires the Company to present comprehensive income (loss) in accordance with SFAS No. 130, “Reporting Comprehensive Income”, which establishes standards for reporting and display of comprehensive income (loss), its components and accumulated balances. Comprehensive income comprises net income (loss) and all charges to shareholders’ equity except those resulting from investments by owners and distributions to owners.

All dollar amounts set forth in this report are in Canadian dollars, except where otherwise indicated.

The noon rate of exchange on June 16, 2005 as reported by the Bank of Canada, for the conversion of Canadian dollars into U.S. dollars was Cdn$1.2376 per U.S.$1.00 (Cdn.$1.00 equals $0.72).

The high and low exchange rate in each month has been calculated using the average buy/sell rate of the Bank of Canada

The following table sets forth (i) the rate of exchange for the Canadian dollar, expressed in U.S. dollars, in effect at the end of the periods indicated, (ii) the average of exchange rates in effect on the last day of each month during such periods, and (iii) the high and low exchange rates during such periods, each based on the noon rate of exchange as reported by the Bank of Canada for conversion of U.S. dollars into Canadian dollars.

Subsequent to the suspension of continuous mining activities at Table Mountain in 1998, the Company’s activities have been financed primarily through the sale of common shares and related party advances. The Company will need to obtain additional funding to pursue its exploration and developmental activities during the next fiscal year. At the present time, the Company anticipates seeking additional funding through additional private placements, the exercise of options and warrants, joint venture agreements, production financing, pre-sale loans, or a combination of these options. The Company’s inability to raise additional capital to fund operations through the remainder of this year and through the next fiscal year would have a detrimental effect on the Company’s viability and capability to pursue its operational activities.

No assurance can be given that the proceeds of the private offering of the Company’s securities described above will provide sufficient funds to undertake all of the Company’s exploration activity for the next twelve months. Failure to obtain such financing could be detrimental to the success of the Company’s operations.

To the best of our knowledge, the Company has obtained all necessary governmental permit approvals for development of its properties. If additional approvals are necessary for any development in the future, the Company intends to provide all the necessary information to regulatory authorities and adjust its development plans to enable it to obtain any requisite approvals. In the event the Company is not able to obtain the necessary approvals, the Company’s development plans and operations could be negatively impacted. The Company currently believes its operations throughout comply with all governmental regulations, and it intends to comply with all governmental regulations as it continues to explore, develop and, if possible, exploit its properties.

The Company’s objective is to delineate economic bodies of gold mineralization on its properties. The decision to go into full scale production and undertake additional exploration and development programs and feasibility studies will involve consideration and evaluation of several significant factors including, but not limited to: costs of bringing proven reserves into production, including additional exploration and development work, preparation of production feasibility studies; availability and costs of financing; ongoing costs of production; market prices for the metals to be produced; environmental compliance regulations and restraints; and political climate, governmental regulation and control, or both. There is no assurance that these factors will be favorable so that full scale production and additional exploration will be economically feasible.

The Company has not yet fully explored or developed all targets on its properties and has not had net income from operations for the past three years. There can be no assurance that the Company will become profitable in the future. At present the company’s only established reserves occur on the Table Mountain Gold Property. There is no assurance that these reserves shall be economically mined.

The Company is an exploration stage company with no history of profitability. There can be no assurance that the operations of the Company will be profitable in the future. The Company has limited financial resources and will require additional financing to further explore, develop, acquire and retain its property interests and if financing is unavailable for any reason, the Company may become unable to acquire and retain its mineral concessions and carry out its business plan. These circumstances raise doubt about our ability to continue as a going concern, as described in the comments by our independent auditor for U.S. Readers on Canada – U.S. reporting difference on the December 31, 2004 and 2003 consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.

It is likely that to obtain necessary funds, the Company will have to sell additional securities, including, but not limited to, its common shares or by other means, the effect of which would result in a substantial dilution of the present equity interests of the Company’s shareholders.

The profitability of the Company’s current operations is significantly affected by the market price of gold. Market gold prices can fluctuate widely and are affected by numerous factors beyond the Company’s control, including;

the strength of the US dollar (the currency in which the price of gold is generally quoted) and of other currencies,

production costs in major gold-producing regions such as South Africa, South America and the former Soviet Union.

The potential profitability of mineral properties owned by the Company is dependent upon many factors. For instance, world prices of and markets for non-precious and precious metals and minerals are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these three, and respond to changes in domestic, international, political, social and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially affect the financial performance of the Company.

The mining industry is intensely competitive. The Company competes with many major mining companies that have substantially greater financial and operational resources. Accordingly, there is a high degree of competition for desirable mining leases, suitable prospects and funding.

The demand for and supply of gold affects gold prices, but not necessarily in the same manner as supply and demand may affect the prices of other commodities. The supply of gold consists of a combination of new mine production and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrial organizations and private individuals. As the amounts produced in any single year constitute a very small portion of the total potential supply of gold, normal variations in current production do not necessarily have a significant impact on the supply of gold or on its price. There is a risk that the Company revenue from gold sales, if any, may never rise above the cost of production and as such operations may never become economical.

Some of the factors in gold market fluctuations include the pricing and demand, producing costs and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of minerals, and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital to be profitable or viable.

Mining operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, flooding, explosions, rock-bursts, cave-ins, landslides, inability to obtain suitable or adequate machinery, equipment or labor, and other risks are involved. The Company may become subject to liability for pollution, cave-ins, or hazards against which it cannot adequately insure or which it may elect not to insure. Incurring any such liability may have an adverse effect on the Company’s financial position and operations.

The validity of mining claims is often uncertain and may be contested. In accordance with mining industry practice, the Company has surveyed the key claims of the known resources located within its properties. However, the boundaries of some of the Company's mining properties have not been surveyed, and, therefore, in accordance with the mining laws of British Columbia, the precise location and area of these mining properties may be in doubt and could be the subject of competing claims. Title insurance is unavailable in Canada. The bulk of the Company’s claims have been held for at least 20 years, during which time there have been no disputes as per the Company’s knowledge. However, there is no assurance that these claims will not be contested in the future.

Mining operations are subject to federal, provincial and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Milling operations are also subject to federal, provincial, and local laws and regulations, which seek to maintain health and safety standards by regulating the design and use of mining methods and equipment. Various permits from government bodies are required for mining operations to be conducted; no assurance can be given that such permits will be received. No assurance can be given that environmental standards imposed by federal, provincial, or local authorities will not be changed or that any such changes would not have material adverse effects on the Company’s activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on the Company. Additionally, the Company may be subject to liability for environmental damages, which it may elect not to insure against due to prohibitive premium costs and other reasons. 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, environmental legislation, and mine safety.

The Company’s primary interest is in the Table Mountain Gold Property. The Company faces further significant risks regarding the current gold mining project at Table Mountain, including:

The world price for precious and base metals is dependent upon numerous economic, political, and social factors over which the Company has no control. Inflationary changes in the next few years may cause the cost projections or the projects to be insufficient and thereby render the project unprofitable. Mining policies in British Columbia may interfere with the extraction of the Company’s resources.

The Company’s products such as gold and base metals are traded in US dollars. It is subject to foreign currency fluctuations and such fluctuations may materially affect the Company’s financial position and results. The Company does not engage in currency hedging activities.

As stated, the primary focus of the Company is the production of gold from operations at the Table Mountain Gold Property (Table Mountain) located in the Cassiar Mining District of the Liard Mining Division in Northern British Columbia.

The Company first acquired mineral property interests and conducted exploration activities in the Table Mountain area in 1978. In 1984, the Company conveyed its interests in the Table Mountain Gold Property to a predecessor of Energold Minerals, Inc. (“Energold”) that operated a mine and established a mill at the site in exchange for a net profit interest in the production. From 1984 until 1989, the Company received over $6.8 million from its net profits interest in production from the Energold operations. Energold ceased operations at Table Mountain in 1989/1990.

In January 1993, the Company acquired all of Energold’s property interests at Table Mountain, that included Energold’s 300-ton per day mill, various buildings at the site, sundry mining equipment, various vehicles, substantial historical mining data and other capital goods in exchange for the issuance of 2,032,229 shares of the Company's common stock at a deemed value of $1.2 million. Since that acquisition, the Company has invested approximately $6 million in developing ore reserves and improving the mining facilities.

Cusac began mining on the Table Mountain Gold Property in September of 1993. Mining operations continued until low grades and weak bullion prices forced suspension of continuous operations in the fourth quarter of 1997. Limited operations resumed in July of 1998 and continued until June of 1999. Between April of 1994 and suspension of operations the Company produced approximately 63,000 ounces of gold from the property.

As outlined below, peripheral portions of the Table Mountain Gold Property have been subject to various option agreements.

In June of 1994, to fund further exploration on a portion of the Table Mountain property, the Company granted Demand Gold Ltd. (formerly Demand Technologies, Inc., hereinafter (“Demand”), a British Columbia corporation having certain officers and directors in common with the Company), an Option to acquire a 50% interest in 30.2 square miles of the property. Subsequent to December 31, 1997, the option expired.

In January of 1995, the Company entered into a Mining Venture Agreement with Cyprus Canada Inc., a subsidiary of Cyprus Amax Minerals of Denver, Colorado (“Cyprus”) regarding a northern portion of the Table Mountain property consisting of a group of claims comprising approximately 15 square miles of ground known as the Taurus Project. The Taurus project consists of mineralized zones that straddle the boundary of claims held by International Taurus Resources Inc. and Cusac.

Under the agreement, Cyprus could earn a 50% interest in this property by spending $2 million over 3 years and a 70% interest by establishing commercial production. Cusac was to receive payments of $320,000, of which $70,000 was received on signing and an additional $30,000 was received on the anniversary date of the agreement. In August of 1996, after spending approximately $1 million, Cyprus elected to withdraw from the project.

In August of 1996, the Company entered into an option agreement with International Taurus Resources Ltd. ("Taurus") regarding the same claims formerly under option to Cyprus. Given the low-grade gold content, the Company dropped this option agreement in 2000. In 2005, Taurus merged with American Bonanza Gold Mining Inc. to form a new company of the same name and as such is the new tenure holder of the claims that the Company formerly had under option.

The core productive portion of the Table Mountain Gold Property has been fully controlled and 100% owned by the Company since 1993.

Since 1997, the Company has suspended mine operations and has entered into a “care and maintenance” mode with regards to the Table Mountain Mine due to the low gold prices in the late 1990’s and early 2000’s and difficulty in raising capital. In recent years the price of gold has increased and the Company has been able to raise equity funding for exploration, as outlined in detail below. Production has not recommenced at time of writing, but management is seeking to raise sufficient funds to restart mining operations. As outlined below, the Company completed in Q1 2005 an independent Preliminary Feasibility Study relating to gold reserves at Table Mountain that indicates the economic viability of recommencing operations and a requirement for CDN$ 3.7 million start-up funds.

Cusac Gold Mines Ltd. (the “Company”; “Cusac”), a British Columbia, Canada corporation, is engaged in the business of acquisition, exploration, development and mining of precious metal resource properties.

The primary focus of the Company is the production of gold from operations at the Table Mountain Gold Property (Table Mountain) located in the Cassiar Mining District of the Liard Mining Division in Northern British Columbia. Cusac is also involved in Platinum exploration in the Similkameen Mining Division of British Columbia.

The Company was incorporated under the name Glen Copper Mines Limited pursuant to the laws of the Province of British Columbia by registration of its Memorandum and Articles in 1965. It changed its name to Cusac Industries Ltd. in 1974 and then to Cusac Gold Mines in 1995. The Company’s executive offices are located at 911 – 470 Granville Street, Vancouver, B.C. V6C 1V5: (604) 682-2421, Fax: (604) 682-7576; website: www.cusac.com. The contact person is Mr. David H. Brett, Director, President & CEO of the Company.

The Company has 100,000,000 authorized common shares of no par value of which, 43,331,712 common shares of Common Stock were issued and outstanding as of December 31, 2004. The Company also has 5,000,000 preference shares of no par value as of December 31, 2004.

The Common shares of the Company are trading on the Toronto Stock Exchange with a trading symbol CQC and trading on the NASDAQ OTCBB under the symbol CUSIF.

The Corporation’s head and principal office is located at 911 – 470 Granville Street, Vancouver, British Columbia, Canada V6C 1V5. The Company has one inactive wholly-owned subsidiary, Gulf Titanium Inc

Note: The following historical and geological information relating to the Table Mountain Property is largely from “Technical Report on Table Mountain Gold Property - Cusac Gold Mines Ltd. Cassiar Mining District, British Columbia, Canada” by Dale A. Sketchley, M.Sc., P.Geo., July 31, 2003 and conforms to disclosure requirements for mineral companies as promulgated by Canadian securities regulators under National Policy 43-101. Management of the Company is in agreement with the content of this report and as such it is presented here as reflecting the position and opinions of management.

The Table Mountain Gold Property is in northern British Columbia, 115 km southwest of Watson Lake, Yukon Territory, and 120 km northeast of Dease Lake, British Columbia (Figure 1). Access to the property is via Highway 37, which connects to these towns. The abandoned town of Cassiar is at the northwestern end of the property, and the unincorporated settlement of Jade City is on Highway 37 at the road entrance to the mine facilities.

Cusac Gold Mines Ltd. presently controls the majority of the hard rock mining claims and a number of placer claims in the Cassiar area, which comprise the Table Mountain Gold Property in the Liard Mining District, NTS 104P (Figure 2). The property covers approximately 14,000 hectares (5,100 acres) and is mostly contiguous. The property has been acquired by direct staking, outright purchase, and option agreements. Most of the claims are owned outright, with some subject to option payments and net smelter royalties, or net profit interests. The claim names, tenure numbers, expiry dates, number of units, and tag numbers of all claims that comprise the property and are currently in good standing are listed in Appendix II of the Report which is filed as Exhibit 15.1.

The author of the report has not verified the title to these claims, the underlying agreements, and claim post locations, because these are beyond the scope of this report, except for those that cover the most recent area of exploration work. To the best of management’s knowledge, there have been no disputes to the title of these claims in the past 20 years. A field inspection of the Cordoba and Nu-Tara claims, which cover the recent work area, was conducted during the most recent property visit, and the Legal Corner Posts for these claims were verified to be accurately located according the mineral titles map M104P022 (Figure 3). In addition, the Nu-Tara claim has been legally surveyed.

Figure 1. Table Mountain Gold Property Location Map. The red highlighted square indicates the property location and the area illustrated in Figure 2.

Figure 2. Table Mountain Gold Property Claim Location Map. Red stars indicate the main mining areas, and the blue star, the processing, tailings, and camp facilities.

Figure 3. Mineral Titles Map M104P022. Verification of location of Cordoba and Nu-Tara mineral claims.

The Table Mountain processing and support facilities consist of a 300 ton-per-day gravity-floatation mill, power plant, service facilities, offices, core library, cookhouse, and bunkhouses. A newly-completed and permitted tailings pond, with approximate capacity of 50,000 tonnes, is next to these facilities, which are centrally located in the camp adjacent to McDame Lake and Highway 37. Additional service facilities are located at the Cusac mine in the southern portion of the camp

The property contains numerous occurrences of gold-bearing quartz veins, many of which have been mined underground and less so from surface. Numerous old surface disturbances such as access roads, trenches, open pits, underground staging areas, and drill sites occur throughout the property and have been reclaimed (Hunt 2003). There are two tailings disposal facilities, one of which has been reclaimed. Deposits of material from placer mining are present along McDame Creek. The author of the report knows of no environmental liabilities on the property. Management of the Company has estimated in 2004 an asset retirement obligations totaling approximately $500,000 (consisted of estimated annual payments of approximtately $50,000 for a period of 10 years) based on its understanding of the requirements to reclaim, decommission and clean up its Table Mountain Mine site. Work permits are required on an as-needed basis in advance of the work being conducted.

Numerous secondary haul roads, accessible by two-wheel-drive vehicles, connect to all parts of the camp from Highway 37. Four-wheel-drive and off-road vehicles are required to access more remote areas of the property and those with roads or trails in poor condition.

The climate is characterized by short, warm summers and long, cold winters. Underground mining, which is most common, can be conducted year round, and small open pit mining, which is less common, is usually conducted only in the summer.

The property covers the McDame Creek valley at McDame Lake and the lower tributary valleys of Snowy Creek, Troutline Creek, Quartzrock Creek, Lang Creek, and Finlayson Creek; the upper valley of Pooley Creek; all of Table Mountain; and the lower slopes of Mount McDame and Huntergroup Massif. Other prominent, frequently referred to, geographic features include Wings Canyon at the confluence of Troutline Creek and Quartzrock Creek, Callison Lake northeast of the Main Mine, and Needlepoint Mountain west of Cusac Mine.

Valley bottoms comprise shallow lakes and swamps with thick, stunted growths of pine and spruce. Treed areas extend to upland areas where they give way to open brush and alpine meadows. Although the surrounding mountainous areas are rugged, much of the camp area has rolling topography. Placer workings extend from McDame Lake down McDame Creek for about 20 km.

The property contains numerous historical mining areas and is well set up for continued mining operations. Areas of high exploration potential have sufficient surface areas for access; power and water sources are in-place; mining personnel would be hired externally and housed in the on-site work camp; tailings storage areas are permitted; and the on-site processing plant is operational.

Gold was discovered in the Cassiar District in 1874. The district developed into one of British Columbia's major placer camps; most of its production occurred between 1874 and 1895. The largest nugget discovered in British Columbia, 73 oz, came from this camp (Barlee 1980). Minor small-scale placer mining continues today.

Although placer production in the district was significant, little was done prior to 1933 to locate lode gold deposits. In 1934, the first gold-bearing quartz veins were found in Quartzrock Creek. Following this, numerous veins were discovered and many claims were staked. The higher-grade portions of these veins were exploited by small-scale mining over the next forty years. At one point, half-a-dozen abandoned mill sites with capacities of less than 12 tons per day existed in the area. Well-known individuals that played an important role in the early years of the emerging gold camp include John Vollaug, Hans Ericksen, J.R. Boulton, John Hope, F. Callison, Pete Hamlin, and Fred and Guilford Brett. Cusac's interest in the area began with the prospecting efforts of Fred and Guilford Brett who formed Glen Copper Mines Ltd., which evolved into Cusac Industries Ltd., and in 1995, Cusac Gold Mines Ltd.

The first larger operation started in 1978 when the Agnes and Jennie Mining Company Limited and Nu-Energy Development Corp., which later amalgamated to become Erickson Gold Mining Corporation, commenced production from the Jennie Vein in the Main Mine. In 1979 and 1980, Cusac conducted work in the area of the Cusac Mine. During 1980, Plaza Mining Corporation commenced open pit production from the eastern portion of the Vollaug Vein. Between 1978 and 1984, development of the Main Mine, also known as the Erickson Mine, was expanded to include workings on four main levels to exploit the Jennie, Maura, Alison, and Bear Veins. Esso Resources Canada Limited conducted exploration around the Main Mine in the early 1980's.

Exploration around Quartzrock Creek by United Hearne Resources Limited in the late 1970's lead to commencement of production at the Taurus Mine in 1981, which continued until 1988. At the same time, Sable Resources Ltd. and Plaza Resources Ltd. developed underground workings on the east side of 88 Hill.

Cusac discovered several veins at Pooley Creek in 1982, and conducted minor work on them. In 1983, Erickson commenced production from the Troutline Mine at the eastern end of the Vollaug Vein and from various open pits along it. In the following year, Cusac optioned its property to Erickson, which had acquired Plaza in the previous year and continued to expand its property holdings.

In 1985, Total Compagnie Francaise des Petroles acquired operating control of Erickson, renamed the company Total Energold Corporation, commenced production from the Eileen Vein in the Cusac Mine in 1986, and discovered additional veins in the area. During 1988, Total started work on the 10 level, a 2.5 km drift to access the Michelle High Grade Vein (MHG), which could not be accessed from the Cusac Mine because of high water flows. Production from the Cusac Mine and Main Mine ceased, with only minor production continuing on the Vollaug Vein. Work on level 10 ceased in 1989 due to high costs and high water flows.

Total elected to divest itself of all North American mineral assets in 1991. Cusac purchased these assets, free and clear of any royalties to Total, re-opened the Cusac Mine, and in 1993, commenced production on the Bain Vein (Bain Mine). During the development of the Cusac decline to the MHG Vein, the Big vein was defined and mined. Mining of the MHG commenced in June 1995, and continued through 1997.

The Katherine vein was open pit mined during 1995, and in early 1996, the 10 level development was extended by 250m. Additional mining was conducted on the Vollaug, Melissa, and Lily Veins during 1996 and 1997, and surface mining was done on the Bear Vein during 1998.

In 1995, Cyprus Canada Inc. (Cyprus) entered into agreements with International Taurus Resources Inc. (Taurus) and Cusac on the Taurus project north of the current property area, which resulted in the definition of an inferred open pitable resource. In 1996, Cyprus withdrew from the project, and Cusac entered into an agreement with Taurus, which conducted additional work that defined an indicated resource. In 1998, Cusac optioned the claims and consolidated the entire Cassiar Gold Camp under one operator. Cusac completed reclamation of the Taurus mine site, but no further work was conducted, and the agreement was subsequently terminated.

Diamond drilling was conducted on the East Bain Vein during 2002, which confirmed the existence of a gap with the West Bain Vein, but failed to extend the structure to the east.

The Cassiar Gold Camp is one of British Columbia's major placer districts with recorded production of about 74,500 oz of gold (2,317 kg) between 1874 and 1895 (Holland 1950). Minor placer production still continues today.

The first hard rock production occurred in 1934 when one ton of rock, containing four ounces of gold, was shipped out. In 1939, 114 oz (3.5 kg) of gold were recovered from 130 tons of rock taken from the Jennie Vein. During the 1940's, 1950's and 1960's, a maximum of 100 tons of ore was mined from the main deposits in the camp (Diakow and Panteleyev 1981).

The largest producer in the camp, the Main Mine, was in operation from 1979 until 1988. Approximately 150,000 oz (4,666 kg) of gold were produced from the Jennie-Maura-Alison and Bear Vein systems (Glover 1998). The Taurus Mine operated between 1981 and 1988, and it produced 35,000 oz (1,089 kg) of gold (Trenaman 1997). A small amount of this production came from the Plaza adit and open cuts on 88 Hill. The Vollaug Vein was mined from various open pits and underground workings between 1980 and 1997. Approximately 50,000 oz (1,555 kg) of gold were produced from this structure (Glover 1998). Mining commenced on the Eileen-Michelle-Lily Vein system in 1986, and continued until 1997, with about 90,000 oz (2,799 kg) of gold produced (Glover 1998). Production from the Bain Vein system spanned the period from 1993 to 1995, and totalled 24,000 oz (746 kg) of gold (Glover 1998). Surface production from the Bear Vein in 1998 totalled about 1,000 oz (31 kg) of gold. Recorded production from the camp totals about 423,500 oz (13,172 kg) of gold.

Silver production from various deposits in the camp generally amounts to 75% of gold production. A summary of gold production from major vein systems in the camp is given in Table 1.

Because the Main Mine has been closed and essentially sealed, the author of the Glover (2002b) report is of the opinion that historical economic evaluations done to establish reserves from this area of the property do not reflect additional costs that would be incurred to re-open the mine and extract the mineralized material; therefore, it cannot be considered to contain reserves as outlined by the CIM Standards on Mineral Resources and Reserves (2000). Accordingly, these reserves should be reclassified as resources using comparable categories, i.e. Proven Mineral Reserve to Measured Mineral Resource, and Probable Mineral Reserve to Indicated Mineral Resource, until an economic re-evaluation has been completed.

Reserves in the Cusac Mine do not need to be reclassified because this mine has not been closed and sealed.

Reserves in the Bain Mine were recently re-estimated by Fitzpatrick and Glover (2003) and are discussed in this annual report under the sections Mineral Resource Estimate and Mineral Reserve Estimate.

The Cassiar Gold Camp is in the Sylvester Allochthon of the Slide Mountain Terrane (Gabrielse 1963; Gordy et al. 1982; Harms 1984, 1986, 1989; Harms et al. 1989; Nelson and Bradford 1989, 1993). The allochthon occupies the flat-bottomed McDame synclinorium, which lies on autochthonous rocks of the Cassiar Terrane. It comprises gabbro, pillowed and massive basalt, banded chert, carbonate, argillite, ultramafics, and minor arenite of Late Devonian to Late Triassic age.

The internal structure of the Sylvester Allochthon is characterized by many interleaved tectonic slices, bounded by subhorizontal, layer-parallel faults. These lithotectonic slices are an order of magnitude smaller than the terrane itself, and they consist of a single rock type, or a few repeated rock types. Small numbers of slices occur together in larger second-order packages, which are also fault-bounded and lensoidal (Harms 1986).

Nelson and Bradford (1989, 1993) divided the allochthon into three stacked, structural-lithological packages. Division I, the lowest, is a sedimentary sequence that occurs along the margins. The middle, Division II, is an ophiolitic assemblage that occupies the central portion and contains two major ultramafic sheets. Division III, the upper, is an island-arc unit that caps the Division II at higher elevations. The Cassiar Gold Camp is within Division II.

The Sylvester Allochthon responded to Jurassic compressional tectonics by thrusting along easterly-directed thrusts rather than regional-scale folding. This resulted in the stacking of the three divisions into their present arrangement (Nelson and Bradford 1989, 1993). The synclinal geometry resulted from the formation of anticlinal stacks on either side during compression. In addition, emplacement of the Cassiar batholith uplifted the pile, contributing to the consistent northeastward dip along its western margin.

Rocks in the Cassiar area have been informally divided into lower, middle, and upper thrust sheets for mine geology purposes (Figure 4). The lower and middle thrust sheets belong to Division II of Nelson and Bradford (1989, 1993); the upper, to Division III. The lower thrust sheet comprises three volcanic-sedimentary subunits; the middle, Table Mountain Sediments (TMS); and the upper, Huntergroup Volcanics. A major ultramafic sheet separates the lower and middle thrust sheets (Harms et al. 1989; Nelson and Bradford 1989, 1993).

The basal volcanic-sedimentary subunit of the lower thrust sheet comprises basalt, pillow-basalt breccias, and tuff interbedded with black clastics. It is exposed west of the camp along the margins of the allochthon and was intersected at depth in drill holes in the western and northwestern part of the camp. The unit does not host any of the veins in the camp. It does host three known massive sulphide occurrences and a silica-pyrite replacement body on Mt. McDame.

The middle subunit, which comprises mafic extrusive rocks interlayered with bedded chert and argillite, crops out along the northeastern and southwestern margins of the camp along ridges and valley sides. Although it does not crop out extensively within the camp, it underlies much of the camp as shown in drill-hole intersections. Correlations are made using green to maroon and red chert, bedded rhodonite northeast of Taurus Mine, and bedded magnetite in lower portion of the Main Mine. The unit does not host significant veins and is more amenable to development of silicification because the rocks are brittle and shatter as noted in the lower levels of the Main Mine.

The upper subunit is the most widespread and crops out over most of the camp. It comprises massive and pillowed basalt with rare chert intercalations. The lower portion of this unit in the Taurus area is marked by magnetite and jasper-rich basalt. The presence of magnetite-rich basalt elsewhere in the camp suggests that this rock type is more widespread than recognized. The non-magnetic and non-jasper-bearing basalt sequence hosts most of the vein systems in the camp and has been the focus of exploration.

Table Mountain Sediments (TMS) of the middle thrust sheet cap basalt of the lower thrust sheet. They crop out extensively in the southern portion of the camp on Table Mountain and in the lower areas surrounding the Huntergroup Massif. In the northern portion of the camp, they locally form thin klippen. They comprise thin-bedded slaty siltstone, sandstone, calcareous mudstones, and grey limestone. Veins rarely extend up into these rocks.

A thin discontinuous sheet of ultramafic rocks occurs at the base of the TMS. The sheet locally thickens to large bodies in the order of hundreds of metres. Near vein systems, these ultramafic rocks are altered to a quartz-carbonate-fuchsite assemblage, referred to as listwanite. Some of the carbonate-mica alteration extends up into the overlying black sedimentary rocks.

Huntergroup Volcanics comprise the Huntergroup Massif, which caps TMS in the southeastern portion of the camp. It comprises augite porphyry flows, tuffs, breccias, tuffaceous sandstones, and scattered limestone pods. The unit does not host any of the veins in the camp.

Diabase and lamprophyre dykes crosscut all lithologies, including veins. Dykes are steeply dipping and strike easterly. Xenoliths of granitic rock occur in several dykes throughout the camp.

Structural features are divided into two temporal groups: an early one related to the formation of the allochthon with pre-and syn-mineralization structures; and a late one with post-mineralization structures. The early group contains thrust faults and related folds along with accompanying foliations and joints that parallel veins. The late group contains high-angle faults that offset veins. Some of the late faults are antecedent structures. Although they are clearly associated with mineralization, movement is post-mineralization.

The axis of the McDame Synclinorium lies along Quartzrock Creek and passes over Table Mountain through the centre of the Huntergroup Massif. The structural style along the axis is long, structurally-controlled flats characterized by klippen of TMS and Huntergroup Volcanics. Along the western margin of the allochthon, which is adjacent to Cassiar Gold Camp, the flats pass into short easterly-dipping frontal ramps. On the eastern side of the synclinorium, the flats pass into westerly-dipping frontal ramps.

On the eastern slope of Table Mountain, a frontal ramp places the older upper subunit of the lower thrust sheet over younger TMS of the middle thrust sheet. This structure is interpreted by Harms et al. (1989) to join up with a steeply north-dipping, easterly-trending fault along the south side of Table Mountain. The orientation of this fault, which is like a frontal ramp with Table Mountain on the northern up-thrown side, is anomalous. Ball (1989) suggests that it is associated with significant changes in orientation of the bottom of the middle thrust sheet. These ramps are interpreted to root into a flat beneath McDame Creek valley (Harms et al. 1989).

In the Taurus Mine and 88 Hill area, several moderately easterly-dipping reverse faults are present: Decline, Taurus West, and unnamed faults (Broughton and Masson 1986; Read and Psutka 1983). Movement on these structures is post-mineralization; however, they may be antecedent frontal ramp structures that root into a flat developed along the hanging wall of argillite of the lower subunit of the lower thrust sheet. This argillite was intersected at depth in drill holes west of 88 Hill.

Smaller second order lithotectonic units are present along the sole of major thrust faults where structural imbrication is common. On the western side of Table Mountain below the sole of the middle thrust sheet that comprises TMS, a package of rocks referred to as the Sediment-Volcanic Unit crops out (Ball 1989). A thin ultramafic sheet, locally altered to listwanite, occupies its sole thrust fault. Rocks within this unit are brecciated and foliated to varying degrees. This is the greatest thickness of deformed rocks known in the camp. The presence of this anomalous thickening may be a reflection of doming that produced the Table Mountain anticline on the north side of the east-west frontal ramp that occurs along the south side of Table Mountain (see section on Anomalous Folds). These features could be important in the formation of veins within the Main Mine, which was the largest producer in the camp. Similar structural patterns were noted in drill core at the same structural level on the eastern margin of Table Mountain. Mapping by Pantaleyev and Diakow (1982) in the northern portion of the camp along the lower reaches of Troutline Creek, Quartzrock Creek, and Snowy Creek, outlined several suspected thrust faults that possibly bound second order lithotectonic units.

Deformation along some thrust faults is intense (Diakow and Panteleyev 1981; Gordey et al. 1982; Ball 1985, 1989). Along the sole thrust near Needlepoint Mountain and at the base of the middle thrust sheet comprising TMS, a weak transposition fabric is present that grades into a cataclastic foliation along the contact. Augen and blocks of more competent rocks are set in a sheared and rodded argillaceous shale matrix. The ultramafic sheet at the base of the TMS is marked by discontinuous tabular lenses of intensely-foliated serpentinite or listwanite up to 10 metres thick with a lateral extent several times larger. The ultramafic sheet is locally structurally-imbricated with adjacent lithologies. Listwanite is black adjacent to argillaceous rocks.

Folds, with a trend similar to the synclinorium and probably related to its formation, are widespread. Northwesterly-trending bedding that dips southwesterly and northeasterly supports this observation. Along the western margin of the synclinorium, a syncline was noted between Troutline Creek and Lang Creek (Diakow and Pantaleyev 1981). In the northern portion of the camp, a northwesterly-trending anticline occurs southeast of Taurus where chert of the middle subunit of the lower thrust sheet is exposed (Read and Psutka 1983; Broughton and Masson 1996). This anticline plunges into the Taurus Mine area where chert is encountered in the lower levels of the mine. Chert sequences were also encountered at depth in two other locations, 88 Hill and west Troutline Creek, and are probably anticlines (Broughton and Masson 1996). Northeast of Snowy Creek, a syncline-anticline pair occurs in the middle subunit of the lower thrust sheet (Diakow and Pantaleyev 1981). In the southern portion of the camp, a syncline occurs along the high point of Table Mountain (Diakow and Panteleyev 1981). Minor folds are locally common within outcrops of TMS. At the Cusac Mine, Ey (1986) documented various styles of minor folds trending northwesterly within chert units.

A second set of younger folds, trending east-northeastly, is present. These folds probably represent perpendicular cross-folding undulations that have been documented by Ey (1986) in various styles of minor folds within chert units at the Cusac Mine. Northeasterly-trending bedding that dips northwesterly and southeasterly is supportive of this observation. Diakow and Panteleyev (1981), and Nelson and Bradford (1993) also documented a northeasterly-trending set of minor folds. Klippen of TMS at Main Mine and north of McDame Lake trend east to northeasterly and may be preserved because of the cross-folding. Fold axes in the earlier northwesterly-trending folds plunge both northwesterly and southeasterly, which may be a reflection of the east-northeasterly-trending folds.

The axis of a large anticline that forms Table Mountain and crests along the south side trends easterly. This fold orientation may be related to a steep east-west thrust fault on the south flank (Ball 1989; Harms et al. 1989). The orientation of this reverse fault, which is like a frontal ramp with Table Mountain on the northern up-thrown side, is anomalous. The development of the anticline may reflect doming, which is consistent with kinematic indicators on the Vollaug Vein (Ey 1987, Nelson 1990; Nelson and Bradford 1993) that indicate a southerly vergence for the middle thrust sheet comprising TMS. This is opposite of the expected vergence from a northeasterly-directed thrust system that stacked each of the lithotectonic packages higher in the sequence from sources farther west (Nelson and Bradford 1993). Alternatively, the easterly-trending anticline may be a variant of the younger east-northeasterly-trending cross-folds influenced by the older east-west thrust fault. The slightly northeasterly elongate shape of the Table Mountain klippen is suggestive of this.

A steep northwesterly-trending cleavage is common throughout the camp and is geometrically consistent with the older northwesterly-trending folds (Diakow and Panteleyev 1981; Ball 1985, 1988, 1989; Ey 1986; Nelson and Bradford 1993). Crenulation lineations parallel to these fold axes occur locally.

A northeasterly-trending shallowly-dipping cleavage is locally common (Diakow and Panteleyev 1981; Ball 1989) and may be related to the younger northeasterly-trending folds.

A strong northeasterly-trending joint-fracture set is widespread (Gabrielse 1963; Diakow and Panteleyev 1981; Read and Psutka 1983; Ey 1986; Harms 1988; Ball 1989; Nelson and Bradford 1993). In most cases, these structures have negligible offset. Diakow and Panteleyev (1981) related them to the northeasterly-trending folds.

Along the western margin of the allochthon, northeasterly-trending faults offset the contact with underlying autochthonous rocks (Diakow and Panteleyev 1981; Panteleyev and Diakow 1982, Nelson and Bradford 1993). Prominent northeasterly-trending photo lineaments that extend into the camp suggest that some of these faults continue through. Read and Psutka (1983) mapped northeasterly-trending sinistral faults between Quartzrock and Snowy Creeks that offset lithological contacts. Vein systems are associated with east-northeasterly-trending shear faults that parallel veins, splay off them and lie within or form one of the walls (Read and Psutka 1983; Ball 1985, 1989; Ey 1986, 1987).

Late structural features consist of northerly and northwesterly-trending faults that offset veins and the northeasterly-trending faults. Most of these are high-angle structures. Exceptions are the northerly-trending Decline Fault and Taurus West Fault in the Taurus Mine area, which dip moderately to the east (Read and Psutka 1983; Broughton and Masson 1996), and the Maura West Fault in the Main Mine, which dips moderately to the northwest (Ball 1989).

Prominent late structures occur in a northerly-trending belt, which extends for 15 km from south of Cusac Mine, through Main Mine to north of Taurus Mine. They are collectively referred to as the Erickson Creek Fault Zone (ECFZ). Movement along the ECFZ is dextral with the eastern side downdropped (Ey 1986).

In the southern portion of the camp south of McDame Lake, the ECFZ is dominated by a duplex fault and photo linear system spaced about 500 to 1,000 metres apart. Prominent structures that comprise the system are the Lily Fault in the Cusac Mine, and the 30-40 Fault, 2810 Fault, and Maura East Fault in the Main Mine. Within the ECFZ, northwesterly and northeasterly-trending structures that offset veins are present locally.

In the northern portion of the camp north of McDame Lake, the ECFZ swings slightly west of north as it is offset by sinistral northeasterly-trending faults (Read and Psutka 1983). The system is not as well-defined in this area; however, the presence of strong northerly-trending structures along Wings Canyon and the Decline Fault, Taurus West Fault and adjacent faults in the Taurus Mine area indicate a zone of disruption (Read and Psutka 1983; Broughton and Masson 1996).

A prominent northerly-trending simplex fault and photo linear system occurs 1,000 metres east of the ECFZ. It comprises the Beaton Creek Fault Zone (BCFZ), which offsets the Vollaug Vein with a dextral, east-side down movement. Photo lineaments coincide with Beaton Creek, upper portions of Snowy Creek, and tributaries to upper Pooley Creek.

A north-northeasterly-trending simplex fault system (Nelson and Bradford 1989, 1993), herein referred to as the Boomerang - Lyla Fault Zone (BLFZ), occurs within and along the western side of the allochthon. The Boomerang and Lyla veins occur along a klippen of TMS adjacent to this structure, which has east-side down movement.

Two prominent northerly-trending regional faults that parallel the ECFZ, BCFZ, and BLFZ occur adjacent to the Cassiar Gold Camp. They comprise Marble Creek Fault (MCFZ) and Rosella Fault (RFZ) (Harms 1989; Nelson and Bradford 1989,1993). These faults have eastern sides down-dropped, similar to the ECFZ, BCFZ, and BLFZ, which are dextral. The Marble Creek Fault and Rosella Fault occur within rocks of the Cassiar Terrane that underlie the Sylvester Allochthon. Although their proportions are not indicative of significant crustal breaks, they are large enough and probably extend deep enough to suggest that they could be a major controlling feature for a hydrothermal system.

Although movements on structures comprising the ECFZ are post-mineralization, at least some of them must be antecedent because most vein systems in the camp are spatially related to them. This relationship is also manifested at the Christine Vein on the east side of Table Mountain and at the Huntergroup Veins on the east side of the Huntergroup Massif. Although these are outside of the ECFZ and BCFZ, they are associated with northerly-trending structures also.

A small set of faults trending east-northeasterly occurs throughout the camp. These include faults along the Sky, Lyla, and southern part of the Vollaug veins. They are related to significant changes in the orientation of the bottom of the middle thrust sheet (Ball 1989). Some of these are antecedent structures because they control the veins.

Veins have been well-described by Mandy (1935, 1937), Diakow and Panteleyev (1981), Grant (1981), Pantaleyev and Diakow (1982), Fjetland (1982), Hooper (1984), Dussel (1986), Ball (1985, 1989), Sketchley (1986, 1989), Gunning (1988), Broughton and Masson (1986), and Panteleyev et al. (1997). Panteleyev et al. (1997) developed a general model for mesothermal gold-bearing quartz veins of the Cassiar Gold Camp that illustrates the spatial relationships of the various vein types within lithotectonic units and a possible genetic connection to a cryptic intrusion (Nelson 1990; Nelson and Bradford (1989, 1993).

Veins in the Cassiar Gold Camp consist of early barren quartz veins without visible alteration; main stage barren and gold-bearing quartz veins with sericite-ankerite alteration envelopes; and late barren quartz-carbonate veins with kaolinite-ankerite alteration envelopes. Early veins are widespread; main stage veins are generally confined to well-defined vein systems; and late veins locally crosscut and brecciate earlier veins.

Main stage white quartz veins form a continuum from barren to strongly mineralized. Barren and weakly-mineralized veins are usually single stage with minor sulphides, whereas strongly-mineralized veins are composite structures with abundant banding and varying amounts of sulphides. Several stages of white quartz veins are present: barren; silver-rich with low Au:Ag ratios; and gold-rich varieties with Au:Ag ratios about one.

Clear quartz veins, containing pyrite, sphalerite and tetrahedrite with uncommon chalcopyrite, galena and arsenopyrite, crosscut gold-bearing white quartz veins. Gold is usually associated with sulphides. Minor tourmaline is present in veins in the Taurus Mine area.

Panteleyev and Diakow (1982) recognized two fundamental vein types: Type I veins, hosted by basalt of the upper subunit of the lower thrust sheet; and Type II veins, occurring along the contact of the bottom of the middle thrust sheet (Panteleyev et al. 1997). Gunning (1988) and Broughton and Masson (1996) described another style of mineralization, pyritic replacement zones.

Type I veins occupy steeply-dipping east-northeasterly to northeasterly-trending, subparallel fractures that comprise the majority of veins in the camp. A small number of veins trend northerly. Most veins are short and narrow and pinch and swell along strike. Many are sigmoidal, dipping steeply north, and terminate by pinching, horsetailing, or as knots or localized bulbous masses. North-northeasterly-trending tension gashes occur along the margins of individual veins, indicating veins formed in a sinistral shear environment. Veins are typically up to one metre wide and several tens of metres long. Some are several metres wide and hundreds of metres long. Late crosscutting faults have broken veins into numerous segments that appear to be separate structures.

Type I veins occur within the lithostratigraphic horizon comprising basalt that lies above chert of the middle subunit of the lower thrust sheet and below the contact of the bottom of the middle thrust sheet that comprises TMS. Most veins in the areas around Cusac Mine, Main Mine, and north of Taurus Mine lie immediately below TMS and form thicker structures that are more persistent. The upper 30 m of these veins are the most productive in the camp, and gold grades decrease and become more erratic down dip into the roots of the system. In the Taurus Mine area, most veins are lower in the lithostratigraphic sequence closer to the chert and form wider systems comprising narrower, less persistent structures that are lower in grade, but contain higher gold in altered wallrocks.

In summary, there appears to be a continuum from widespread, lower-grade systems of multiple veins with high gold contents in altered wallrock, upward into narrower, erratic and lower-grade single structures that pass into consistently higher-grade composite structures in wallrocks immediately under the cap of TMS. In the Cusac Mine and Main Mine, veins root into a prominent chert unit in the lower portions of the mines, although structural imbrication under the lower contact of the middle thrust sheet does complicate this relationship. In the central part of the camp, there is a transition from narrower, erratic and lower-grade single structures on the south side of McDame Lake to widespread, lower-grade systems of multiple veins under a cap of TMS on the north side of McDame Lake. This could be a function of a major structure along McDame Creek and/or a thinning of basalt that forms the upper subunit of the lower thrust sheet.

Type II veins occupy the shallowly-dipping plane of the thrust fault that occurs at the bottom of the middle thrust sheet comprising TMS. Most veins are along the footwall of the ultramafic sheet, which is generally altered to listwantite, or extend up into it. Uncommonly, veins extend up into TMS where they pinch rapidly. Veins have a characteristic ribboned appearance from carbon-rich stylolites. Veins are generally less than two metres thick, but can be up to four metres. Thicker, productive vein segments appear to be related to rolls along the contact or anomalous thickening of listwanite.

The best Type II vein example is the Vollaug Vein, which extends for almost three kilometres along Table Mountain. Other smaller veins or vein segments are the Jennie's Revenge Vein in the Main Mine, the tops of larger structures in the Cusac Mine and area, some of the Hunter Veins on the east side of Huntergroup Massif, and veins under klippen of TMS north of McDame Lake.

Pyritic replacement zones occur in the Taurus West area and along the lower decline in the Taurus Mine. They are characterized by 10 % to 40 % fine-grained to euhedral pyrite in a carbonate-altered rock. Zones commonly display a finely-banded shear fabric. Quartz veins are notably absent, and contacts with unaltered basalt are typically very sharp.

Strong wallrock alteration, which can be an important exploration guide, is associated with gold-bearing veins hosted by mafic and ultramafic rocks. Within mafic rocks, basalt is altered to a sericite-ankerite-quartz assemblage that forms well-developed envelopes around veins (Sketchley 1986, 1989). Envelopes are surrounded by widespread propylitic alteration. More intense alteration adjacent to veins commonly contains coarse disseminated pyrite, commonly with anomalous gold values. Carbon-rich zones and crackle brecciation, comprising quartz and carbon, are locally common in more intense alteration. At the Taurus Mine, pyritic alteration envelopes contain enough gold to constitute a potentially-mineable resource. Within ultramafic rocks, serpentinite is altered to talc, talc-breunerite-quartz, and breunerite-quartz-fuchsite assemblages with increasing intensity (Dussel, 1986).

Vein systems extend outward from the ECFZ and are up to five kilometres long. The length of the systems is a function of exposure and may be controlled by the BCFZ and the BLFZ, which occur within two to three kilometres of the ECFZ. The longest system, Wings Canyon, occurs in a relatively flat, and extensive, but thin exposure of basalt of the upper subunit of the lower thrust sheet that lies just on top of chert of the middle subunit and beneath a cap of TMS.

The known extent of vein systems south of Wings Canyon is limited because of a thick cap of TMS to the east and a deeper erosional level to the west. North of Wings Canyon, the systems progressively extend farther west from the ECFZ to the BLFZ. This may be due to the presence of TMS close to chert, which underlies host basalt. The northern systems do not extend farther east. Reasons for this are not known.

Along the ECFZ, there is a crude periodicity of vein systems. North of McDame Lake where wider systems are present, they are spaced about 1,500 metres apart. South of McDame Lake where narrower systems are present, they are spaced about 400 to 600 metres apart. This apparent periodicity could be used to guide exploration where gaps exist along the ECFZ. A schematic longitudinal section of the Table Mountain Gold Property is shown in Figure 5.

The following is a list of known vein systems in the camp from north to south. Vein or area names for each system and mines are tabulated. These systems are shown on Figure 5, a schematic longitudinal section of the Table Mountain Gold Property, and include gaps along the ECFZ with high exploration potential.

Lyla-Boomerang: Easterly-trending Type I silver-rich veins along north side of klippen of TMS on southeast side of Mount McDame.

Elan: Easterly-trending Type I silver-rich vein system that is three kilometres long extending from Quartzrock Creek to southeast side of Mount McDame.

Taurus-88 Hill: Broad easterly-trending Type I vein system that crosses Quartzrock Creek at the Cassiar access road.

Wings Canyon: Broad northeasterly-trending Type I vein system extending from north of Highway 37 west of McDame Lake to east of Snowy Creek.

- Reo, Left Shoe, Blueberry Hill, Red Rock Canyon, Klondike, Snowy Creek, Rich, Berube

Newcoast-Van: Broad northeasterly-trending Type I vein system that includes several smaller Type II veins and extending from west end of McDame Lake to north of Highway 37 at Jade City.

Smile-Davis: Northeasterly-trending Type I vein system extending from Callison Lake four kilometres to the northeast along the south side of McDame Creek.

Switchback: Northeasterly-trending Type I vein on south side of tailings pond adjacent to klippen of TMS.

Kelly: Northeasterly-trending Type I vein southeast of 1140 portal of Main Mine adjacent to small exposure of listwanite.

Jennie-Maura-Alison: Northeasterly-trending faulted segments of Type I vein under klippen of TMS that appears to trend into a Type II vein (Jennie's Revenge).

- Table Mountain Mine, Vollaug 4700 and 5700 Mine Levels, Troutline Mine, Finlayson Mine, Plaza Open Pit, numerous Vollaug Open Pits

Cirque: Several small northeasterly-trending Type I veins that occur on the west side of the cirque above Main Mine.

Sky: Type I vein along steeply north-dipping major east-west fault that juxtaposes black clastics up against the normal sequence of TMS - Listwanite - Basalt.

Sky-Jill Gap: A prominent northeasterly-trending photo lineament similar to those at the Eileen-Michelle-Lily and Bain system.

- Eileen South, Big, Michelle High Grade, Fred, Dino, Prosser, East-West, L, Heather

Bain: Northeasterly-trending Type I veins system under and within listwanite adjacent to TMS.

North Pete: Several small quartz stringers along north side of major listwanite body.

Significant veins or vein systems that occur outside of the main camp area are tabulated as follows.

Jade: Northerly-trending vein on south slope of Table Mountain within TMS along photo lineament of BCFZ.

Christine: Northerly-trending Type I vein in Finlayson Creek on east side of Table Mountain along contact of TMS.

Meg: Northeasterly-trending Type I vein in basalt on northeast flank of Table Mountain.

Huntergroup: Easterly to northeasterly-trending Type I and II veins on the east side of Huntergroup Massif along contact of TMS.

Nelson (1990), Nelson and Bradford (1989, 1993), and Panteleyev et al. (1997) discussed formation of the mesothermal gold-quartz vein deposits of the Cassiar Gold Camp. Although the system has characteristics that resemble classic mesothermal lode gold deposits, major structures within and bounding the Sylvester Allochthon are flat in contrast to regional breaks associated with major camps. Northerly-trending structures that control the distribution of veins, ECFZ, BCFZ, and BLFZ, although significant, are not major crustal breaks. Similarly, east-northeasterly structures that host and are associated with the veins are minor without significant offsets. Suggestions that these structures developed in an extensional environment related to dextral movement on major northwesterly-trending regional faults are not compatible with vein system geometry. The geometric pattern of these structures is that of a box-shaped array, not the expected en echelon pattern. In addition, the veins are considered to have formed at about 130 Ma (Panteleyev 1982; Sketchley 1986; Sketchley et al. 1986) when the regional strain pattern was compressive, not extensional. This age, which was confirmed by Panteleyev (personal communication 1998), postdates emplacement of the Cassiar Batholith, which might have contributed to development of the host fractures.

An alternative proposal for development of the camp by Nelson (1990) and Nelson and Bradford (1989, 1993) is that of an intrusion driven hydrothermal system. Evidence for a cryptic intrusion beneath the camp comes from the 130 Ma date of formation, granite clasts that occur in a number of post-mineralization lamprophyre dykes, and the spatial disposition of the actinolite-epidote isograd. The granite clasts occur in dykes from the Table Mountain area to north of Snowy Creek and contrast with dykes north of the camp that contain clasts of subjacent miogeoclinal units, but not granite (Read and Psutka 1983; Sketchley 1986; Nelson 1990; Nelson and Bradford 1989, 1993). The isograd generally follows the eastern edge of the Cassiar batholith, but swings east around the camp in an anomalously-wide arc. Based on textural and age relationships, actinolite that formed within the isograd is not related to the Cassiar Batholith.

The ECFZ, which has late dextral movement (Ey 1986, 1987), may have developed as a cross fault in response to dextral motion on major northwesterly-trending regional faults. The orientation of the ECFZ at 000⁰is compatible with development of dextral synthetic Riedel fractures between regional faults striking 165⁰. The MCFZ, BLFZ, ECFZ, and BCFZ appear to be arranged en echelon in a northwesterly-trending array, supporting this hypothesis. Northerly-trending structures that control the Christine and Hunter Veins may be manifestations of this array. The structural regime at this time (130 Ma) was compressive and hence would not facilitate development of northerly-trending dilatent structures that could host veins, although they do occur.

Dextral motion on the ECFZ may have caused minor sinistral movement along pre-existing east-northeasterly-trending fractures. Tension gashes within a duplex fault system striking 000⁰ would be expected to develop at 045⁰, and antithetic Riedel fractures with sinistral movement at 075⁰. Vein systems in the camp strike from 060⁰ to 105⁰, have sinistral movement, and are parallel to subparallel to regional fractures and joints. The box-shaped array of veins are analogous to antithetic Riedel fractures occurring along and controlled by anastomosing faults of the ECFZ, which is an antecedent structure. Movement along undulating fractures hosting the veins would adequately account for the dilation needed in development of Type I veins and is compatible with the geometry of tension gash veins that formed along vein margins.

The development of Type II veins along Table Mountain is related to shearing with a southerly vergence of the middle thrust sheet, i.e. tops to south movement (Ey 1987). Doming from emplacement of a buried intrusion would account for this movement, create dilatant zones for Type I veins, and explain the sigmoidal shape of some structures. Further evidence is provided by vein dips throughout the camp, which suggest uplifting. In the southern part of the camp, veins tend to dip steeply north, whereas in the northern part of the camp at the Taurus Mine, veins tend to dip steeply south (Broughton and Masson 1996). Doming could be related to southerly-directed thrusting along the reverse fault that bounds the Sky vein on the southern side of Table Mountain. This movement may have caused development of the Table Mountain Anticline and an anomalous thickening of structural imbrication in that area (Ball 1985). This area occupies the centre of the camp and was the most productive.

The architecture of the hydrothermal system that formed gold-bearing quartz veins appears to have been controlled by the ECFZ, and possibly the adjacent BLFZ and BCFZ. The ECFZ, which is an antecedent structure, and is probably related to emplacement of a buried intrusion responsible for the system. The two different structural regimes presented to explain vein development would have been operative at the same time, further linking the ECFZ to a buried intrusion.

Veins are not prevalent lower in the lithostratigraphic package, possibly because chert is more prevalent and because of its brittle nature, it would effectively shatter, making it more amenable to development of broad zones of silicification. Vein systems in the northern portion of the camp are empirically associated with anticlinal structures in the chert (Broughton and Masson 1996), which suggests a focusing of fluids. Vein systems above chert tend to be widespread with narrower veins, which may reflect shattering in the brittle, underlying rocks as fractures coalesced and developed better in overlying mafic volcanic rocks. Higher gold contents in altered wall rocks above chert may reflect precipitation of gold by flooding as fluids moved upward and out of chert into a new physiochemical environment. Higher up in the systems, fluid flow would have coalesced more into single stage barren to low-grade veins and then up into composite higher-grade veins under incompetent carbonaceous black clastics. These rocks effectively capped the hydrothermal system, damming fluids, and because of their carbonaceous nature may have facilitated precipitation of gold.

Mineralization controls are features that characterize productive structures throughout the camp. They are useful in guiding exploration for extensions to known vein systems and in anomalous gaps between productive areas. Important mineralization controls are listed as follows.

Proximity to antecedent northerly-trending structures. Prominent northerly-trending structures in order of importance are ECFZ, BCFZ, and BLFZ. Less prominent structures include faults along the Christine and Huntergroup veins. Productive veins occur within the ECFZ duplex and generally within one kilometre of the bounding faults.

Northeasterly-trending fracture zones. Dominant fracture systems may be related to faults that offset allochthon margins. Several vein systems that extend under TMS are marked by prominent photo lineaments.

An apparent periodicity between vein systems. In the northern portion of the camp, this is about 1,500 m; in the southern portion, about 400 to 600 m.

Rolls in the lower contact of the TMS. Productive sections of the Vollaug Vein are adjacent to a roll that defines the Table Mountain Anticline.

An apparent thickening of listwanite. Prominent listwanite bodies occur adjacent to the Pete Vein, the Bain Vein, the Eileen-Michelle-Lily Vein, and the Jennie-Maura-Alison Vein systems. Listwanite isopachs along the Vollaug vein suggest productive zones are spatially related to thicker sections of listwanite.

An apparent periodicity of ore shoots along veins. Along the Eileen-Michelle-Lily Vein system, the ore shoots are about 80 to 130 m long with barren gaps of 65 to 110 m (Downie 1997).

Rake of veins. The Eileen-Michelle-Lily Vein system appears to rake to the east. This may be related to a sinistral movement along shears hosting veins, coupled with a southerly vergence of the middle thrust sheet, i.e. north side of the structures move upward and to the west. This hypothesis suggests exploration should be initiated on the western side of the controlling, northerly-trending structures under caps of TMS.

Almost all of the exploration work conducted on the Table Mountain Gold Property is historical in nature. This work includes geological mapping, geophysical surveys, soil sampling, trenching, drilling, and underground drifting.

A small diamond-drilling program was conducted under Notice of Work Permit Number 0100115 during 2002 to further explore and further define the East Bain Vein, which was initially defined by diamond drilling during 1990 and 1991 (Westervelt 1991, Glover 2002a). The program comprised eleven holes of NQ diamond drilling totalling 2395.1 m; ten of these holes were collared on the Nu-Tara mineral claim, and one on the Cordoba mineral claim (Figure 6). Collar locations, which were tied into the mine survey grid by chain and compass, were field verified by the author of the report1 using a hand-held GPS unit with a field accuracy of +10 m. The holes were found to be located correctly on the mine grid, but a discrepancy exists between the GPS UTM and mine grid coordinate systems, which should be investigated further. The mine grid coordinate system is shifted approximately 200 m south and east of the GPS UTM grid coordinate system.

Down-hole drill hole dip orientations were determined using corrected acid tests; lithological descriptions and structural core axis angles were recorded; and quartz veins were sampled. Core axis angles were used to correct intersected vein intervals to true thicknesses. Drill core samples were sent to Eco Tech Laboratory Ltd. for gold and silver assaying. Core sample locations were field verified by the author of the report.

02BG-02 tested the vein 50 metres west of previous intersections and intersected a strong quartz vein yielding 5.19 oz/ton over 0.6metres that is a small faulted wedge with limited tonnage potential.

02BG-03 tested the eastern end of the vein and intersected a quartz vein system that returned 0.38 oz/ton over 2.6 metres.

02BG-04 tested the western end of the vein to define a target elevation for development and intersected 0.554 oz/ton over 1.4 metres.

02BG-05 tested the eastern extent of the vein and intersected a weakly mineralized vein breccia.

02BG-06 tested the central portion of the vein and intersected 0.6m of vein fault breccia that returned 0.062 oz/ton over 0.6 metres.

02EB-07 tested the eastern extent of a vein above a known fault and did not intersect any significant veining.

Holes 02EB-08 to 11 were drilled as a fence on section 8398E to test for an eastern extension of the vein and did not intersected any significant veining.

Most samples collected during past exploration programs are regarded as historical in nature; hence, little documentation exists regarding methods and approach.

Drill core sampling that was done during the 2002 exploration program consisted of bagging whole core samples that were taken from individual quartz veins intersected in drill holes. A total of 36 samples was collected.

Samples from the 2002 exploration program were assayed at Eco-Tech Laboratories Ltd. in Kamloops, British Columbia; sample preparation and analytical methods are in Appendix III; and copies of analytical certificates are in Appendix IV.

Samples were shipped in nine groups, varying from two to nine samples, to Eco-Tech, which processed samples and issued approved analytical certificates. There was no formal chain of custody, and samples were not shipped in tamper-proof containers. Sample pulps and rejects are stored at the Eco-Tech facility. Because of the limited number of collected samples, no blanks, field duplicate, or reference samples were included by Cusac personnel in the field; however, Eco-Tech inserted its own laboratory duplicate and reference samples.

The author of the report has verified analytical data quoted in this report from the 2002 exploration program with respect to the original analytical certificates; however, actual field samples could not be verified because of the whole core sampling.

The 2002 exploration program was conducted to explore and further define the East Bain Vein, which was discovered and defined by diamond drilling from 1989 to 1991 (Westervelt 1993, Glover 2002a, Fitzpatrick and Glover 2003). This initial work resulted in a Drill Indicated Probable Reserve estimates of 34,741 tons grading 0.687 oz/ton (0.502 oz/ton Au cut to 2 oz/ton) totalling 23,881 ounces (17,423 ounces Au cut to 2 oz/ton) for the West Bain Vein, and a Drill Possible Reserve estimate of 22,120 tons grading 0.565 oz/ton Au (no cut required), totalling 12,498 ounces Au for the East Bain Vein (Westervelt 1993). Both of these estimates are historical in nature and regarded as an order-of-magnitude because they do not follow the CIM Standards on Mineral Resources and Reserves (2000). Additional drilling was conducted on the West Bain Vein during 1993, which confirmed the initial estimate, and it was subsequently mined from 1993 to 1995 with production of 60,000 tons grading 0.4 oz/ton Au, totalling 24,000 ounces compared to the original estimate of 23,881 ounces uncut or 17,423 ounces cut. It is noteworthy that although there was a large increase in tonnage and a lower grade, a similar number of ounces were obtained, which is primarily related to mining dilution.

The 2002 exploration program comprised eleven drill holes, four of which intersected the East Bain Vein, confirming previous work, whereas the remaining drill holes, which were targeted at extending the known resources, failed to do so. Data from the four new drill holes were compiled with the historical data (Westervelt 1993), excluding one of the original drill holes used by Westervelt (1993), and an updated mineral resource estimate was completed under the supervision of Professional Engineer K.P. Fitzpatrick (Fitzpatrick and Glover 2003).

The resource estimate was calculated using a polygonal method, which has been historically used for narrow gold-bearing high-grade quartz vein systems on the Table Mountain Gold Property. Two estimates were completed, one with uncut assays and one with assays cut to 2 oz/ton, which is a historical cutting factor The updated resource estimate comprises Blocks 02BG-02, 02BG-03, 02BG-04, and 02BG-06, based on new drill-hole data, and Blocks 90-340, 90-357, 90-359, 0.264/0.2, 91-371, and 90-373, based on historical drill-hole data (Figures 7 and 8). Except for Block 02BG-02, these resource blocks form a contiguous group that are ordered from west to east as follows: 02BG-04, 91-373, 90.357, 02BG-06, 91-371, 0.264/0.2, 02BG-03, 90-340, and 90-359. Block 02BG-02 at the western end of the vein is a small fault-bounded wedge based on a single drill hole. The final tabulation excluded Block 0.264/0.2, which is based on a historical drill hole, because it was considered sub-ore grade. The specific gravity used for all calculations is 2.95 tons per cubic metre, which is equal to 2.67 tonnes per cubic metre, a historical value.

The author of the report reviewed the updated estimate, which was classified as a “Drill Indicated Resource” by Fitzpatrick and Glover (2003), and is of the opinion that it must be re-classified to conform to the CIM Standards on Mineral Resources and Reserves (2000). Block 02BG-02 is reclassified as inferred because geological and grade continuity cannot be assumed, i.e. it is not contiguous with the rest of the resource blocks, and it is based on a single drill hole whose assays cannot be validated. The remaining blocks remain in same confidence category; however, the nomenclature has been changed to an Indicated Mineral Resource to conform to the CIM Standards on Mineral Resources and Reserves (2000). The Indicated classification is retained because geological and grade continuity can be reasonably assumed, i.e. the blocks are contiguous and each is based on proximal gold-bearing quartz veins of similar strike, dip, and nature, and historical assay data have been validated by new assay data of similar tenor in adjacent blocks and supported by multiple documented occurrences of visible gold. The re-classified Mineral Resource Estimate is given in Table 3. Block 02BG-06 was excluded from the tabulation because it is sub-ore grade, i.e. 0.06 oz/ton, which maintains consistency with the original updated estimate where a sub-ore grade block was excluded.

For reference purposes, the definitions of Inferred Mineral Resources and Indicated Mineral Resources are given as follows (CIM Standards on Mineral Resources and Reserves 2000).

An “Inferred Mineral Resource” is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling

gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

An “Indicated Mineral Resource” is that part of a mineral resource for which quantity, grade or quality, densities, shape, and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Preliminary evaluations were completed by Professional Engineers K.P. Fitzpatrick (Fitzpatrick and Glover 2003) and A.J. Beaton (Beaton 2003) to assess the viability of mining the East Bain Vein. Fitzpatrick and Glover (2003) provided a plan for the development and stoping of the East Bain Vein based on the entire updated resource using assays cut to 2 oz/ton and dilution to a mining width of 1.5 metres. The resulting estimate based on mining parameters was re-classified as a “Mining Reserve”; however, none of the work included cost estimates to assess the economic viability of mining. Fitzpatrick and Glover (2003) recognized that Block 02BG-02 was not well-defined and separated it from the main mining plan by proposing a short exploration decline to obtain additional information before developing a mining plan. Beaton (2003) completed a Cost Analysis of Development based on the entire updated resource using uncut assays and dilution of 10 %. No comments were made about re-classifying the resulting estimate as a reserve, although it was based on mining processing, metallurgical, and economic factors.

The author of the report reviewed the updated estimate, which was classified as a “Mining Reserve” by Fitzpatrick and Glover (2003), and is of the opinion that it does not conform to the CIM Standards on Mineral Resources and Reserves (2000) and cannot be classified as a Mineral Reserve Estimate. The reasons are that the Fitzpatrick and Glover (2003) study does not include cost estimates to assess the economic viability of mining; the Beaton (2003) study includes Block 02BG-02, which contains a significant Inferred Mineral Resource that cannot be used in an economic study to define a Mineral Reserve Estimate; and no comments were made by Beaton (2003) about using that study to define a Mineral Reserve Estimate. Hence, the reader is cautioned that the updated Indicated Mineral Resource estimate for the East Bain Vein cannot be re-classified to a Mineral Reserve at this time because it has not been demonstrated to have economic viability.

For reference purposes, the definition of a Probable Mineral Reserve is given as follows (CIM Standards on Mineral Resources and Reserves 2000).

A “Probable Mineral Reserve” is the economically mineable part of an Indicated, and in some circumstances a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This study must include adequate information on mining processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES

Information regarding Mining Operations, Recoverability, Markets, Contracts, Environmental Considerations, Taxes, Capital and Operating Cost Estimates, Economic Analysis, Payback, and Mine Life are beyond the scope of this report. The reader is referred to Mining Engineering reports by Fitzpatrick and Glover (2003), and Beaton (2003), for mining aspects, and Environmental Reports by Hunt (2003) for reclamation work, Griffin (2003) for tailings storage facilities, and Glover and Brett (2003) for mine closure plans.

The author of the report concludes that the Table Mountain Gold Property has a high potential for discovering new high-grade gold vein systems along the Erickson Creek Fault Zone, similar to the ones already mined. In addition, the unexplored areas adjacent to Beaton Creek, Boomerang-Lyla Fault Zones, similar structures along Finlayson Creek, eastern side of Table Mountain and Huntergroup Massif also have a potential for discoveries of high-grade gold vein systems. However, there is no assurance that high-grade gold vein will ever be discovered or, if discovered, can be mined economically.

Gold-bearing quartz vein systems that historically produced most of the gold from the Table Mountain Gold Property are the primary exploration targets and are discussed in order of priority under Target Areas 1 to 7 (Figure 9).

Area 1 comprises the western end of the East Bain Vein and a possible offset eastern extension across the Lily Vein. Two drill holes are required to further define Block 02BG-02 (Target 1A), which has a significant Inferred Mineral Resource, and increase the confidence level to an Indicated Mineral Resource. Two drill holes are required to validate Blocks 02BG-06 and 0.264/0.2, which are sub-ore grade and not included in the final resource tabulation, because it is likely the grade could be higher (Target 1A). An additional drill hole is required at the north end of the eastern fence of drill holes (Target 1B) that were drilled previously to test for a possible eastern extension of the East Bain Vein across the Lily Vein. Following this, a fence of five drill holes should be drilled approximately 100 metres to the east (Target 1C) to test for extensions further to the east.

Area 2 comprises a large gap between the Cusac and Main Mines that contains several prospective areas. These areas are referenced as 2A to 2C for prioritization of drilling.

The most prospective area is between the Jill and Sky Veins where the topography flattens and the western contact of TMS swings to the west, and possibly covers veins along the northern extension of the ECFZ from the Hot-Fred-Dino-Eileen Vein systems. A prominent photo lineament, similar to those over the Eileen–Michelle–Lily and Bain Vein systems, cuts through this area. There also is a small occurrence of non-fuschsitic listwanite on the western side of the TMS about mid-way between the Jill and Sky veins along the trend of the photo lineament. Topographic expressions around and west of the listwanite occurrence are similar to that west of the Eileen-Michelle-Lily and Bain Vein systems. Soil sampling, conducted by Esso Minerals during the mid-1980’s, outlined weak and spotty, but widespread gold and arsenic anomalies along the projected ECFZ trend. In the order of 500 m north of the Hot Vein pit, Cusac collared

a poorly-documented diamond-drill hole in TMS and drilled through about 60 m of shale and argillite into about 15 m of fuschsitic listwanite, then into the underlying mafic volcanic rocks

(personal communication, Guilford Brett 2003). About 23 drill holes are required in this area (Target 2A) to search for gold-bearing quartz vein systems by mapping listwanite and volcanic alteration facies in conjunction with developing isopach maps of the TMS-listwanite and listwanite-volcanic contacts. Contingent on the results of these holes, additional 20 holes are required for follow-up.

Northeast of the Sky Vein, an area informally known as the Gap (Target 2B) contains a previous diamond drill hole intersection of 0.355 oz per ton of gold over 0.8 m. The intersection is below a thin layer of TMS within basalt of the lower thrust sheet. The location is immediately south of and below the crest of Table Mountain, which offers a significant advantage for development. Four drill holes are required to investigate this intersection further, and contingent on the results of these holes, additional four holes are required for follow-up.

The area east of the Sky Vein has not been explored for extensions to this vein system, which would be situated along the trend of the ECFZ, or any potential vein systems that are adjacent to it (Target 2C). The Sky Vein itself is not that prospective, because it has been extensively explored and its geological setting along two fault-bounded blocks of TMS above volcanic rocks is not as prospective as that of veins which are actually bounded by overlying TMS; however, the area further to the east has had very little exploration of the lower TMS contact. Four drill holes are required to investigate this area further, and contingent on the results of these holes, additional four holes for follow-up.

Area 3 comprises the Newcoast-Van Vein system, which occurs in basalt underlying a thin cap of TMS. Extensive exploration was conducted around the margins of this cap for narrow high-grade veins; however, little work was done within the area underlain by the cap. Widely-spaced drilling in 1995 returned intersections of 3.696 oz/ton of gold over 0.1 m and 1.679 oz/ton of gold over 0.2 m, which indicates the presence of a gold-bearing vein system. Four drill holes are required to investigate the area under the centre of the TMS cap (Target 3A) to explore for a low-grade bulk tonnage vein and alteration system amenable to open pit mining, and contingent on the results of these holes, additional four holes for follow-up.

Area 4 comprises a gap in the ECFZ that contains projected extensions of the Switchback and Kelly Veins. Neither of these projected extensions has been investigated.

The Switchback Vein occurs on the northeast side of a klippen of TMS and underlying listwanite. Two samples returned 0.122 oz/ton and 0.260 oz/ton of gold each over one metre. The eastern extension of this area, which is in the ECFZ, is low-lying and on the south side of the tailings pond (Target 4A). Four drill holes are required to investigate this gap, and contingent on the results of these holes, additional four holes for follow-up.

The Kelly Vein, which occurs adjacent to a small exposure of listwanite in trenches, was explored by drilling and intersected in the 1140 drift of the Main Mine, with one sample returning 0.280 oz/ton over one metre. The eastern extension of this area, which is in the ECFZ, is low lying within Erickson Creek (Target 4B). Four drill holes are required to investigate this gap, and contingent on the results of these holes, additional four holes for follow-up.

Area 5 comprises the southern portion of the BCFZ where it cuts TMS. The northerly-trending Jade Vein crops out on the south slope of Table Mountain within TMS, indicating the presence of a hydrothermal system along this structure away from known productive veins. Four drill holes are required to investigate this area for occurrences of fuschsitic listwanite and possible vein systems beneath TMS. The holes should be located adjacent to and on either side of the Jade Vein. An initial hole should be drilled to test the thickness of TMS (Target 5A), and contingent on the results of this drill hole, the remaining holes completed (Target 5B).

Area 6 comprises possible extensions to the Bear and Jennie-Maura-Alison Veins to the east of the Main Mine. Although much exploration was done along the eastern margin of the ECFZ by previous operators, none was successful in locating vein extensions. Part of this was due to the steeper orientation of drilling, which failed to intersect the eastern extension of the Bear Vein, whereas later flat drilling did intersect it. Because productive veins occur within one kilometre of the bounding faults of the ECFZ, the geometry of existing drill holes should be examined to check for gaps along the lower contact of TMS in this area. Gaps should be investigated with near horizontal to shallowly south-dipping drill holes. Four drill holes should be collared above the eastern extension of the Bear Vein and drilled to the south to explore for vein systems. An initial hole should be drilled to investigate the area (Target 6A), and contingent on the results of this drill hole, the remaining holes completed (Target 6B).

Area 7 comprises gaps on the north and south sides of the Bain Vein system. These areas are best explored with drill holes collared from the Bain Vein underground workings to avoid drilling through TMS. Four drill holes are required to investigate this area further; two initial holes from the West Bain Vein (Target 7A), one to the north and one to the south, and contingent on development access to the East Bain Vein, two additional holes, one to the north and one to the south from the East Bain Vein (Target 7B).

Exploration throughout the Table Mountain Gold Property is at a mature level. Soil geochemical and ground geophysical surveys have been done in most areas, and most exploration is now done by diamond drilling. Various alternative exploration tools, including seismic surveys and percussion drilling, have been proposed to map the base of TMS to look for rolls and thickening of listwanite; however, both of these tools still do not adequately test target areas and additional diamond drilling will always be required. Because of this, diamond drilling is recommended to search for gold-bearing quartz vein systems by mapping listwanite and volcanic alteration facies in conjunction with developing isopach and structural contour maps of the TMS-listwanite and listwanite-volcanic contacts to target prospective areas.

A number of exploration practices were reviewed during the preparation of this report. These practices are discussed below with respect to the “Exploration Best Practices Guidelines”, which are included with the CIM Standards on Mineral Resources and Reserves (2000).

Acid tests were used for down hole surveying. This type of test should not be relied upon as it only measure hole dips and not azimuths. Several types of instruments are commercial available for lease that measure down-hole dip and azimuth in non-magnetic and magnetic rocks.

Whole core was sampled and sent for metallics assaying in an effort to improve the representivity of gold grades. Although whole core samples are larger in size and the representivity of gold grades will be improved, core must be split with half sent to a laboratory for analyses and half archived for reference purposes.

Samples were sent to the laboratory with no independent quality control samples because of the small number of samples. Certified reference samples, blank samples, and where appropriate, duplicate core, reject, and pulp samples should be included with batches of samples sent to the laboratory regardless of the number of samples.

Visible gold and high gold grades are frequently observed in quartz veins at the Table Mountain Gold Property. The historical cutting factor used is 2 oz/ton, which commonly has resulted in the underestimation of the contained gold, particularly in the top 10 to 20 m of quartz veins, occurring under listwanite. The author of the report is of the opinion that grade cutting should be revised to a scheme of 5 oz/ton for 10 m below a listwanite contact, and the historical 2 oz/ton for the remainder of the veins.

A specific gravity value of 2.67 was used for resource calculations. This value is historically based and should be validated by collecting a suite of samples and sending them to a laboratory for measurements.

Any further work on the Table Mountain Gold Property should follow “Exploration Best Practices Guidelines” and take into account the previous discussion.

The Company's mining operations at Table Mountain are regulated under the Mines Act (13C), which applies to all British Columbia mines during exploration, development, construction, production, closure, reclamation, and abandonment. Security for mine reclamation may be required before the commencement of work on a mine as a condition of the issuance of a permit under the Mines Act.. The Company has currently posted all required bonds for its ongoing work, but additional bonds may be required as new mining plans are developed in the future. The Company may be required to fulfill its reclamation obligations if the mine is closed for indefinite period(s).

The federal government's regulation and enforcement tools over ongoing operations include the Canadian Environmental Protection Act, which regulates toxic substances; the Fisheries Act, which prohibits the deposit of deleterious substances in water frequented by fish and also prohibits the harmful alteration, disruption, or destruction of fish habitat; and the Transportation of Dangerous Goods Act, pursuant to which permits must be obtained for discharges of contaminates to the environment from an industry, trade, or business.

Although the Company does not now own any real property rights or conduct any mining operations in the United States. The Company knows of no environmental hazards on any such property or pending or threatened investigations by environmental authority in the United States. However, the CERCLA and analogous state statutes impose stringent reporting requirements for the release or disposal of hazardous substances. Under CERCLA, any party responsible for the release or threatened release of a hazardous substance in the environment is responsible for all removal and remediation costs and for the costs of the damage to natural resources. Responsible parties under CERCLA include the owner or operator of the site where the release occurs or anyone who owned or operated the site when the disposal was made, regardless of culpability.

The Company believes that it holds all permits now required to conduct existing exploration and mining operations at the Table Mountain property. The Company will need additional permits and studies to operate other properties in which it may acquire interests, and there is no assurance that the Company will be able to obtain or maintain all permits required to conduct exploration activities or to begin construction or operation of mining facilities at any such properties on terms that permit operation at economically justifiable costs.

Amendments to current laws, regulations, and permits governing operations and activities of mining companies or more stringent implementation thereof could require increases in capital expenditures or production costs or reduction in levels of production at producing properties, or require delay or abandonment of the development of new mining projects.

Title to hard rock mining claims in British Columbia is obtained in one of several ways. Claims may be staked under the Mineral Tenure Act. To maintain a claim, the holder must pay recording fees and perform work on the claim in minimum prescribed amounts. Placer claims may also be required under the Mineral Tenure Act and are subject to similar constraints. The Company's rights in the Table Mountain property currently consist of full and fractional mineral claims and Crown Grants. The Company's hard rock mineral claims have terms expiring from 1997 to 2005, and are automatically renewable provided that the regulatory minimum investment in assessment work is duly filed with the appropriate provincial authorities each year. The Company's investment in these claims is expected to be sufficient to keep its claims in good standings for at least 15 years. See "Item.5 Operating and Financial Review and Prospects”. Crown Grants are quite different and are acquired as a fee simple interest in the minerals in perpetuity granted to the holder. Once obtained, no further work or filings are required to keep Crown Grants in good standing except for the payment of taxes.

As stated previously, Cusac is also involved in Platinum Group Metals exploration. In 2000, in an effort to diversify, Cusac entered into an option agreement with Tilava Mining Corporation to acquire 75% of the Golden Loon property north of Kamloops, BC. The Company’s exploration activity on the Clearwater Platinum Project during the period yielded insufficient results to warrant continued work and as such option payments due June 1, 2001 regarding the Golden Loon property were not made and the option expired. No further work is planned in the Clearwater Platinum Project and all interest in the property has been abandoned.

Subsequent to December 31, 2004, the Company completed and published the results of a Preliminary Feasibility Study1 related to the East Bain Vein and the Rory Vein. The prefeasibility study was prepared by Dennis Bergen, PEng, an independent qualified person under National Instrument 43-101. Highlights of the prefeasibility study are as follows:

Ore currently outlined in the East Bain and Rory veins totals 44,000 tons of probable mineral reserves grading 0.49 ounce per ton, containing 21,360 ounces of gold.

The company would net $2.5-million in cash from the project (projected to take 12 months) after deducting all operating costs and capital expenditures.

The project would result in an annualized internal rate of return of 129 per cent.

Total cash costs (included all direct on-site operational and overhead costs) per ounce are estimated to be $256 (U.S.) per ounce and total production costs (includes amortization) are estimated to be $292 (U.S.), under the assumption that all capital costs of the project ($765,000) are amortized immediately.

The prefeasibility study is based on cut grades only (meaning all drill core assays used in reserve calculations over two ounces per ton were cut back to two ounces), assumes a gold price of $535 (Canadian), and does not include previously announced Rory and East Bain inferred mineral resources of 3,369 tons grading 0.96 ounce per ton (cut). A sum of $3.7-million is required to finance capital expenditures and operating cost to bring the project to positive cash flow.

However, there is no assurance that the specified amount of gold is available, can be economically mined and the Company can receive any cash return of the project.

During the year ended December 31, 2004, the Company’s expenditures have been financed through issuance of common shares. Equity financing raised, including flow-through shares, during the year was $961,268, compared to $1,949,690 raised in 2003. No gold production occurred during the period resulting in a net loss of $1,692,229 or $0.04 per share, a increase of over last year’s loss of $1,465,121, $0.04 per share loss.

General and administrative costs were $ 661,147 during 2004 compared to $ 991,710 for 2003. General and administrative expenses include office rent, legal and accounting fees, listing fees, shareholder communications and non-cash employee and director incentive stock option expense that is calculated based on Canadian generally accepted accounting principles. The Company’s assets totaled $3,374,820 at the end of 2004 compared to $3,970,972 at the end of 2003. The decrease in the book value of the company’s assets is mainly attributable to a decrease in cash generated from equity financing completed during the period.

General and administrative costs were $991,710 during 2003 compared to $813,229 for Fiscal 2002, an increase of $207,322. General and administrative expenses include office rent, legal and accounting fees, listing fees, shareholder communications and various other costs. The increase in administration costs is due largely to a $628,625 non-cash employee and director incentive stock option expense that is calculated based on generally accepted accounting principles. . The Company’s assets totaled $3,970,972 at the end of 2003 compared to $2,842,118 at the end of 2002. The increased book value of the company’s assets is mainly attributable to an increase in cash generated from equity financing completed during the period.

In 2004, 2003 and 2002 no gold mining operations were carried out. Revenues from the sale of gold concentrates during fiscal 1999 were approximately $256,424, as compared to approximately $487,000 during fiscal 1998. The decrease is due to limited mining activity, which includes bulk sample milling to keep the plant in operational condition.

No production costs were incurred for the last three fiscal years as no gold mining operations were carried out. Production costs were $124,581 during fiscal 1999 as compared to $487,033 during fiscal 1998. Although the Company contemplated in fiscal 1998 to increase the through put rates, due to low gold prices the Company did not under take extensive mining operations. To keep the plant in operational condition and to expand exploration activity, the Company worked only on the newly discovered extension of the Bear Vein with a small crew. Cash costs per ounce of gold sold were $337 (US$227) per ounce during fiscal 1998 as compared to $573 (US$417) in fiscal 1997. Cash costs include mining, milling maintenance and on-site general and administrative expenditures.

At December 31, 2004 the Company had current assets of $676,076 consisting of cash, receivables, flow-through share proceeds, and prepaid expenses, compared to $1,158,477 at the end of 2003. The decrease in current assets is attributable to depletion of cash through increased exploration expenditures, coupled with a decrease in financing activity. The decrease in financing activity is believed by management to be attributable mainly to poor market conditions for junior gold issuers that prevailed for much of 2004.

Current liabilities at December 31, 2004 were $961,905, compared to $522,420 for the end of 2003. The increase is primarily attributable to new bank indebtedness of $307,516 and an increase in accounts payable. The bank indebtedness represents an operating line of credit used by the Company to pay expenses that are not exploration expenses and therefore not payable from its flow-through share proceeds. The increase in accounts payable is attributable primarily to an increase in trade payables to exploration service providers.

Equity financing raised during 2004 was $961,268 (includes $720,000 in flow-through financing) compared to $1,949,690 (includes $1,050,000 in flow-through financing) raised during 2003. The decline in equity financing year over year can be attributed partly to poor equity market conditions during the period. Also, as mentioned above, the Company had engaged an underwriter to complete a $3,000,000 convertible debenture financing in 2004 that was not completed in part due to the sudden and unfortunate passing away of the lead investment advisor responsible for the financing.

At December 31, 2004, the Company had a working capital deficiency of $285,829 as compared to a surplus of $636,057 at December 31, 2003, a difference of ($921,886). The loss of surplus and increased deficiency is attributable to the failure of the above described convertible debenture offering, combined with the Company’s obligation to expend all funds raised pursuant to “flow-through” share offerings completed in 2003. Management is taking steps to cure this deficiency by seeking additional equity financing. As at June 16, 2005, the Company has no cash on hand. Until such time as additional equity financing can be raised, the Company is relying on advances from its directors and shareholders to provide working capital as needed.

In response to regulatory and industry changes, the Company changes its accounting policy from time to time to comply with applicable rules and guidelines. During the year, the Canadian Institute of Chartered Accountants (CICA), introduced changes to its Generally Accepted Accounting Principles (GAAP) that affect the Company, resulting in the following changes that materially affect Company’s audited financial statements for the year ended December 31, 2004:

Stock Based Compensation. Effective January 1, 2004, the fair value of stock options granted to the Company’s employees and all others are now required to be expensed against earnings. Previously, only the fair value of options granted to consultants were expensed. The Company has retroactively adopted this new stock compensation policy which has caused the net loss of the Company to increase by $8,025 and $15,343 in 2003 and 2002 respectively. The new policy had no effect on the 2004 net income.

Asset Retirement Obligations. Under Canadian GAAP, effective the Company’s fiscal 2004 period and going forward, the Company is required to examine whether or not any asset on the balance sheet might reasonably be expected to cost the Company expenses to retire such asset from the company’s books. One asset that bears such examination is the Company’s main resource property, the Table Mountain Property. Ongoing environmental reclamation may be required, leading to regular expenditures. Accordingly, the Company has estimated that approximately $50,000 per year in expenses will be required for a period of 10 years for a total of $500,000 commencing immediately, to retire this asset. The Net Present Value of these current and future expenditures is now reflected on the Company’s balance sheet.

Flow-Through Shares. In accordance with CICA Emerging Issue Committee No. 146 regarding the accounting of flow-through shares, as a result of the Company having sufficient temporary differences available to offset the renounced tax reduction, the Company has recognized $256,464 future income tax recovery related to the renouncement of tax reductions to shareholders.

In January 2003, the FASB issued FIN No. 46 (which was amended in December 2003 to become FIN No. 46R), “Consolidation of Variable Interest Entities, an Interpretation of ARB 51”. The primary objectives of FIN No. 46R are to provide guidance on the identification of entities for which control is achieved through means other than voting rights (variable interest entities or “VIEs”) and how to determine when and which business enterprise should consolidate the VIE. This new model for consolidation applied to an entity for which either: (1) the equity investors do not have a controlling financial interest; or (2) the equity investment at risk is insufficient to finance that entity’s activities without receiving additional subordinated financial support from other parties. In addition, FIN 46R requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. As amended in December 2003, the effective dates of FIN No. 46R for all non-small business issuers are as follows: (a) for interests in special-purpose entities: periods ended after December 15, 2003; (b) for all other VIEs, no later than the first reporting period ended after March 15, 2004.

The implementation of this new standard did not have a material effect on the Company’s financial statements.

In December 2004, FASB issued SFAS No. 153 to amend Opinion 29 by eliminating the exception for non-monetary exchanges of similar productive assets and replaces it with general exception for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange is defined to have commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange.

The implementation of the not yet adopted standard is not expected to have a material effect on the Company’s financial statements.

Our consolidated financial statements have been prepared in accordance with accounting principle generally accepted in Canada. Differences from United States accounting principles are disclosed in Note 13 in the Notes to the Consolidated Financial Statements in Item 17 of this Annual Report on Form 20F. Some accounting policies have a significant impact on the amount reported in these financial statements. A summary of those significant accounting policies can be found in the Summary of Significant Accounting Policies in our consolidated financial statements. Note that our preparation of this Annual Report on Form 20-F requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates. We believe as explained below that our most critical accounting policies cover the following areas: resource properties, long-term investments and stock-based compensation.

Our policy on resource properties determines the timing of our recognition of certain exploration costs. In addition, this policy determines whether acquisition, exploration and development costs are classified as expenses or capitalized. Management is required to use professional judgment in determining whether costs meet the criteria for immediate expense or capitalization.

Long-term investments, which consist primarily of investments in public companies, are recorded at cost less write-downs, when in management’s opinion a permanent impairment in value has occurred. Management is required to use professional judgement in determining whether long-term investments have suffered permanent impairments in value.

Effective January 1, 2004, the Company has retroactively adopted the new recommendations of the Canadian Institute of Chartered Accountant (“CICA”) Handbook Section 3870, “Stock-based compensation and other stock based payments”, which now requires companies to adopt the fair value based method for all stock-based awards granted on or after January 1, 2002. Previously the Company was only required to disclose the pro forma effect of stock options issued to employees and directors in the notes to the financial statements. The Company has retroactively applied this new accounting policy to prior years and restated the consolidated financial statements accordingly. The effect of the restatement was to increase the net loss for 2002 by $15,343 for options granted in 2002, to increase the net loss for 2003 by $8,025 for options granted in that year, and to increase the accumulated deficit as of December 31, 2003 by $23,368. Contributed surplus was restated for the corresponding effect of these restatements Item 6: Directors, Senior Management, and Employees.

The following list, as of December 31, 2003, provides the names of the Directors and the senior management of the Company. The Directors have served in their respective capacities since their election appointment and will serve until the next Annual General Meeting of Shareholders or until a successor is duly elected, unless the office is vacated in accordance with the Articles of the Company. All Directors are residents of Canada.

There are no trends known to management that are reasonably likely to have material effect on the company's net assets, revenue, or liquidity.

for Consolidated Pacific Bay Minerals Ltd. since September 2004; Project Manager - Materials Testing and Consulting, Inc. from June 2001 to December 15, 2004; Self-employed geological consultant in Argentina and the U.S. - October 1995 to June 2001.

All directors are elected and their term of office expires at our next annual general meeting.

During the year ended December 31, 2004, there were two (2) executive officers of the Company.

There have been and are no other arrangements or understandings between any two or more Directors or Executive Officers, pursuant to which he was or will be selected as a Director or Executive Officer.

Remuneration paid or payable to directors and officers of the Company in 2004 amounted to $167,000 (2003 - $171,650; 2002 -$184,000). As at December 31, 2004, $71,795 (2003 – $98,100) is included in accounts payable to one director for remuneration. During 2002 $45,500 (2004 and 2003 - $Nil) in consulting fees were settled through the issuance of 250,000 shares and warrants.

During 2004, the Company received $39,000 (2003 - $60,000; 2002 - $59,922) for rent and administrative services provided to companies with common directors. These amounts are recorded as a reduction of administration expenses.

measured at the exchange value which was the amount of consideration established

The Company does not have a long-term incentive plan for its directors or officers and, accordingly, no LTIP awards were made to either of David H. Brett or Guilford H. Brett in the most recently completed financial year.

Shareholders of the Company and the regulatory authorities have approved a Stock Option Plan through which shares are reserved from the Treasury of the Company for issuance to Directors and Key Employees of the Company pursuant to Incentive Stock Option Agreements to be entered into with them, all in accordance with the terms of the Stock Option Plan. Options will be granted in order to provide an optionee with a form of remuneration and an incentive to act in the best interests of the Company.

The following options and SARs were granted to the Named Executive Officer during the most recently completed financial year.

The following table sets out the aggregate options exercised by the Named Executive Officer during the most recently completed financial year and the aggregate financial year-end value of unexercised options:

AGGREGATED OPTION/ SAR EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR AND FINANCIAL YEAR-END OPTIONS/ SAR VALUES

The closing market price of the Company's common shares on December 31, 2004 was $0.16 per share. The exercise price of the options held by the Named Executive Officers is $0.36 per share as to 940,000 options and $0.37 per share as to 450,000 options.

Termination of Employment, Change in Responsibilities and Employment Contracts

The Company had an employment agreement dated January 1, 1988, as amended (the "Employment Agreement") with Guilford H. Brett that expires on January 1, 2004 and automatically renewing thereafter on an annual basis unless terminated by either of the parties in accordance with the provisions of the Agreement. Under the Employment Agreement Guilford Brett is to receive an annual salary of $90,000, subject to adjustment in accordance with changes in the Consumer Price Index for Canada, together with a car allowance of $600 per month.

Either the Company or Guilford Brett could terminate the Employment Agreement on 12 months' notice. In the event of any such termination by the Company, the Company shall, at the expiration of such 12 month period pay to Guilford Brett an amount equal to 12 months' remuneration at the then current rate of remuneration.

In the event of a change of control of the Company, Guilford Brett has the option, until the first anniversary of such change, to terminate the Employment Agreement on 30 days notice. If he elects to terminate the Employment Agreement, he is entitled to receive all money and benefits he would have received under the Employment Agreement until its next anniversary, together with 12 months' remuneration at the level of remuneration being paid to him at the date of termination. A change of control is deemed to occur:

at such time as an individual or group of individuals who appear to be acting in concert, other than Guilford Brett or a group to which he belongs, acquires 20% or more of the outstanding Common Shares of the Company; or

at such time as a majority of the Board of Directors of the Company is constituted by persons other than persons who are, as at January 1, 1988, members of the Board of Directors of the Company.

On November 19, 2004, Guilford H. Brett voluntarily stepped down as CEO. There was no change of control in the Company. The Company is presently negotiating appropriate severance compensation with Mr. Brett.

During the most recently completed financial year the directors of the Company did not receive fees for attendance of board meetings or other cash compensation in their capacity as directors. The Directors may be reimbursed for actual expenses reasonably incurred in connection with the performance of their duties as directors. Directors are also eligible to receive incentive stock options to purchase common shares of the Company.

The following options and SARs were granted to directors of the Company during the most recently completed financial year.

The closing market price of the Company's common shares on December 31, 2004 was $0.16 per share. The exercise price of the options held by non-executive directors is $0.36 per share as to 40,000 options and $0.37 per share as to 20,000 options.

The following table sets out information with respect to options and SARs exercised by non-executive directors during the most recently completed financial year and outstanding to the non-executive directors at the end of the most recently completed financial year.

The Company is not party to Management Contracts with anyone other than Directors or Named Executive Officers of the Company.

None of the Directors or Senior Officers of the Company have been indebted to the Company or its subsidiary during the financial year ended December 31, 2004.

The Company does not have a long-term incentive plan for its Directors or Officers.

As at June 16, 2005, David H. Brett owns 75,000 shares and has a 170,000 share option at $0.36 and 100,000 share option at $0.37. Guilford H. Brett owns 265,052 shares and has a 400,000 share option at $0.36 and a 250,000 share option at $0.37. Luard Manning has a 40,000 share option at $0.36 and a 20,000 share option at $0.36. Leanora Homrig has a 170,000 share option at $0.36 and a 100,000 share option at $0.37.

The Company has authorized 100,000,000 common shares and 5,000,000 preference shares without par value. As at December 31 2004, 43,331,712 common shares were issued and outstanding.

The Company’s securities are recorded on the books of its transfer agent in registered form. The majority of such shares are, however, registered in the name of intermediaries such as brokerage houses and clearinghouses on behalf of their respective clients. The Company does not have knowledge of the beneficial owners thereof. To the best of its knowledge, the Company is not directly nor indirectly owned or controlled by another corporation(s) or by a foreign government.

To the knowledge of the directors and senior officers of the company, no persons or companies beneficially own, directly or indirectly, equity shares carrying more than 5% of the voting rights attached to all of the shares of the company.

There are no voting agreements or similar arrangements (formal, informal, written, or oral) known to management to exist.

The Company was incorporated under the name Glen Copper Mines Limited pursuant to the laws of the Province of British Columbia by registration of its Memorandum and Articles in 1965. It changed its name to Cusac Industries Ltd. in 1974 and then to Cusac Gold Mines Ltd. in 1995. The Company’s Common Shares are traded on the Toronto Stock Exchange under symbol CQC and also on NASDAQ OTC BB under symbol CUSIF.

Pacific Corporate Trust is the Company’s Transfer Agent in Vancouver located at Pacific Corporate Trust Company, 10^th Floor - 625 Howe Street, Vancouver, BC V6C 3B8 and in Toronto, located at Pacific Corporate Trust Company, Box 56,1925 Commerce Court West, Toronto, Ontario M5L 1B9.

The Trust company records indicate as of December 31 2004, 22,775,118 shares registered in the names of 227 Canadian individuals, companies and brokerage houses. This represents registered Canadian shareholders holding 14.8% of the issued shares.

There are 11 shareholders in foreign countries other than the United States who hold 11,365 shares, representing less than 0.03% of issued shares.

There are 1,296 shareholders of record in the United States holding 22,775,118 shares, representing 84.49% of the issued shares. The Company has no knowledge of the number of bearer (street form) shares held by other United States residents. Similarly, the Company has no knowledge of the number of Canadian and other shareholders who hold bearer shares, or whose shares are in the combined number held by brokerage firms.

The Company was accepted for trading on NASDAQ in July 1980 under the symbol CUSIF. On August 20 1998, the NASDAQ Stock Market, Inc. chose to delist the Company's securities from trading on the NASDAQ Stock Market for the sole reason that the price for the Company’s common stock had not maintained a bid price of US$1.00in keeping with a recently implemented new rule. At the time of the determination, Cusac was and remains in complete compliance with all other NASDAQ rules. The Company’s common stock continues to trade on the OTCBB. In addition, Cusac remains a reporting company under the United States Securities and Exchange Commission rules and its common stock continues to trade on the Toronto Stock Exchange.

Loans payable to directors and related parties bearing no interest, security or fixed terms of repayment amounted to $11,925 (2003 - $Nil).

Remuneration paid or payable to the officers and directors in year 2004 amounted to $167,000 (2003 - $171,650 ; 2002 - $184,000 ). As at December 31, 2004, $71,795 (2003 - $98,100 ) is included in accounts payable to one director for remuneration. During 2002 $45,000 (2004 and 2003 $Nil) in consulting fees were settled through the issuance of shares and warrants.

During the year 2004, the Company received $39,000 (2003 - $60,000 2002 - $59,922) for rent and administrative services provided to companies with common directors.

Please refer to the Consolidated Audited Financial Statements in the Appendix, which includes Auditor’s report, Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Cash Flows. There are no legal proceedings currently pending.

No significant changes occurred since the date of the annual financial statements included in the document.

The shares of the Company are traded on the Toronto Stock Exchange under the trading symbol CQC and also on the OTC Bulletin Board under the symbol CUSIF.

The Company has not distributed dividends on its common stock in the past and doses not expect to distribute dividends in the near future.

The Company is not intending at this time to do any offering of its shares, hence Item 9 is not applicable.

The high and low sales prices of the common share price of the Company for the most recent six months and five fiscal years on the Toronto Stock Exchange (“CQC”) are:

The high and low sales prices for the recent six months and five fiscal years in US Dollars on the OTC:BB (“CUSIF”) are:

The Company was incorporated under the name Glen Copper Mines Limited pursuant to the laws of the Province of British Columbia by registration of its Memorandum and Articles in 1965. It changed its name to Cusac Industries Ltd. in 1974 and then to Cusac Gold Mines Ltd. in 1995. The Company’s Common Shares are traded on the Toronto Stock Exchange under symbol CQC and on NASDAQ OTC BB under symbol CUSIF.

The Company has authorized 100,000,000 common shares and 5,000,000 preference shares without par value. As at December 31 2003, 39,400,981 common shares were issued and outstanding.

The Company has a Stock Option Plan (“the Plan”) for directors, officers and employees. There are restrictions on the number of common shares to be reserved for individuals and insiders under the Plan. Options granted must be exercised no later than ten years after the date of the grant or such lesser periods as regulations require. The maximum number of Common Shares to be issued under the Plan is 5,000,000 provided that the Company can not have at any given time more than 20% of its issued shares under option. The number of shares reserved for issuance at any one time to any one person shall not exceed 5% of the outstanding shares issued.

The following table summarizes the number of fully-exercisable stock option transactions and the weighted average exercise prices thereof:

The weighted average fair value of options granted during 2004 was $0.16 (2003 - $0.27, 2002 - $0.15) based on the Black-Scholes option pricing model using weighted average assumptions, as described in Note 8 of the audited annual financial statements.

A summary of the common share options exercisable and outstanding at December 31, 2004 is as follows:

During the year ended December 31, 2002, 250,000 shares (valued at $45,500 based upon the trading price of the common shares on the date of the agreement) and 250,000 fully exercisable warrants with exercise prices of $0.17 and $0.19 in the first year and $0.20 in the second year were issued as settlement for amounts due for consulting services owed to directors totaling $45,500 (Note 10).

Canada has no system of exchange controls. There are no exchange restrictions on borrowings from foreign countries or on the remittance of dividends, interest, royalties and similar payments, management fees, loan repayments, settlement of trade debts, or the repatriation of capital. The Investment Canada Act (the “Act”) enacted on June 20, 1985, as amended by the Canada-United States Free Trade Agreement Implementation Act (Canada), requires the prior notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a “non-Canadian” of “control” of a “Canadian business,” all as defined in the Act. For the purposes of the Act, “control” can be acquired through the acquisition of all or substantially all of the assets used in the Canadian business, or the direct or indirect acquisition of interests in an entity that carries on a Canadian business or which controls the entity, which carries on the Canadian business. Under the Act, control of a corporation is deemed to be acquired through the acquisition of a majority of the voting shares of a corporation, and is presumed to be acquired where more than one-third, but less than a majority, of the voting shares of a corporation are acquired, unless it can be established that the corporation is not controlled in fact through the ownership of voting shares. Other rules apply with respect to the acquisition of non-corporate entities.

To the best of the registrant's knowledge, there are no governmental laws, decrees or regulations in Canada relating to restriction on the import/export of capital, or which affect the remittance of interest, dividends, or other payments to non-resident holders of the Company’s common stock. Any such remittance to United States' residents, however, is subject to a 15% withholding tax pursuant to Articles X, Xl, and XII of the reciprocal Canada-United States Income Tax Convention. Except for the Investment Canada Act, there are no limitations under the laws of Canada, the Province of British Columbia, or in the Charter or any other constituent documents of the registrant on the rights of foreigners to hold and/or vote the shares of the registrant. The provisions of the Investment Canada Act provide legislative guidelines for screening and evaluating new foreign investment in Canada. The purpose of the legislation is to:

encourage investment in Canada that contributes to economic growth and employment;

provide for the review of significant investments by Non-Canadians to ensure benefits to Canada

direct acquisition of control of an existing Canadian business with assets in excess of five million dollars;

indirect acquisition of an existing Canadian business having assets of fifty million dollars or more;

indirect acquisition of control of an existing Canadian business with assets of between five million and fifty million dollars where Canadian assets constitute over 50% of the total assets involved in the worldwide transaction; and

investments in prescribed areas related to cultural heritage or national identity where the discretionary authority to review is exercised.

The foregoing discussion of Canadian taxation and United States taxation is of a general and summary nature only and is not intended to be, nor should it be considered to be, legal or tax advice to any particular shareholder. Accordingly, prospective investors should consult their own tax advisors as to the tax consequences of receiving dividends from the company or disposing of their Common Stock.

Our Restated Articles of Incorporation are registered with Industry Canada under Certificate No. 66957. A copy of the Restated Articles of Incorporation has been previously filed with the Corporation’s Form F-1.

Exhibits attached to this Form 20-F are also available for review at our head office located at 911 – 470 Granville Street, Vancouver, British Columbia V6C 1V5 or you may request them by calling our office at 604-682-2421. Copies of our financial statements and other continuous disclosure documents required under the British Columbia Securities Act are available for viewing on the internet at www.SEDAR.com. Copies of our financial statements and other continuous disclosure documents are also available for viewing at www.sec.gov.

The following discussion summarizes the principal Canadian federal income tax considerations generally applicable to a person (an “Investor”) who acquires one or more Common Shares of the Corporation, and who at all material times for the purposes of the Income Tax Act (Canada) (the “Canadian Act”) deals at arm’s length with the Corporation, holds all Common Shares solely as capital property, is a non-resident of Canada, and does not, and is not deemed to, use or hold any Common Shares in or in the course of carrying on business in Canada. It is assumed that the Common Shares will at all material time be listed on a stock exchange that is prescribed for the purposes of the Canadian Act.

This summary is based on the current provisions of the Canadian Act, including the regulations thereunder, and the Canada-United States Income Tax Convention (1980) (the “Treaty”) as amended. This summary takes into account all specific proposals to amend the Canadian Act and the regulations thereunder publicly announced by the government of Canada to the date hereof and the Corporation’s understanding of the current published administrative and assessing practices of the Canada Revenue Agency (“CRA”). It is assumed that all such amendments will be enacted substantially as currently proposed, and that there will be no other material change to any such law or practice, although no assurances can be given in these respects. This summary does not take into account any provincial, territorial or foreign income tax law or treaty other than the Treaty.

This summary is not, and is not to be construed as, tax advice to any particular Investor. Each prospective and current Investor is urged to obtain independent advice as to the Canadian income tax consequences of an investment in Common Shares applicable to the Investor’s particular circumstances.

An Investor generally will not be subject to tax pursuant to the Canadian Act on any capital gain realized by the Investor on a disposition of a Common Share unless the Common Share is “taxable Canadian property”, and is not “treaty-protected property”, of the Investor for purposes of the Canadian Act. A Common Share that is disposed of by an Investor will not constitute taxable Canadian property of the Investor provided that neither the Investor, nor one or more persons with whom the Investor did not deal at arm’s length, alone or together at any time in the 60 months immediately preceding the disposition owned, or owned any right to acquire, 25% or more of the issued shares of any class of the capital stock of the Corporation. The Common Share will be a treaty-protected property of the Investor if, under the terms of an applicable bilateral tax treaty, any gain realized by the Investor on disposition of the share is exempt from Canadian income tax under Part I of the Canadian Act. For example, pursuant to the Treaty, a Common Share of the Corporation held by an Investor who is a resident of the United States for the purposes of the Treaty will generally constitute treaty-protected property, provided that the value of the Common Share is not derived principally from real property (including resource properties) situated in Canada and that the Investor does not have, and has not had within the 12-month period, preceding the disposition, a “permanent establishment”, or a “fixed base” available to the Investor in Canada.

An Investor whose Common Shares constitute taxable Canadian property and are not treaty-protected property, and who disposes of one or more Common Shares in a taxation year, will realize a capital gain (capital loss) equal to the amount by which the proceeds of disposition therefor exceed (are exceeded by) the adjusted cost base thereof to the Investor and the Investor’s reasonable costs of disposition. The Investor will be required to include one half of any such capital gain (taxable capital gain) in the Investor’s taxable income earned in Canada for the taxation year and to pay Canadian income tax accordingly. The Investor will be entitled to deduct one half of any such capital loss (allowable capital loss) against taxable capital gains included in the Investor’s taxable income earned in Canada in the taxation year and, to the extent not so deductible, against taxable capital gains included in the Investor’s taxable income earned in Canada in any of the three preceding taxation years or in any subsequent taxation year.

Each Investor will be required to pay Canadian withholding tax on the amount of any dividend, including any stock dividend, paid or credited or deemed to be paid or credited by the Corporation to the Investor on a Common Share. The rate of withholding tax is 25% of the gross amount of the dividend, or such lesser rate as may be available under an applicable income tax treaty. Pursuant to the Treaty, the rate of withholding tax applicable to a dividend paid on a Common Share to an Investor who is a resident of the United States for the purposes of the Treaty is 5% if the Investor is a company that owns at least 10% of the voting stock of the Corporation, and 15% in any other case, of the gross amount of the dividend. The Corporation will be required to withhold any such tax from the dividend, and remit the tax directly to CRA for the account of the Investor.

The following is a general discussion of all material United States federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of common shares of the Corporation. This discussion does not address individual consequences to persons subject to special provisions of federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences. (See “Canadian Federal Income Tax Considerations above”).

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. This discussion does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time. This discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advise to any holder or prospective holder of common shares of the Corporation and no opinion or representation with respect to the United States federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares of the Corporation are urged to consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Corporation.

As used herein, a “U.S. Holder” means a holder of common shares of the Corporation who is a citizen or individual resident of the United States, a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof or a trust whose income is taxable in the United States irrespective of source. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific provisions of federal income tax law, such as tax-exempt organizations, qualified retirement plans, individual retirement accounts and other tax-deferred accounts, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, nonresident alien individuals, persons or entities that have a “functional currency” other than the U.S. dollar, shareholders who hold common shares as part of a straddle, hedging or a conversion transaction, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S. Holders who own common shares as capital assets. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares.

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Corporation are required to include in gross income for United States federal income tax purposes the gross amount of such distributions equal to the U.S. dollar value of such dividends on the date of receipt (based on the exchange rate on such date) to the extent that the Corporation has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder’s federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s federal taxable income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below). To the extent that distributions exceed current or accumulated earnings and profits of the Corporation, they will be treated first as a return of capital up to the U.S. Holder’s adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.

In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain, to the extent that there are no expenses associated with the transaction that meet the requirement for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.

Dividends paid on the common shares of the Corporation will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Corporation (unless the Corporation qualifies as a “foreign personal holding company” or a “passive foreign investment company,” as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Corporation. The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.

Under current temporary Treasury Regulations, dividends paid on the Corporation’s common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends paid, and the proceeds of a sale of the Corporation’s common shares, in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 31% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Corporation may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign sources income bears to his or its worldwide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of income such as “passive income,” “high withholding tax interest,” “financial services income,” “shipping income,” and certain other classifications of income. Dividends distributed by the Corporation will generally constitute “passive income” or, in the case of certain U.S. Holders, “financial services income” for these purposes. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific, and U.S. Holders of common shares of the Corporation should consult their own tax advisors regarding their individual circumstances.

A U.S. Holder will recognize gain or loss upon the sale of common shares of the Corporation equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholder’s tax basis in the common shares of the Corporation. Preferential tax rates apply to long-term capital gains of U.S. Holders who are individuals, estates or trusts. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder, which will be long-term capital gain or loss if the common shares of the Corporation are held for more than one year. Deductions for net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

In the following circumstances, the above sections of this discussion may not describe the United States federal income tax consequences resulting from the holding and disposition of common shares:

If 50% or more of the combined voting power or total value of the Corporation’s outstanding shares are held, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and the Corporation is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Corporation may be treated as a “foreign investment company” as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gain.

If more than 50% of the voting power of all classes of shares or the total value of the shares of the Corporation is owned, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom own 10% or more of the total combined voting power of all classes of shares of the Corporation (“United States shareholder”), the Corporation could be treated as a “controlled foreign corporation” under Subpart F of the Code. This classification would effect many complex results one of which is the inclusion of certain income of a CFC which is subject to current U.S. tax. The United States generally taxes a United States shareholder of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such U.S. shareholders are generally treated as having received a current distribution out of the CFC’s Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFC’s earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Corporation who is or was a United States shareholder at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Corporation attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to United States shareholders of the CFC. This rule generally will be effective for taxable years of United States shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States shareholders. Special rules apply to United States shareholders who are subject to the special taxation rules under Section 1291 discussed above with respect to a PFIC. Because of the complexity of Subpart F, and because it is not clear that Subpart F would apply to U.S. Holders of common shares of the Corporation, a more detailed review of these rules is outside of the scope of this discussion.

Market risk represents the risk of loss that may impact the financial position, results of operations, or cash flows of the Company due to adverse changes in financial market prices, including interest rate risk, foreign currency exchange rate risk, commodity price risk, and other relevant market or price risks.

In 2004, the Company arranged a $57,000 letter of credit facility and a $300,000 line of credit with a bank bearing interest at prime (3.75% at December 31, 2004) per annum which is collateralized by the Company’s cash and cash equivalents and flow through share proceeds.

At present the Company conducts substantially all of its activities in Canada with the majority of transactions denominated in Canadian dollars. The Company’s management believes that fluctuations in interest rates and currency exchange rates in the near term will not materially affect the Company’s consolidated operating results, financial position or cash flows as the Company has limited risks related to interest rate and currency exchange rate fluctuations.

As the Company is in a care and maintenance stage, it presently has no activities related to derivative financial instruments, derivative commodity instruments or hedging instruments.

There are no material modifications to instruments defining the rights of holders of any class of registered securities and there is no general or specific effect on the Company’s securities.

Based on their evaluation as of as at December 31, 2004 of this Annual Report on Form 20-F, the Company’s Chief Executive Officer and Officer acting in the capacity of the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-14(c) and 15-d14(c) under the Securities Exchange Act of 1934 (the “Act”) ) are effective to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Act is recorded, processed, summarized and communicated to them as appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of the recent evaluation performed by the Company’s Chief Executive Officer and Officer acting in the capacity of the Chief Financial Officer including any corrective actions with regard to significant deficiencies and material weaknesses.

The Registrant’s Board of Directors has determined that it does not have an independent audit committee financial expert serving on its audit committee. The Company plans to retain a financial expert to serve on the audit committee upon commencement of commercial production. Management believes that current board members have sufficient financial expertise to deal with operations at their current small scale.

The Registrant has not adopted a code of ethics that applies to the Chief Executive Officer and the Chief Financial Officer, as well as to all other staff. The Company believes that the CEO and CFO operate according to an acceptable but as yet undocumented code of ethics. The Company plans to codify ethical guidelines for its senior officers in the near future.

Audit fees were for professional services rendered by BDO for the audit of the Registrant’s annual financial statements and services provided in connection with statutory and regulatory filing or engagements.

Tax fees were for tax compliance, tax advice and tax planning professional services. These services consisted of tax compliance including the review of tax returns, and tax planning and advisory services relating to common forms of domestic and international taxation (i.e. income tax, capital tax, goods and services tax, payroll tax and value added tax).

It is within the mandate of the Registrant’s Audit Committee to approve all audit and non-audit related fees. The audit Committee has pre-approved specifically identified non-audit related services, including tax compliance, review of tax returns, documentation of processes and controls as submitted to the Audit Committee from time to time. The auditors also present the estimate for the annual audit related services the Committee from time to time. The auditors also present the estimate for the annual audit related services to the Committee for approval prior to undertaking the annual audit of the financial statements.

See the Audited Financial Statements listed in Item 19 Exhibits hereof and filed as part of this Annual Report. The Company’s financial statements are stated in Canadian Dollars and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in material respects for the periods presented with United States GAAP, except as discussed in the notes to the financial statements. The FINANCIAL STATEMENTS contain an Independent Auditors’ Report, Consolidated Balance Sheet, Consolidated Statements of Operations & Deficit, Consolidated Statements of Cash Flows, Summary of Significant Accounting Policies and Notes to Financial Statements.

The financial statements and notes required by Item 17 are attached hereto and found immediately following the text of this Annual Report in an exhibit I.

The following financial statements are filed as part of this annual report on Form 20-F:

Exhibit 12.1 – Certification pursuant to Rule 13a-14(A)/15d-14(A) of the Chief Executive Officer.

Exhibit 12.2 – Certification pursuant to Rule 13a-14(A)/15d-14(A) of the Officer Acting in the Capacity of the Chief Financial Officer.

Exhibit 13.1 - Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 13.2 - Certification of Officer Acting in the Capacity of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 15.1 - Technical Report on Rory & East Bain Veins – Table Mountain Gold Property, Liard Mining District, British Columbia, Canada.

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing of Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

FORM 51-102F1

ANNUAL MANAGEMENT DISCUSSOIN AND ANALYSIS

FOR

CUSAC GOLD MINES LTD.

Cusac Gold Mines Ltd. (the “Company”) is engaged in the business of exploring for, developing and producing gold. The Company’s primary asset is the Table Mountain Property (“Table Mountain”), a 48 square mile package of mineral claims located in north central British Columbia, Canada. Table Mountain is a former gold producer with significant mine infrastructure, including a 300-ton per day ore processing facility, private roadways, underground working, shops, buildings, and various regulatory permits required for a producing mine. Table Mountain also hosts numerous gold exploration targets outside the immediate mine area, including part ownership the Taurus Project, a large scale, bulk tonnage gold prospect. Full-time operations at Table Mountain were suspended at the end of 1997 due to reduced gold prices and ore grades. The facility was at that time placed into care and maintenance mode.

During the last few years, the price of gold has surged and renewed investor interest in and financing of the Company has resulted. Based on this renewed interest, and favourable exploration results obtained in this and prior periods, management is seeking the financing required to place its property back into production and fund ongoing exploration at Table Mountain. Although management is optimistic about raising the required capital for production and ongoing exploration, investors should be advised that there is no guarantee that such financing will be obtained.

During the year, the Company continued to explore the Table Mountain Property, primarily through diamond drilling. Exploration expenditures for the year totalled $1,120,152 compared with $446,176 in 2003. The significant increase of 151% is attributable to an increase in financing activity at the end of 2003 that made funds available for use in 2004.

Detailed technical reports relating to the Company’s Table Mountain Property are available at no charge to the public at www.sedar.com, the web site for Canada’s securities regulatory filings. Investors are also invited to visit the Company’s web site (www.cusac.com) for additional information, including recent press releases.

Investors should be cautioned that the Company’s business is subject to the considerable risks associated with the mining industry in general, such as fluctuating metal prices, environmental risks, high capital costs, and other risks. Investors are invited to investigate other risk factors relating to the Company’s business as disclosed in the Company’s Form 20F annual

disclosure document filled with the United States Securities and Exchange Commission and available for viewing by the public at www.sec.gov/edgar.

SELECTED ANNUAL FINANCIAL INFORMATION

	Revenues		Ordinary Loss (per share)			Total Loss (per share)		Total Assets		Long Term Debt		Dividends
2004		Nil		1,823,550(.04	)		1,948,693(.04)*		3,374,820		Nil		Nil
2003		Nil		1,479,989 (.04	)		1,465,121 (.04)**		3,970,972		Nil		Nil
2002		Nil		1,155,963 (.04	)		1,192,84796 (.04)***		2,842,118		Nil		Nil

* Includes $135,310 investment write-down and $10,167 interest gain.

**Includes $ 14,868 in interest income and equipment sale gains.

***Includes $35,000 in investment write-downs.

The above summary reflects the current non-producing status of the Company. Losses are attributable to ongoing exploration at Table Mountain and administration costs. The increase in losses in 2004 is attributable to increased exploration expenditures. The decrease in assets in 2004 as compared with 2003 is primarily attributable to a decrease in the Company’s cash position. The Company was generally less successful in raising funds in 2004 as compared to 2003, partly due to unfavourable market conditions for gold equities and partly due to a large financing ($3,000,000) that absorbed significant management time and attention but did not complete in part due to the untimely passing away of the lead investment advisor in charge of the offering.

SUMMARY OF QUARTERLY RESULTS

Selected consolidated financial information for the year ended December 31, 2004 and each of the last seven quarters of fiscal 2003 (unaudited):

	^4th Qtr		3^rd Qtr		2^nd Qtr		1^st Qtr		4^th Qtr		3^rd Qtr		2^nd Qtr		1^st Qtr
3 Mo Ended	31/12/04		30/09/04		30/06/04		31/03/04		31/12/03		30/09/03		30/06/03		31/03/03
Revenue		-		-		-		-		-		-		-		-
Net Loss		202,119		689,355		551,982		234,033		524,212		602,699		148,022		153,954
Loss/share		.01		.02		.004		.006		.013		.02		.004		.005

The above quarterly results reflect generally increasing mineral exploration and financing activities. The fourth quarter of 2003 shows relatively higher losses than other periods during the year due substantially to the inclusion of stock option expenses incurred during the period. The fourth quarter of 2004 however shows a reduced loss compared to earlier quarters in the year as exploration activity was reduced, insignificant stock option expense was added to the period because of the lack of new stock options granted during the period, and due to a change in accounting policy, as explained below,

$256,464 in future income tax recoveries were recorded related to the Company’s flow-through exploration funding in 2004.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2004 the Company had current assets of $676,076consisting of cash, receivables, flow-through share proceeds, and prepaid expenses, compared to $1,158,477at the end of 2003. The decrease in current assets is attributable to depletion of cash through increased exploration expenditures, coupled with a decrease in financing activity. The decrease in financing activity is believed by management to be attributable mainly to poor market conditions for junior gold issuers that prevailed for much of 2004.

Current liabilities at December 31, 2004 were $961,905, compared to $522,420for the end of 2003. The increase is primarily attributable to new bank indebtedness of $307,516 and an increase in accounts payable. The bank indebtedness represents an operating line of credit used by the Company to pay expenses that are not exploration expenses and therefore not payable from its flow-through share proceeds. The increase in accounts payable is attributable primarily to an increase in trade payables to exploration service providers.

Equity financing raised during 2004 was $961,268 (includes $720,000 in flow-through financing) compared to $2,069,690 (includes $1,050,000 in flow-through financing) raised during 2003. The decline in equity financing year over year can be attributed partly to poor equity market conditions during the period. Also, as mentioned above, the Company had engaged an underwriter to complete a $3,000,000 convertible debenture financing in 2004 that was not completed in part due to the sudden and unfortunate passing away of the lead investment advisor responsible for the financing.

SIGNIFICANT CHANGES TO ACCOUNTING POLICY DURING THE YEAR

In response to regulatory and industry changes, the Company changes its accounting policy from time to time to comply with applicable rules and

guidelines. During the year, the Canadian Institute of Chartered Accountants (CICA), introduced changes to its Generally Accepted Accounting Principals (GAAP) that affect the Company, resulting in the following changes that materially affect Company’s audited financial statements for the year ended December 31, 2004:

	1.	Stock Based Compensation. Effective January 1, 2004, the fair value of stock options granted to the Company’s employees and all others are now required to be expensed against earnings. Previously, only the fair value of options granted to consultants were expensed. The Company has retroactively adopted this new stock compensation policy which has caused the net loss of the Company to increase by $8,025 and $15,343 in 2003 and 2002 respectively. The new policy had no effect on the 2004 net income.

	2.	Asset Retirement Obligations. Under GAAP, effective the Company’s fiscal 2004 period and going forward, the Company is required to examine whether or not any asset on the balance sheet might reasonably be expected to cost the Company expenses to retire such asset from the company’s books. One asset that bears such examination is the Company’s main resource property, the Table Mountain Property. Ongoing environmental reclamation is required, leading to regular expenditures. Upon complete mine closure, certain additional costs would be incurred. Accordingly, the Company has estimated that approximately $50,000 per year in expenses will be required for a period of 10 years to retire this asset. The Net Present Value of these current and future expenditures is now reflected on the Company’s balance sheet.

	3.	Flow-Through Shares. In accordance with CICA Emerging Issue Committee No. 146 regarding the accounting of flow-through shares, as a result of the Company having sufficient temporary differences available to offset the renounced tax reduction, the Company has recognized $252,464 future income tax recovery related to the renouncement of tax reductions to shareholders.

INVESTOR RELATIONS

Investor relations activity during the year consisted of routine shareholder communications.

CERTIFICATION

I, David H. Brett, certify that:

I have reviewed this annual report on Form 20-F of Cusac Gold Mines Ltd. (the "Company");

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 12, 2005

"David H. Brett"
David H. Brett

President and

Chief Executive Officer

CERTIFICATION

I, Leanora B. Homrig, certify that:

I have reviewed this annual report on Form 20-F of Cusac Gold Mines Ltd. (the "Company");

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 12, 2005

"Leanora B. Homrig"
Leanora B. Homrig

Secretary and

Chief Financial Officer

CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David H Brett, President and Chief Executive Officer of Cusac Gold Mines Ltd. (the "Company"), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i)

the Annual Report on Form 20-F of the Company for the fiscal year ended December 31, 2004 (the "Annual Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii)

the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:

"David H. Brett"

Name:

David H. Brett

Title:

Chief Executive Officer

Date:

July 12 2005

CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Leanora B. Homrig, Secretary and Chief Financial Officer of Cusac Gold Mines Ltd. (the "Company"), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i)

(ii)

the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:

"Leanora B. Homrig"

Name:

Leanora B. Homrig

Title:

Chief Executive Officer

Date:

July 12 2005

TECHNICAL REPORT

RORY & EAST BAIN VEINS

TABLE MOUNTAIN GOLD PROPERTY

LIARD MINING DISTRICT

BRITISH COLUMBIA, CANADA

Prepared for

Cusac Gold Mines Ltd.

March 22, 2005

R. Dennis Bergen, P. Eng. (APEGBC)

Lasqueti Island, B.C. V0R 2J05 Canada

Tel:

(250) 333-8529

Fax:

(250) 333-8529

dbergen1@telus.net

Technical Report on Rory & East Bain Veins - Table Mountain Gold Property

Liard Mining District, British Columbia, Canada

Cusac Gold Mines Ltd.

R. Dennis Bergen, P.Eng. 05/07/2005

TABLE OF CONTENTS

Page

1.0	SUMMARY	7
2.0	INTRODUCTION AND TERMS OF REFERENCE	8
3.0	DISCLAIMER	9
4.0	PROPERTY DESCRIPTION AND LOCATION	10
5.0	ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY	15
6.0	HISTORY	16
6.1	Chronology	16
6.2	Production	17
7.0.	GEOLOGICAL SETTING	18
7.1	Regional Geology	18
7.2	Camp Geology	19
8.0	DEPOSIT TYPES AND MINERALIZATION	22
8.1	Mineralization Types	22
8.2	Alteration Types	23
8.3	Vein Systems, Deposit Model, and Mineralization Controls	23
9.0	EXPLORATION	25
9.1	Rory Vein Exploration	25
9.2	East Bain Exploration	25
10.0	DRILLING	25
10.1	Rory Vein Drilling	25
10.2	East Bain Vein drilling	34
11.0	SAMPLING METHOD AND APPROACH	35
11.1	Rory Vein Sampling	35
11.2	East Bain Vein sampling	36
12.0	SAMPLE PREPARATION, ANALYSES, AND SECURITY	37
12.1	Rory Vein	37
12.2	East Bain Vein	37
13.0	DATA VERIFICATION AND VALIDATION	38

13.1	Rory Vein Data Verification and validation			38
13.1.1	Data Transcription			38
13.1.2	Assay QA-QC			38
13.1.3		Standards and Duplicates Performance	39
13.1.4		Blank Sample Performance	43
13.2		East Bain Vein data Verification and Validation	43
14.0		ADJACENT PROPERTIES	43
15.0		MINERAL PROCESSING AND METALLURGICAL TESTING	44
15.1		Metallurgical Testing	44
15.2		Past Mill Performance	44
15.2.1		Recovery	44
15.2.2		Throughput	45
15.3		Projected Metallurgical Performance	46
15.4		Processing	46
15.4.1		Mill Flowsheet	46
15.4.2		Plant Restart and Modifications	46
15.5		Assay Laboratory	47
15.6		Tailings Storage Facility	49
15.6.1		Facility Description	49
15.6.2		Remaining Tailings Capacity	49
15.6.3		Items to be addressed	50
16.0		MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES	51
16.1		Rory Vein Mineral Resource Estimate	51
16.2		Rory Vein Mineral Reserve	56
16.2.1		Cut off grade	56
16.2.2		Mineral Reserve Estimates	56
16.2.3		Rory Vein Mineral Reserves	57
16.3		East Bain Vein Mineral Resource	58
16.3.1		Historical Background	58
16.3.2		Mineral Resource Estimate	60

16.4	East Bain Vein Mineral Reserve		64
17.	0 ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES		66
17.1	Production Plans		66
17.2	Mining Operations		66
17.2.1	Rory Vein Mining		66
17.2.2	East Bain Mining		70
17.2.3	Dilution		71
17.2.4	Manpower		71
17.3	Recoverability		73
17.3.1	Projected Metallurgical Performance		73
17.4	Markets		74
17.5	Contracts		74
17.6	Environmental Considerations		75
17.6.1	Permit M-127		75
17.6.2	Air Emissions and Waste Management Permits	76
17.6.3	Metal Mine Effluent Regulations (MMER)	76
17.6.4	ARD/ Metal Leaching		77
17.6.5	Closure and Reclamation		77
17.6.6	Other Environmental Issues		77
17.7	Tax		78
17.8	Capital and Operating Cost estimates		78
17.9.	Economic analysis		80
17.10	Payback		81
17.11	Mine Life		81
18.0.	INTERPRETATION AND CONCLUSIONS		81
19.0	RECOMMENDATIONS		83
20.0..	REFERENCES		83
21.0	STATEMENTS OF QUALIFICATIONS		89

LIST OF FIGURES

Table Mountain Gold Property - Provincial Location Map

Table Mountain Gold Property - Claim Location Map

Rory Vein Area - Claim Location Map

East Bain Vein Area - Claim Location Map

Table Mountain Gold Property - General Geology

Table Mountain Gold Property - Schematic Longitudinal Section

Rory Vein - Three Dimensional View of the 1210 and 1140 Levels of the Main Mine

Rory Vein – Plan View of the 1210 and 1140 Levels of the Main Mine

Rory Vein – Plan View of Surface Drill Hole Locations

10.

Rory Vein – 170 N Cross Section

11.

Rory Vein – 1205 Elevation Plan

12.

Rory Vein – 1170 Elevation Plan

13.

Rory Vein – 1140 Elevation Plan

14.

Bain Vein Drill Hole Locations

15.

Rory Vein - Gold Values of CRM's used with Screen Metallics Assays

16.

Rory Vein - Comparison of Screen Metallics Assays versus Routine Assays (no trim)

17.

Rory Vein - Comparison of Screen Metallics Assays versus Routine Assays (40 g/t trim)

18.

Rory Vein - Comparison of Screen Metallics Assays versus Routine Assays (5 g/t trim)

19.

Process Flow Sheet

20.

Tailings Storage Facility

21.

Rory Vein – Longitudinal Section with Mineral Resource Blocks

22.

East and West Bain Vein Longitudinal Section

23.

East and West Bain Mineral Resource and Reserve Blocks

24.

Rory Vein Plan Overview

25.

Rory Vein Plan Detailed

26.

East Bain Vein Plan Overview

27.

East Bain Vein Plan Detailed

28.

Sensitivity Analysis

LIST OF TABLES

Selected Claim Information

Historical Gold Production

Certified Reference Materials Means and Tolerance Limits

Historical Mill Performance

Rory Vein Mineral Resource Estimate

Cut Off Grade Estimate

Rory Vein Mineral Reserve Estimate

East Bain Vein Resource Calculation Summary

East Bain Vein Mineral Reserve Estimate

10.

Manpower Summary

11.

Capital Summary

12.

Operating Cost Summary

13.

Cash Flow Summary

SUMMARY

This report has been prepared at the request of David Brett, President and CEO of Cusac Gold Mines Ltd. and Lesley Hunt, Vice President, Exploration of Cusac Gold Mines Ltd., for the purpose of compiling technical information on the Rory and East Bain Veins on the Table Mountain Gold Property as required for a NI 43-101 independent technical disclosure report. The format followed for this report is that outlined by form NI 43-101F. Work conducted for the report entailed a review of previous technical reports, preparation of mine plans and other studies to complete the preliminary feasibility study. The author visited the site from January 11 to 14, 2005.

The Table Mountain Gold Property comprises a number of past-producing, high-grade, underground gold mines and placer workings in the Cassiar District of British Columbia. Total gold production to date from the Cassiar District is about 423,500 oz (13,172 kg) of gold. The property is centred on a 15 km long, gold-bearing hydrothermal system that developed along and adjacent to the northerly-trending Erickson Creek Fault Zone.

Mineral resources for the property were previously estimated and reported by D. Sketchley, P.Geo. in "Technical Report on Table Mountain Gold Property, Liard Mining District, B.C. Canada, July 2003" and "Technical Report on Rory Vein, Table Mountain Gold Property, Liard Mining District, B.C. Canada, November 2004". The resource estimates were calculated using a 2 ounce per ton capping. The Rory vein has an Indicated Mineral Resource of 22,000 tons grading 0.355 oz gold per ton and containing 7,807 ounces of gold. The East Bain vein has an

Indicated Mineral Resource of 22,157 tons grading 0.63 oz gold per ton and containing 13,923 ounces of gold.

Plans for the extraction of the gold using shrinkage stoping and mine development starting from existing workings were developed. Ore will be milled in the existing 300 tpd facility. Development and production schedules together with operating and capital cost estimates were prepared.

The Rory Vein contains a Probable Mineral Reserve of 16,000 tons grading 0.46 ounces gold per ton and containing 7,360 ounces of gold. (14,500 tonnes @ 15.7 grams gold per tonne and containing 236.6 kg of gold) based on assays capped at 2 ounces per ton, a minimum mining width of 1.5 m, 10% dilution at zero grade, gold price of $CDN535 per ounce, and a cut off grade of 0.31 ounces per ton.

The East Bain Vein contains an Probable Mineral Reserve of 28,000 tons grading 0.50 ounces gold per ton and containing 14,000 ounces of gold (25,500 tonnes grading 17.1 grams gold per tonne and containing 450.1 kg of gold) based on assays capped at 2 ounces per ton, a minimum mining width of 1.5 m, 10% dilution at zero grade, gold price of $CDN535 per ounce, and a cut off grade of 0.27 ounces per ton.

Extraction of the two veins is estimated to cost $765,000 in capital costs and $ 5.5 million in operating costs. Based on a price of $CDN 535 per ounce of gold and an additional 15% contingency on the capital and operating costs the project would generate a cash flow of $2.5

million and have an internal rate of return of 129%. The development and production phases of the project will last for 8 months.

The project cash flow is most sensitive to changes in metal price and grade and is less sensitive to changes in the operating costs. It is least sensitive to changes in the capital costs.

There are current permits for mining and waste disposal. There are environmental issues related to previous workings and some work required at the tailings facility.

2.0

INTRODUCTION AND TERMS OF REFERENCE

This report has been prepared at the request of David Brett, President and CEO and Lesley Hunt, Vice President, Exploration of Cusac Gold Mines Ltd. (Cusac), for the purpose of compiling an independent technical report on the Rory and East Bain Veins on the Table Mountain Gold Property. The format followed for this report is that outlined by form NI 43-101F. The information disclosed in this report includes information from Cusac, information from previous technical reports, information generated by other qualified persons and reviewed by the author and information developed by the author.

Previously mineral resource estimates were completed on the Rory and East Bain veins. No additional field work except for a site visit has been undertaken. The only new work covered in this report is the preparation of development and operating plans for the mineral resources to allow the estimation of mineral reserves. Work conducted for the report entailed a site visit,

review of existing technical reports, review of historical production records, review of permits, review of proposed mining plans, preparation of economic models and ongoing communications with Cusac personnel.

The site visit and report compilation achieved the following objectives:

Inspection of site conditions

Inspection of equipment on site

Review of Mineral Resource estimation

Review of proposed mining methods, plans and equipment

Review of processing facilities

Review of information on tailings management, permitting and environmental conditions

Review of concentrate sales agreement

Preparation of a Mineral Reserve Estimate

Metric units are used throughout this report, except for the mineral reserve estimates and production forecasts which are in imperial units which conform to the property operating history.

3.0

DISCLAIMER

The author has reviewed and analyzed data provided by Cusac, its consultants and previous operators of the facilities and has drawn his own conclusions therefrom augmented by his own direct field examination. The author has not carried out any independent exploration work, sampling or assaying but the presence of gold in the local rocks is substantiated by previous production and previous technical reports by qualified Persons.

Beyond a review of the internet MEM listing of claim ownership for those claims where the veins are located the author has not investigated or confirmed the ownership of the claims.

4.0

PROPERTY DESCRIPTION AND LOCATION

The property description and location are more completely described by Sketchley (2003 and 2004) in technical reports entitled "Technical Report on Table Mountain Gold Property" and "Technical Report on Rory Vein, Table Mountain Gold Property". The key details are included here.

The Table Mountain Gold Property is in northern British Columbia, 115 km southwest of Watson Lake, Yukon Territory, and 120 km northeast of Dease Lake, British Columbia (Figure 1). Access to the property is via Highway 37, which connects to these towns. The abandoned town of Cassiar is at the north-western end of the property, and the unincorporated settlement of Jade City is on Highway 37 at the road entrance to the mine facilities.

hectares, is mostly contiguous, and has been acquired by direct staking, outright purchase, and option agreements. Most of the claims are owned outright, with some claims, not within the operations reviewed herein, subject to net smelter royalties. The Rory Vein area is situated on the Sun, Up, Jennie Extension #3, and Jennie Extension #4 claims (Figure 3). The East Bain vein is located on the Nu-Tara claim (Figure 4). All relevant claim information is given in Table 1.

The author has confirmed that Cusac is the registered owner of these claims on the internet based Ministry of Energy and Mines web site.

The Table Mountain processing and support facilities consist of a 300 ton-per-day gravity-flotation mill, power plant, service facilities, offices, core library, cookhouse, and bunkhouses. A permitted tailings storage facility, with an approximate capacity of 50,000 tonnes, is next to these facilities, which are centrally located in the camp adjacent to McDame Lake and Highway 37. Additional service facilities are located at the Cusac mine in the south central portion of the property.

The property contains numerous occurrences of gold-bearing quartz veins, many of which have been mined underground and less so from surface. Numerous old surface disturbances such as

access roads, trenches, open pits, underground staging areas, and drill sites occur throughout the property and have been reclaimed (Hunt 2003). There are two tailings disposal facilities, one of which has been reclaimed. Deposits of material from placer mining are present along McDame Creek.

Except as disclosed in this report the author knows of no environmental liabilities on the property. There is an existing mining permit issued by the Ministry of Energy and Mines and the reopening of the mine for the exploitation of the reserves should require only the submission of mining plans and a notice to the District Inspector of Mines.

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Figure 1. Table Mountain Gold Property – Provincial Location Map.

The red square indicates the property location and approximates the area illustrated in Figure 2.

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Figure 2. Table Mountain Gold Property - Claim Location Map.

The stars indicate the primary areas of interest.

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Figure 3. Rory Vein Area – Claim Location Map.

Figure 4. East Bain Vein Area – Claim Location Map.

Table 1. Selected Claim Information
Table 1. Selected Claim Information
Project	Claim Name	Tenure No.	Expiry	Area (Ha)	Tag No.
Rory	JENNIE EXTENSION#3	226196	2006/JUN/30	25	59860
Rory	JENNIE EXTENSION#4	226193	2006/JUN/30	25	A59861
Rory	SUN	221632	2006/JUN/30	200	7200
Rory	UP	221633	2006/JUN/30	125	7305
East Bain	NU-TARA	222403	2006/JUN/30	300	4194

5.0

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY

The property description and location has been taken from published technical reports by Sketchley (2003 and 2004).

6.0

HISTORY

The property history has been taken from published technical reports by Sketchley (2003 and 2004).

6.1

Chronology

Gold was discovered in the Cassiar District in 1874. The district developed into one of British Columbia's major placer camps with most of its production occurring between 1874 and 1895. The largest nugget discovered in British Columbia, 73 oz (2,503 gm), came from this camp (Barlee 1980). Minor small-scale placer mining continues today.

portions of these veins were exploited by small-scale mining over the next forty years. At one point, half-a-dozen abandoned mill sites with capacities of less than 12 tons per day existed in the area. Well-known individuals that played an important role in the early years of the emerging gold camp include John Vollaug, Hans Erickson, J.R. Boulton, John Hope, F. Callison, Pete Hamlin, and Fred and Guilford Brett. Cusac's interest in the area began with the prospecting efforts of Fred and Guilford Brett who formed Glen Copper Mines Ltd., which evolved into Cusac Industries Ltd., and in 1995, Cusac Gold Mines Ltd.

the Cusac Mine and Main Mine ceased, with only minor production continuing on the Vollaug Vein. Work on level 10 eventually ceased in 1989 due to high costs and high water flows.

In 1995, Cyprus Canada Inc. (Cyprus) entered into agreements with International Taurus Resources Inc. (Taurus) and Cusac on the Taurus project north of the current property area,

which resulted in the definition of an inferred open pitable resource. In 1996, Cyprus withdrew from the project, and Cusac entered into an agreement with Taurus, which conducted additional work that defined an indicated resource. In 1998, Cusac optioned the claims and consolidated the entire Cassiar Gold Camp under one operator. Cusac completed reclamation of the Taurus mine site, but no further work was conducted, and the agreement was subsequently terminated.

Diamond drilling was conducted on the East Bain Vein during 2002, which confirmed the existence of a gap with the West Bain Vein, but failed to extend the structure to the east.

The Rory Vein comprises a newly discovered vein, which was intersected at the top of a hole initially aimed at the down dip projection of the Maura Vein below the 14 level of the Main Mine. Drilling was done throughout June, July, and August, 2004, with a total of 33 holes completed.

6.2

Production

produced 35,000 oz (1,089 kg) of gold (Trenaman 1997). A small amount of this production came from the Plaza adit and open cuts on 88 Hill. The Vollaug Vein was mined from various open pits and underground workings between 1980 and 1997. Approximately 50,000 oz (1,555 kg) of gold was produced from this structure (Glover 1998). Mining commenced on the Eileen-Michelle-Lily Vein system in 1986, and continued until 1997, with about 90,000 oz (2,799 kg) of gold produced (Glover 1998). Production from the Bain Vein system spanned the period from 1993 to 1995, and totalled 24,000 oz (746 kg) of gold (Glover 1998). Surface production from the Bear Vein in 1998 totalled about 1,000 oz (31 kg) of gold. Recorded production from the camp totals about 423,500 oz (13,172 kg) of gold.

Silver production from various deposits in the camp generally amounts to 75% of gold production. A summary of gold production from major vein systems in the camp is given in Table 2.

Table 2. Historical Gold Production Table Mountain Gold Property – Cusac Gold Mines Ltd.
Vein System or Area	Tons (x 1,000)*	*Head Grade (oz/ton)**	Ounces (x 1,000)*
Jennie-Maura-Alison & Bear	300	0.50	150
Eileen-Michelle-Lily	150	0.60	90
Bain	60	0.40	24
Vollaug	170	0.30	50
Taurus	318	0.12	35
McDame Creek Placer	N/A	N/A	74.5
Total	N/A	N/A	423.5

*Approximate values obtained from internal company reports.

7.0

GEOLOGICAL SETTING

The geological setting information has been taken from published technical reports by Sketchley (2003 and 2004).

7.1

Regional Geology

The Table Mountain property is in the Sylvester Allochthon of the Slide Mountain Terrane (Gabrielse 1963; Gordy et al. 1982; Harms 1984, 1986, 1989; Harms et al. 1989; Nelson and Bradford 1989, 1993). The allochthon occupies the flat-bottomed McDame synclinorium, which lies on autochthonous rocks of the Cassiar Terrane. It comprises gabbro, pillowed and massive basalt, banded chert, carbonate, argillite, ultramafics, and minor arenite of Late Devonian to Late Triassic age, which has been divided into three stacked, structural-lithological packages by

Nelson and Bradford (1989, 1993). The property is within Division II, which comprises an ophiolitic assemblage that occupies the central portion and contains two major ultramafic sheets. The regional and camp geology is compiled in detail by Sketchley (2003).

7.2

Camp Geology

Rocks in the Cassiar area have been informally divided into lower, middle, and upper thrust sheets for mine geology purposes (Figure 5). The lower and middle thrust sheets belong to Division II of Nelson and Bradford (1989, 1993); the upper, to Division III. The lower thrust sheet comprises three volcanic-sedimentary subunits; the middle, Table Mountain Sediments (TMS); and the upper, Huntergroup Volcanics. A major ultramafic sheet separates the lower and middle thrust sheets (Harms et al. 1989; Nelson and Bradford 1989, 1993).

The basal volcanic-sedimentary subunit of the lower thrust sheet comprises basalt, pillow-basalt breccias, and tuff interbedded with black clastics. It is exposed west of the camp along the margins of the allochthon and was intersected at depth in drill holes in the western and north-western part of the camp. The unit does not host any of the veins in the camp.

The middle subunit, which comprises mafic extrusive rocks interlayered with bedded chert and argillite, crops out along the north-eastern and south-western margins of the camp along ridges and valley sides. The unit does not host significant veins and is more amenable to development of silicification because the rocks are brittle and shatter as noted in the lower levels of the Main Mine.

The upper subunit is the most widespread and crops out over most of the camp. It comprises massive and pillowed basalt with rare chert intercalations with the lower portion in the Taurus area marked by magnetite and jasper-rich basalt. The non-magnetic and non-jasper-bearing basalt sequence hosts most of the vein systems in the camp and has been the focus of exploration.

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Figure 5. Table Mountain Gold Property – General Geology

Table Mountain Sediments (TMS) of the middle thrust sheet cap basalt of the lower thrust sheet. They crop out extensively in the southern portion of the camp on Table Mountain and in the northern portion of the camp they locally form thin klippen. They comprise thin-bedded slaty siltstone, sandstone, calcareous mudstones, and grey limestone. Veins rarely extend up into these rocks.

Diabase and lamprophyre dykes crosscut all lithologies, including veins. Dykes are steeply dipping and strike easterly. Xenoliths of granitic rock occur in several dykes throughout the camp.

Structural features are divided into two temporal groups: an early one related to the formation of the allochthon with pre- and syn-mineralization structures; and a late one with post-mineralization structures. The early group contains thrust faults and related folds along with accompanying foliations and joints that parallel veins. The late group contains high-angle faults that offset veins. Some of the late faults are antecedent structures. Although they are clearly associated with mineralization, movement is post-mineralization. Structural features are discussed in more detail by Sketchley (2003).

8.0

DEPOSIT TYPES AND MINERALIZATION

The deposit types and mineralization information has been taken from published technical reports by Sketchley (2003 and 2004).

8.1

Mineralization Types

Previous Work

Vein Stages

Main stage white quartz veins form a continuum from barren to strongly mineralized. Barren and weakly-mineralized veins are usually single stage with minor sulphides, whereas strongly-mineralized veins are composite structures with abundant banding and varying amounts of sulphides. Clear quartz veins, containing pyrite, sphalerite and tetrahedrite with uncommon chalcopyrite, galena and arsenopyrite, crosscut gold-bearing white quartz veins. Gold is usually associated with sulphides.

Spatial and Geometric Relationships

Type I veins occupy steeply-dipping east-north-easterly to north-easterly-trending, subparallel fractures that comprise the majority of veins in the camp. Most veins are short and narrow and pinch and swell along strike although many are sigmoidal, dipping steeply north, and terminate by pinching, horsetailing, or as knots or localized bulbous masses. Veins are typically up to one metre wide and several tens of metres long that are commonly broken into numerous segments that appear to be separate structures. Most veins in the areas around Cusac Mine, Main Mine, and north of Taurus Mine are Type I, lie immediately below TMS, and form thicker structures

that are more persistent. The upper 30 m of these veins are the most productive in the camp, and gold grades decrease and become more erratic down dip into the roots of the system.

8.2

Alteration Types

Strong wallrock alteration is associated with gold-bearing veins hosted by mafic and ultramafic rocks. Within mafic rocks, basalt is altered to a sericite-ankerite-quartz assemblage that forms well-developed envelopes around veins (Sketchley 1986, 1989). Envelopes are surrounded by widespread propylitic alteration. More intense alteration adjacent to veins commonly contains coarse disseminated pyrite, commonly with anomalous gold values. Carbon-rich zones and crackle brecciation, comprising quartz and carbon, are locally common in more intense alteration. Within ultramafic rocks, serpentinite is altered to talc, talc-breunerite-quartz, and breunerite-quartz-fuchsite assemblages with increasing intensity (Dussel, 1986).

8.3

Vein Systems, Deposit Model, and Mineralization Controls

Vein systems extend outward from the ECFZ and are up to five kilometres long. Along the ECFZ, there is a crude periodicity of vein systems. North of McDame Lake they are spaced about 1,500 metres apart, whereas south of McDame Lake they are spaced about 400 to 600 metres apart. A list of known vein systems throughout the camp is given by Sketchley (2003). The more important systems are shown on Figure 6, a schematic longitudinal section of the Table Mountain Gold Property.

Nelson (1990), Nelson and Bradford (1989, 1993), and Panteleyev et al. (1997) discussed formation of the mesothermal gold-quartz vein deposits of the Cassiar area. This work has been compiled and summarized along with mineralization controls by Sketchley (2003).

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Figure 6. Table Mountain Gold Property - Schematic Longitudinal Section.

9.0

EXPLORATION

The exploration section has been taken from published technical reports by Sketchley (2003 and 2004).

Much of the exploration work conducted on the Table Mountain Gold Property is historical in nature. This work includes geological mapping, geophysical surveys, soil sampling, trenching, drilling, and underground drifting. The nature and extent of previously conducted work is summarized by Sketchley (2003). The 2004 work program under Notice of Work Permit Number 14675-200 comprised surface diamond drilling done by DJ Drilling; survey preparatory work by Lone Star Surveying; and drill hole setups by Cusac site personnel. All work procedures, which are described under Drilling in this report, were conducted according to "Exploration Best Practices Guidelines" included with the CIM Standards on Mineral Resources and Reserves (2000).

9.1

Rory Vein Exploration

The Rory Vein, a new discovery, was intersected at the top of the first hole that was initially aimed at the down dip projection of the Maura Vein below the 14 level of the Main Mine. The remainder of the program, which comprised 34 holes totalling 5,084 metres, delineated the vein.

9.2

East Bain Exploration

10.0

DRILLING

The drilling section has been taken from published technical reports by Sketchley (2003 and 2004).

10.1

Rory Vein Drilling

Drill holes were collared to give south-south-easterly striking traces perpendicular to the north-north-easterly strike of the Rory Vein and were inclined moderately to steeply to the east to yield vein intersections about 45° to 60° to core axis with the vein, which is moderately to steeply east-dipping. Core axis angles were used to correct intersected vein intervals to true thicknesses. A three dimensional block view of the Rory Vein drilling and Main Mine workings is illustrated in Figure 7; a plan view of the Main Mine workings in Figure 8; a plan view of the surface drill hole locations in Figure 9; the 170 N cross section in Figure 10, the 1205 Elevation plan in Figure 11, the 1170 Elevation plan in Figure 12, and the 1140 Elevation plan in Figure 13.

Drill collar locations are currently marked with a post and a metal Dymo tag, which is acceptable; however, a longer lasting marking method should be considered. Holes that cannot

be marked because they are in the middle of a haul road should have a post placed on the side of the road adjacent to the collar location with an added comment that points to the location of the drill hole.

Collar locations were tied into the mine survey grid by GPS. Because there were no mine grid survey points in area and the mine grid was not tied to NAD83 datum, which is used by GPS systems, survey preparatory work had to be completed. This was done by Lone Star Surveying who surveyed various widely spaced mine grid survey points from the Main Mine and Cusac Mine areas and developed a translation algorithm to be able to use GPS coordinates to obtain mine grid coordinates. The algorithm, which comprises a rotation of about 1.27° and a translation of 80 to 100 metres, allows for accurate surveying within the current work area. About 30 IP's (iron pin's) with a plastic numbered survey tag were placed around the current work area to be able to control the location of new drill holes.

Down hole surveys were taken with a Sperry Sun measurement unit, which comprises a compass and dip meter along with a camera that takes a snapshot of the measurements. The unit is located on the end of aluminum rods that extend down the hole past the core barrel to avoid magnetic interference. Calibration of the unit was done by placing it in an inclined cradle and comparing readings to those from several compasses corrected for a magnetic declination of 25°E. Drill rigs were aligned by compass with the azimuth of the collar equal to the aligned rig.

All drilling information was compiled on a master spreadsheet and relevant portions imported into Gemcom for geological modelling. Recorded data comprises the following items.

Header – Hole, X, Y, Z, Depth.

Surveys – Hole, Depth, Azimuth, Dip.

Lithology – Hole, From, To, Code.

Assays – Hole, From, To, Sample, Width, Au g/tonne, Au o/ton.

Composites – Hole, From, To, Core Length, True Width, Au g/tonne - uncapped, Au oz/ton - uncapped, Au oz/ton – capped to 2 oz/ton.

. [techmar011.jpg]

Figure 7. Rory Vein – Three dimensional view of the 1210 (blue) and 1140 (purple) levels of the Main Mine

Vein outline (red), drill hole traces (dark grey), and Black Breccia Fault (light grey).

Figure 8. Rory Vein – Plan view of the 1210 and 1140 levels of the Main Mine

with vein outline and Black Breccia Fault.

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Figure 9. Rory Vein – Plan view of surface drill hole locations with hole traces (grey), high gold (red), and low gold (blue).

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Figure 10. Rory Vein – 170 N Cross Section with 1210 level (open blue rectangle), 1140 level (open purple rectangle), vein outline

(red and green), and Black Breccia Fault (grey).

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Figure 11. Rory Vein – 1205 Elevation plan with 1210 level (blue), vein outline (red and green) and Black Breccia Fault (grey). Vein dips steeply to the west and fault dips moderately to the east.

Figure 12. Rory Vein – 1170 Elevation plan with vein outline (green and red) cut by Black Breccia Fault (grey). Vein dips steeply to the west and the fault dips moderately to the east

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Figure 13 – Rory Vein – 1140 Elevation plan with 1140 Level (purple) and Black Breccia Fault (grey). Vein is above the Black

Breccia Fault, which dips moderately to the east.

1.2

East Bain Vein drilling

A small diamond-drilling program was conducted under Notice of Work Permit Number 0100115 during 2002 to further explore and further define the East Bain Vein, which was initially defined by diamond drilling during 1990 and 1991 (Westervelt 1991, Glover 2002a). The program comprised eleven holes of NQ diamond drilling totalling 2395.1 m; ten of these holes were collared on the Nu-Tara mineral claim, and one on the Cordoba mineral claim (Figure 4). Collar locations, which were tied into the mine survey grid by chain and compass, were field verified by the author using a hand-held GPS unit with a field accuracy of +10 m. The holes were found to be located correctly on the mine grid, but a discrepancy exists between the GPS UTM and mine grid coordinate systems, which should be investigated further. The mine grid coordinate system is shifted approximately 200 m south and east of the GPS UTM grid coordinate system.

A summary of the drill hole targets, results, and interpretation is as follows.

02BG-01 tested the gap with West Bain Vein and did not intersect any veins.

02BG-02 tested the vein 50 metres west of previous intersections and intersected a strong quartz vein yielding 5.19 oz/ton over 0.6metres that is a small faulted wedge with limited tonnage potential.

02BG-03 tested the eastern end of the vein and intersected a quartz vein system that returned 0.38 oz/ton over 2.6 metres.

02BG-04 tested the western end of the vein to define a target elevation for development and intersected 0.554 oz/ton over 1.4 metres

02BG-05 tested the eastern extent of the vein and intersected a weakly mineralized vein breccia.

02BG-06 tested the central portion of the vein and intersected 0.6m of vein fault breccia that returned 0.062 oz/ton over 0.6 metres.

02EB-07 tested the eastern extent of a vein above a known fault and did not intersect any significant veining.

Holes 02EB-08 to 11 were drilled as a fence on section 8398E to test for an eastern extension of the vein and did not intersected any significant Ining

Figure 14. Bain Vein Drill Hole Locations.

11.0

SAMPLING METHOD AND APPROACH

The sampling method and approach section has been taken from published technical reports by Sketchley (2003 and 2004).

11.1

Rory Vein Sampling

Drill core sampling done during the 2004 exploration program consisted of logging core, marking the mineralized sections into sample intervals based on geological criteria, splitting the core in half along its length using a continuous line to prevent bias, and bagging one-half of the split core from each marked sample interval. A total of 867 samples was collected and sent for Screen Metallics Assays (SMA) or Routine Sample Assays (RSA), which are included in the Rory Vein database. An additional 344 routine assays were conducted for verification purposes on samples originally sent for screen metallics assays.

A QA-QC program was conducted by Cusac personnel, which comprised inserting Certified Reference Materials (CRM's) every tenth sample into batches of samples to be assayed. Field blanks were included later in the program. A total of 92 CRM's and five field blanks were used for the assays included in the database.

Core sample locations and sample results were verified in the field by the author. Sample results were compared with observed mineralogy including sulphides and visible gold (VG). In most cases, higher gold grades were returned where VG was noted; however, in some cases VG was not noted; therefore, the grades of the coarse and fine fraction of SMA were checked. Most higher grade samples have elevated gold in both fractions; however, samples with higher grades where VG was not observed returned higher gold value in the fine fraction only and not in the coarse fraction, which would explain why visible gold was not observed.

11.2

East Bain Vein sampling

Most samples collected during past exploration programs are regarded as historical in nature; hence, little documentation exists regarding methods and approach.

12.0

SAMPLE PREPARATION, ANALYSES, AND SECURITY

The sampling preparation, analyses and security section has been taken from published technical reports by Sketchley (2003 and 2004).

1.1

Rory Vein

Samples were shipped on an as required basis by packing in cardboard boxes wrapped in plastic packing tape then delivered to the Northern Thunderbird Air terminal in Dease Lake, B.C. for air freight shipment to Smithers, B.C. where they were transferred to an Air Canada Jazz flight to Vancouver, B.C. and then delivered by courier to the ALS Chemex facility. There was no formal chain of custody and shipping containers initially did not utilize tamper-proof seals, although these were introduced later in the program.

ALS Chemex prepared samples for analysis, conducted SMA and RSA, and issued approved analytical certificates, which comprise electronic files and hard copy certificates stored at site. Samples are stored at ALS Chemex facility in North Vancouver, B.C.

Sample preparation procedures comprised crushing samples to 70% passing 2 mm (10 mesh), then riffle splitting a 1 kg subsample, which was pulverized to 85% passing 75 microns (200 mesh). For RSA, a 30 gram subsample was fire assayed, and for SMA, the 1 kg pulverized subsample was dry screened to obtain the +100 micron coarse and fine fractions, the coarse fraction was fire assayed in its entirety, and two 30 gram subsamples from the fine fraction were fire assayed and averaged to obtain a mean value. All samples were weighed during processing and a final gold value was calculated by weighted averaging of the coarse fraction and mean fine fraction gold assays. Fire assays were conducted using industry standard procedures, which entailed mixing samples with flux, fusion to obtain a lead button, cupellation to obtain a gold bead, digestion by aqua regia, and analysis by AAS.

12.2

East Bain Vein

Samples from the 2002 exploration program were assayed at Eco-Tech Laboratories Ltd. in Kamloops, British Columbia; sample preparation and analytical methods are in Sketchley (2003).

13.0

data verification and validation

The data verification and validation section has been taken from published technical reports by Sketchley (2003 and 2004).

13.1

Rory Vein Data Verification and validation

13.1.1 Data Transcription

Survey data is manually entered and assay data electronically transferred into a master spreadsheet. Survey data is also manually entered into a Gemcom Access database, whereas the assay data is converted to CSV files and then auto imported. The master spreadsheet is backed up every day and the Access database is backed up at least once per week.

The author has verified analytical data quoted in this report from the 2004 exploration program with respect to the original analytical certificates. Sperry Sun down hole survey camera shots were reread by Cusac personnel. Field sample locations were checked through inspection of core archives.

13.1.2 Assay QA-QC

Assay results were obtained by Cusac in electronic format from ALS Chemex via their Internet based Geotrieve system. Upon receipt of assay results, data was imported into the master spreadsheet and Gemcom database, with values for CRM's and FB's tabulated, plotted on QC control charts, and compared to a two standard deviation pass-fail tolerance criteria based on a Round Robin program conducted by the supplier, CDN Mineral Resource Laboratories Ltd. of Delta, B.C. Seven CRM's were used with ID, means, and tolerance limits tabulated in Table 3.

Table 3. Certified Reference Materials - Means and Tolerance Limits
CRM ID	+3SD Limit	+2SD Limit	Mean	-2SD Limit	-3SD Limit
	g/tonne
CDN GS-4	3.77	3.66	3.45	3.24	3.14
CDN GS-6	10.74	10.49	9.99	9.49	9.24
CDN GS-7	5.84	5.61	5.15	4.69	4.46
CDN GS-9	1.96	1.89	1.75	1.61	1.54
CDN GS-5A	5.51	5.37	5.10	4.83	4.70
CDN GS-15	16.18	15.89	15.31	14.73	14.44
CDN GS-20	21.61	21.27	20.60	19.93	19.60

13.1.3 Standards and Duplicates Performance

CRM values for fine fraction SMA are illustrated in Figure 15 with comparison of final SMA and RSA illustrated in Figures 16, 17, and 18.

CRM values for SMA were examined first because these assays were used in the database, then if they failed, the CRM values for RSA were examined next, if available, because they were required as part of the validation process. Most CRM values for SMA are between the +2SD tolerance limits; a smaller number of single values are at or between +2 to +3SD and -2 to -3SD; and five are outside +3SD.

The five CRM values that are outside of the +3SD tolerance limits were examined closely along with their surrounding assays because the original samples were no longer available to be re-assayed, i.e. the SMA method uses the entire sample. Although this is a drawback of the method, SMA is superior to RSA because of the reduced nugget effect and sampling errors, which must be taken into account if re-assaying is being considered. Because of this assays were validated by a series of steps to determine the impact of the CRM failures and acceptability.

[techmar025.gif]

[techmar027.gif]

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Validation steps are given as follows.

1. Presence of surrounding barren samples:

if the CRM for SMA failed; and

if the surrounding samples are barren;

then the impact is irrelevant;

therefore, assays can be used as is.

Comparison of SMA and RSA:

if the CRM for SMA failed;

if the CRM for RSA passed;

if RSA are similar to SMA; and

if coarse gold is not present as indicated by low coarse fraction weights and assays;

then the amount of coarse gold is insignificant and RSA are essentially check duplicate assays;

therefore, RSA support SMA, the impact is minor, and the SMA can be used as is.

2. Comparison of SMA and RSA:

if the CRM for SMA failed;

if the CRM for RSA failed;

if RSA are similar to SMA assays; and

if coarse gold is not present as indicated by low coarse fraction weights and

assays;

then the amount of coarse gold is insignificant and RSA are essentially check duplicate assays that have also failed;

then, the RSA cannot be used to support the SMA, although because both have failed the impact could be significant;

therefore, how the assays are to be used must be examined to determine if the impact is significant and re-assaying is required, i.e. go to Point 7.

3. Comparison of SMA and RSA:

if the CRM for SMA failed;

if the CRM for RSA passed;

if RSA are higher than the SMA; and

if coarse gold is present as indicated by higher coarse fraction weights and assays;

then the amount of coarse gold is significant and it is likely that there would be a high level of variation compared to the original assays when re-assaying archived samples;

then, the impact will be hard to assess because of sampling errors;

therefore, how the assays are to be used must be examined to determine if the impact is significant and re-assaying is required, i.e. go to Point 7.

4. Comparison of SMA and RSA:

if CRM for SMA failed;

if RSA are higher than the SMA; and

if coarse gold is present as indicated by higher coarse fraction weights and assays;

then the amount of coarse gold is significant and it is likely that there would be a high level of variation compared to the original assays when re-assaying archived samples;

then, the impact will be hard to assess because of sampling errors, although because both assays failed the impact could be significant ;

therefore, how the assays are to be used must be examined to determine if the impact is significant and re-assaying is warranted, i.e. go to Point 7.

5. Comparison of SMA and SMA:

if CRM for SMA failed;

if CRM for RSA failed;

if there is poor agreement between SMA and RSA; and

if varying amounts of coarse gold are present as indicated by varying coarse fraction weights and assays, i.e. something has failed in the sample preparation and/or assay process;

then the impact is significant;

therefore, how the assays are to be used must be examined to determine if the impact is significant and re-assaying is warranted, i.e. go to Point 7.

6. Examination of how the SMA are to be used;

if the assays do not carry a significant portion of the resource estimate or were not

used in it, i.e. assays that are diluted substantially by adjacent lower assays and have a lower tonnage influence;

then the impact will be low;

therefore, assays can be used as is;

if the assays carry a significant portion of the resource estimate;

then the impact will high;

therefore, archived core samples would need to be re-assayed.

Three of the failed CRM's for SMA are below the -3SD tolerance limits (low bias) and occur within sequences of samples that are barren; hence, Criterion 1 was applied and the assays were accepted into the database as is.

Two of the failed CRM for SMA are greater than the +3SD tolerance limits (high bias) and occur within the same sequence of samples that contains a mixture of gold values. The first of these has a CRM for RSA that passed, the surrounding assays are less than 8 g/t, and are not from the Rory Vein; hence, Criteria 1, 4, and 7 were applied and the assays were accepted into the database as is. The second of these failures has a passed routine CRM and several high gold assays; hence, Criteria 4 and 7 were applied and the assays were accepted into the database as is because the surrounding assays are diluted substantially by adjacent barren assays, would not carry a significant portion of the resource estimate, and the impact would be minor.

13.1.4 Blank Sample Performance

Blank samples were introduced part of the way through the drilling program at the recommendation of the author following the field visit. All blank samples returned low values indicating no incidents of contamination during sample preparation. One sample that returned a value of 0.18 g/t suggests that there might have been a small amount of cross-contamination; however, the values immediately before it are very low.

13.1

East Bain Vein data Verification and Validation

Sketchley (2003) verified analytical data quoted in his report from the 2002 exploration program with respect to the original analytical certificates; however, actual field samples could not be verified because of the whole core sampling.

14.0

ADJACENT PROPERTIES

No information on adjacent properties is included in this report other than historical information on the chronology of exploration and mining events and general geological descriptions.

15.0

MINERAL PROCESSING AND METALLURGICAL TESTING

15.1

Metallurgical Testing

There has been no metallurgical testing of material from the East Bain or Rory Veins. However, the Table Mountain Gold Property has a operating history and a number of different veins have been exploited. Both the Rory and East Bain veins are located adjacent to past producing veins and the geology and mineralization are similar to the nearby veins. Therefore, the metallurgical performance is expected to be similar to the historical experience.

15.2

Past Mill Performance

15.2.1 Recovery

Mill records from 1996 were reviewed and the results are summarized below:

Tons milled

26,864

Maximum tpd

269 for a one week period

Head grade

0.84 opt

Tailings grade

0.04 opt

Total Recovery

94.9%

Gravity recovery

39%

Flotation recovery

56%

Flotation con grade

15 to 18 opt

Flotation con quantity

2 - 3% of feed

Discussions with Cusac personnel and former mill operators support the assumption that recoveries from the various veins are similar with the exception of the Vollaug vein where the presence of carbonaceous material led to lower recoveries. This is not a problem associated with the Rory or East Bain veins.

Over the operating history at the property (Table 4) the tailings grades have averaged 0.032 oz/ton on an annual average basis if all of the production years are included in the calculation. If the unusually low results from 1988 and 1994 are deleted from the calculation, the average tailings grade is 0.037 oz/ton.

Table 4: Historical Mill Performance
	Year	Milled	Head Grade	Mill	Recovered	Recovered Grade	Tails Grade
		Tons	oz/T Au	Recovery	oz Au
	1979	31,845	0.61	95	18,500	0.58	0.029
	1980	32,189	0.57	96	17,536	0.54	0.025
	1981	38,245	0.37	96	13,539	0.35	0.016
	1982	38,724	0.57	95	20,984	0.54	0.028
	1983	69,497	0.52	94	34,099	0.49	0.029
	1984	91,483	0.31	88	25,061	0.27	0.036
	1985	68,835	0.31	91	19,363	0.28	0.029
	1986	27,167	0.94	95	24,262	0.89	0.047
	1987	95,179	0.42	92	36,847	0.39	0.033
	1988	79,247	0.22	96	16,709	0.21	0.009
	1994	35,258	0.45	94	15,722	0.45	0.004
	1995	23,286	0.61	93	13,202	0.57	0.043
	1996	26,870	0.85	95	21,729	0.81	0.041
	1997	26,741	0.36	87	8,331	0.31	0.048
	Totals	684,566	0.45	93	285,884		0.032

	Average Tails w/o 1988 and 1994	570,061					0.037

15.2.2 Throughput

Mill operating data for short periods from 1997, 1999 and one undated August indicate similar performance to that from 1996. There is only one 7 day period in the data reviewed when the mill through put exceeded 150 tpd. This is the week of April 14, 1996 when 269 tpd were milled over the 7 day period. Recovery and concentrate grades for this period are similar to periods with lower throughput. It is assumed that the mill throughput has been limited by the mine output leading to relatively low throughput compared to the rated mill capacity

Previous plant operators have reported that the mill ran well at 12.5 wtph which would be about 288 tpd based on 4% moisture in the feed. The application of a 97% mill availability factor gives a throughput rate of 280 tpd. Further discussions with former site mill operators indicate the potential to increase throughput with simple changes such as changing the grinding ball size or changes to the feed conveyor belt speed.

15.3

Projected Metallurgical Performance

Based upon the past performance of the mill and the assumption that the Rory and East Bain ores will respond to treatment as previous ores the expected mill performance is shown below.

Tons milled per day

280

Head grade

0.49 opt (diluted average grade)

Tailings grade

0.035 opt (assumed mill performance)

Total Recovery

92.9% (calculated from head and tails grades)

Au recovery to Gravity

37.1% (40% of total gold recovery)

Flotation recovery

55.7% (60% of total gold recovery)

Flotation con grade

15 opt

15.4

Processing

15.4.1 Mill Flowsheet

Ore will be processed in the existing 300 ton per day capacity plant. The existing flowsheet is show in Figure 19. The process facilities are a single steel clad building which also houses the power house.

The plant has a crushing circuit with a coarse ore bin, 20" by 30" jaw crusher, 6' by 12' screen, 400 ton fine ore bin and 3' standard cone crusher. Ore is typically crushed to pass a 3/8" screen. The jaw crusher is fed directly from the coarse ore bin with no grizzly ahead of the jaw crusher to eliminate the fines fed to the crusher. There is a grizzly at the dump for the coarse ore bin to keep oversize rocks out of the crusher circuit.

The grinding circuit consists of a 9' diameter by 10' long, 400 hp ball mill with cyclones for sizing and a jig on the cyclone underflow. The typical grind is 65 % minus 200 mesh. The jig concentrate is upgraded on a shaker table in a batch operation. Previously the jig concentrate was then sent to a refinery.

From the grinding circuit the ore is pumped to a bank of 8 flotation cells. The concentrate is filtered in a twin disk filter and dried in a rotary drum drier. The dry concentrate is then bagged in 2 tonne bags for shipment to a smelter. Flotation tails are pumped to the tailings impoundment.

15.4.2 Plant Restart and Modifications

The mill was visited as part of the January 2005 site visit. The process facilities remain intact. There will be clean up required and some repair of timbers in the coarse ore bin. The mill liners have been removed and will need to be replaced. Undoubtedly there will be a number of pump seals, drive belts, and pipelines to be repaired, but a previous mill operator did not note any major items which required attention.

A review of the mill flow sheet and operation is proposed using an experienced metallurgist/mill superintendent, first during the mill rehabilitation phase to assist in getting the appropriate maintenance work completed, and then for a short while at the start of operations to assist in optimizing the mill operation and increasing the throughput while attaining or surpassing the forecast tailings grade.

A small smelting furnace should be installed for the production of dore from the gravity concentrate to reduce the sampling uncertainties associated with concentrates and to reduce the offsite refining fees. This would also make a more saleable product, as dore is readily saleable at a number of refineries.

15.5

Assay Laboratory

The assay lab and sample preparation facilities are located in a small building near but separate from the mill. The lab is equipped for fire assaying with a gravity finish. A new microbalance, a lab scale, and lab supplies will be required as well as clean up of the facilities. The assay lab will need to be operational before any of the mine development encounters the ore zone.

[techmar033.gif]

Figure 19. Process Flow Sheet

15.6

Tailings Storage Facility

15.6.1 Facility Description

There are two tailings storage facilities ("TSF") at the site. TSF1 was the original facility and is no longer in active use. Plans exist for the closure of TSF1 but there is also the possibility that the tailings could be treated in the future for the recovery of the remaining gold.

TSF2 and TSF3 are the active sites and are adjacent to one another. The sites are located about 500 m northeast of the mill. A plan of the current TSF is shown in Figure 20. TSF2 was built in two stages with the design and construction review by Knight Piesold. Phase 1 of TSF2 was constructed in late 1993 and phase 2 done in the spring of 1996. TSF2 contains about 112,000 tons of tailings at this time and there is some space remaining for additional tailings deposition. Knight Piesold inspected the facility in 2002 and outlined some work to be under taken including an upgrade to the spillway that may provide additional storage space in TSF2.

The specific recommendations made by Knight Piesold were:

A survey of the crest should be carried out to determine the minimum freeboard measured from the spillway sill elevation. Low spots should be raised to create a level crest.

The existing pipe spillway makes very little contribution to the water management due to its low capacity. This is not a concern as there is sufficient storage in the facility to temporarily store an extreme event.

Thought should be given to removing the pipe spillway and possibly using it for the Phase 3 storage area. Consideration should be given to the construction of a spillway channel in native ground in the south abutment. The spillway should be designed for a specified flood peak flow.

Upgrading the spillway for Phases 1 and 2 will provide additional storage for tailings in addition to that available in Phase 3

The facility is in acceptable condition to receive tailings once the mill is recommissioned.

In the fall of 1997 TSF3 was built. It is immediately adjacent to TSF2. TSF3 is noted by Knight Piesold in their 2002 inspection as ready to receive tailings. It is essentially empty.

15.6.2 Remaining Tailings Capacity

Volume estimates were completed by Cusac on TSF3 and TSF2. The volume of TSF3 was estimated to be 21,000 m³ to the crest with a surface area of 4,400 m² at the top. Therefore, allowing for 1 m freeboard there is a tailings capacity of 16,600 m³. At 1.7 tons per m³ this would provide space for 28,000 tons of tailings.

The surface of the tailings in TF2 was surveyed in 2004 employing RTK Differential GPS. This data and existing survey data for the dam permitted the calculation of the volume between a

plane 1m lower than the crest of the dam (1 m freeboard) and a plane representing the current top of the existing tailings. The volume was estimated to be 18,600m³. This represents capacity for approximately 30,000 tons of tailings in TSF2.

The combined storage capacity remaining is then 58,000 tons, which is more than required for the current mineral reserve.

15.6.3 Items to be addressed

The MEM have notified Cusac of certain items that MEM feels need to be addressed in advance of reactivation of the tailings facilities. The items noted by MEM are:

TSF#1 should not be used for tailings and the closure of TSF#1 should proceed as described in report by Knight Piesold

TSF#2 should not be used until the consultants' recommendations from the 2002 inspection report are satisfactorily addressed. This includes a survey of the dam crest, filling low spots on the crest and checking the decant/spillway capacity for a 1:200 year design flood event.

An Operation, Maintenance and Surveillance manual is required for the facility

It is recommended that Cusac respond to MEM and prepare the necessary manual before restarting the mill.

Figure 20: Tailings Storage Facility

16.0

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

Data compilation and resource estimation work were completed in-house with checking and compilation done by Sketchley (2003 and 2004).

16.1

Rory Vein Mineral Resource Estimate

Data compilation and resource estimation work were completed in-house by Mike Glover and Lesley Hunt with checking and compilation done by Sketchley, (2004). Resource estimates were calculated using a polygonal method with a radius of influence of 15 m, although in most cases intersecting polygons have reduced the block radii to around 12 m. Calculation checks were done on vein width and grade; block area, volume, and tonnage; and gold content.

Except for Block 04MM-04, polygonal resource blocks with mineable gold grades form a

contiguous group along the lower portion of the vein adjacent to the Black Breccia Fault. An Indicated Mineral Resource classification was assigned to these blocks because geological and grade continuity can be reasonably assumed, i.e. blocks comprise proximal gold-bearing quartz vein material of similar strike, dip, tenor, and nature. Block 04MM-04 occurs by itself and is not contiguous with the remaining resource blocks; therefore, it was assigned an Inferred Mineral Resource classification.

The tabulated Mineral Resource Estimates with uncut assays and assays capped at 68.57 g/tonne (2 oz/ton), is tabulated in Table 5 with a longitudinal cross section of resource blocks illustrated in Figure 21. The specific gravity used for all calculations is 2.95 tons per cubic metre, which is equal to 2.65 tonnes per cubic metre. This is a historical value that was validated by the author using four samples from the Rory Vein, which returned a mean value of 2.67. For reference purposes, the definitions of Inferred, Indicated, and Measured Mineral Resources are given as follows (CIM Standards on Mineral Resources and Reserves 2000).

Inferred Mineral Resource

An "Inferred Mineral Resource" is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Indicated Mineral Resource

An "Indicated Mineral Resource" is that part of a mineral resource for which quantity, grade or quality, densities, shape, and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Measured Mineral Resource

A "Measured Mineral Resource" is that part of a mineral resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable, exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Table 5. Rory Vein Mineral Resource Estimate Capped @ 68.57 g/tonne = 2 oz/ton SG = 2.65 tonnes/cubic metre or 2.95 tons/cubic metre
Block Number	Au oz/ton	Au Cap oz/ton	Width metres	Tons	No Cap oz	Capped oz
Indicated Mineral Resource
01	0.220	0.220	1.21	798	176	176
14	1.190	0.710	1.86	1,740	2,071	1,236
18	0.220	0.220	1.69	1,164	256	256
19	0.460	0.460	2.29	2,340	1,076	1,076
21	0.200	0.200	3.47	3,291	658	658
22	0.380	0.360	7.17	3,244	1,233	1,168
29	0.160	0.160	4.19	3,885	622	622
30	0.160	0.160	2.26	3,697	592	592
35	1.300	1.100	2.06	1,840	2,392	2,024
Inferred Mineral Resource


04	0.450	0.330	1.99	2,093	942	691
Imperial
Total Indicated Mineral Resource (uncapped) =				22,000 tons @ 0.413 oz/ton (9,075 oz)
Total Inferred Mineral Resource (uncapped) =				2,093 tons @ 0.450 oz/ton (942 oz)

Total Indicated Mineral Resource (capped) =				22,000 tons @ 0.355 oz/ton (7,807 oz)
Total Inferred Mineral Resource (capped) =				2,093 tons @ 0.330 oz/ton (691 oz)

Metric
Total Indicated Mineral Resource (uncapped) =				19,958 tonnes @ 14.16 g/tonne
Total Inferred Mineral Resource (uncapped) =				1,899 tonnes @ 15.43 g/tonne

Total Indicated Mineral Resource (capped) =				19,958 tonnes @ 12.17 g/tonne
Total Inferred Mineral Resource (capped) =				1,899 tonnes @ 11.31 g/tonne

[techmar036.jpg]

Figure 21. Rory Vein – Longitudinal section with mineral resources blocks (looking west).

16.2

Rory Vein Mineral Reserve

16.2.1 Cut off grade

A cut off grade analysis for the Rory and East Bain veins was compiled using the assumptions in the economic models. The analysis is shown below in Table 6.

Table 6: Cut Off Grade Estimate
	Cost per ton
	Rory Vein	Rory Vein Incremental	East Bain Vein
Mining costs	86.6	20.0	57.2
Ore haul	2.3	2.3	4.6
Mill	19.0	19.0	19.0
Overheads	46.6	29.0	46.6
Total cost per ton	154.5	61.3	135.4
Gold price ($CDN/oz)	535	535	535
Gold recovery	92.4%	82.5%	93%
CUT OFF GRADE (oz/ton)	0.31	0.14	0.27

Based on this cut off grade analysis there were several blocks in the Rory mineral resource that did not meet the total cost cut off grade. An incremental cost estimate was prepared as a review of the layout and longitudinal section indicates that these blocks will be mined for efficient extraction of the reserve. Furthermore, the development necessary to extract this material will be in place for the higher grade blocks.

All of the East Bain mineral resource blocks are above the cut off grade

16.2.2 Mineral Reserve Estimates

The mineral reserve estimates are based on shrinkage stoping methods. Stope layouts were developed from the longitudinal sections and development layouts were generated with access from existing workings. From the indicated mineral resources the probable mineral reserve estimate was compiled by reviewing the individual drill hole intercepts and selecting the highest contiguous grade portions. The 2 oz/ton capping was used for the mineral reserve estimate. A minimum mining width of 1.5 m was used and 10% mining dilution at zero grade was added to calculate the mineral reserve. The thickness of the mineral reserve blocks varies compared to the mineral resource blocks but the polygonal area from the resource estimate was used in the mineral reserve estimate. The mining plans are consistent with selective small scale mining

For reference the definition of a mineral reserve and probable mineral reserve are included below:

"A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.

A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified."

16.2.3 Rory Vein Mineral Reserves

There are several individual blocks within the Rory mineral reserve that are below the overall cutoff grade included in the stope plan and in the mineral reserve. Block 04MM-01 was included as it connects two areas which will be mined. Block 04MM-18 was included partially for access to other blocks but also because the drill hole does have two samples in excess of 0.45 oz/t. Blocks 04MM-29 and 04MM-30 were included in the stope outline as the drill holes contain samples over 0.45 oz/ton and provide a reasonable starting point for the stope undercut.

The blocks that do not exceed the overall cut off grade do exceed the incremental cut off grade based on them carrying their mining, ore haulage, processing and the maintenance portion of the overhead costs. Therefore, these blocks have been incorporated into the probable mineral reserve.

The mineral reserve is shown in Table 7. All of the mineral reserves are probable mineral reserves. No inferred resources were included in the estimation of the mineral reserves. The probable mineral reserve at the Rory Vein is 16,000 tons grading 0.46 oz/ton and containing 7,360 ounces of gold. For the mineral reserve statement the tons and grade were multiplied to generate the contained ounces in the mineral reserve.

Table 7. Rory Vein Mineral Reserve Estimate
Block Number	Au Cap oz/ton	Width metres (before 10% dilution)	Tons		Capped Oz
Probable Mineral Reserve
04MM-18	0.224	1.50	1136		254
04MM-01	0.154	1.50	1089		168
04MM-33	1.000	2.06	2024		2024
04MM-19	0.418	2.29	2574		1076
04MM-14	0.745	1.59	1636		1220
04MM-29	0.239	1.50	1530		366
04MM-30	0.182	1.70	3059		556
04MM-22	0.836	2.73	1359		1136
04MM-21	0.364	1.76	1836		668

Total	0.46		16,243		7,468
Rounded	0.46		16,000		7,360
Imperial
Total Probable Mineral Reserve (capped) =				16,000 tons @ 0.46 oz/ton (7,360 oz)
Contained ounces based on tons times grade

Metric
Total Probable Mineral Reserve (capped) =				14,500 tonnes at 15.7 g/t (236.6 kg)

Assumptions: 1.5 m minimum width plus 10% dilution 2 oz/ton cap, $CDN 535 per oz gold price, Cut off grade of 0.31 oz/ton, 2.95 tons per cubic meter small scale shrinkage stoping

16.3

East Bain Vein Mineral Resource

Data compilation and resource estimation work were completed in-house with checking and compilation done by Sketchley (2003).

16.3.1 Historical Background

Probable Reserve estimates of 34,741 tons grading 0.687 oz/ton (0.502 oz/ton Au cut to 2 oz/ton) totalling 23,881 ounces (17,423 ounces Au cut to 2 oz/ton) for the West Bain Vein, and a Drill Possible Reserve estimate of 22,120 tons grading 0.565 oz/ton Au (no cut required), totalling 12,498 ounces Au for the East Bain Vein (Westervelt 1993). Both of these estimates are historical in nature and regarded as an order-of-magnitude because they do not follow the CIM Standards on Mineral Resources and Reserves (2000). Additional drilling was conducted on the West Bain Vein during 1993, which confirmed the initial estimate, and it was subsequently mined from 1993 to 1995 with production of 60,000 tons grading 0.4 oz/ton Au, totalling 24,000 ounces compared to the original estimate of 23,881 ounces uncut or 17,423 ounces cut. It is noteworthy that although there was a large increase in tonnage and a lower grade, a similar number of ounces were obtained, which is primarily related to mining dilution.

16.3.2 Mineral Resource Estimate

The resource estimate was calculated using a polygonal method, which has been historically used for narrow gold-bearing high-grade quartz vein systems on the Table Mountain Gold Property. Two estimates were completed, one with uncut assays and one with assays cut to 2 oz/ton, which is a historical cutting factor The updated resource estimate comprises Blocks 02BG-02, 02BG-03, 02BG-04, and 02BG-06, based on new drill-hole data, and Blocks 90-340, 90-357, 90-359, 0.264/0.2, 91-371, and 90-373, based on historical drill-hole data (Figures 22 and 23). Except for Block 02BG-02, these resource blocks form a contiguous group that are ordered from west to east as follows: 02BG-04, 91-373, 90.357, 02BG-06, 91-371, 0.264/0.2, 02BG-03, 90-340, and 90-359. Block 02BG-02 at the western end of the vein is a small fault-bounded wedge based on a single drill hole. The final tabulation excluded Block 0.264/0.2, which is based on a historical drill hole, because it was considered sub-ore grade. The specific gravity used for all calculations is 2.95 tons per cubic metre, which is equal to 2.67 tonnes per cubic metre, a historical value.

The author reviewed the updated estimate, which was classified as a "Drill Indicated Resource" by Fitzpatrick and Glover (2003), and is of the opinion that it must be re-classified to conform to the CIM Standards on Mineral Resources and Reserves (2000). Block 02BG-02 is reclassified as inferred because geological and grade continuity cannot be assumed, i.e. it is not contiguous with the rest of the resource blocks, and it is based on a single drill hole whose assays cannot be validated. The remaining blocks remain in same confidence category; however, the nomenclature has been changed to an Indicated Mineral Resource to conform to the CIM Standards on Mineral Resources and Reserves (2000). The Indicated classification is retained because geological and grade continuity can be reasonably assumed, i.e. the blocks are contiguous and each is based on proximal gold-bearing quartz veins of similar strike, dip, and nature, and historical assay data have been validated by new assay data of similar tenor in adjacent blocks and supported by multiple documented occurrences of visible gold. The re-

classified Mineral Resource Estimate is given in Table 8. Block 02BG-06 was excluded from the tabulation because it is sub-ore grade, i.e. 0.06 oz/ton, which maintains consistency with the original updated estimate where a sub-ore grade block was excluded.

For reference purposes, the definitions of Inferred Mineral Resources and Indicated Mineral Resources are given as follows (CIM Standards on Mineral Resources and Reserves 2000).

Inferred Mineral Resource

Indicated Mineral Resource

[techmar038.gif]

Figure 22. East and West Bain Vein Longitudinal Section.

[techmar040.gif]

Figure 23. East Bain Vein Mineral Resource and Reserve Blocks (with uncut gold grades and length of intersection).

Table 8. East Bain Vein Resource Calculation Summary
Block Number	Resource Category	Au oz/ton	Au Cut oz/ton	Core Width		Core Angle	True Width	Tons	Uncut Ounces	Cut Ounces

02BG-02	Inferred	5.190	2.000	0.60		80	0.59	1276	6622	2552
02BG-03	Indicated	0.380	0.380	2.60		85	2.59	4271	1623	1623
02BG-04	Indicated	0.554	0.554	0.90		90	0.90	4362	2417	2417
90-340	Indicated	1.520	0.769	1.45		75	1.40	2066	3140	1590
90-357	Indicated	0.660	0.660	1.70		80	1.67	2944	1943	1943
90-359	Indicated	1.930	0.862	1.40		75	1.35	1384	2672	1194
91-371	Indicated	0.410	0.410	2.00		80	1.97	5061	2075	2075
91-373	Indicated	1.490	1.490	1.50		75	1.45	2069	3082	3082

Total Indicated Mineral Resource (uncut) =					22,157 tons @ 0.77 oz/ton (16,952 oz)
Total Indicated Mineral Resource (cut) =					22,157 tons @ 0.63 oz/ton (13,923 oz)

Total Inferred Mineral Resource (uncut) =					1,276 tons @ 5.19 oz/ton (6,622 oz)
Total Inferred Mineral Resource (cut) =					1,276 tons @ 2.00 oz/ton (2,552 oz)

Notes. - Cutting factor of 2 ounces per short ton. - Gold grade in ounces per short ton. - Core width in metres. - Specific gravity in tons per cubic metre.

1.4

East Bain Vein Mineral Reserve

The East Bain ore reserves were generated in the same fashion as for the Rory Vein and using cut off grades as described in Section 16.2.1. The cut off grade estimated for the East Bain vein was 0.27 oz/ton based on a gold price of $CDN 535 per ounce.

The mineral reserve estimates are based on shrinkage stoping methods. Stope layouts were developed from the longitudinal sections and development layouts were generated with access from existing workings. All of the individual drill hole intercepts were above the cut off grade and were included in the mineral reserve estimate in their entirety. The 2 oz/ton capping was used for the mineral reserve estimate. A minimum mining width of 1.5 m was used and 10% mining dilution at zero grade was added to calculate the mineral reserve. The thickness of the mineral reserve blocks varies compared to the mineral resource blocks but the polygonal area from the resource estimate was used in the mineral reserve estimate. The mining plans are consistent with selective small scale mining practice.

The inferred mineral resources were excluded from consideration in the mineral reserve estimate.

The probable mineral reserve is shown in Table 9. The probable mineral reserve at the East Bain vein is 28,000 tons at 0.50 oz/ton and containing 14,000 ounces of gold.

Table 9. East Bain Vein Mineral Reserve Estimate
Block Number	Reserve Category	Au Capped oz/ton	True Width (m)	Tons		Capped Ounces

02BG-03	Probable	0.345	2.59	4698		1623
02BG-04	Probable	0.302	1.50	7997		2417
90-340	Probable	0.652	1.50	2434		1588
90-357	Probable	0.600	1.67	3230		1938
90-359	Probable	0.705	1.50	1689		1191
91-371	Probable	0.373	1.97	5568		2075
91-373	Probable	1.309	1.50	2356		3085
Total		0.498		27,972		13,917
Rounded	Probable	0.50		28,000		14,000
Imperial
Total Probable Mineral Reserve (capped) = Contained ounces based on tons times grade					28,000 tons @ 0.50 oz/ton (14,000 oz)

Metric
Total Probable Mineral Reserve (capped)					25,500 tonnes @ 17.1 g/t (450.1 kg)

Assumptions: 1.5 m minimum width plus 10% dilution, 2 oz/ton cap, $CDN 535 per oz gold price, Cut off grade of 0.27 oz/ton, 2.95 tons per cubic meter, small scale shrinkage stoping.

17.0

ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES

17.1

Production Plans

The information covered in this section is taken from a Preliminary Feasibility Study completed on the Rory and East Bain veins.

17.2

Mining Operations

17.2.1

Rory Vein Mining

The Rory Vein will be mined by shrinkage stoping using mechanized equipment for mucking and rail haulage to move the ore from the stope to the portal. The vein will be mined as a single stope. The bottom of the stope will be accessed from the 14 level though the development of a trackless access ramp and a tracked haulage cross cut. A raise will be driven to a cross cut on the 21 level to provide access for services, an escape way and ventilation.

A conventional slusher drift undercut will be driven at the base of the ore along with a parallel ore extraction drift. A series of close spaced drawpoints will be developed from the ore extraction drift to the undercut.

Stoping will be done using stopers and drilling 8 foot vertical holes. Each shift will include drilling, mucking of the swell and blasting. Ore will be drawn from the drawpoints to provide space for the blasting.

A plan showing an overview of the Rory Vein development is included in Figure 24 and a more detailed view of the Rory Vein development is shown in Figure 25.

Ore will be hauled from the drawpoints to the ore pass by LHD. The ore will then be loaded into an ore train and hauled to surface. At surface the ore will be loaded into a surface haul truck for transport to the mill. When drilling is complete the stope will be mucked out as quickly as possible

Mine waste will be removed by rail cars and placed in a rock dump near the 14 portal.

Electrical power will be provided either via the existing power line or by a small generator that would be located at the portal.

Ventilation will be provided by mechanical ventilation fans and ducting to intake air at the 14 portal and exhausting the air through the stope and up the access raise to the 21 level.

While the stope is being blasted the only ore available will be the swell from the blasting and the planned production rate from mucking the swell is 100 to 200 tpd. Then when all the ore is blasted the planned production rate for broken ore will be about 600 tpd. Ore will be stockpiled before mill startup so that continuous mill production can be maintained.

The development to the stope is forecast to take 2 weeks for drift rehabilitation and 2 months of development. Stope production then continues for a further 6 weeks. The inferred block of mineral resources has not been included in the production estimate. However this area will be explored in the course of mining to determine if there is additional ore that can be recovered.

Figure 24 Rory Vein Plan Overview

Figure 25 Rory Vein Plan Detailed

17.2.2

East Bain Mining

The East Bain Vein will be mined by shrinkage stoping using mechanized equipment for development, mucking and haulage of ore from the stope to the portal. The vein will be mined from 2 stopes. The bottom of the stopes will be accessed from the bottom of a decline driven from existing workings. A raise will be driven to surface to provide an escape way and ventilation. A plan of the mining development is shown in Figures 26 and 27.

A conventional slusher drift undercut will be driven at the base of the ore along with a parallel ore extraction drift. The undercut will be driven at a +10% grade to follow the base of the ore as interpreted from the drilling. A series of close spaced drawpoints will be developed from the ore extraction drift.

Stoping will be done using stopers and drilling 8' vertical holes. Each shift will include drilling, mucking of the swell and blasting. Ore will be drawn from the drawpoints to provide space for the blasting. The ore will be loaded in to trucks and hauled up the decline to surface.

The existing decline will be rehabilitated and slashed as necessary to permit use of 13-ton haulage trucks. The sill drift will be driven with a slusher to minimize dilution. A raise to surface will be driven to provide ventilation and a second access. Ore will be hauled from the drawpoints to a truck loading location by LHD. The ore will then be hauled to surface by truck and dumped in a stockpile at the portal. At surface the ore will be loaded into a surface haul truck for transport to the mill.

Mine waste will be removed by LHD and haul truck and placed in a rock dump near the East Bain portal.

Electrical power will be provided either via the existing power line or by a small generator which would be located at the portal.

Ventilation will be provided by mechanical ventilation fans and ducting to intake air down the decline to the stope.

While the stope is being blasted the only ore available will be the swell from the blasting. This is forecast to provide up to 270 tpd. When all the ore is broken the planned production rate from mucking the swell is about 650 tpd. The rehabilitation is forecast to take 2 weeks and the stope development is forecast to take 3 ½ months. Ore production will then continue for 2 months.

The inferred block of mineral resources was not included in the production estimate. However this area will be explored in the course of mining to determine if there is additional ore that can be recovered from that area.

17.2.3

Dilution

A minimum width of 1.5 m has been used for the stoping. At the undercut level the minimum width will be attained by developing the undercut as a slusher drift.

In addition to the minimum width a mining dilution of 10% at zero grade is included in the calculations. This 10% dilution accounts for variations in the vein thickness and orientation to which the mining can not exactly respond. Close regular grade control will be utilized to ensure that the best grades are attained. Drilling limits for the sides will be marked by a geologist. The on site assay lab will provide assay data to aid in the stope grade control.

17.2.4 Manpower

The planned mining and processing project will be carried with a small versatile crew and minimal management and administration personnel. This is the appropriate approach based upon the short duration of the project.

Mine manpower requirements have been developed based on the estimated productivity for development and production activities plus estimates for service, maintenance and supervisory personnel.

The mill manpower requirements are based on the minimum needs for a small plant. An overhead category has been utilized to include the administration and surface maintenance personnel. The manpower requirements are outlined in Table 10.

Table 10: Manpower Summary
Area	Day 1 to 42	Day 43 to 70	Day 71 to 180	Day 181 to 228
Administration	5	5	5	2
Services & Maintenance	8	7	7	6
Camp	4	4	4	2
Mine	21	22	12	-
Mill	-	-	2	7

Total	38	38	30	17

Figure 26: East Bain Vein Plan Overview

Figure 27: East Bain Vein Plan Detailed

17.3

Recoverability

The metal recovery and mineral processing are covered in Section 15 of this report. There has been no metallurgical testing of material from the East Bain or Rory Veins. However, in both cases the veins are located near past producing veins and the geology and mineralization are similar to the nearby veins. Therefore, the metallurgical performance is expected to be similar to the historical experience.

17.3.1 Projected Metallurgical Performance

Based upon the past performance of the mill and the assumption that the Rory and East Bain ores will respond to treatment as previous ores the expected mill performance is shown below.

Tons milled per day

280

Head grade

0.49 opt (diluted average grade)

Tailings grade

0.035 opt (assumed mill performance)

Total Recovery

92.9% (calculated from head and tails grades)

Au recovery to Gravity

37.1% (40% of total gold recovery)

Flotation recovery

55.7% (60% of total gold recovery)

Flotation con grade

15 opt

Ore will be processed in the existing 300 ton per day capacity plant as described in Section 15.

17.4

Markets

The project will produce gold bearing concentrates and dore bars. The gold will be sold into the world market. There are a number of smelters that can process the high grade gold flotation concentrates and there are a number of refineries that can process the dore. Cusac has previously demonstrated the ability to market flotation concentrates from the property.

17.5

Contracts

The project will market a high grade gold flotation concentrate and gold dore bars. In April 2004 Cusac entered into an agreement with Marubeni Corporation ("Marubeni") for the treatment and refining of gold flotation concentrates. The agreement was to cover shipments up to January 2005 but as there was no production in that time frame there were no deliveries under the agreement. However, the contract terms have been used as representative of the terms that Cusac could negotiate for the treatment of concentrates.

The contract covered shipments in lots of 200 dmt/month delivered in 2 mt polybags to a warehouse in Vancouver. Metal prices are based on the Metals Week prices for silver and gold over a 2 month quotation period beginning one month before delivery at the Japanese port.

Silver payment is 90% of contained silver less 50g/dmt. Gold payment is scaled based on the gold content of the concentrate. For the expected grades in excess of 400 g/dmt (11.7 opt) the payment is 96.5% of the contained gold. If gold grades are lower and are between 300 and 400 g/dmt the payment is 96% of the contained gold.

The treatment charge is $US 375.50 per dmt in Vancouver and the refining charges are $US 0.5 per payable ounce of silver and $US6.5 per payable ounce of gold.

If arsenic and antimony content is greater than 0.1% there is a penalty of $US3/dmt for each 0.1% in excess of 0.1%.

The former contract included provisions for sampling, representation, dispute resolution insurance and payment for loss.

An 85% provisional payment will be made within 5 days of Marubeni having seller's moisture content, the warehouse weight and a Marubeni provisional assay certificate. Final payment is

made when final assays, weight, moisture content and metal prices are known after delivery to the smelter. It is assumed that concentrates will sit in Vancouver for 4 to 6 weeks so that with a 2 week shipping period and a month after arrival for metal pricing the final payment would be at least 12 weeks after delivery to Vancouver.

The flotation concentrate will be trucked to Vancouver in truck load lots. The estimated cost for concentrate shipping is $CDN 100 per ton.

It will be necessary for Cusac to renegotiate a contract for the sale of concentrates. This is not considered to be a significant problem for a relatively clean gold bearing concentrate.

The dore from the jig concentrate will be tabled on site and then smelted to produce 1000 ounce dore bars. These bars are easy to sample and ship by air freight to any one of a number of smelters in Canada or around the world. The usual terms are payment of 99.5% of the contained gold and refining charges of $US 5.00 per ounce of gold. Payment is generally made within a week of arrival at the refinery. Cusac has not entered into any contracts for the sale of dore but no significant problems are expected in getting a contract for the purchase of the dore bars.

17.6

Environmental Considerations

Mining is regulated by the Ministry of Energy and Mines ("MEM") which approves work programs and reclamation plans for mining projects. The mining permits expand over time as the initial permit is issued and then amended as subsequent mining plans are proposed and approved. The permit is also amended as the closure and reclamation plans are submitted and approved by MEM. Waste management is regulated by the Ministry of Water Land and Air Protection ("MWLAP").

There are three key permits for the project. The MEM Permit M-127 permits the mining and processing and the MWLAP PA-13757 Air Emissions and PE-13756 Waste Management permits relate to waste discharges from the processes. All three permits are in place.

17.6.1 Permit M-127

All mining work is undertaken under Reclamation Permit M-127. Reclamation Permit M-127 was issued to Cusac on October 27, 1993. It is the primary permit currently issued for the operation. It was subsequently amended in November of 1993, June of 1994, October of 1994, December of 1994, May of 1995 and November of 1998 to reflect changes in the operation.

The most recent mining permit document is a draft copy of the M-127 permit dated October 2004 and entitled "Permit M-127 Approving Closure Plan and Increased Security'. This permit is in response to the closure plan submitted by Cusac in late 2003. The permit outlines the closure work to be done and a reclamation security provision of $1.622 million to be provided by Cusac. This is $1.51 million greater than the current reclamation security in place and under the draft permit Cusac will be required to increase the security held by the Province by $150,000 per year payable on December 31 of each year from 2005 to 2014 less a deduction for reclamation completed in that year.

Considering that the mining and processing of ore from the East Bain and Rory veins will not result in any significant additional surface disturbance, they will be developed from existing workings and there is an existing mine permit the only requirement should be a submission of the mining plans and a notice to the District Inspector of Mines. The notice should include detailed mine plans, with a Professional Engineer's stamp, to facilitate the process. It is possible that MEM may require a Permit Amendment Application.

17.6.2 Air Emissions and Waste Management Permits

Permit PA-13757 is an air emissions permit which was last revised May 29, 2001. The permit authorizes the emissions from 2 diesel generators, a 600 kW camp generator and a 74 kW standby generator and from the ore crusher. The permit sets a limit for airborne dust in the mill area and requires the operation of the wet scrubber for the crushing plant. Changes to the approved works require the approval of MWLAP.

Permit PE-25436 is an effluent emissions permit which was last revised June 29, 1995. The permit authorizes the effluent discharge from the tailings storage facility. The permit requires the maintenance of 1 m of free board and specifies weekly sampling for conductivity of the effluent when discharging to the tailings facility. If the conductivity exceeds 600 µS/cm then a grab sample must be collected and analyzed for pH and an ICP metals scan.

In the event that there is direct discharge from the facility there are requirements for weekly analysis including pH, ICP metal scan, TSS and flow and a monthly toxicity analysis.

The permit requires the above monitoring but sets the following limits "effluent shall be equal or better than typical flotation plant effluent where neither mercury nor cyanide are employed in the mill process".

Both permits are active and operations can be recommenced under the permits.

17.6.3 Metal Mine Effluent Regulations (MMER)

The MMER were amended as posted in the Canada Gazette Part 1 dated 28 July 2001 and in Part II of the Canada Gazette on June 19, 2002. The regulations were registered on June 2, 2002. The amended MMER applies to all mines in Canada and will apply to the operation when it reopens. The MMER have a number of monitoring and reporting requirements wherein Cusac will be obliged to report to the Federal Government through the Director, Environmental Protection, Pacific and Yukon Region. With the planned reopening of the mine Cusac will be required to notify the Director as outlined in the regulations.

Deposition to the tailings facility is permitted but monitoring requirements may be increased if the discharge to the tailings facility is considered the "final point of discharge". The monitoring includes weekly analysis for metals, TSS and pH and monthly acute toxicity testing.

There is also a requirement for an environmental effects monitoring program (EEM). With the reopening of the mine Cusac will be required to complete an initial EEM study and there are additional studies required over a multi year period. The EEM will require the services of a consulting firm.

A detailed review of the new MMER will be necessary to determine the requirements for the operation. However, on the assumption that a baseline EEM will need to be designed and completed a $150,000 cost allowance has been included in the operating costs.

17.6.4 ARD/ Metal Leaching

There has been acid rock drainage/ metal leaching (ARD/ML) test work on rocks from the Cusac property (Norecol, 1990). Norecol concluded that ‘there is negligible potential for generation of acidity from the underground workings, tailings impoundment or waste rock at the Erickson Mine after it has been reclaimed, no additional testing is recommended and no particular measures to deal with long term acid generation are needed as part of reclamation."

There has been no water quality monitoring over the past few years to confirm the conclusions made by Norecol regarding ARD/ML.

17.6.5 Closure and Reclamation

Cusac prepared and submitted a closure plan to MEM in March 2003. As noted above MEM is in the process of incorporating that closure plan into the M-127 permit.

The closure plan outlines the work to be undertaken. In general the work includes the clean up of all surplus material, removal of structures, closure of openings and revegetation of the disturbed areas. Closure plans for the Tailings facilities have been prepared for Cusac by the consulting firm Knight Piesold.

There is a significant discrepancy between the Cusac closure cost estimate and the MEM closure cost estimate. MEM's estimate is higher by an order of magnitude and MEM have used their estimate is determining the security requirements for the amended permit. Based on recent discussions, Cusac and MEM decided jointly that Cusac prepare a budget for reclamation activities proposed to be carried out over a five year period for review by MEM for inclusion in the M-127 permit.

17.6.6 Other Environmental Issues

Together with the permit issues noted in Section 15.7.4 related to the tailings storage facility there are several other items to be addressed.

The MEM Geotechnical Engineer has concerns related to the remediation plan, design and work related to the Bear trench and regular road maintenance or the status of cross ditches on roads not in regular use.

Through the most recent period of care and maintenance it appears that Cusac was at times tardy in the preparation and reporting of inspections and in addressing the items raised in those inspections.

The author noted a storage building with numerous containers of unknown but assumed to be hazardous materials that will need to be disposed of in a proper manner.

The author noted many electrical transformers. There has not been a detailed sampling survey and so there may be PCB filled or PCB contaminated units in use or in storage on the property. Sampling in 2003 did not indicate that there were PCB's present but testing of transformers which are to be disposed of or sold should be carried out before any action is taken with the transformers.

Sewage disposal for the planned camp will require the installation of a suitable septic field as there is not an existing septic field.

17.7

Taxes

There are two taxes under the Mineral Tax Act. The Net Revenue Tax is 13% of net revenue and can be reduced to zero tax payable through the application of the cumulative tax credit account. With the accumulated capital expenditures on the Table Mountain property the net revenue tax should be reduced to zero.

The Net Currents Proceeds Tax is 2% of the net current proceeds. In the calculation of the net current proceeds tax payable it can be reduced by 25% as an earned depletion tax credit. Therefore, a net currents proceeds tax of 1.5% of the net current proceeds has been included in the analysis.

Income taxes for Cusac are assumed to be zero based upon the accumulation of expenses over the past years when the mine has not been operated.

17.8

Capital and Operating Cost estimates

With the existing facilities and mine development there is not a large capital requirement for the project. The capital required will provide the necessary replacement equipment to complete the work.

Due to the short project life the labour for the rehabilitation of services and the mill along with all of the mine development costs have been treated as operating costs as they will be written off within a single annual period. The start up capital cost estimate is shown in Table 11.

	Table11: Capital Summary
Camp		$250,000

Mining Equipment		$333,500

Mill & Assay Lab		$46,800

Surface Facilities		$134,700

		$765,000

Capital cost estimates are based on a mixture of quotations for some equipment, listed prices for other equipment and estimates to complete repairs in other areas. Capital cost estimates were compiled by Cusac and by other engineers and were reviewed by the author. Based on the short duration of the project there is no provision for sustaining capital.

Operating cost estimates have been generated by Cusac and other engineers and reviewed by the author. They are based on a mixture of quotations, historical information and the experience of the author and other experienced mine management personnel who have worked on the cost estimates.

The total operating cost for the project is $6.3 million or $ 142.8 per ton (including the 15% contingency). The operating costs are summarized in Table 12.

Table 12: Operating Cost Summary
	$ 000's
East Bain Mining	1,603
Rory Mining	1,205

Processing	870

Overhead	1,785

Total	5,463

contingency 15%	818

grand total	6,281

tons milled	44,000

cost per ton	142.8

17.9

Economic analysis

The project schedule and the economic model were developed by Ed. Craft and Mike Glover, and were reviewed and checked by the author.

There is an 8 week period before the mine rehabilitation begins in order to get the necessary camp and other equipment so that the project work can begin.

The project has a total duration of 228 days from the first maintenance and repair work through to the completion of mining and processing. The work could be started at any time but a spring or summer startup would be less troublesome whereas a winter startup would incur additional costs for heating and for generally dealing with less than ideal conditions.

The production of gold commences in about week 10 and is completed by week 32. There will be 11,892 ounces of gold produced in 708 dry tons of flotation concentrate and 7,928 ounces of gold produced as dore bars.

The project cash flow is summarized below in Table 13. The undiscounted project cash flow is $CDN 2.5 at a gold price of $CDN 535 per ounce. The internal rate of return is 129% and the net present value at an annual interest rate of 15% is $CDN 2.1 million.

The total production cost per ounce is $US 292 (assuming that all capital is depreciated and that is applied to the production) and the total cash cost per ounce is $US 256.

Table 13: Cash Flow Summary
Mining Costs	$2,807,486
Processing Costs	$870,000
General Operating Costs	$1,784,639
Capital Costs	$765,000
Total Costs	$6,227,125
Plus Contingency @ 15%	$7,161,194

Total revenue	$9,751,148

BC net proceeds tax	$52,046

Net Cash Flow	$2,537,908

A sensitivity analysis was compiled to determine the project sensitivity to changes in gold price, grade, operating cost and capital cost. For each of these variables a range of values from 70% to 130% of the base estimate was considered. The results are summarized in Figure 28. The

project is most sensitive to changes in the gold price and grade. It is slightly less sensitive to changes in the operating costs and it is the least sensitive to changes in the capital costs.

Figure 28: Sensitivity Analysis

17.10

Payback

The project has a payback period of approximately 9 months from the start of capital expenditures.

17.11

Mine Life

The mine life is approximately 10 months from the start of work until the completion of processing but revenue continues to flow for a further 2 months.

18.0

INTERPRETATION AND CONCLUSIONS

Based on the mineral resource estimates by Sketchley (2003 and 2004) and mining plans prepared by E. Craft, P.Eng and M. Glover of Cusac as reviewed and modified with the author and utilizing development from existing workings and shrinkage stoping mineral reserves have been estimated for the Rory and East Bain veins. The mineral reserve estimates are based upon a gold price of $CDN 535 per ounce, a minimum mining width of 1.5 m and an additional 10% dilution. Ore would be processed in the 300 tpd facility at the site with a planned production rate of 280 tons per day.

The Rory Vein contains a Probable Mineral Reserve of 16,000 tons grading 0.46 ounces gold per

ton and containing 7,360 ounces of gold. (14,500 tonnes @ 15.7 grams gold per tonne and containing 236.6 kg of gold). This is based on a gold price of $CDN 535 per ounce, a cut off grade of 0.31 oz/ton, 1.5 m minimum width,10% additional dilution and mining by small scale shrinkage stoping. In the Rory vein the estimated mineral reserve is based on the selective mining of the higher grade portions of the mineral resource intervals.

The East Bain Vein contains an Indicated Mineral Reserve of 28,000 tons grading 0.50 ounces gold per ton and containing 14,000 ounces of gold (25,500 tonnes grading 17.1 grams gold per tonne and containing 450.1 kg of gold). This is based on a gold price of $CDN 535 per ounce, a cut off grade of 0.27 oz/ton, 1.5 m minimum width,10% additional dilution and mining by small scale shrinkage stoping.

The reserves can be exploited under existing permits though submission of mine plans and a notice to the District Inspector of Mines will be required. There is some environmental work required at the tailings area and at a previous open pit and a tailings facility operating procedure is required. Reopening of the mine may also trigger environmental monitoring requirements under the Metal Mine Effluent Regulations

The mining project has a 2 month preproduction period and a 7 month mining and processing period. It will be necessary to negotiate a new marketing contract or a renewal of the previous contract for the sale of flotation concentrates.

The capital costs are estimated to be $765,000 and the operating costs are estimated to be $5.5 million. At a gold price of $CDN 535 per ounce and with an additional 15% contingency on the capital and operating costs, the project will generate a cash flow of $CDN 2.5 million and has an annualized internal rate of return of 129%. The total production cost per ounce is $US 292 (assuming that all capital is depreciated and that is applied to the production) and the total cash cost per ounce is $US 256.

The production plans are consistent with the usual practices for small high grade mining operations in remote locations. The property has a history of high grade production and the mineral reserve estimates are consistent with previous production from other veins at the property. The development of the mineral reserves will provide opportunities to examine inferred mineral resource blocks.

19.0

RECOMMENDATIONS

Cusac should carry out the planned negotiations with the MEM to complete the amendment to the M-127 permit to incorporate the site reclamation plan. Further Cusac should review and embark upon the work outlined by its consultants with respect to the tailings facility and respond to the MEM regarding their concerns related to the tailings facility and reclamation of old workings.

In advance of a production decision Cusac should negotiate a new contract for the sale of the flotation concentrates.

If Cusac reopens the operation it should consider and undertake the reclamation activities possible while maintaining the site for future production

20.0

references

Bain, J., Yip, G., Ball, M., (1991): Bain Vein Ore Reserve Calculation - Quadrilateral Method. Unpublished Company Report for Total Energold Corporation, unknown pages.

Ball, M., 1985. Structural Geology Associated with Gold-Bearing Quartz Veins in the McDame Gold Mining Camp, Liard Mining Division, Cassiar District, British Columbia: Unpublished Company Report for Erickson Gold Mining Corporation, 22 pages.

Ball, M. 1989. Erickson Gold: Geology and Model of Ore Formation; Unpublished Company Report for Total Energold Corporation, 75 pages.

Ball, M., (1994) :1994 Exploration Plan for the Table Mountain Gold Property. Unpublished Company Report for Cusac Industries Ltd., unknown pages.

Barlee, N.L., 1980. The Guide to Gold Panning in British Columbia; Canada West Publications, 192 pages.

Beaton, A.J., 2003. Cost Analysis of Development for East Bain Vein. Unpublished Company Report for Cusac Gold Mines Ltd., 3 pages.

Bergen, R.D., February 2005. Preliminary Feasibility Study on the Rory and East Bain Veins of Cusac Gold Mines Ltd., Table Mountain Gold Property, B.C. Canada

Brett, Dan, 2004, Thoughts on Cusac's Mill, unpublished company memo from October 2004

Broughton, D., and Masson, M., 1996. Report on 1995 Exploration Program on the Taurus Project, B.C., NTS 104P/5; Unpublished Company Report for Cyprus Canada Inc., 57 pages and appendices.

Canada Gazette, 2002, Metal Mine Effluent Regulations

Canadian Securities Administrators, 2001. National Instrument 43-101 Standards of Disclosure for Mineral Projects. Summary Brochure

Canadian Securities Administrators, 2001. National Instrument 43-101 Standards of Disclosure for Mineral Projects. Policy Document.

Canadian Securities Administrators, 2001. Companion Policy 43-101CP. Policy Document.

Canadian Securities Administrators, 2001. Technical Report Form 43-101F1. Policy Document.

CIM Standing Committee on Reserve Definition, 2000. CIM Standards on Mineral Resources and Reserves - Definitions and Guidelines.

Concentrate Sales Agreement between Cusac Gold Mines Ltd and Marubeni Corporation, April 2004, Unpublished Company document

Craft, E.W., 2005. Rory Vein Mining Plan, Unpublished documents prepared for Cusac Gold Mines Ltd.

Cusac Gold Mines Ltd., 1996 Annual Report

Cusac Gold Mines Ltd., Mill Reports 1996 and 1997, unpublished internal documents

Cusac Gold Mines Ltd., An Exploring Producer, company brochure

Diakow, L.J. and Panteleyev, A., 1981. Cassiar Gold Deposits, McDame Map-area (104P/4,5); in Geological Fieldwork 1980, British Columbia Ministry of Energy, Mines and Petroleum Resources, Paper 1981-1, pp 55-62.

Downie, I., 1997. A Review of the Table Mountain Gold Property and Recommendations for Exploration; Unpublished Company Report for Cusac Gold Mines Ltd., Iain Downie Geoconsult, 20 pages and appendices.

Dussel, E., 1986. Listwanites and their Relationship to Gold Mineralization at Erickson Mine, British Columbia, Canada; Unpublished M.Sc. thesis, Western Washington University, 90 pages.

Ey, F., 1986. Structural Analysis of the Cusac Decline, Erickson Gold Mine, Cassiar, B.C.; Unpublished Company Report for Erickson Gold Mining Corporation, Minatco Ltd., 11 pages and appendices.

Ey, F., 1987. Structural Control of the Vollaug Gold Bearing Quartz Vein, Total Erickson, Erickson Gold Mine, Cassiar, B.C.; Unpublished Company Report for Erickson Gold

Mining Corporation, Minatco Ltd., 9 pages and appendices.

Fitzpatrick, K.P., and Glover, M.J., 2003. Table Mountain Gold Property, East Bain Vein Mining Plan, Nu-Tara and Cordoba Mining Claims, Liard Mining Division. Unpublished Company Report for Cusac Gold Mines Ltd., 42 pages.

Fjetland, G. 1982. A Microscopy Investigation of the Gold and Sulphides from the Erickson Mine, Cassiar, B.C.; Unpublished Company Report for Erickson Gold Mining Corporation.

Gabrielse, H., 1963. McDame Map-Area, Cassiar District, British Columbia; Geological Survey of Canada, Memoir 319, 138 pages.

Gordey, S.P., Gabrielse, H. and Orchard, M.J., 1982. Stratigraphy and Structure of the Sylvester Allochthon, Southwest McDame Map Area, Northern British Columbia; in Current Research, Part B, Geological Survey of Canada, Paper 82-1B, pp 101-106.

Glover, M., 1998. Table Mountain Gold Property, 1998. Project Review and Exploration Proposal. Unpublished Company Report for Cusac Gold Mines Ltd., 33 pages.

Glover, M.J., 2002a. Table Mountain Gold Property, Diamond Drilling Report, East Bain Vein, 2002 Field Season. Unpublished Company Report for Cusac Gold Mines Ltd., 29 pages and appendices.

Glover, M.J., 2002b. United States Securities & Exchange Commission, Form 20-F. Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the Fiscal year Ended December 31, 2002, Commission File Number 0-13548, Cusac Gold Mines Ltd.

Glover, M.J., 2003. Table Mountain Gold Property, East Bain Vein Mining Project Summary, Nu-Tara and Cordoba Claims. Unpublished Company Report for Cusac Gold Mines Ltd., pages and appendices.

Glover, M.J., 2004. Table Mountain Gold Property, Diamond Drilling Report, Don and High Claims, 2003 Field Season. Unpublished Company Report for Cusac Gold Mines Ltd., 33 pages and appendices.

Glover, M.J., and Brett, D., 2003. Table Mountain Gold Property, Mine Closure Plan, Reclamation Permit M-127, Liard Mining Division. Unpublished Company Report for Cusac Gold Mines Ltd., 38 pages and appendices.

Glover, M.J. & Brett, D., 2004. Table Mountain Gold Property Annual Reclamation Report for 2003 Reclamation Permit M-127, Unpublished Company Report

Glover & Fitzpatrick, 2003, East Bain Vein Mining Plan, Unpublished Company Report

Grant, D.R., 1981. A Study of the Sulphide Mineralogy and Geology of the McDame Gold Camp, Cassiar, British Columbia, Unpublished B.A.Sc. thesis, The University of British Columbia, 78 pages.

Griffin, B., 2003. Tailings Storage Facility, Preliminary Closure Plan. Unpublished Company Report for Cusac Gold Mines Ltd., 17 pages. Knight Piésold Consulting.

Gunning, M.H., 1988. Cornucopia (Taurus Mine), Gold Distribution in the Taurus Mine Quartz Veins; British Columbia Ministry of Energy, Mines and Petroleum Resources, Exploration in British Columbia 1987, pp B95-B105.

Harms, T.A., 1986. Structural and Tectonic Analysis of the Sylvester Allochthon, Northern British Columbia: Implications for Paleogeography and Accretion, Unpublished Ph.D. Thesis, The University of Arizona.

Harms, T., 1989. Geology of the Northeast Needlepoint Mountain and Erickson Mine Areas, Northern British Columbia; in Geological Fieldwork 1989, British Columbia Ministry of Energy, Mines and Petroleum Resources, Paper 1990-1, pp 339-345.

Harms, T., Ball, M., Fischer, P. and Nelson, J. 1989. Geology of the Needlepoint Mountain Map Area; British Columbia Ministry of Energy, Mines and Petroleum Resources, Open File 1989-19, 1:25,000 map.

Holland, S.S., 1950. Placer Gold Production of British Columbia, British Columbia Ministry of Energy, Mines and Petroleum Resources, Bulletin 28 (reprinted in 1980), 89 pages.

Hooper, D., 1984. A Study of the Gold-quartz Veins at Erickson Gold Camp, Cassiar, North-Central British Columbia; Unpublished B.Sc. thesis, The University of British Columbia, 96 pages.

Hunt, L.C., 2003. Reclamation Report for 1998 – 2002 on the Table Mountain Gold Property. Unpublished Company Report for Cusac Gold Mines Ltd., 21 pages.

Knight Piesold, 2002, Tailings Storage Facility, 2002 Site Inspection and Annual Report, Ref No. VA101-81/1-1. Unpublished report prepared for Cusac Gold Mines.

Mandy, J.T., 1935. McDame Creek Area, Dease River; British Columbia Minister of Mines Annual Report, 1935, pp. B12-B22.

Mandy, J.T., 1937. McDame Creek Area; British Columbia Minister of Mines Annual Report, 1937, pp. B24-B37.

Ministry of Energy & Mines, October 2004, Draft Permit M-127 Approving Closure Plan and

Increasing Reclamation Security

Ministry of Energy & Mines, Mineral Titles Online Viewer re owner 105981 (Cusac Gold Mines Ltd.)

Ministry of Environment Land and Parks (now Ministry of Water Land and Air Protection), June 1995, Effluent Emissions Permit PE 13756

Ministry of Environment Land and Parks (now Ministry of Water Land and Air Protection), May 2001, Air Emissions Permit PE 13757

Nelson, J.L, 1990. Evidence for a Cryptic Intrusion Beneath the Erickson-Taurus Gold-Quartz Vein system, Near Cassiar, B.C. (104P/4,5); in Geological Fieldwork 1989, British Columbia Ministry of Energy, Mines and Petroleum Resources, Paper 1990-1, pp 229-233.

Nelson, J.L. and Bradford, J.A., 1989. Geology and Mineral Deposits of the Cassiar and McDame Map Areas, British Columbia (NTS 104P/3,5) in Geological Fieldwork 1988, British Columbia Ministry of Energy, Mines and Petroleum Resources, Paper 1989-1, pp 323-328.

Nelson, J.L. and Bradford, J.A., 1993. Geology of the Midway-Cassiar Area, Northern British Columbia (104O, 104P) Ministry of Energy, Mines and Petroleum Resources, Bulletin 83, 94 pages.

Norecol, 1990. Results of Acid Generation Testing

Panteleyev, A, and Diakow, L.J., 1982. Cassiar Gold Deposits, McDame Map-area; in Geological Fieldwork 1981, British Columbia Ministry of Energy, Mines and Petroleum Resources, Paper 1982-1, pp 156-161.

Panteleyev, A., Broughton, D., and Lefebure, D., 1997. The Taurus Project, A Bulk Tonnage Gold Prospect near Cassiar, British Columbia, NTS 104P/5; in Geological Fieldwork 1996, British Columbia Ministry of Employment and Investment, Energy and Minerals Division, Geological Survey Branch, Paper 1997-1

Personal Communications with Colin Craft, former mill operator, January 2005

Read, P.B. and Psutka, J.F., 1983. Surface Geology, Taurus Mine, Cassiar B.C.; Unpublished Company Report for Trenaman, Spencer and Associates Limited, Geotex Consultants Limited, 31 pages and appendices.

Sketchley, D.A., 1986. The Nature of Carbonate Alteration in Basalt at Erickson Gold Mine, Cassiar, North-central British Columbia; unpublished M.Sc. thesis, The University of British Columbia, 272 pages.

Sketchley, D.A., Sinclair, A.J., and Godwin, C.I., 1986. Early Cretaceous Gold-Silver Mineralization in the Sylvester Allochthon, near Cassiar, North Central British Columbia; Canadian Journal of Earth Sciences, Vol. 23, No. 9, pp 1455-1458.

Sketchley, D.A. and Sinclair, A.J., 1989. Carbonate Alteration in Basalt at Total Erickson Gold Mine, Cassiar, Northern British Columbia; Economic Geology, Vol. 86, No. 3, pp. 570-587.

Sketchley, D.A., 1998. Geological Evaluation of the Cassiar Gold Camp, British Columbia. Unpublished Company Technical Report for Cusac Gold Mines Ltd., 34 pages.

Sketchley, D.A., 2001. Geological Evaluation of the Cassiar Gold Camp, British Columbia. Unpublished Company Summary Technical Report for Cusac Gold Mines Ltd., 10 pages.

Sketchley, D.A., 2003. Table Mountain Gold Property, Liard Mining District, British Columbia. Unpublished Company Technical Report for Cusac Gold Mines Ltd., 125 pages including appendices.

Sketchley, D.A., 2003. Technical Report on Table Mountain Gold Property Liard Mining District British Columbia, Canada

Sketchley, D.A., 2004, Technical Report on Rory Vein, Table Mountain Gold Property Liard Mining District British Columbia, Canada

Trenaman, R.T., 1997. Report on the 1996 Exploration Program - Taurus Project, Cassiar, British Columbia; Unpublished Company Report for International Taurus Resources Inc., 31 pages and appendices.

Westervelt, R. D.,(1993). A Summary Review Report on the Table Mountain Gold Property, Cassiar, British Columbia. Unpublished Company Report for Cusac Industries Ltd., 31 pages and appendices.

21.0

STATEMENTS OF QUALIFICATIONS

I, Raymond Dennis Bergen, certify the following:

I am an independent consulting engineer with office on Lasqueti Island, B.C., Canada V0R 2J0.

I earned a Diploma of Mining Technology in 1972 at the British Columbia institute of Technology and a Bachelor of Applied Science in Mineral Engineering in 1979 at The University of British Columbia.

I am a Professional Engineer registered with The Association of Professional Engineers and Geoscientists of the Province of British Columbia, No. 16064.

I have practiced my profession for 33 years and I am experienced in open pit and underground mine operation, engineering and management, feasibility and development studies, mineral reserve estimation and mineral project evaluation.

I am a Qualified Person, as outlined in National Instrument 43-101 of the Canadian Securities Administrators, and I have read National Instrument 43-101 and its companion policies.

This technical report dated March 23^rd, 2005 and titled "Technical Report on the Rory and East Bain Veins, Table Mountain Gold Property, British Columbia, Canada", was prepared for Cusac Gold Mines Ltd. and is based on an evaluation of data conducted by me. The quality of information and conclusions contained in it are consistent with the general requirements for a preliminary feasibility study and based upon: i) information available at the time of preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, and qualifications set forth within it. I am not aware of any material fact or item that could change or affect the conclusions contained in this study.

My most recent visit to the property took place from January 12 to 14, 2005.

Other than my capacity as an independent consulting engineer to Cusac Gold Mines Ltd., I have not received and do not expect to receive a direct or indirect interest in the properties described in this report, nor in Cusac Gold Mines Ltd.

Permission is given to Cusac Gold Mines Ltd. to use this report in its complete form. Permission must be obtained before publication of any portion of this report.

Dated the 23^rd day of March, 2005 and submitted in electronic format only.

__________________________________

Raymond Dennis Bergen, B.A.Sc., P.Eng.

STATEMENT OF QUALIFICATIONS

I, Dale A. Sketchley, certify the following:

10.

I am an independent consulting geologist, employed by Acuity Management Ltd., with office at 15068 Spenser Court, Surrey, B.C., Canada V3S 5Z8.

11.

I earned a Bachelor of Science in Geology-Geophysics in 1975 and a Master of Science in Geology in 1986, at The University of British Columbia.

12.

I am a Professional Geoscientist registered with The Association of Professional Engineers and Geoscientists of the Province of British Columbia, No. 23913.

13.

I am registered as a Fellow of the Geological Association of Canada and a member of the Canadian Institute of Mining, Metallurgy and Petroleum.

14.

I have practised my profession for 30 years and I am experienced in open pit and underground feasibility and development studies, resource/reserve estimation, ore reserve reconciliation audits, mine site and regional exploration, which includes extensive work in sampling, QA-QC, and data analysis.

15.

I am a Qualified Person, as outlined in National Instrument 43-101 of the Canadian Securities Administrators, and I have read National Instrument 43-101 and its companion policies.

16.

The Technical Report dated March 23, 2005, and titled "Rory and East Bain Veins - Table Mountain Gold Property", was prepared for Cusac Gold Mines Ltd. by Dennis Bergen, P.Eng. The geological and resource estimation portions of this report were obtained directly from my original and previously filed reports, titled "Table Mountain Gold Property", dated July 31^st, 2004 and "Rory Vein - Table Mountain Gold Property", dated November 14^th, 2004. The original reports on the East Bain and Rory Veins are based on an evaluation of data conducted by me.

17.

The quality of information and conclusions contained in the report titled "Rory and East Bain Veins - Table Mountain Gold Property" are consistent with the level of work involved in my services and based upon: i) information available at the time of preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, and qualifications set forth within it. I am not aware of any material fact or item that could change or affect the conclusions contained in this memorandum.

18.

The original report on the East Bain Vein is based on a visit to the property for that purpose from July 14 to 16, 2003 and the original report on the Rory Vein is based on a visit to the property for that purpose from June 25 to 28, 2004.

19.

Other than my capacity as an independent consulting geologist to Cusac Gold Mines Ltd., I have not received and do not expect to receive a direct or indirect interest in the properties described in this report, nor in Cusac Gold Mines Ltd.

20.

Permission is given to Cusac Gold Mines Ltd. to use this report in its complete form. Permission must be obtained before publication of any portion of this report.

Dated the 23^rd day of March, 2005 and submitted in electronic format only

____________________________________

Dale A. Sketchley, M.Sc., P.Geo. (Signed)

	2004 ^(a)	2003^{(a) , (b)}	2002 ^(b)	2001 ^(b)	2000 ^(b)
Production Revenue	-		-
Production Costs	-	-	-		$127,064
Administration & Amortization	$703,398	$1,033,813	$817,295	$339,673	$420,124
Exploration Expense	$1,120,152	$446,176	$330,668	$174,404	$204,461
Future Income Taxes Recovery	$(256,464)	-	-	-	-
Operating Loss	$(1,823,550)	$(1,479,989)	$(1,155,963)	$(514,077)	$(751,649)
Net Loss	$(1,692,229)	$(1,465,121)	$(1,192,847)	$(446,239)	$(574,649)
Loss per share	$(0.04)	$(0.04)	$(0.04)	$(0.02)	$(0.02)
Net Assets	$2,070,627	$3,121,004	$2,321,253	$1,852,767	$2,028,465
Total Assets	$3,374,820	$3,970,972	$2,842,118	$2,416,123	$2,465,823
Capital Stock	$20,038,558	$19,404,606	$17,454,916	$16,168,748	$15,911,123

		2002
Risk-free rate		0.001%
Dividend yield		Nil%
Volatility factor of the expected market price
of the Company's common shares		146%
Weighted average expected life of the warrants (months)		12

	2004	2003
Risk-free rate	3.06%	2.59%
Dividend yield	Nil%	Nil%
Volatility factor of the expected market price
of the Company's common shares	89%	92%
Weighted average expected life of the options (months)	12	18

	2004	2003	2002
		(Restated)	(Restated)

Net loss per Canadian GAAP	$ (1,692,229)	$ (1,465,121)	$ (1,192,847)
Adjustments related to:
Stock based compensation	-	8,025	15,343
Loss on settlement of debt	-	-	(17,288)
Flow through shares	(256,464)	-	-
Compensation expense on warrants and renouncement of tax benefit	(50,199)	-	-
Asset retirement obligation	(342,288)	-	-
Accretion expense	14,740	14,105	13,498

Net loss per US GAAP	(2,326,440)	(1,442,991)	(1,181,294)
Unrealized gains (losses) on investments	30,960	14,414	(64,267)

Comprehensive loss per United States GAAP	$ (2,295,480)	$ (1,428,577)	$ (1,245,561)

Loss per share per US GAAP Basic and diluted	$ (0.06)	$ (0.04)	$ (0.04)

Shareholders’ equity per Canadian GAAP	$ 2,070,627	$ 3,121,004	$ 2,007,810
Adjustment related to:
Asset retirement obligation	-	327,548	313,443
Accumulated comprehensive loss - unrealized loss on investments	(33,053)	(64,013)	(78,427)

Shareholders’ equity per US GAAP	$ 2,037,574	$ 3,384,539	$ 2,242,826

	Monthly High ⁽¹⁾	Monthly Low ⁽¹⁾
June 2005	$0.82	$0.79
May 2005	$0.81	$0.79
April 2005	$0.82	$0.80
March 2005	$0.83	$0.80
February 2005	$0.81	$0.80
January 2005	$0.83	$0.81
December 2004	$0.84	$0.81

Table 2. Historical Mineral Reserve Estimates (Glover 2002b) Table Mountain Gold Property – Cusac Gold Mines Ltd.
Mine Area	Vein Name		Block Name	Reserve Category (Proven)	Reserve Category (Probable)	Resource Category (Drill)	Block Grade (oz/ton)	Total Ounces (Proven)	Total Ounces (Probable)	Total Ounces (Drill)	Notes
Main	Jennie		B1		265		0.70		186		Below 35 L
Main	Jennie		B2		750		0.51		383		Below 35 L
Main	Jennie		D		950		0.38		361		Below 35 L
Main	Dease		DS1	170			0.78	133			Pillar over XC
Main	Dease		DS2	225			0.60	135			Pillar over XC
Main	Dease		DS4	1,130			0.61	689			Below 21 L
Main	Dease		DS5		525		0.75		393		Below 21 L
Main	Goldie		J2	300			0.30	90			Pillar below XC
Main	Goldie		J3		300		0.30		90		Pillar below XC
Main	Caitlin		K1		2,249		0.24		546		Crown Pillar
Main	Caitlin		K2		5,396		0.27		1,457		Crown Pillar
Main	Caitlin		K3			5,250	0.23			1,229
Cusac	Lily		1800	240			1.00	240			Lily 1800 Pillar
Bain	Bain		EBain			24,434	0.97			23,636	East Bain
Individual Tonnage Totals				2,065	10,435	29,684		1,287	3,416	24,865
Individual Au Grades				0.62	0.33	0.84
Grand Totals				42,184 tons			0.70 oz/ton	29,568 ounces
Notes:		- Ore is Proven where the grade has been reasonably established by past production and detailed sampling.
		- Probable ore includes blocks where continuity and grade have been established on at least two sides.
		- Drill indicated blocks are included where geological and assay continuity are reasonably assured.

Table 3. East Bain Vein Resource Calculation Summary
Block Number	Resource Category	Au oz/ton	Au Cut oz/ton	Core Width	Core Angle	True Width	Tons	Uncut Ounces	Cut Ounces
Block Number	Resource Category	Au oz/ton	Au Cut oz/ton	Core Width	Core Angle	True Width	Tons	Uncut Ounces	Cut Ounces
02BG-02	Inferred	5.190	2.000	0.60	80	0.59	1276	6622	2552
02BG-03	Indicated	0.380	0.380	2.60	85	2.59	4271	1623	1623
02BG-04	Indicated	0.554	0.554	0.90	90	0.90	4362	2417	2417
90-340	Indicated	1.520	0.769	1.45	75	1.40	2066	3140	1590
90-357	Indicated	0.660	0.660	1.70	80	1.67	2944	1943	1943
90-359	Indicated	1.930	0.862	1.40	75	1.35	1384	2672	1194
91-371	Indicated	0.410	0.410	2.00	80	1.97	5061	2075	2075
91-373	Indicated	1.490	1.490	1.50	75	1.45	2069	3082	3082

Total Indicated Mineral Resource (uncut) =					22,157 tons @ 0.77 oz/ton (16,952 oz)
Total Indicated Mineral Resource (cut) =					22,157 tons @ 0.63 oz/ton (13,923 oz)

Total Inferred Mineral Resource (uncut) =					1,276 tons @ 5.19 oz/ton (6,622 oz)
Total Inferred Mineral Resource (cut) =					1,276 tons @ 2.00 oz/ton (2,552 oz)

Notes. - Cutting factor of 2 ounces per short ton. - Gold grade in ounces per short ton. - Core width in metres. - Specific gravity in tons per cubic metre.

	Payments Due by Period ($’s)
Contractual Obligations	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
Long-Term Debt Obligations other than Capital Lease Obligations	-	-	-	-	-
Capital Lease Obligations	-	-	-	-	-
Operating Lease Obligations	-	-	-	-	-
Purchase Obligations	-	-	-	-	-
Other Long-Term Liabilities reflected on the Corporation’s Balance Sheet under Canadian GAAP, Asset Retirement Obligation)	500,000	50,000	50,000	50,000	350,000
Total	500,000	50,000	50,000	50,000	350~~,000~~

		Annual Compensation			Long-Term Compensation
					Awards		Payouts
NEO Name and Principal Position (a)	Year (b)	Salary ($) (c)	Bonus ($) (d)	Other Annual Compen-sation ($) (e)	Securities Under Options/ SARs Granted (#) (f)	Restricted Shares or Restricted Share Units ($) (g)	LTIP Payouts ($) (h)	All Other Compen-sation ($) (i)
David H. Brett CEO & CFO	2004	$57,000	Nil	Nil	Nil	Nil	Nil	Nil
Leanora Homrig CFO	2004	Nil	Nil	$54,000	Nil	Nil	Nil	Nil
Guilford H. Brett Former CEO	2004 2003 2002	$90,000 $90,000 $90,000	Nil Nil Nil	Nil Nil Nil	Nil 750,000 300,000	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil

Plan Category	A Number of securities to be issued upon exercise of outstanding options, warrants and rights	B Weighted-average exercise price of outstanding options, warrants and rights	C Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A)
Equity compensation plans approved by securityholders	2,160,000	$0.36	2,840,000
Equity compensation plans not approved by securityholders	N/A	N/A	N/A
Total	2,160,000	$0.36	2,840,000

Month	High	Low
June 2005	$0.14	$0.10
May 2005	$0.15	$0.12
April 2005	$0.15	$0.11
March 2005	$0.16	$0.14
February 2005	$0.16	$0.14
January 2005	$0.17	$0.15

Quarter	High	Low
First	$0.15	$0.11
Second	$0.44	$0.16
Third	$0.43	$0.27
Fourth	$0.52	$0.32

Quarter	High	Low
First	$0.50	$0.21
Second	$0.29	$0.20
Third	$0.34	$0.22
Fourth	$0.43	$0.20

	Number of options	Weighted Average Exercise Price

Outstanding at December 31, 2001	1,310,000	$0.25
Granted	2,450,000	0.25	*
Exercised	(1,970,000)	0.24

Outstanding at December 31, 2002	1,790,000	0.27
Granted	2,340,000	0.36	*
Cancelled/expired	(275,000)	0.35
Exercised	(1,725,000)	0.27
Outstanding at December 31, 2003	2,130,000	0.36
Granted	50,000	0.37	*
Exercised	(20,000)	0.25

Outstanding at December 31, 2004	2,160,000	$0.36

Number	Exercise Price	Expiry Date
110,000	$0.25	May 22, 2005
50,000	$0.37	May 27, 2006
1,180,000	$0.36	July 28, 2006
820,000	$0.37	November 14, 2006

2,160,000

	2004	2003	2002	2001	2000
High	$0.7141	$0.7061	$0.6583	$0.6669	$0.6894
Low	$0.8537	$0.7867	$0.6231	$0.6279	$0.6521
Average	$0.7683	$0.7136	$0.6369	$0.7046	$0.6725
Period End	$0.8300	$0.7738	$0.6329	$0.6279	$0.6669

Month	High	Low
May, 2003	$0.54	$0.385
April, 2003	$0.48	$0.295
March, 2003	$0.35	$0.27
February, 2003	$0.46	$0.31
January, 2003	$0.45	$0.35
December, 2002	$0.52	$0.33

For the years ended December 31		2004			2003			2002
					(Restated)			(Restated)
Expenses
	Administration including stock based compensation of $7,900 (2003 - $628,625; 2002 - $361,667)	$	661,147		$	991,710		$	813,229
	Amortization of property, plant and equipment		42,251			42,103			4,066
	Resource property acquisition		-			-			8,000
	Resource property exploration		1,120,152			446,176			330,668
Loss from operations			(1,823,550	)		(1,479,989	)		(1,155,963	)
Other income (expenses)
	Loss on sale of investments		-			-			(7,427	)
	Gain on equipment disposal		-			12,662			1,605
	Interest		10,167			2,206			3,938
	Investment write-down (Note 2)		(135,310	)		-			(35,000	)
			(125,143	)		14,868			(36,884	)
Loss before income taxes			(1,948,693	)		(1,465,121	)		(1,192,847	)
Future income tax recovery (Note 9)			256,464			-			-
Net loss for the year			(1,692,229	)		(1,465,121	)		(1,192,847	)
Deficit, beginning of year			(17,273,894	)		(15,808,773	)		(14,615,926	)
Deficit, end of year		$	(18,966,123	)	$	(17,273,894	)	$	(15,808,773	)
Loss per share - basic and diluted		$	(0.04	)	$	(0.04	)	$	(0.04	)
Weighted average shares outstanding			40,088,695			34,506,123			29,273,211

	Exercise Price
Number	Year 1	Year 2	Expiry Date

200,000	$0.19	$0.20	June 17, 2004
50,000	$0.17	$0.20	August 1, 2004

Principal Accountant Service (1)	For the fiscal year ended December 31, 2004	For the fiscal year ended December 31, 2003
Audit Fees	$33,612	$23,565
Tax Fees	$3,988	$2,000

	Contents
Report of Independent Registered Public Accounting Firm		2
Comments by Auditors for U.S. Readers on Canada-U.S. Reporting Differences		3
Consolidated Financial Statements
Balance Sheets		4
Statements of Operations and Deficit		5
Statements of Cash Flows		6
Summary of Significant Accounting Policies		7 - 11
Notes to the Financial Statements		12 - 26

December 31	2004			2003
				(Restated)
Assets
Current
Cash and cash equivalents	$	375		$	81,193
Receivables		15,836			7,362
Prepaid expenses		10,717			19,922
Flow-through share proceeds (Note 9)		649,148			1,050,000
		676,076			1,158,477
Long-term investments and advances (Note 2)		408,877			498,786
Property, plant and equipment (Note 3)		78,298			102,140
Resource properties (Note 4)		2,211,569			2,211,569
	$	3,374,820		$	3,970,972
Liabilities and Shareholders' Equity
Liabilities
Current
Bank indebtedness (Note 5)	$	307,516		$	2,228
Accounts payable and accrued liabilities		642,464			520,192
Loans from related parties (Note 6)		11,925			-
		961,905			522,420
Asset Retirement Obligations (Note 12)		342,288			327,548
Shareholders' equity
Share capital (Note 7)
Authorized
5,000,000 preference shares, no par value
100,000,000 common shares, no par value
Issued
43,331,712 (2003 - 39,400,981) common shares		20,038,558			19,404,606
Contributed surplus (Note 8)		998,192			990,292
Deficit		(18,966,123	)		(17,273,894	)
		2,070,627			3,121,004
	$	3,374,820		$	3,970,972

Acquisition of mineral property interests for shares	$	-	$	-	$	8,000
Stock-based compensation (Note 8)	$	7,900	$	628,625	$	361,667
Issuance of flow-through shares (Note 7)	$	720,000	$	1,050,000	$	75,000
Asset Retirement Obligations (Note 12)	$	342,288	$	327,548	$	313,443
Settlement of debt with shares and warrants (Note 7)	$	-	$	-	$	45,500
Shares received as settlement of advances receivable	$	-	$	120,000	$	-

Ability to Continue as a Going Concern		While the consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, the Table Mountain Mine, being in a care and maintenance mode, the occurrence of significant losses in recent years and the Company’s deficit raise substantial doubt about the validity of this assumption. If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported net loss and the balance sheet classifications used.

		The Company’s continued existence as a going concern is dependent upon its ability to continue to obtain adequate financing arrangements and to achieve profitable operations. Management’s plans in this regard are to diversify its resource property holdings and obtain sufficient equity or debt financing to enable the Company to continue its efforts towards the exploration and development of new mineral properties and recommence producing gold at the Table Mountain Mine when economically feasible.

		While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate sufficient funds for operations.

Principles of Accounting		The Company follows Canadian generally accepted accounting principles as set out below. Differences from United States accounting principles are disclosed in Note 13 to these financial statements.

		All figures are reported in Canadian dollars. Exchange ratios between the United States and Canadian dollar for each of the periods reported in these financial statements, with bracketed figures reflecting the average exchange rate for the year are:

		December 31, 2004 US $1 : CDN $1.2021 CDN $(1.3016) December 31, 2003 US $1 : CDN $1.2946 CDN $(1.4010) December 31, 2002 US $1 : CDN $1.5769 CDN $(1.5702)

Principles of Consolidation		These consolidated financial statements include the accounts of Cusac Gold Mines Ltd. and its inactive, wholly-owned subsidiary Gulf Titanium Inc. All intercompany balances have been eliminated.

Cash and Cash Equivalents		The Company considers cash and cash equivalents to include amounts held in banks and highly liquid investments with maturities at point of purchase of three months or less. The Company places its cash and cash investments with institutions of high-credit worthiness. At times, such investments may be in excess of federal insurance limits.

Property, Plant and Equipment		Property, plant and equipment are recorded at cost. Amortization is recorded over the estimated useful life of the property, plant and equipment on the straight-line basis as follows:

		Mine plant and buildings - 10% Mine equipment - 30% Office equipment - 20% - 30% Automotive equipment - 30% Leasehold improvements - over lease term

Resource Properties		Exploration costs pertaining to individual resource prospects are charged to income as incurred except for expenditures on specific properties having indications of the presence of a mineral resource with the potential of being developed into a mine. In this case, acquisition, exploration and development costs relating to mineral properties are deferred until such time as it is determined that the costs are not likely to be recouped or mineral properties are brought into production, abandoned, or sold, at which time they are amortized on the unit of production basis over the estimated life of the property or written off to earnings. Revenue incidental to exploration and development activities, including the proceeds on sales of partial properties, is credited against the cost of related properties. Properties that include certain abandoned claims are carried at cost unless only minimal exploration costs were incurred on abandoned claims, in which case the cost of acquisition is apportioned and an appropriate amount is written off. Inactive properties are carried at cost unless there is an abandonment of the Company’s interest, at which time the cost is written off. Gains or losses on partial sales of properties are reflected in the Consolidated Statement of Operations and Deficit in the period of sale.

		Where the Company enters into an option agreement for the acquisition of an interest in mining properties which provides for periodic payments, such amounts unpaid are not recorded as a liability since they are payable entirely at the Company’s option. As at December 31, 2004, the Company had no material option agreements outstanding that it was pursuing.

Impairment of Long-lived Assets		The Company periodically evaluates the future recoverability of its long-lived assets. Impairment losses or write-downs are measured as the difference between the carrying amount and the fair value of the asset and are recorded in the event the net book value of such assets are determined to be not recoverable based on the estimated undiscounted future cash flows attributable to these assets.

Future Income Taxes		Income taxes are accounted for by the liability method. Under this method, income taxes reflect the deferral of such taxes to future years. The deferral is a result of temporary differences which arise when certain costs, principally amortization and deferred exploration, are claimed for tax purposes in different time periods than the related amounts are amortized in the accounts.

Long-term Investments and Advances		Long term investments which consist primarily of investments in public companies are recorded at cost less write-downs, when in management’s opinion an other-than-temporary impairment in value has occurred. Fair value of the investment in shares is determined based on market prices and the fair value of the advances approximates book value.

Estimates and Assumptions		The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. The assets which required management to make significant estimates and assumptions in determining carrying value include long-term investments, property, plant and equipment and resource properties.

Loss Per Share		Basic loss per share is calculated by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share reflects the potential dilution of securities that could share in earnings of an entity. In a loss year, potentially dilutive common shares are excluded from the loss per share calculation as the effect would be anti-dilutive. Basic and diluted loss per share are the same for the years presented.

		For the years ended December 31, 2004, 2003 and 2002, potentially dilutive common shares (relating to options and warrants outstanding at year end) totaling 8,600,654 (2003 - 6,924,500; 2002 - 4,735,625) were not included in the computation of loss per share because their effect was anti-dilutive.

Financial Instruments		Financial instruments include cash and cash equivalents, receivables, flow-through share proceeds, long-term investments and advances, bank indebtedness, accounts payable and accrued liabilities and loans from related parties. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. Unless otherwise noted, fair values approximate carrying values for these financial instruments.

Stock-Based Compensation		Effective January 1, 2004, the Company has retroactively adopted the new recommendations of the Canadian Institute of Chartered Accountant (“CICA”) Handbook Section 3870, “Stock-based compensation and other stock based payments”, which now requires companies to adopt the fair value based method for all stock-based awards granted on or after January 1, 2002. Previously the Company was only required to disclose the pro forma effect of stock options issued to employees and directors in the notes to the financial statements. The Company has retroactively applied this new accounting policy to prior years and restated the consolidated financial statements accordingly. The effect of the restatement was to increase the net loss for 2002 by $15,343 for options granted in 2002, to increase the net loss for 2003 by $8,025 for options granted in that year, and to increase the accumulated deficit as of December 31, 2003 by $23,368 (Note 8). Contributed surplus was restated for the corresponding effect of these restatements.

Flow Through Shares		Prior to March 19, 2004, the Company provided certain share subscribers with a flow through component for tax incentives available on qualifying Canadian exploration and development expenditures. Where the Company had sufficient available tax loss carryforward balances or other deductible temporary differences to offset future tax liabilities arising from the renunciation of the tax benefits of the expenditures, no future tax asset or liability adjustments were reported and no allocation was made to share capital or deferred costs for the tax component renounced to subscribers. Effective March 19, 2004, the Canadian Institute of Chartered Accountants issued additional guidance on the accounting treatment of Canadian flow-through shares through its Emerging Issues Committee Abstract (“EIC”) No. 146. All flow-through shares issued by the Company on or after March 19, 2004 are accounted for in accordance with this Abstract. The Abstract recommends that upon renunciation to the shareholders, the Company will reduce share capital and recognize a temporary future income tax liability for the amount of tax reduction renounced to the shareholders. In instances where the Company has sufficient available tax loss carryforwards or other deductible temporary differences available to offset the renounced tax deduction, the realization of the deductible temporary differences will be credited to income in the period of renunciation.

1.	Nature of Business

	Cusac Gold Mines Ltd. (the “Company”) is in the business of exploring, developing and mining resource properties. As at December 31, 2004, the Company’s principal asset, the Table Mountain Mine, was non-producing and in a care and maintenance mode. The recoverability of amounts shown for resource properties is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to recommence producing gold at the Table Mountain Mine as well as future profitable production or proceeds from the disposition of such properties.

	2004		2003
Investments
Consolidated Pacific Bay Minerals Ltd., 7% interest in common shares (2003 - 8%)	$	95,080	$	95,080
ClearFrame Solutions Inc. (formerly Knexa Solutions Inc., 4% interest in common shares (2003 - 5%) and warrants		71,753		207,064
		166,833		302,144
Advances
ClearFrame Solutions Inc.		75,000		95,117
Consolidated Pacific Bay Minerals Ltd.		167,044		101,525
	$	408,877	$	498,786

	The advances except as discussed below, are unsecured, non-interest bearing and without specific terms of repayment. Consolidated Pacific Bay Minerals Ltd. has common directors with the Company. ClearFrame Solutions Inc. (“ClearFrame”) had common directors during the year but as a result of a restructuring, as at December 31, 2004, ClearFrame and the Company had no common directors.

	In 2004, ClearFrame issued to the Company and put in trust 1,500,000 common shares as collateral against the $75,000 of advances owing to the Company. The Company then issued options to the management and directors of ClearFrame to allow the option holders to purchase these 1,500,000 ClearFrame shares at $0.05 per share for a period from July 6, 2004 to March 5, 2005. Subsequent to December 31, 2004, the option holders exercised their options to purchase the ClearFrame shares for gross proceeds of $75,000.

	In 2003, Consolidated Pacific Bay Minerals Ltd. issued 500,000 (2002 - Nil) common shares and ClearFrame issued 700,000 (2002 - Nil) common shares to the Company as repayment of advances totaling $50,000 and $70,000, respectively. The share valuations approximated the trading price of the issuing companies’ common shares on the date agreements were entered into to settle the debts.

	Subsequent to December 31, 2004 the Company was loaned 750,000 ClearFrame shares from two directors. The loan was structured as unsecured, non-interest bearing and with no fixed terms of repayment.

2.	Long-term Investments and Advances - Continued

	Aggregate cost and market value information with respect to long-term investments as at December 31, 2004 and 2003 are summarized as follows:

	2004		2003
Aggregate cost, net of write-downs	$	166,833	$	302,144
Aggregate market value	$	133,780	$	238,131
Gross unrealized losses	$	33,053	$	64,013
Gross unrealized gains	$	-	$	-

					2004						2003
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Automotive equipment	$	152,686	$	144,196	$	8,490	$	149,461	$	140,558	$	8,903
Leasehold improvements		2,128		2,128		-		2,128		2,128		-
Mine plant and buildings		515,265		515,265		-		515,265		515,265		-
Mine equipment		1,344,771		1,286,611		58,160		1,344,771		1,261,686		83,085
Office equipment		78,337		66,689		11,648		63,153		53,001		10,152
	$	2,093,187	$	2,014,889	$	78,298	$	2,074,778	$	1,972,638	$	102,140

	Table Mountain Mine

	The Table Mountain Mine property (the “Property”) is located in the Cassiar district of British Columbia. The Property consists of 152 (2003 - 159) full and fractional mineral claims and Crown Grants, with hard rock claims covering an area of approximately 12,346 hectares (2003 - 16,468) or 47.5 square miles (2003 - 63.6 square miles). During 2004 and subsequent to year end, the Company reviewed its land holdings and found that many of its claims were overlapping, and as such adjusted its holdings so that the total land mass covered has decreased slightly using fewer mineral claims. In management’s opinion, the recalculation of the total land mass covered has no impact on the property’s estimated reserves and resources and, accordingly, no related costs were written off.

	Included in deferred development costs is $114,444 (2003 - $114,444) on deposit with regulatory authorities to ensure costs of environmental reclamation charges are provided for.

	Commitments and Contingencies:

	Certain historically non-producing claims carry obligations for the Company to pay net smelter return royalties of 2½% and a 10% net profits interest on production from these claims.

	There is a lien against the Table Mountain Mine property in connection with unpaid taxes. The Company has provided collateral for the lien in the form of a letter of credit as outlined in Note 5.

	Other

	On July 29, 2004, the Company entered into an agreement to purchase two mineral claims in the Laird mining division of British Columbia (Wildcat Properties) for 30,000 common shares of the Company which were issued subsequent to December 31, 2004.

6.	Loans From Related Parties

	Loans payable to directors bearing no interest, security or fixed terms of repayment amounted to $11,925 (2003 - $Nil).

	On November 2, 2004, the Company issued 200,000 flow-through units by way of a private placement for proceeds of $60,000. Each unit consisted of one common share and one Series A warrant entitling the holder to purchase one common share at an exercise price of $0.35 until July 15, 2005. At the same time, 100,000 flow-through common shares were issued by way of private placement for proceeds of $32,000.

	On November 10, 2004, the Company issued 869,231 flow-through units by way of a private placement for proceeds of $226,000. Each unit consisted of one common share and one Series A warrant entitling the holder to purchase one common share at an exercise price of $0.31 for a one-year period.

7.	Share Capital - Continued

	On November 10, 2004, the Company also issued 76,923 Series B independent agent warrants entitling the holder to purchase one unit at an exercise price of $0.26 for a one-year period in connection with the above noted private placement. Each unit consists of one non-flow-through common share and one Series A warrant entitling the holder to purchase one non-flow-through common share at an exercise price of $0.31 for a one-year period.

	On December 30, 2004, the Company issued 300,000 flow-through units by way of a private placement for proceeds of $78,000. Each unit consisted of one common share and one Series A warrant entitling the holder to purchase one non-flow through common share at an exercise price of $0.31 for a one-year period.

	On December 30, 2004, the Company issued 1,800,000 flow-through units by way of a private placement for proceeds of $324,000. Each unit consisted of one common share and one half Series A warrant entitling the holder to purchase one non-flow through common share at an exercise price of $0.20 for one whole warrant (two half warrants) for a one-year period. The company incurred $39,344 in issuance costs associated with the above private placement.

	On December 30, 2004, the Company also issued 108,000 common shares as a finance fee to an independent agent in connection with the above noted private placement. These shares were valued based on the trading price of the common shares on the date of the agreement. At the agreement date the market value of these shares was approximately $19,500. Additionally the Company issued 150,000 Series B agent warrants entitling the holder to purchase one unit at an exercise price of $0.18. Each unit consists of one common share and one half Series A warrant entitling the holder to purchase one common share at an exercise price of $0.20 for one whole warrant (two half warrants) for a one-year period.

	Subsequent to December 31, 2004 the Company issued 200,000 units by way of a private placement for gross proceeds of $32,000. Each unit consisted of one common share and one Series A warrant entitling the holder to purchase one common share at an exercise price of $0.20 for a one-year period.

	In March 2003, the Company issued 400,000 units by way of a private placement for proceeds of $148,000. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share at an exercise price of $0.42 for a one-year period.

	In April 2003, the Company issued 60,000 units by way of a private placement for proceeds of $27,000. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share at an exercise price of $0.50 for a one-year period.

	In December 2003, the Company issued 3,000,000 flow-through units and 430,000 non-flow-through units by way of a private placement for gross proceeds of $1,218,700. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share at an exercise price of $0.47 for an eighteen month period. The company incurred $118,915 in share issuance costs associated with the above private placements.

7.	Share Capital - Continued

		In December 2003, the Company also issued 100,000 non-flow-through shares as a finance fee to an agent in connection with the above-noted private placements. These shares were valued based on the trading price of the common shares on the date of agreement. At the agreement date the market value of these shares was approximately $35,000. Additionally, the Company issued 514,500 agent warrants, with each warrant entitling the holder to purchase one non-flow-through common share at an exercise price of $0.47 for an eighteen month period.

		In October 2002, the Company issued 1,500,000 units by way of a private placement for proceeds of $525,000. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share at an exercise price of $0.40 for a one-year period.

		In June 2002, the Company issued 200,000 units by way of a private placement for proceeds of $30,000. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share at an exercise price of $0.15 in the first year and $0.20 in the second year.

		In August 2002, the Company issued 950,000 units by way of a private placement for proceeds of $143,500. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share at an exercise price of $0.15 and $0.17 in the first year and $0.20 in the second year.

	b)	Warrants

		The following table summarizes the number of fully exercisable warrants transactions during 2004, 2003 and 2002: