20-F

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

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

OR

x   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2003 (with other information to March 31, 2004 except where noted)

OR

¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

CIK# 878518
Commission file number 0-19476

TASEKO MINES LIMITED
(Exact name of Registrant specified in its charter)

TASEKO MINES LIMITED
(Translation of Registrant’s name into English)

BRITISH COLUMBIA, CANADA
(Jurisdiction of incorporation or organization)

Suite 1020, 800 West Pender Street
Vancouver, British Columbia, Canada, V6C 2V6
(Address of principal executive offices)

COMMON SHARES WITHOUT PAR VALUE
(Title of Class)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class	Name of each exchange on which registered
None	Not applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act

Common Shares without Par Value
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None

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Number of outstanding shares of Taseko's only class of capital stock as on September 30, 2003.

53,880,973 Common Shares Without Par Value

Indicate by check mark whether Registrant (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 Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

NOT APPLICABLE

Indicate by check mark which financial statement item Registrant has elected to follow:

Item 17 x       Item 18  ¨  

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

NOT APPLICABLE

Currency and Exchange Rates

All monetary amounts contained in this Registration Statement are expressed in Canadian dollars unless otherwise indicated. On March 31, 2004, the Bank of Canada noon rate for the conversion of US Dollars to Canadian Dollars was US$1.00=Cdn$1.311
(see Item 3A for further historical exchange rate information).

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T A B L E   O F   C O N T E N T S

		Page
GLOSSARY		1
ITEM 1	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3	KEY INFORMATION	1
A.	SELECTED FINANCIAL DATA	1
B.	CAPITALIZATION AND INDEBTEDNESS	4
C.	REASONS FOR THE OFFER AND USE OF PROCEEDS	4
D.	RISK FACTORS	4
ITEM 4	INFORMATION ON THE COMPANY	6
A.	HISTORY AND DEVELOPMENT OF THE COMPANY	6
B.	BUSINESS OVERVIEW	7
C.	ORGANIZATIONAL STRUCTURE	8
D.	PROPERTY, PLANT AND EQUIPMENT	8
E.	FURTHER PARTICULARS OF TASEKO’S PROPERTIES	9
E.1	THE GIBRALTAR MINE	9
E.2	PROSPERITY PROJECT	17
E.3	HARMONY GOLD PROJECT	21
ITEM 5	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	24
OVERVIEW		24
A.	OPERATING RESULTS	25
B.	LIQUIDITY AND CAPITAL RESOURCES	26
C.	RESEARCH EXPENDITURES	30
D.	TREND INFORMATION	30
E.	CRITICAL ACCOUNTING POLICIES	30
ITEM 6	DIRECTORS AND SENIOR MANAGEMENT	31
A.	DIRECTORS AND SENIOR MANAGEMENT	31
B.	COMPENSATION	33
C.	BOARD PRACTICES	34
D.	EMPLOYEES	34
E.	SHARE OWNERSHIP	34
ITEM 7	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	36
A.	MAJOR SHAREHOLDERS	36
B.	RELATED PARTY TRANSACTIONS	37
C.	INTERESTS OF EXPERTS AND COUNSEL	39
ITEM 8	FINANCIAL INFORMATION	39
A.	CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION	39
B.	SIGNIFICANT CHANGES	39
ITEM 9	THE OFFER AND LISTING	39
A.	OFFER AND LISTING DETAILS	39
B.	PLAN OF DISTRIBUTION	40
C.	MARKETS	40
D.	SELLING SHAREHOLDERS	40
E.	DILUTION	40

F.	EXPENSES OF THE ISSUE	40
ITEM 10	ADDITIONAL INFORMATION	41
A.	SHARE CAPITAL	41
B.	MEMORANDUM AND ARTICLES OF ASSOCIATION	41
C.	MATERIAL CONTRACTS	44
D.	EXCHANGE CONTROLS	44
E.	TAXATION	45
F.	DIVIDENDS AND PAYING AGENTS	52
G.	STATEMENT BY EXPERTS	52
H.	DOCUMENTS ON DISPLAY	52
I.	SUBSIDIARY INFORMATION	52
ITEM 11	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	52
A.	TRANSACTION RISK AND CURRENCY RISK MANAGEMENT	52
B.	EXCHANGE RATE SENSITIVITY	52
C.	INTEREST RATE RISK AND EQUITY PRICE RISK	52
D.	COMMODITY PRICE RISK	52
ITEM 12	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	53
A.	DEBT SECURITIES	53
B.	WARRANTS AND RIGHTS	53
C.	OTHER SECURITIES	53
D.	AMERICAN DEPOSITARY SHARES	53
ITEM 13	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	53
ITEM 14	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	53
ITEM 15	CONTROLS AND PROCEDURES	53
ITEM 16	AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES, AND EXEMPTIONS	54
A.	AUDIT COMMITTEE FINANCIAL EXPERT	54
B.	CODE OF ETHICS	54
C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	54
D.	EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES	54
E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	54
ITEM 17	FINANCIAL STATEMENTS	54
ITEM 18	FINANCIAL STATEMENTS	55
ITEM 19	EXHIBITS	55

GLOSSARY

In this Form 20-F, the following terms have the meanings set forth herein:

Bio-oxidation	A process employing oxidation of elements caused by bio-organisms; it is enhanced in a gold recovery process by providing the optimum temperature, acidity (pH) and level of oxygen for the natural oxidation process to work more effectively.
Epithermal deposit	A mineral deposit formed at low temperature (50-200 degrees Celsius), usually within one kilometre of the earth’s surface, often as structurally controlled veins.
Induced Polarization	A geophysical survey used to identify a feature that appears to be different from the typical (“IP”) Survey or background survey results when tested for levels of electro-conductivity; IP detects both chargeable, pyrite-bearing rock and non-conductive rock that has high content of quartz.
Mineral Symbols	Au – Gold; Cu – Copper; Pb – Lead; Ag – Silver; Zn – Zinc; Mo – Molybdenum.
Porphyry deposit	A type of mineral deposit in which ore minerals are widely disseminated, generally of low grade but large tonnage.
Solvent Extraction – Electrowinning (“SX-EW”)	A metal extraction technique in which a copper oxide is dissolved into solution, then an electric current is induced through the solution between a pair of electrodes (anode & cathode), and metal is deposited on the cathode. Since this ion deposition is selective, the cathode product is generally high grade and requires little further treatment before it is used in manufacturing processes.

PART 1

ITEM 1                     IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2                     OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3                     KEY INFORMATION

A.            Selected Financial Data

The following constitutes selected financial data for Taseko Mines Limited ("Taseko" or the "Company") for the last five fiscal years ended September 30, 2003, in Canadian dollars, based on Taseko's financial statements presented in accordance with Canadian generally accepted accounting principles (“CDN GAAP”) and reconciled to United States generally accepted accounting principles ("US GAAP").

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(Thousands of Cdn$		As at September 30
except number of shares)
Balance Sheet Data		2003			2002			2001			2000			1999
CDN GAAP
Total assets	$	61,235		$	60,310		$	32,070		$	79,499		$	91,874
Total liabilities		36,551			39,738			35,629			33,396			52,191
Share capital		126,088			118,531			87,897			87,897			80,067
Convertible debenture		19,600			18,711			17,903			8,500			4,000
Contributed surplus		65			--			--			--			--
Deficit		(121,069	)		(116,670	)		(109,358	)		(50,294	)		(44,385	)
Shareholders’ equity (deficiency)		24,684			20,572			(3,558	)		46,103			39,683
Working capital (deficiency)		2,259			(4,277	)		(188	)		13,872			13,159
Plant and equipment, net		9,554			10,159			10,873			11,587			12,304
Mineral property interests		28,813			28,813			602			44,826			38,857
US GAAP
Total assets		43,709			57,429			32,070			79,499			91,874
Total liabilities		23,497			48,627			43,709			33,396			52,191
Convertible debenture - debt		9,777			8,888			8,080			8,500			4,000
Share capital		125,510			118,531			87,897			88,686			80,067
Contributed surplus		720			655			109			--			--
Deficit		(115,840	)		(120,206	)		(109,467	)		(50,294	)		(44,385	)
Shareholders’ equity (deficiency)		20,212			8,802			(11,638	)		46,103			39,683
Working capital (deficiency)		(19	)		(4,277	)		(188	)		13,872			13,159
Plant and equipment, net		69			10,159			10,873			11,587			12,304
Mineral property interests		23,051			25,932			602			44,826			38,857
Weighted average number of
outstanding common shares		46,984,378			30,338,098			25,067,697			23,402,726			17,969,886

No cash or other dividends have been declared.

(Thousands of Cdn$		Year ended September 30
except per share amounts)
Statement of Operations Data		2003			2002			2001			2000			1999
CDN GAAP
Investment and other income	$	721		$	552		$	1,110		$	678		$	361
General and administrative		1,769			2,686			4,106			2,122			2,375
Stock based compensation		65			--			--			--			--
Exploration, including
reclamation accretion		2,030			2,072			3,860			4,465			2,003
Refinery project		500			1,699			3,572			--			--
Write down of (gain on) mineral
property interests, inventory,
investments and land		(132	)		599			47,734			--			--
Net income (loss) for the year		(3,511	)		(6,504	)		(58,162	)		(5,909	)		(4,022	)
Loss per common share		(0.09	)		(0.24	)		(2.35	)		(0.25	)		(0.22	)

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(Thousands of Cdn$	Year ended September 30
except per share amounts)
Statement of Operations Data	2003		2002		2001		2000		1999
US GAAP
Investment and other income	721		552		1,110		678		356
General and administrative	1,989		3,494		4,755		2,122		2,375
Stock based compensation	65		546		109		--		--
Exploration	2,703		2,072		3,860		4,465		2,003
Refinery project	500		1,699		3,572		--		--
Amortization of mineral properties	2,881		2,881		--		--		--
Write down of (gain on) mineral
property interests, inventory,
investments and land	(132	)	599		47,734		--		--
Cumulative adjustment to reflect
change in accounting policy	11,651		--		--		--		--
Income (loss) for the year	4,366		(10,739	)	(58,920	)	(5,909	)	(4,022	)
Basic income (loss) per share	0.09		(0.35	)	(2.35	)	(0.25	)	(0.22	)
Diluted income (loss) per share(2)	0.09		(0.35	)	(2.35	)	(0.25	)	(0.22	)

Notes:

(1)

Under Canadian GAAP applicable to junior mining exploration companies, mineral exploration expenditures may be deferred on prospective properties until such time as it is determined that further exploration is not warranted, at which time the property costs are written off. Taseko is permitted to and has expensed exploration costs as incurred, which is consistent with U.S. GAAP, whereby all exploration expenditures are expensed until an independent feasibility study has determined that the property is capable of economic commercial production.

(2)

With the exception of 2003, stock options and warrants outstanding were not included in the computation of diluted loss per share as their inclusion would be anti-dilutive.

See Item 17 for accompanying consolidated financial statements prepared in accordance with Canadian generally accepted accounting principles for further details, including the notes to the financial statements, which reconcile Canadian GAAP to US GAAP.

All currency amounts in this Form 20-F are stated in Canadian dollars unless otherwise indicated.

Conversion of metric units into imperial equivalents is as follows:

Metric Units	Multiply by	Imperial Units
hectares	2.471	= acres
metres	3.281	= feet
kilometres	0.621	= miles (5,280 feet)
grams	0.032	= ounces (troy)
tonnes	1.102	= tons (short) (2,000 lbs)
grams/tonne	0.029	= ounces (troy)/ton

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The following table sets out the exchange rates, based on average noon rates as certified by the Bank of Canada, for the conversion of Canadian dollars into United States dollars in effect at the end of the following periods, and the average exchange rates and the range of high and low exchange rates during such periods.

	For year ended September 30
	2003	2002	2001	2000	1999
End of the period	1.350	1.586	1.593	1.522	1.44
Average for the period	1.465	1.573	1.549	1.485	1.47
High for the period	1.594	1.613	1.596	1.542	1.53
Low for the period	1.334	1.511	1.499	1.449	1.44

B.            Capitalization and Indebtedness

Not applicable

C.            Reasons for the Offer and Use of Proceeds

Not applicable

D.            Risk Factors

No Ore.

Taseko’s three projects have large tonnage, low grade mineralization, which at current metals prices and other economic considerations cannot be classified as “ore.” Unless gold (herein sometimes “Au”) and copper (herein sometimes “Cu”) prices improve, this measured and indicated mineralized material may never be “ore” and may not be capable of commercial mining.

Additional Funding Requirements.

Taseko’s operations consist almost exclusively of cash consuming activities given that its three main mineral projects are either in the exploration stage or are in standby mode related to a former producing mine, which is on care and maintenance awaiting better copper prices. Taseko will need to receive significant (approximately $1-2 million) new equity capital or other funding annually in order to fund these continuing operations, and failing that, it may cease to be economically viable.

Uncertain Project Realization Values.

Taseko capitalizes acquisition costs incurred in connection with its projects. Due to the extended depressed price conditions in the metals markets at the time, and in accordance with its accounting policy, the Company wrote down the acquisition costs of each of the Prosperity and Gibraltar projects to $1,000 during fiscal 2001.

Taseko Has No History of Earnings and No Foreseeable Earnings.

Taseko has a 35 year history of losses and there can be no assurance that Taseko will ever be profitable. Taseko has paid no dividends on its shares since incorporation and does not anticipate paying dividends in the foreseeable future.

Going Concern Assumption.

Taseko’s consolidated financial statements have been prepared assuming Taseko will continue as a going concern; however, unless additional funding is obtained this assumption will have to change and Taseko’s assets may need to be written down to asset prices realizable in insolvency or under distress circumstances.

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The auditors report on the 2003 consolidated financial statements includes additional comments that state that the financial statements are affected by conditions and events that cause substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of that uncertainty.

General Mining Risks.

Factors beyond the control of Taseko will affect the marketability of any substances discovered. Metal prices, in particular gold and copper prices, have fluctuated widely in recent years. The mining industry in general is intensely competitive and there is no assurance that, even if commercial quantities of ore are discovered, a profitable market may exist for the sale of minerals produced by Taseko. The marketability of metals is also affected by numerous other factors beyond the control of Taseko. These other factors include government regulations relating to price, royalties, allowable production, and importing and exporting of metals. The operations of Taseko may require licenses and permits from various governmental authorities. There can be no assurances that Taseko will be able to obtain all necessary licenses and permits that may be required to carry out exploration, development and operations at its projects. Environmental concerns about mining in general are also a factor that may affect Taseko. Taseko also competes with many companies possessing far greater financial resources and technical facilities than itself for the acquisition of mineral concessions, claims, leases and other mineral interests, as well as for the recruitment and retention of qualified employees.

Taseko’s Share Price is Volatile.

The market price of a publicly traded stock, especially a junior resource issuer like Taseko, is affected by many variables not directly related to the exploration success of Taseko, including the market for junior resource stocks, the strength of the economy generally, the availability and attractiveness of alternative investments, and the breadth of the public market for the stock. The effect of these and other factors on the market price of the common shares on the TSX Venture Exchange and NASDAQ’s Over-the-counter Bulletin Board suggests Taseko’s shares will continue to be volatile. Taseko shares have ranged between approximately Cdn$0.25 and Cdn$20.00 in the last 10 years.

Taseko’s Directors and Officers are Part-Time and Serve as Directors and Officers of Other Companies.

All of the directors and officers of Taseko serve as officers and/or directors of other resource exploration companies and are engaged and will continue to be engaged in the search for additional resource opportunities on their own behalf and on behalf of other companies. Situations may arise where these directors and officers will be in direct competition with Taseko. Such potential conflicts, if any, will be dealt with in accordance with the relevant provisions of British Columbia corporate and common law. In order to avoid the possible conflict of interest, which may arise between the directors’ duties to Taseko and their duties to the other companies on whose boards they serve, the directors and officers of Taseko expect that participation in exploration prospects offered to the directors will be allocated between the various companies that they serve on the basis of prudent business judgment and the relative financial abilities and needs of such companies to participate. The success of Taseko and its ability to continue to carry on operations is dependent upon its ability to retain the services of certain key employees and members of its board of directors.

Likely PFIC Status Has Consequences for U.S. Investors.

Potential investors who are U.S. taxpayers should be aware that Taseko expects to be a passive foreign investment company (“PFIC”) for the current fiscal year, and may also have been a PFIC in prior years and may also be a PFIC in subsequent years. If Taseko is a PFIC for any year during a U.S. taxpayer’s holding period, then such U.S. taxpayer will generally be required to treat any so-called “excess distribution” received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes a qualified electing fund (“QEF”) election or a mark-to-market election with respect to the shares of Taseko. In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of Taseko’s net capital gain and ordinary earnings for any year in which Taseko is a PFIC, whether or not Taseko distributes any amounts to its shareholders. A U.S. taxpayer who makes the mark-to-market election, generally, must include as ordinary income in each year, the excess of the fair market value of the common shares over the taxpayer’s tax basis therein.

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Significant Potential Equity Dilution.

Taseko had 5,089,000 stock options (of which all were in the money) and 10,975,000 warrants (of which all are were in the money) as of March 31, 2004. In addition, Taseko had shares potentially issuable upon conversion of the Boliden Debenture (see Item 4, Gibraltar Mine – Acquisition Terms). Together these will likely act as an upside damper on the trading range of Taseko’s shares. There are also shares potentially issuable on conversion of the preferred Shares of Taseko’s subsidiary, Gibraltar (see Item 19). As a consequence of the passage of time since the date of their original sale and issuance, only 3,900,000 shares of Taseko remain subject to any hold period restrictions in Canada or the United States; which hold period expires on July 11, 2004.

The unrestricted resale of outstanding shares from the exercise of dilutive securities, including the Boliden Debenture, may have a depressing effect on the market for Taseko’s shares. Dilutive securities represent approximately 25% of Taseko’s currently issued shares as of March 31, 2004.

ITEM 4                     INFORMATION ON THE COMPANY

A.            History and Development of the Company

1.            The legal name of the company, which is the subject of this Form 20-F, is “Taseko Mines Limited” (herein “Taseko” or the “Company”).

2.            Taseko was incorporated in British Columbia ("BC"), Canada on April 15, 1966.

3.            Taseko was incorporated under and continues to subsist under the laws of the Province of British Columbia, Canada. Taseko’s natural resource exploration activities are limited to British Columbia, consequently the primary corporate, commercial, and other laws pertinent to Taseko are those of the Province of British Columbia. Taseko’s principal business office is at Suite 1020, 800 West Pender Street, Vancouver, British Columbia V6C 2V6, although Taseko also has a field office at its Gibraltar Mine site in McLeese Lake near Williams Lake, B.C.

4.            The principal business events in Taseko’s 35 year history are (most important and recent matters first):

(i)            the acquisition of the Gibraltar Mine in July 1999. The Gibraltar Mine is located in British Columbia and was a copper producer under different owners from 1972 to 1998. As a relatively low grade deposit with sulphide mineralization averaging 0.311% copper, copper prices of US$0.90 or more per pound are required under current economic circumstances for the Gibraltar Mine, which is still largely equipped and maintained on stand-by, to recommence conventional operations;

(ii)           the acquisition of the Harmony Gold Project in October 2001. The Harmony Gold Project is an undeveloped resource located in British Columbia and has measured and indicated mineralized material of 64 million tonnes grading 1.53 grams Au/tonne, as estimated at a cut-off grade of 0.60 grams Au/tonne, for a total of 3 million ounces; and

(iii)          the acquisition and legal settlement respecting the Prosperity Project in British Columbia (1960’s to 1993) and the advancement of exploration and pre-feasibility engineering thereof (1991 to date). Exploration expenses to the extent of approximately $41.5 million have been incurred by Taseko on the Prosperity Project, which has demonstrated continuity of a low grade copper/gold deposit (over 155,000 metres of drilling by Taseko and its predecessors) with estimated measured and indicated mineralized material of 1.0 billion tonnes grading 0.41 grams Au/tonne and 0.24% Cu, at a cut-off of 0.14% Cu.

5.            The Company’s principal capital expenditures (there have been no material divestitures) over the three fiscal years ended September 30, 2003 are as follows:

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Year	Gibraltar Mine	Prosperity Project	Harmony Gold Project	Westgarde Project
(i)       Amounts deferred (capitalized or invested)
2003	Nil	Nil	Nil	Nil
2002	Nil	Nil	$28,811,296(1)	Nil
2001	Nil	Nil	Nil	$1
(ii)      Amounts recorded as exploration expenses (recoveries),                            excluding amounts shown as stock-based compensation
2003	1,913,712	88,500	27,317	NIL
2002	2,337,742	(35,858)	Nil	(229,999)
2001	3,262,265	386,935	Nil	210,976

(1) these are non-cash capitalized amounts from the issuance of equity securities in a subsidiary

6.            Subject to Taseko sourcing and securing additional funding, the following table illustrates the principal capital expenditures estimated by property (all of which are located in British Columbia, Canada) which Taseko would ideally incur in the ensuing year:

	Gibraltar Mine	Prosperity Project	Harmony Gold Project
2004 Activities	Mine Restart Capital $21,000,000 Mine Restart Working Capital $4,000,000	Nil	Nil

B.            Business Overview

1.             Taseko’s Business Strategy and Principal Activities

Taseko is focused on acquiring ownership of and advancing exploration and related activities on known mineral deposits that have as their basic characteristic, large tonnage (based on extensive drill testing for continuity) mineralization which, under metals price assumptions that fall within historical averages, are potentially capable of supporting a mine for 10 years and longer. Taseko endeavors to apply advanced mining and recovery techniques to ascertain the maximum potential for eventual production of these deposits. Taseko’s Prosperity Project, Gibraltar Mine Project and Harmony Gold Project are all such large tonnage mineral resources. None of them can currently be economically mined at prevailing metal prices. Current metal prices are average by reference to past metals cycles. Taseko believes the investment value in its common shares is derived from appreciating the large amount of contained metals on its projects which has value for investors who share Taseko management’s view that there will be an ongoing demand for copper and gold, resulting in a continuing need to replace depleted reserves. Taseko’s management remains optimistic that metal prices will eventually increase sufficiently to support mining at these Projects at some future time.

Taseko does not have any operating revenue although historically it has had annual interest revenue as a consequence of investing surplus funds pending the completion of exploration programs. Subject to having sufficient start-up capital (estimated at Cdn$25 million), the Gibraltar Mine is capable of producing copper concentrate at a cost of approximately US$0.90 per pound. However, the cost of copper production would be reduced if the copper refinery, which has been the subject of feasibility-level engineering studies in fiscal 2001 and 2002, is built at a capital cost of approximately Cdn$110 million. The resource extraction business has historically

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been cyclical. The prices received for copper and gold have been volatile and, in the case of gold, have been affected by factors and sentiments outside of the cost of production. The mining business operates in a world-wide market and prices are derived from relatively pure market forces so competition to sell any metals or concentrates produced is not an issue if metals prices warrant production.

Taseko and its subsidiaries own their mining projects outright but potential mining operations are nevertheless subject to extensive government regulation. Management believes that the Gibraltar Mine will be able to obtain government permitting to restart mining operations as soon as the necessary start-up capital is available and copper prices strengthen. The Prosperity Project is well advanced in the requisite preparatory engineering and analysis for a final request to government for mine development permitting, although the capital cost of placing the Prosperity Project into production of $400-$800 million (dependent on a final rate of mineralized material through-put decision) is not obtainable by Taseko in the current circumstances. The Harmony Gold Project has not been significantly moved towards mine development permitting since a period of more active exploration in the late 1990’s. The provincial government of British Columbia and the federal government of Canada both have jurisdiction over a wide variety of activities and persons affected by mining including local communities, habitat users and others claiming to hold a stake in the outcome of mining activity. British Columbia has not recently been perceived as a mining-friendly jurisdiction although recently operating British Columbia mines with comparable grades have been ranked amongst the world’s most efficient and responsible operations.

2.             Funding Initiatives

Gibraltar Mine Surplus Equipment and Supplies Sale

As a requirement of the Gibraltar's Reclamation Permit M-40, the mine site equipment was pledged as security against future reclamation costs. Gibraltar has received authorization from the B.C. Ministry of Energy and Mines to sell up to $4,000,000 of redundant equipment and supplies that are not expected to be required for the restart of the mine. This will still leave equipment and supplies with a book value of approximately $13,000,000 as security.

Gibraltar Mine Reclamation Deposits Released

As a result of progressive reclamation work and a landfill project reducing liability costs at Gibraltar, $2.5 million was released from the cash reclamation fund in December 2002. The reclamation deposit of approximately $16 million was released to Taseko in early 2004 after being replaced by an environmental deposit funded mainly by arms'-length investors, who received a put right in consideration of providing this funding (see Items 4 and 19).

C.            Organizational Structure

Taseko operates directly and also through one principal subsidiary, Gibraltar Mines Ltd. (“Gibraltar”). Taseko itself owns the Prosperity Project, and Gibraltar owns both the Gibraltar Mine and the Harmony Gold Project. Both companies are British Columbia, Canada companies and all operations of both companies are in British Columbia.

D.            Property, Plant and Equipment

The Gibraltar Mine was acquired in July 1999, approximately one year after commercial mining operations were suspended due to then-prevailing low copper prices. The Gibraltar Mine was acquired with mill and mining equipment and supplies valued at approximately $19 million. The purchase of the mine included an environmental deposit for $8 million (which was later increased to $18.4 million in 2001, and then decreased to $15.9 million in December 2002) and mineral property interests valued at $3.3 million. The Gibraltar Mine has an estimated $32.7 million liability to reclaim and manage the area should it be determined that operations must permanently cease and the area be reclaimed. (See Item 4, Gibraltar Mine – Acquisition Terms and Environmental Matters.)

Neither the Prosperity Project nor the Harmony Gold Project have any mining plant or equipment located thereon, although both projects have field accommodation and miscellaneous exploration equipment, which is of little realizable value, on site.

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E.            Further Particulars Of Taseko’s Properties

E.1          The Gibraltar Mine

Acquisition Terms

On July 21, 1999, Taseko’s subsidiary, Gibraltar Mines Ltd., purchased the Gibraltar Mine from Boliden Westmin (Canada) Limited (“Boliden”) and certain of its affiliates, including all mineral interests, mining and processing equipment and facilities, and assumed responsibility for ongoing reclamation. Pursuant to the terms of the acquisition, Gibraltar acquired mining equipment, parts and supplies inventories valued at $19 million, an existing Government environmental deposit of $8 million, and mineral interests valued at $3.3 million, and received $20.1 million in cash over 18 months from closing, of which $17 million was received pursuant to a 10-year non-interest bearing convertible debenture issued to Boliden. Gibraltar assumed the estimated reclamation liability pertaining to the Gibraltar Mine of $32.7 million and Taseko guaranteed Gibraltar’s obligations to Boliden. The principal sum advanced under the debenture is convertible into Taseko common shares in the first year at $3.14 per Taseko share. The conversion price escalates $0.25 per Taseko share each year over the 10-year term of the debenture on each July 19th anniversary of closing. The conversion price at September 30, 2003 (and at March 31, 2004) was $4.14 per Taseko share. The debenture is due on July 19, 2009. After July 31, 2004 the debenture can be converted at Taseko’s option at then-prevailing market prices for Taseko shares or paid out in cash, at Taseko’s election. Taseko retains certain rights of first refusal respecting any proposed sale of shares acquired by Boliden under the debenture. One provision of the agreement with Boliden is currently in dispute in that Taseko is claiming indemnity from Boliden in respect of tax liability associated with the $8 million environmental deposit which Taseko alleges is a liability for which Boliden remains responsible. Taseko’s claim is for approximately $3-4 million and although the matter has not yet proceeded to legal proceedings, Taseko has notified Boliden it is claiming a right of set-off of this claim in connection with the Boliden debenture.

Location, Access and Infrastructure

The Gibraltar Mine area consists of 251 mineral claims, 30 mining leases, and some ancillary fee simple real estate held by Gibraltar. The mine site covers approximately 109 square km, located at latitude 52 degrees 30’N and longitude 122 degrees 16’W in the Granite Mountain area, approximately 65 km north of the City of Williams Lake in south-central British Columbia, Canada. Access to the Gibraltar Mine from Williams Lake is via Highway 97 to McLeese Lake. From McLeese Lake, a paved road provides access to the Gibraltar Mine site. The total road distance from the City of Williams Lake to the Gibraltar Mine is 65 km and motor vehicle travel time is approximately 45 minutes.

The British Columbia Railway services Williams Lake and has rail service to facilitate the shipping of bulk commodities from Williams Lake to Vancouver, or copper concentrates through to the Pacific Ocean port of North Vancouver. A siding for the shipment of concentrate from the Gibraltar Mine has been established adjacent to Highway 97 at MacAllister, 6 km north of McLeese Lake. Electricity is obtained from the British Columbia Hydro and Power Authority (“BC Hydro”). Natural gas is provided by Avista Energy and Terasen Gas (formerly, "BC Gas"). The community of Williams Lake is sufficiently close and is capable of supplying goods and services to the Gibraltar Mine and its personnel.

The Gibraltar Mine mineral claims cover an area of gentle topography; local relief is in the order of 200 m. The plant site is located at an elevation of approximately 1,100 m above sea level. The project area has a moderate continental climate with cold winters and warm summers. Ambient air temperature ranges from a winter minimum of -34 degrees C to a summer maximum of 35 degrees C. Annual precipitation at the site averages 51 cm, of which about 17 cm falls as snow. Maximum snow depth is about 1 m, most of which falls in late February.

History

The earliest record of work at the Gibraltar Mine is found in the 1917 British Columbia Minister of Mines Annual Report, which describes the activities of Joseph Briand and partners exploring copper-bearing quartz veins (a tabular or sheet-like mineral deposit with identifiable walls, often filling a fracture or fissure) on the Rainbow group of mineral claims. These original showings are believed to lie about 60 m west of the current Pollyanna pit.

The early 1960s marked the entry of the major mining companies into the Granite Mountain area and the subsequent introduction of modern exploration techniques, which ultimately led to the discovery of the mineral deposits. Of the

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seven Gibraltar mineral deposits that are now known, only Gibraltar West offered any exposure of surface mineralization; Pollyanna, Connector and Gibraltar East had a few minor exposures of leached limonitic capping; Granite Lake, Gibraltar West Extension and the Sawmill Zone were completely covered by overburden. In this environment, the most effective exploration tools were soon found to be Induced Polarization (“IP”) geophysics and diamond drilling.

Mine production began in March 1972. Mining reserves as estimated on December 31, 1971 (at a 0.25% copper cut-off), were approximately 300 million tonnes of 0.37% copper at a 2.15:1 waste-to-mineralized material strip ratio.

The Gibraltar Mine operated almost continuously from 1972 to 1998. Total production to the end of 1998 totals 845,825 tonnes (1.86 billion lbs.) of copper and 8,938 tonnes (19.7 million lbs.) of molybdenum from 305 million tonnes (336 million tons) milled. During the past operating mine life, reconciliation studies on a number of open pit stages have demonstrated good correlation between reserve estimates and actual production.

In addition to copper production in concentrate, the Gibraltar Mine has also produced cathode copper by leaching both low-grade dump material and leachable oxide material from the pits using sulphuric acid and natural bacteria. The copper is recovered from solution by the solvent extraction-electrowinning (SX/EW) process. SX/EW plant operations are expected to resume when further oxide material is mined from the Pollyanna and Connector pits.

Over the mining life since 1972, Gibraltar stockpiled approximately 339 million tonnes (374 million tons) of waste rock in five main storage areas. Much of this material contains copper, though at grades lower than the milling cutoff grades which have ranged between 0.16% and 0.25% Cu. The stockpiles have become chemically and biologically active, and naturally discharge small quantities of acidified water, containing copper, in dilute solution. Prior to 1986, and more recently since the SX/EW plant has been shut down, these and all other mine area drainage waters have been collected in ditches and ponds and neutralized prior to safe disposal in the tailings impoundment. Since February 1999, these waters have been discharged to the completed Gibraltar East Pit.

From October 1986 to the time the SX/EW plant was shut down, acidic solutions draining from the dumps were treated in the solvent extraction-electrowinning plant. To date, some 38,430 tonnes (84.7 million pounds) of electrowon copper have been produced. Future recovery of electrowon copper will be mainly from engineered leach pads.

During 1999-2000, Gibraltar geologists and engineers actively explored for additional mineralized material and to better defining known resources. They have also been maintaining the Gibraltar Mine for re-start and completing on-going reclamation work. All mining and process equipment has been maintained in a ready-to-go state and operating/environmental permits have been kept in good standing.

A drill program with combined environmental and geological information objectives was conducted in November and December of 1999. The program comprised 25 drill holes (4 diamond and 21 reverse circulation) and, while aimed at obtaining information pertaining to regional groundwater flow, allowed for collection of much geological information including lithology, alteration, mineralization and structure. In total 1,635 m of drilling was completed and the core was analyzed for copper content. The analytical results increased deposit information and will assist in future geological and engineering activities.

In December 1999 and January 2000, the digital database of geological information on the Gibraltar property was expanded to include information from both inside and outside the pit areas. All historic geophysical and geochemical data contained in archive files, field reports and maps were digitized and a series of maps illustrating geophysical and geochemical data were generated. Drill collar coordinates and downhole survey information, including hole length, geology, sample intervals and assay (a quantitative test of minerals and ore by chemical and/or fire techniques) results for drill holes that had not previously been in digital form were added. Data for some 200 drill holes, comprising 24,000 m were added. Plans identifying the location of drill holes relative to known geophysical and geochemical data and anomalies were generated.

Subsequent to the completion of the geological compilation described above a property-scale Induced Polarization (“IP”) geophysical survey was designed and initiated in August 2000. Field activities included 237 kilometres of line-cutting and approximately 220 km of IP survey. Interpretation of the results was completed in the spring of 2001. Several deposit scale anomalies were identified including one 800 m wide by 4,200 m long anomaly, which

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to date, has been tested by only 7 drill holes. Additional drill holes to test the quality of this anomaly and other geophysically significant locations will be undertaken in the future.

Refinery Study

A scoping study (preliminary review of capital and operating costs to determine the viability of a project at an accuracy of plus or minus 25-30%) to investigate the concept of building and operating a copper refinery at the Gibraltar site, using a hydrometallurgical process developed by Cominco Engineering Services Ltd. (CESL) to recover copper from concentrate was completed in August 2000. The study, undertaken by Gibraltar and CESL, considered existing infrastructure, general site layouts, capital and operating costs, and resulting cash flows. The economic assumptions used were copper price of US$0.90/lb; exchange rate of US$0.68=Cdn$1.00; negotiated power reduction costs; reduced labour rate for 3 years following construction; refinery recovery rate of 95.8%; and concentrator recovery increase of 6% due to decreased concentrate grade to 24%. The cash flow analysis was conducted in constant July 2000 Canadian dollars without consideration for inflation and before any income taxes. The results of the study were an internal rate of return of 18.4% with a net present value at an 8% discount of Cdn$68.4 million (that is, the amount of net present value resulting from the investment of the needed capital costs described below).

The scoping study projected that the capital cost for the refinery would be Cdn$95.0 million including contingencies. Development of the refinery could reduce the operating costs of the mine by up to US$0.20 per pound of copper produced due to elimination of transporting concentrate off-site and other site efficiencies. The scoping study also determined the cost to re-start the Gibraltar Mine. The cost, including working capital, was estimated to be Cdn$25.0 million; this amount would cover concentrator modifications required for the refinery and six months of pre-production stripping in the Pollyanna pit.

After the details of the study were reviewed, a decision was made to proceed to the feasibility-level engineering and analysis stage. On October 6, 2000, Gibraltar and CESL signed a Memorandum of Agreement (“Gibraltar/CESL MOA”). The Gibraltar/CESL MOA outlined a work plan as well as management and funding arrangements for the work plan and, upon satisfactory results and receipt of requisite approvals, the project management, construction, commissioning and operation of a refinery at the Gibraltar mine site. Under the terms of the agreement, Gibraltar and CESL would each pay 50% of the Cdn$2.7 million cost of the MOA work plan.

In late 2000, Gibraltar shipped 900 tonnes of mineralized material from site in south-central British Columbia to CESL’s pilot concentrator in Vancouver, BC. As this material was processed in the CESL pilot concentrator, tailings were back-hauled to the Gibraltar site for disposal. Seven tonnes of concentrate were produced, comprising 3.5 tonnes of 18% copper concentrate and 3.5 tonnes of 24% copper concentrate. Concurrently, Gibraltar conducted metallurgical tests on representative samples of Gibraltar mineralized material at G&T Metallurgical Services in Kamloops, BC, in order to develop parameters for lock cycle tests that would definitively confirm an increase in mill copper recovery with a decrease in concentrate copper grade. Tests done to date indicate up to a 6% increase in mill copper recovery may be available with minor modifications to the mill circuit and a decrease in specifications for the concentrate copper grade.

In early 2001, the concentrate that was produced at the pilot concentrator was run through the CESL process pilot plant. The run successfully produced London Metal Exchange grade cathode copper and proved that the CESL process was adaptive to the Gibraltar material. It was also found that the CESL process is more amenable to the 24% concentrate than the 18% concentrate. The pilot plant program provided the process design criteria for a Process Engineering Package that formed the basis for a feasibility-level capital and operating cost study. Feasibility-level work for the refinery was carried out in 2001 under the direction of Gibraltar Engineering Services Limited (“GESL”) Partnership, a Taseko-sponsored investment partnership financed mainly by arms'-length investors, which raised funding on behalf of Taseko and Gibraltar, and CESL.

During the latter half of the 2001 fiscal year, Bateman Engineering Pty of Australia was engaged to conduct an engineering feasibility-level cost study for the construction and operation of a hydrometallurgical copper utilizing CESL technology at the Gibraltar mine. The study involved engineering and design work sufficient to determine the capital and operating costs for the facility to an accuracy of –5% to +15%. The refinery would be capable of processing 130,000 tonnes of 24% copper concentrate and producing 30,000 tonnes of London Metal Exchange-grade copper cathode annually. The study estimated the refinery capital cost to be $109.5 million and the annual operating cost to be $16.3 million or US$0.147 per pound copper produced.

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The study also identified several synergies with the existing Gibraltar mill and treatment facilities. For example, as acid would be produced in the refinery, less acid would need to be procured for the heap leach facility at the Gibraltar site. In addition, heating the leach solution with excess heat generated by the refinery would enhance copper recovery from the heap leach. Implementing some of these additional opportunities would result in cost savings beyond the $17.4 million per annum savings associated with changing the Gibraltar mine from a concentrate producer to a cathode producer.

In 2001, GESL had the mandate of raising financing to advance engineering work on the Gibraltar Refinery for use of the CESL technology at the Gibraltar Mine and in other similar operations. This limited partnership raised $1.85 million in late 2001 and was purchased by Taseko, with TSX Venture Exchange consent, under a takeover bid, for 4.967 million shares in February 2002. GESL then owned about 39% of the engineering business with the balance owned by an affiliated limited partnership that was acquired in April 2003. GESL and the affiliate used their funds to advance technical and economic feasibility studies of the CESL process. (See Item 5B)

Property Geology

The Gibraltar Mine generally consists of seven separate mineralized zones. Six of these – Pollyanna, Granite Lake, Connector, Gibraltar East, Gibraltar West and Gibraltar West Extension – occur within the Granite Mountain batholith in a broad zone of shearing and alteration. A seventh copper mineralized body, the Sawmill zone, lies about 6 kilometres to the south, along the southern edge of the batholith, within a complex contact zone between the batholith and Cache Creek Group rocks.

Two major structural orientations have been recognized at Gibraltar: the Sunset and Granite Creek mineralized systems. The Sunset system strikes northwesterly with one set of structures dipping 35 degrees to 45 degrees to the south and a conjugate set, known as the Reverse Sunset, dipping 50 degrees to 60 degrees to the north. The Granite Creek system strikes east-west and dips 20 degrees to 40 degrees to the south with a subordinate set of structures dipping steeply in a northerly direction. Structures of the Sunset system that host mineralization are mainly shear zones, with minor development of stockwork and associated foliation lamellae. Host structures of the Granite Creek system are predominantly oriented stockwork zones.

The Granite Creek system provides the major structures that control mineralization of Pollyanna, Granite Lake and the Sawmill zones. These bodies have the characteristic large diffuse nature of porphyry copper type mineralization. The Gibraltar East deposit is essentially a system of interconnected Sunset zones, which create a large body of uniform grade. Gibraltar West and Gibraltar West Extension deposits are contained within a large complex shear zone.

Geological modelling, geophysical surveys (dominantly Induced Polarization) and diamond drilling have been the primary exploration tools used at the Gibraltar Mine in order to delineate sulphide (a compound of sulphur and another element, typically a metallic sulphide compound) resources. Subsequent exploration has added 363 million tonnes grading 0.285% copper to the sulphide mineral resource and 95 million tonnes grading 0.305% copper and 0.010% molybdenum to the sulphide ore resource. Further exploration activity appears warranted depending on available funds to outline new mineralized zones.

Oxide copper mineralization was recognized during early exploration programs at Gibraltar. The potential economic benefit from this mineralization, however, was not realized until late 1986 when a solvent extraction-electrowinning plant was commissioned to treat acidic copper solutions draining from existing low grade mineralized material pits. Data collected during a sulphide copper exploration program in the 1990’s between the Gibraltar East and Pollyanna open pits (Connector Zone) indicate that there is potential for substantial oxide copper mineralization in this zone.

Exploration during mine operation has been limited and focused predominantly in and around existing pits. A number of excellent targets to explore for new deposits occur near the existing open pits (Gibraltar West Extension, Connector, Gibraltar East Extension, Crusher) and on other parts of the property (e.g. Sawmill). These target zones require testing by drilling; the remainder of the Gibraltar property requires exploration utilizing a comprehensive program of geological mapping, induced polarization geophysical surveying and geochemical sampling. This work began in 2000 with an extensive IP survey. Several of the IP anomalies outlined during the 2000 surveys were tested by drilling in 2003 (see Exploration 2003).

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Mineralization Types

Pyrite and chalcopyrite (a sulphide mineral of copper and iron) are the principal primary sulphide minerals of the Gibraltar Mine mineralization. Fine-grained chalcopyrite, generally barely visible without magnification, accounts for 60 percent of the copper content and constitutes the single most important form of copper mineralization. Coarser grained chalcopyrite usually occurs in quartz veins and shear zones.

Small concentrations of other sulphides are present in Gibraltar mineralization. Bornite (a sulphide mineral of copper and iron: Cu₅FeS₄), associated with magnetite and chalcopyrite, occurs on the extremities of the Pollyanna and Sawmill deposits. Molybdenite (molybdenum sulphide MoS₂; an ore of molybdenum) is a minor but economically important associate of chalcopyrite in the Pollyanna, Granite Lake and Sawmill deposits.

There is a close spatial relationship between sulphide mineralization and alteration in the Gibraltar deposits. The principal alteration minerals are chlorite, sericite, epidote, carbonate and quartz. Higher-grade mineralization is associated mainly with sericite and chlorite.

Mining

The Gibraltar Mine is a typical open pit operation that utilizes drilling, blasting, cable shovel loading and large-scale truck hauling to excavate rock. The mine is planned to enable excavation of sulphide mineralized material of sufficient grade that it can be economically mined, crushed, ground and processed to a saleable product by froth flotation. (Flotation is a method of mineral separation after crushing and grinding ore whereby a froth, created in a slurry by a variety of reagents, causes some finely crushed minerals to float whereas others sink).

The flotation overflow, or concentrate (mineralization, which is increased in purity by primary production techniques that include crushing, grinding and flotation to eliminate portions of valueless rock), has a copper grade of about 100 times that of the rock from which it was processed and is sold to smelters for further treatment to provide high purity copper metal. The flotation underflow, or tailings, has had its minerals removed and is pumped to the tailings storage facility.

During the mining process, unmineralized and insufficiently mineralized rock must be excavated to expose the economically mineralized material. This low grade material contains either sulphide or oxide copper mineralization. A portion of the low-grade sulphide and all of the oxide material can be leached with sulphuric acid which is naturally assisted by bacterial action. The resultant copper sulphate solution can be processed to cathode copper in the Gibraltar Mine’s solvent extraction/electrowinning (SX/EW) plant.

The sulphide mineralized rock, which forms the basis for mine planning, is considered the “Sulphide Inventory.” The leachable, low-grade mineralized material is not included in the “Sulphide Inventory” and constitutes the “Leachable Copper Inventory.” Much of the rock adjacent to the Gibraltar mine pits or within the mine’s claim boundaries is mineralized and has been delineated and quantified. This material has not been included in the current mine plan in the “Sulphide Inventory” or in the “Leachable Copper Inventory”. This mineralized material has been called “Additional Mineralized Material.”

Estimates of Mineralization

There are approximately 760 million tonnes (837 million tons) of measured and indicated resources currently outlined at Gibraltar and described in detail in the following sections. This includes a total sulphide (in-pit inventory and additional material) resource of about 743 million tonnes (821 million tons) grading 0.287% copper and 0.008% molybdenum at a 0.2% copper cut-off and an oxide and leachable copper resource of 16.4 million tonnes (18.1 million tons) grading 0.2% copper at a 0.1% acid soluble copper cut-off.

12  Year Mine Plan

The resource estimate for a further 12 year mine plan was completed by Gibraltar staff in 1998, and audited by a professional geologist at Roscoe Postle and Associates Inc. The in-pit measured and indicated resources are comprised of 149 million tonnes (163.9 million tons) grading 0.305% copper and 0.010% molybdenum of sulphide mineralization and 14.8 million tonnes (16.3 million tons) of oxide mineralization at 0.148% copper. The sulphide

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resources for the Polyanna and Granite Lake pits were estimated at a 0.20% copper cut-off and for the Connector pit at a 0.16% copper cut-off. The oxide mineralization was estimated at a 0.10% acid soluble copper cut-off.

Additional measured resources of 401 million tonnes (442 million tons) grading 0.288% total copper and 0.007% Mo and indicated resources of 195 million tonnes (215 million tons) grading 0.27% total copper and 0.008% molybdenum have also been outlined on the property but outside of the 12-year mine plan. The cut-off used varied according to location and characteristics of the material that was estimated; the cut-off for the Connector area was 0.16% copper, for Gibraltar East area was 0.17% copper and for all other areas was 0.20% copper.

In-Pit Sulphide Inventory
Pit	Resource Category	Tons (000s)	Cu (%)	Mo (%)	Cut-off (%Cu)
Polyanna	Measured	34,283	0.317	0.010	0.20
	Indicated	1,977	0.285	0.010	0.20
	Subtotal	36,260	0.315	0.010	0.20
Connector	Measured	43,826	0.294	0.010	0.16
	Indicated	6,179	0.261	0.011	0.16
	Subtotal	50,005	0.270	0.010	0.16
Granite Lake	Measured	70,691	0.322	0.009	0.20
	Indicated	6,942	0.321	0.007	0.20
	Subtotal	77,633	0.322	0.009	0.20
TOTAL		163,898	0.305	0.010

The average waste-to-mineralized material strip ratio is 1.62

In-Pit Leachable Copper Inventory
Pit	Category	Tons (000’s)	Acid Soluble Copper %	Cut-off % Acid Soluble Copper
Pollyanna	Measured	2,139	0.138	0.10
	Indicated	182	0.184	0.10
PGE Connector	Measured	13,570	0.150	0.10
	Indicated	437	0.130	0.10
TOTAL		16,329	0.146	0.10

15  Year Mine Plan

A 15-year mine plan was developed for the mine in conjunction with the resource estimate and refinery studies in 2001. The resource estimate was completed in 2001 by George Barker, P.Geo. In-pit measured and indicated sulphide resources in the Polyanna and Granite Lake deposits and the Connector Zone outlined under a 15-year plan are estimated to be 189 million tonnes (208 million tons) grading 0.311% copper and 0.010% molybdenum at a 0.2% copper cut-off. There is also a leachable copper inventory in the Polyanna deposit and PGE Connector Zone, estimated to be 16.4 million tonnes (18.1 million tons) of measured and indicated resources grading 0.146% acid soluble copper at a 0.10% acid soluble copper cut-off.

There are also an estimated 554 million tonnes (611 million tons) of measured and indicated resources in the Gibraltar deposits, in addition to those within the 15-year mine plan. These include 367 million tonnes (404 million tons) grading 0.288% copper and 0.007% molybdenum of measured resources and 187 million tonnes (206 million tons) grading 0.27% copper and 0.008% molybdenum of indicated resources. The cut-off used varied according to location and characteristics of the material that was estimated; the cut-off for the Connector area was 0.16% copper, for Gibraltar East area was 0.17% copper and for all other areas was 0.20% copper.

Environmental Matters

The Gibraltar mine has operated for some 27 years from four open pits. Waste dumps were developed in various areas adjacent to the open pits, and tailings were disposed in a pond located about three kilometres north of the mill. A comprehensive assessment of what would be necessary to rehabilitate the site at closure was developed while the mine was operating. The 1998 Decommissioning Plan included an assessment of the costs of reclamation and

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ongoing water treatment based on a 12-year mine life and that much of the reclamation would take place while the mine was in operation.

On acquiring the Gibraltar Mine in 1999, Gibraltar received both independent and government assessments of the reclamation and water management liability for the Gibraltar Mine. The reclamation plan for Gibraltar involves a water management program and establishment of grass/legume vegetative covers for all areas in order to protect against wind and water erosion. Areas around the pits and waste rock storage areas will be re-sloped, dressed with overburden, and seeded. The beaches and slopes of the tailing storage area will also be seeded. The objective is to promote re-establishment of indigenous species, and evolve toward a self-sustaining ecosystem.

The reclamation plan is reviewed periodically and revised as necessary. Progressive reclamation has also been carried out since the mine has been on standby. Also in 2002, Gibraltar and the Cariboo Regional District completed studies and agreed to develop a landfill site on waste dumps in an area that would not be needed for future operation of the mine. The landfill will provide reclamation credits to the land it occupies, as well as revenues. As a result, the Company received a release of $2.5 million from the reclamation deposits held by the government of British Columbia in December 2002. Construction was initiated in June 2003 and operations began in October 2003. Additional credits and offsets are expected related to an on-site power generation project that is presently in the implementation stage.

As a result of the reclamation completed to date, and revenues and credits from new projects, the reclamation liability was estimated to be approximately $32.7 million. Gibraltar held a reclamation fund deposit of approximately $16.5 million on hand that has been determined to be adequate to handle necessary water management under the Decommissioning Plan. The fund accumulated interest at approximately 3% per annum. Additional reclamation costs, of approximately $13 million, would be covered from the sale of the plant and other equipment on site. A Taseko-sponsored mining investment partnership, the GRT Limited Partnership raised approximately $18.6 million to fund Gibraltar reclamation obligations in December 2003. As a consequence of the GRT Partnership replacing the existing environmental deposit with its own funds Taseko received a refund of $16.7 million in January 2004. The GRT Limited Partnership investors received put rights in Taseko shares as a consequence of the agreements whereby the partnership funded the reclamation liability. It is expected that a full or partial release of the security on the residual value of plant and other equipment on site may possibly be provided by the Government.

2003 Exploration

Six target areas were drilled in 2003, summarized in the table below:

DRILLING AREA	DRILLING COMPLETED
	FEET	METRES	No. OF HOLES
98 Oxide Zone	44,785 (42,559 core)	13,650	96
GM Southwest Zone	5,769 (5,635 core)	1,758	9
Water tank Zone	6,827 (6,615 core)	2,081	10
Pothole Zone	7,669 (7,490 core)	2,338	11
Highway Zone	25,336 (23,132 core)	7,722	38
TK Zinc Zone	20,334 (19,373 core)	6,199	30
TOTAL	110,720 (104804 core)	33,752	194

Ninety-six holes, totalling 13,650 metres (44,785 feet), were drilled at the 98 Oxide Zone, outlining a significant resource. Roscoe Postle and Associates is currently completing an independent estimate of the mineral resource.

Nine holes, totalling 1,758 metres (5,769 feet), were drilled at the GM Southwest Zone along two lines located about 1,220 metres southeast of the 98 Oxide Zone to test a large IP anomaly. Results indicate the anomaly reflects a large pyrite zone. Holes drilled along the southwest edge of the anomaly, however, did hit moderate copper-molybdenum mineralization indicating that mineralization may occur southwest of the anomaly towards the Gunn Zone.

Thirty-eight holes, totalling 7,722 metres (25,336 feet), were drilled on a large IP anomaly located about 1.5 km northwest of the Gibraltar East Pit. Results to date indicate the anomaly reflects a zone of significant pyrite-chalcopyrite mineralization called the Highway Zone. Good copper mineralization, associated with pyrite, was encountered in several holes and geological modeling indicates a relatively steep and narrow (30-60 metres)

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mineralized zone with a strike length of at least 915 metres occurs in the area. The zone also contains elevated gold and silver values.

Thirty holes, totalling 6,199 metres (20,334 feet), were drilled to test an IP anomaly located about 2.5 km northwest of the Gibraltar West Pit. Two holes, drilled in the area in the early 1990’s, intersected over 200 feet of near surface anomalous zinc (average grade 0.45 and 0.50% Zn). Anomalous zinc mineralization (sphalerite) has been observed in about 10 of the new holes. This new discovery is called the TK Zinc Zone.

Twenty-one other holes were drilled during the 2003 program. Ten holes, totalling 2,081 metres (6,827 feet), were drilled on a large IP anomaly located about 500 meters northeast of the plant site in an area called the Water Tank Zone. Preliminary results indicate the anomaly reflects a large pyrite zone with minor copper-molybdenum mineralization. Similarly, eleven holes, totalling 2,338 metres (7,669 feet), were drilled on a large IP anomaly located about 2 km east-northeast of the plant site. Preliminary results indicate the anomaly reflects a large pyrite zone with minor copper-molybdenum mineralization.

Sampling and Analytical Procedures

During the 2003 exploration program, 31,944 metres (104,804 feet) of NQ sized core were drilled. All core was photographed, then logged and sampled by technical staff under the supervision of a qualified person. All core was split into two pieces using a mechanical core splitter and sampled. Average sample length is three metres (10 feet). Preparation and analytical testing of the 2003 drill core samples were carried out on-site at the Gibraltar Mines Ltd. Metallurgical Testing Services laboratory. All core was assayed for copper and molybdenite ^(MoS2^{). Selected} intervals were also assayed for acid soluble copper (ASCu), cyanide soluble copper (CNSCu), gold, silver, zinc and lead.

Assays provided for samples from the 2003 Exploration Program include percent total copper, percent acid soluble copper, percent cyanide soluble copper, percent molybdenite, percent zinc, percent lead, grams per tonne silver and grams per tonne gold. The total copper, acid soluble copper, molybdenite, lead, silver and zinc assays are performed by acid digestion of pulverized drill core samples followed by Atomic Absorption Spectrometry (AAS) analyses of the resulting solutions. The cyanide soluble copper assay is performed by cyanide digestion of pulverized drill core samples, followed by AAS on the resulting solutions and the gold assays are performed by fire assay with AAS finish.

QA/QC Procedures

The following Quality Assurance/Quality Control Protocols are implemented in Gibraltar’s Assay Laboratory ensure that accurate, precise and reproducible analytical results are obtained.

• AAS absorbances are checked on reference solutions at each calibration to ensure that the instrument is functioning properly. The resulting absorbance readings are recorded on the assay worksheets.
  
• Random rather than uniform sample weights are utilized for the assays. The weights and instrument readings are recorded in the lab by the assayer and actual assay values are calculated and reviewed by the dedicated QA/QC person.
  
• AAS zero and calibration is checked at a minimum every six samples read and more frequently if significant drift is observed.
  
• Every twentieth sample is re-split from the crushed drill core reject and assayed in parallel with the mainstream sample to ensure accurate sampling. A table and control chart of mainstream vs. re-split sample assays is maintained.
  
• One sample in twenty (not a sample which has been re-split) is assayed in duplicate to insure assay quality. A table and chart of mainstream vs. duplicate sample assays is maintained.
  
• One standard, known to the assayer, is assayed in each set of twenty mainstream assays. A table and chart of the standard assays is maintained.
  
• One blind standard (five standards of various grade randomized and submitted as sequentially number standards) is submitted by the QA/QC person and assayed in each set of mainstream assays. A table and control chart for each standard is maintained to track assay accuracy and repeatability.
  
• One reagent blank assay is run daily to ensure that samples, solutions and apparatus are not contaminated.
  
• Solution standards are routinely run during assay sets to ensure that ore grade solutions read accurately.
  
• Every tenth assay reject pulp sample is sent to an outside laboratory for re-analysis. A table and chart of mainstream vs. outside sample assays is maintained.
  

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• Reject assay pulps are placed in labeled bags and stored as sets corresponding to assay certificate numbers for future reference. Each sample bag also contains an ID tag to ensure positive sample identification.
  
• Reject drill core pulps are stored in labeled bags as drill-hole sets for future reference. Each sample bag also contains an ID tag to ensure positive sample identification.

Security of Samples

At Gibraltar, whole core samples from drilling in the main mine area are taken for analysis, but a library of representative samples of the different rock types and mineralization is retained in an on-site core facility.

Mine Planning

Gibraltar has been maintained on stand-by since 1999, and, subject to refurbishment and start-up investment of approximately $25 million, will be ready to re-start once copper prices stabilize in the range of US-0.90-$1.00 per pound (at an exchange rate of US$0.70=Cdn$1.00). As copper prices are rising and current smelting and treatment costs for concentrate are at historic lows, planning for re-opening the operation has accelerated in 2003 and planning has begun for a possible re-start by late 2004.

Gibraltar has developed a plan to mine 148 million tonnes of “ore grade” material over 12 years to produce an average of 70 million pounds of copper and 700,000 pounds of molybdenum per year in concentrate plus additional cathode copper from its 10 million pound per year solvent extraction electro-winning plant. Gibraltar has the mineral resource base, physical plant and technical/management expertise in place to operate the mine over the 12-year mine plan.

Along with the copper price, the US$-Can$ exchange rate and concentrate treatment charges impact on the minimum copper price required to justify a re-start decision. There is currently a shortage of copper concentrates available from operating mines resulting in record low treatment and refining charges charged by smelters. This means a reduction in treatment costs of over US$0.10 per pound for copper mining companies. The US$-Can$ exchange rate has gone from 0.67 to 0.76 over the last two years, which increases the copper price required to justify re-start, however, the recent rise in copper price to over US$1.00/lb has more than offset the effect of the increase in the exchange rate.

The Gibraltar re-start is based on a “four-year “mine plan, i.e. the initial 3.5 years of the long-range 12-year mine plan. Once the decision is made to re-start the mine, planned open pit pre-development work would begin in the Pollyanna pit area, consisting of mining 10 million tonnes of waste rock. Waste rock removal will require drilling and blasting. The pre-development work in the Pollyanna pit will expose ore grade material allowing for continuous mill feed for 3.5 years.

A recent review of the re-start mine plan indicates capital costs of approximately $21 million and $4 million in working capital would be required. The breakdown of the capital cost is $8.58 million for equipment, $1.83 million for expense projects and $11.05 million for pre-production operations. The four-year mine plan will require six months from the re-start decision date to resumption of full operations. The plan has some challenges, as lower grade/higher strip material would be accessed early in the plan. The average operating cash breakeven cost over the four-years is US$0.83 per pound, with an average cost of US$ 0.90 per pound in the first two years.

During year two of the four year mine plan, it is anticipated copper treatment charges will return to the long term traditional rates of US$0.24 per pound from today’s US$0.11 per pound. At that point in time, Taseko will reevaluate its copper refinery project for Gibraltar.

E.2          Prosperity Project

Location, Access and Infrastructure

The Prosperity Project consists of 196 mineral claims covering the mineral rights for approximately 85 square km of south central British Columbia, Canada. The property is located at latitude 51degrees 28'N and longitude 123 degrees 37' W in the Clinton Mining Division, approximately 125 km southwest of the City of Williams Lake in south-central British Columbia. Access from Williams Lake is via Highway #20 to Lee's Corner, then via an all-weather main line logging haulage road to the site, a total road distance of 192 km. The British Columbia Railway

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services Williams Lake and has rolling stock to facilitate shipping bulk commodities from Williams Lake to Vancouver, or copper concentrates through to the Pacific Ocean ports of Squamish and North Vancouver. The community of Williams Lake is sufficiently close and is capable of supplying goods and services to a possible mine, and its personnel.

Multiple high-voltage transmission lines from the existing Peace River hydroelectric power grid are situated 118 km east of the Prosperity Project. A 124-km conventional power line was designed to connect to the existing B.C. Hydroelectric power grid and should be capable of supplying the required power to service a large mine and mill complex at the Prosperity Project site. A major natural gas transmission pipeline is situated 112 km northeast of the Prosperity Project. Ample water is available nearby for a mining operation.

Geology and Mineralization

The Prosperity property hosts a large porphyry copper-gold deposit. The deposit is predominantly hosted in Cretaceous andesitic volcaniclastic and volcanic rocks. In the western portion of the deposit, the host rocks have been intruded by the multi-phase, steeply south-dipping Fish Creek Stock. The stock is surrounded by an east-west trending, south-dipping swarm of subparallel quartz-feldspar porphyritic dikes. The stock and dikes comprise the Late Cretaceous Fish Lake Intrusive Complex that is spatially and genetically related to the deposit. Post mineralization porphyritic diorite occurs as narrow dikes that cross-cut all host rocks. The central portion of the deposit is cut by two major faults, striking north-south and dipping steeply to the west.

Pyrite and chalcopyrite are the principal sulphide minerals in the deposit. They are uniformly distributed as disseminations, fracture-fillings, veins and veinlets and may be accompanied by bornite and lesser molybdenite and tetrahedrite-tennantite. Native gold occurs as inclusions in, and along microfractures with, copper-bearing minerals and pyrite.

Exploration

Prospectors discovered mineralization in the 1930s. Exploration continued intermittently and by a variety of operators until about 1991, and included extensive IP, magnetic and soil geochemical surveys, and 176 percussion and diamond drill holes, totaling approximately 27,200 metres. This work helped define the Prosperity Project mineralization to a depth of 200 metres, and outlined a copper-gold mineralized zone approximately 850 metres in diameter.

Taseko carried out ongoing and systematic exploration programs from 1991-1999, increasing drilling to 154,631 metres has been drilled in 452 holes and accompanied by progressive engineering, metallurgical and environmental studies.

Sampling and Analysis

Since the current Taseko management group took over the project in 1991, 127,000 m of HQ and NQ core has been drilled in 275 bore holes, and a single 200-m percussion hole. Core recovery averaged 95.7%. Drill company personnel boxed all core and delivered it to Taseko’s logging compound at the Prosperity site twice daily. Taseko geological and engineering staff based at the Prosperity site supervised drilling, logging and sampling. A total of 57,778 core samples were taken, each sample was generally 2 m in length.

In 1991-1994, drill core was mechanically split, one half of which was submitted for preparation and analysis. In 1996-97, 42% was subject to whole core sampling, 44% was sampled as sawn half-core, 5% of samples comprised the larger portion of core sawn 80:20. The remaining 9% was cored overburden, which was not generally sampled. Half of the core remaining after splitting is stored in core racks at site.

Samples were bagged and shipped by commercial surface transport to Vancouver area laboratories, where it was prepped. Samples were dried at temperatures less than 65 degrees C. In 1991-1993, primary comminution to approximately 1/4 inch (6.4 mm) size by a jaw crusher with secondary roll crushing to obtain minus 15 mesh. In 1994-1997, samples were crushed in a single stage so that greater than 60% passed a 10 mesh screen and 500 gram assay splits were riffled out for crushing. Coarse rejects were retained until year 2000 at a warehouse in Port Kells, British Columbia. Ring and puck pulverization was used. In 1991-1993, approximately 95% of the sample passed a 120 mesh screen. In 1994-1997, greater than 90% of the sample passed a 150 mesh screen. Pulp rejects are retained indefinitely at the Port Kells warehouse.

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All assays and analyses were performed by Min-En Laboratories. Gold analysis was done by lead collection fire assay, using a 30 g charge and an Atomic Absorption Spectroscopy (AAS) finish. Copper analysis was done by Aqua Regia digestion on a 2 g sample, AAS finish. Mercury analysis was done by Cold Vapour AA. Multi-element analysis by Inductively Coupled Plasma Emission Spectroscopy (ICP-ES) was also done on all samples.

In order to assess quality control, duplicate and standard reference samples were submitted for assaying, representing more than 10% of the total assays. Random duplicates were derived from 5% of all rejects. Every twentieth sample was shipped to either Chemex Labs Ltd. (now ALS Chemex) or International Plasma Laboratories Ltd. for riffle splitting of the coarse reject, pulverization and analysis for gold and copper. In 1994-1997, project-based, bulk standard reference materials were created and submitted within the mainstream and duplicate analytical streams.

Security of Samples

For Prosperity, drill core is stacked and stored on the property. Pulps and rejects from core samples are generally stored by the analytical facility for one year, then acquired by the Company and stored in a secured facility in Port Kells. All rejects are discarded after two years.

Estimates of Mineralization

In 1998, G. Giroux, P.Eng., reported estimated measured and indicated mineral resources of 1.0 billion tonnes at 0.41 grams gold/tonne and 0.24% copper and an inferred resource of 0.2 billion tonnes grading 0.25 grams gold/tonne and 0.21% copper at $3.25/tonne NSR cut-off.

Engineering Studies

In 1993, Melis Engineering Ltd. was retained by Taseko to carry out comprehensive metallurgical tests on drill core samples from the Prosperity Project to evaluate the metallurgical variability of the deposit. The test program included batch flotation tests and eleven lock-cycle flotation tests on various composites, and provided detailed copper-gold concentrate analyses, grindability assessments, tailings settling tests and environmental data.

The results from the variability testwork demonstrated that copper recoveries ranged from 83.0% to 88.4% with copper concentrate grades ranging from 22.2% copper to 28.8% copper. Gold recoveries ranged from 66.1% to 79.8% with grades ranging from 26.0 grams gold/tonne to 71.3 grams gold/tonne reporting to the copper concentrate. Bond rod mill and ball mill grindability tests of drill hole composites indicated a variation of hardness within individual levels and an increase in hardness with depth. Work indices ranged between 16.4 to 20.4.

The conceptual concentrator design was conventional, consisting of SAG (Semi-Autogenous Grinding) and ball mill grinding; bulk sulphide flotation; regrind and rougher/scavenger flotation; cleaner flotation; and concentrate dewatering.

Late in 1993, Kilborn Engineering Pacific Ltd. was contracted to complete a detailed Project Pre-feasibility Study, which was successfully tabled in mid-1994. The Kilborn Pre-feasibility Study, which considered a 60,000 tonne per day milling rate, addressed most aspects of the Project at the level of detail and analysis greater than that normally attributed to a pre-feasibility study. It confirmed that the Prosperity Project compared favourably with open pit mines currently operating in the region and provided excellent benchmarks for productivity and cost comparisons.

For the Pre-feasibility Study, a mine plan encompassing mineralized material (mineral resource) of 675 million tonnes at an average grade of 0.236% copper and 0.434 grams gold/tonne was outlined, containing 9.4 million ounces of gold and 3.5 billion pounds of copper. The geometry and continuity of the deposit provided for efficient open pit mining with an overall life of mine waste to mineralized material stripping ratio (ratio of waste rock to mineralized material to be removed) of 1.57. At a milling rate of 60,000 tonnes per day (21.9 million tonnes per year), average annual production would be 222,360 ounces of gold, 99 million pounds of copper and 530,000 ounces of silver contained in 185,000 tonnes of concentrate.

In October 1997, Lakefield Research Limited completed pilot plant metallurgical programs and bulk sample processing to confirm final process design criteria. The program focused on finalizing detailed process criteria for a feasibility study, including copper and gold recovery into a copper-gold flotation concentrate, assessment of

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grindability characteristics and detailed concentrate and environmental analyses. Results from the 50-tonne pilot plant program results compared favourably with the Pre-feasibility Study metallurgical results.

Detailed Engineering Work

Detailed investigative work has included a review of all major facilities and their construction requirements, unit costs for labour, materials and equipment. Along with the construction aspects of the project, the deposit’s mine development plan has undergone a series of optimization studies that analyzed how the mining should best progress in consideration of the most recent metal price and exchange rate forecasts. Milling reviews examined the original Lakefield Research investigations, pilot plant program and the more recent modal analyses by G&T Metallurgy to determine if they offered any changes that would result in cost savings. Upon completion of the multitude of studies, an all-encompassing project analysis was conducted in preparation for completing a project feasibility report. During 1999, consulting geotechnical engineers Knight Piesold Ltd. focused their attention on rock waste and tailings storage studies. At the same time, Merit Consultants reviewed the parameters for construction of major structures. The tailings storage studies investigated holding capacities from 490 million tonnes to 810 million tonnes, methods of embankment design from impervious to free draining, filling by cyclone or spigot, and various tailings pumping scenarios. Knight Piesold Ltd. designed the embankment, tailing and reclaim water pipeline system, freshwater supply system, open pit dewatering and slope, waste dumps, geotechnical foundation and surface water run-off control systems. Triton Environmental Consultants developed management for environmental and socio-economic permitting, planning, fisheries compensation, mitigation and reclamation. Merit Consultants International continued to review construction and project management criteria. They also provided details and rates for alternative collective bargaining construction agreements.

All major building structures for the crusher, process plant, service complex, etc were assessed with respect to pre-engineered versus custom engineering plus labour productivity and cost, material unit rates and construction equipment content. Project construction productivity and costs were adjusted to those recently experienced on BC mine projects. Mine engineers examined mining/milling rates of 60,000 and 90,000 tonnes per day along with a reduced mine plan of 400 million tonnes and stripping ratio of 1:1, respectively. The intent was to determine which production rate and plan was better suited for a mine production schedule and mill throughput that considered current metal price and exchange rate forecasts. Following the 60,000 and 90,000 tonnes per day investigations, Taseko engineers and outside consultants conducted detailed optimization investigations for mine production schedules and milling rates of 70,000, 75,000 and 80,000 tonnes per day. A series of pit development plans were investigated, along with decreasing cut-off grade and stockpiling strategies. Waste excavation deferral programs were also examined. Mine-related activities included compilation of the Prosperity economic model with the most recent operating costs, smelter charges, treatment terms, metal prices and exchange rate forecasts. As previously noted, operating costs were rationalized by using those experienced for identical activities at Gibraltar Mine. Facilities would require only one primary crusher and a single overland conveyor to a coarse ore stockpile rather than the dual system originally considered necessary. This large cost saving has been incorporated into the economic evaluations.

In March 2000, subsequent to economic analyses and mining plan optimization studies undertaken by Taseko, a revised processing rate of 70,000 tonnes per day was adopted for a detailed study of the Prosperity Project. The study addressed mining, processing, environmental, ancillary facilities and infrastructure required for completion of the financial and technical evaluation of the Project. It includes a project management plan and summary project schedule, and cost estimates to bring the Project into operation, and an economic analysis. The 2000 work was based on an in-pit resource estimated to be 490.8 million tonnes grading 0.22% copper and 0.43 grams Au/tonne at a $3.25/tonne net smelter return cut-off. This material is within the grade model constructed by Giroux in 1998 from the geological interpretation and rock modelling done by Taseko personnel. The open pit mine design, mine plans, mining capital and operating costs were prepared by Nilsson Mine Services Ltd. with the assistance of the engineering staff of Gibraltar Mines Ltd. Kilborn developed the mill flow sheet in conjunction with the Gibraltar engineering staff. Butterfield Mineral Consultants Ltd. conducted a study of the saleability of the Prosperity concentrate. Pilot plant tailings aging tests continued until August 2000 when the 36-month analyses were completed. The tailings aging tests tables for the 1998 Pilot Plant report were also updated for environmental requirements of the Project Reporting. Electrical transmission design engineers Ian Hayward International Ltd. designed the 230 kilovolt (kV) transmission line, provided the detailed material take-off and selected the right-of-way to the site from the BC Hydro Dog Creek substation.

The latest mining/milling optimization work has detailed much of the engineering work beyond that conducted previously by considering two major initiatives. Firstly, environmental analyses were reviewed and the waste rock

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storage criteria revised, enabling reduced truck haulage requirements. Secondly, application of current and actual Gibraltar mine equipment operating costs resulted in reduced overall mining costs. The most suitable waste rock and tailings storage designs were incorporated into the development. Reduced milling costs were achieved by increasing the primary grind specification from 160 microns to 200 microns. This improvement was determined through additional metallurgical reviews. Cost effective construction criteria, investigated by Merit Consultants, were applied to all major structure cost estimating.

Hypothetical Operating Scenario, Economics

Engineering work by Kilborn and others has determined that Prosperity deposit is technically amenable to open pit mining. A four phase mining plan was designed in which the life of mine strip ratio would be 0.72:1. Under the 70,000 tonnes per day scenario, the project would have a 16-year mine life and a 20-year project life, producing, on average, 235,920 ounces of gold and 102 million pounds of copper per year. Low-grade mineralized material mined over the first 14 years would be stockpiled and processed in the last four years. Mineralized material and waste rock would be mined by conventional drilling, blasting, loading and truck hauling methods.

Gold and copper would be recovered as concentrate employing conventional crushing, grinding and stage flotation technologies. Recoveries would average 70.2% gold and 86.6% copper. A concentrated grading 24.5% copper, 38.8 grams Au/tonne and 89 grams Ag/tonne would be produced. Average annual concentrate production would be 188,885 tonnes (dry). Tailing and waste rock would be storied in an impoundment on site in Fish Lake. Reclamation plans include a fish enhancement plan to compensate for fish habitat lost in Fish Lake. Concentrate would be transported to the Port of Vancouver BC, and shipped overseas for smelting and refining. Supplies would be trucked to site. Power will be supplied by BC Hydro; annual requirements are estimated to be 819.5 gigawatt-hours/year via a 230-kilovolt transmission line that would require construction over a distance of 124 km to the site.

Cost engineering and economic analyses demonstrate that the mine-mill complex would have an average life of mine estimated site operating cost of Cdn$4.99 per tonne of mineralized material and a net smelter return (monies actually received for concentrate delivered to a smelter net of metallurgical recovery losses, transportation costs, smelter treatment-refining charges and penalty charges) of Cdn$7.82 per tonne. Initial capital cost for the mine, mill, ancillary facilities and infrastructure is estimated to be Cdn$684 million (capital costs varies from Cdn$400 – $800 million depending on throughput assumptions of 60,000 to 120,000 tonnes/day). The pre-tax discounted cash flow rate of return (DCFROR) of 3.1% was determined using long-term average price projections. These are: gold at US$350/oz; copper at US$1.00/lb; silver US$6.50/oz and an exchange rate of US:Cdn $0.68. A sensitivity analysis indicates that the DCFROR is most sensitive to the currency rate exchange variable. For example, a 20% reduction in the exchange rate results in a DCFROR of 11.9% and a 20% increase in the exchange rate would result in a DCFROR of –5.2%. It is also sensitive to gold head grade, gold recovery, copper variables and operating cost. For example, a 20% decrease in operating cost gives a DCFROR of 7.6% and a 20% increase reduces the DCFROR to –2.4%. It is least sensitive to smelter terms and initial project capital cost. These rates of return are not sufficient to justify construction of a mine at the Prosperity Project given current copper and gold prices.

Kilborn Engineering Pacific Ltd provided a draft report on the detailed engineering studies in December 2000. Engineering studies will continue and assessments will be undertaken over time as metal prices indicate new opportunities for the Prosperity project. However at this time, Taseko is focusing its resources on the Gibraltar project.

E.3          Harmony Gold Project

Gibraltar Mines Ltd, a subsidiary of Taseko Mines Limited, acquired the Harmony Gold Project in 2002 through a related party transaction with Misty Mountain Gold Ltd. (now renamed Continental Minerals Corporation) involving the issuance of Gibraltar Preferred Shares which are convertible into Taseko shares in certain liquidation events in connection with the Harmony Gold Project (see Items 7 and 19).

Location, Access and Infrastructure

The Harmony Gold Project is located at latitude 53 degrees 31’ N and longitude 132 degrees 13’ W in the Skeena Mining Division, on Graham Island, Queen Charlotte Islands-Haida Gwaii, on the northwestern coast of British Columbia, Canada. The Harmony Gold Project comprises of 50 four post mineral claims, 37 two post mineral

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claims and one fractional claim, totalling 970 claim units and 24,250 ha. The deposit-area claims are in good standing until June 29, 2009.

The Queen Charlotte Islands-Haida Gwaii, are approximately 89 kilometres west of the British Columbia mainland, 159 kilometres southwest of the City of Prince Rupert, and approximately 770 kilometres northwest of the City of Vancouver. Existing high capacity industrial logging roads extending from the towns of Port Clements, Masset and Queen Charlotte City access the site. By road, the property is approximately 40 kilometres from Queen Charlotte City and 30 kilometres from Port Clements. Graham Island is readily accessed by ferries and commercial barges and shipping from both Prince Rupert and Vancouver. There are also daily commercial flights from Vancouver.

Geology and Mineralization

The Harmony property hosts the Specogna epithermal gold deposit, controlled by the Sandspit fault. It is a right lateral transverse-normal fault, with its eastern side down dropped at least several hundred metres, and a dip of 40 to 60^o to the east. Cretaceous Haida Formation mudstones underlie the western side (footwall) of the fault, and the eastern side by Miocene sandstones, siltstones and conglomerates of the Skonun Formation.

Dacite dykes of Tertiary age have intruded along the fault. Contemporaneous, pervasive silicification, hydrothermal brecciation, stockwork and banded quartz veining and gold mineralization have developed along the hanging wall of the fault. This extends for a strike distance of at least 800 metres, eastwards from the fault at least 200 metres and to a depth of at least 240 metres. Pyrite and marcasite are the dominant metallic minerals. Gold occurs as native gold and electrum, which are commonly visible. Silver is also present as an alloy with gold.

Exploration and Estimates of Mineralization

Prospectors discovered mineralization at Harmony in 1970. The project claims were optioned by various companies during the period 1970 to 1975, which carried out geological mapping, geochemical surveys and minor drilling. Consolidated Cinola Mines Ltd acquired the ground in 1977 and, with partners, carried out detailed drilling, totalling 30,116 metres in 231 holes by 1984. In 1981, 465 metres of an underground drift and crosscuts were excavated for a metallurgical bulk sample. A 45 tonne per day pilot mill was established to treat about 5,200 tonnes of material and in 1982, a feasibility study for a 10,000-15,000 tonnes per day operation was completed. From 1986 to 1988, City Resources drilled 83 diamond drill holes and 64 reverse-circulation drill holes, totaling 13,356 metres, and completed 117.6 metres of underground development to obtain a bulk sample, conducted bench scale metallurgical testing, and developed open pit scenarios for the project. Barrack Gold acquired the project in 1989 and renamed the company to Misty Mountain Gold Ltd.

Additional drilling, metallurgical and engineering studies were carried out from 1989-1999. In 1997, M. Nowak, P.Eng., estimated the measured and indicated resources in the deposit to be 64 million tonnes grading 1.53 grams Au/tonne, containing approximately 3 million ounces of gold. There are additional inferred resources of 21 million tonnes grading 1.04 grams Au/tonne. The estimates were done at a 0.60 grams Au/tonne cut-off.

Sample Analysis and Security

During the period from 1971 to 1989, the companies conducting exploration sent either split or sawn half core samples for assaying. Samples were taken continuously over lengths ranging between 1.5 to 2.0 metre, crossing lithologic boundaries in most instances. Early gold analyses included chemical extraction followed by gravimetric or Atomic Absorption (AA) finish. Check assaying procedures were included at various laboratories including Chemex, Bondar Clegg, General Testing and Bell-White Labs.

Drill core sample lengths chosen by Misty Mountain were varied to selectively isolate vein material and to avoid sampling across lithologic boundaries. Samples, totalling 22,421 in number from 35,652 metres of core, for the most part ranged between 1.75 and 2.25 metres (actual range 0.06 – 6.10 metres) in length. Whole NQ2 core rather than half core was sampled to obtain maximum assay precision.

Sample preparation was carried out at Min-En Laboratories in North Vancouver, B.C., where drill core was crushed to 60% passing 10 mesh and pulverized to 90% - 150 mesh. Prepared samples were sent to Chemex Labs Ltd. for mainstream assay and to CDN Labs for check assay. A one assay ton charge was used for gold fire assay with an AA finish; a one gram sample was assayed for silver by AA. All samples were sent for 32 element ICP analysis. A total of 23,690 prepared samples was analysed at Chemex and 1,132 prepared samples was analysed at CDN using a similar assaying procedure.

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Three property standards were prepared to approximate lithologic type and corresponding gold grade, and one of three was inserted into the sample stream. Approximately one in 20 standards was randomly inserted in the mainstream pulps, while one in 13 was inserted in the duplicate pulps. Performance of the three standards assayed, along with the mainstream samples at Chemex, was monitored by comparing the results over time with the mean and tolerance limit values. Of the 1,209 primary results, a total of 48 or 4% were outside of the set tolerances. A rerun of the batches containing the offending standards was re-assayed, resulting in 15 or 1.2% outside of the set tolerances.

Sample Security

Sample pulps are stored in the Company’s warehouse at Port Kells, British Columbia. Drill core is stored at site.

Engineering Studies

Metallurgical testwork completed prior to 1987 fell short of arriving at an economically and environmentally viable ore treatment/gold extraction process for the Specogna Deposit. Since 1996, Misty Mountain has pursued a comprehensive program of extending the previous testwork and exploring other potentially viable process options for the recovery of gold, including gravity, flotation, bio-oxidation of flotation concentrate, bio-oxidation of whole ore, carbon-in-leach cyanidation and thiosulphate leaching. This work has included a reassessment of the ore deposit mineralogy, geology and characteristics of gold mineralization. The reassessment of pre-1987 metallurgical sampling discovered that the previous pilot plant bulk sample material was unrepresentative of the overall deposit, having been collected predominantly from a thin horizontal unit that comprises only about 7% of the overall in-pit rock.

Metallurgical samples for the 1997 and 1998 testwork were carefully selected so as to be representative of the overall in-pit rock units. Bench scale tests of these samples have revealed acceptable gold recoveries both through collection and treatment of a sulphide concentrate and through direct bio-oxidation of whole ore followed by gold leaching. Work is required to optimize the processes from an economical perspective and confirm initial results by applying these same processes to larger, representative samples.

In 1997, preliminary mine planning by Independent Mining Consultants Inc. of Tucson, Arizona resulted an estimated of in-pit material of 64 million tonnes grading 1.52 grams Au/tonne using a 0.60 grams Au/tonne cut-off, with an overall waste to ore stripping ratio of 0.82 tonnes of waste to 1 tonne of ore.

Environmental Considerations

Perceptions of possible acid rock drainage have been the main environmental concern relating to the Harmony Gold Project, based on the previously proposed large scale, open pit mine plan. The location and size of waste rock sites proposed in that plan was also a concern. The previous mine plan was a concern of First Nations and other community people, however, local citizens have not prevented any development work. The area has been extensively logged and permitting efforts by former operators on the Property were well advanced. Misty Mountain initiated base line environmental, wildlife, fisheries, climate, hydrology and vegetation monitoring studies. These studies were initiated before the commencement of the 1995 exploration work in order to establish both Misty Mountain’s intention and desire for the utmost integrity of the database and to establish a firm foundation for future permitting, as the Company recognized that successful development of the project must be done in a safe, environmentally responsible manner, which will maximize benefits to regional communities. The open, cooperative consultation process with all stakeholders, with specific attention to the First Nations community, merged with successful exploration results and utilizing low impact, proven, conventional mining methods, applicable to gold production from epithermal gold mineralization initiated by Misty Mountain would also be the intention of Taseko.

Aboriginal (or “First Nations”) Issues

The Queen Charlotte Islands-Haida Gwaii, including the area surrounding the Harmony Gold Project, are subject to aboriginal peoples’ land claims. Aboriginal land claims are subject to the B.C. Treaty Commission Legislation and the B.C. Treaty Commission, both established in 1993. The Commission facilitates and manages a six stage process whereby the Government of Canada, the Government of British Columbia and a First Nation negotiate a treaty settlement. The Council of Haida Nations (the First Nation claiming jurisdiction over the area of the Harmony Gold Project) is presently in the second stage, Preparation for Negotiations. The British Columbia government has stated a policy that settlements will not adversely affect existing tenures in the settlement areas.

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In late 1999, the First Nations people on Graham Island launched a lawsuit against the Government of British Columbia (Ministry of Forests). In the suit, the First Nations peoples challenged the ability of government to issue effective permits for resource development on the Queen Charlotte Islands. Due in part to this uncertainty, Misty Mountain’s management deferred further work on the project, as has Taseko’s. In late 2000, a decision was rendered on the lawsuit. The First Nations lost its application to have the permit set aside. However the Court went on to create a new moral duty on the part of the exploration companies to consult with First Nations, and also introduced some new uncertainties. Although the decision did not decide whether the First Nations hold aboriginal title to the Queen Charlotte Islands, the judge accepted to some degree that at least some of the lands are subject to aboriginal title or rights and contingent on future land claims negotiations.

A formal land use planning process, co-sponsored by the Province and the Haida, was initiated in mid-2003 and is expected to be completed by the late fall of 2004. The Haida vision is to protect an additional 24% of the land base. A narrow corridor along the Yakoun River is proposed for protection but at this time it is not known what the full effect would be on the Harmony property.

ITEM 5                     OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Overview

Taseko is currently an expenditure-based organization whose business strategy is to acquire, explore and conduct detailed engineering and economic analysis of mineral deposits which have large tonnage and multi-year operation potential. None of Taseko’s currently held mineral deposits currently hosts mineralized material which can be said to be “ore” or feasibly economic at current metals prices, although the Gibraltar Mine, taken out of production and put on standby in 1998 is capable of near term reactivation if copper prices strengthen significantly and for an extended period (subject to approximately $25 million in restart costs using its current processing facilities). In addition, in 2000-2001, the Gibraltar Mine has been the subject of research work, described herein, which could significantly reduce the operating cost per pound of copper produced but would require a significant (in excess of $100 million) capital investment.

In March 2004, the Company announced it was on track to restart operations at the Gibraltar Mine and that it was planning copper concentrate shipments to customers to commence in October 2004.

Under Taseko’s accounting policies, exploration and corporate/administrative costs are expensed as incurred and property acquisition costs are deferred (ie capitalized). Such acquisition costs are written off when Taseko abandons a property due to exploration program results that appear to warrant abandonment or when it appears that the deferred costs may not be recoverable. Acquisition costs and exploration expenditures are usually financed through a combination of cash and common share issuances.

As an expenditure-based corporation, Taseko’s results of operations are often evaluated on an “event driven” basis. Results of operations are difficult to quantify given that the product of these expenditures relates to the nature, extent and statistical confidence (primarily from diamond drill exploration programs) in a deposit’s size and continuity. It is difficult to evaluate the success of operations in a fiscal year by reference to the financial statements, given that results are more appropriately measured by an evaluation of the minerals discovered and/or confirmed. Taseko’s operating activities do not occur on a regular or periodic basis and are subject to the economic realities of metals prices and equity financing conditions for natural resource exploration issuers. Accordingly, it may not be meaningful to seek observable trends in financial operating statistics. Although Taseko calculates an annual loss per share (which has varied over a range of $0.09 to $2.35 over the last three fiscal years), Taseko is of the view that its share price does not vary in accordance with the loss per share statistic but rather Taseko share prices vary with the price of the underlying market for copper and gold and the outlook for these metals.

Taseko’s financial statements are prepared on the basis that it will continue as a going concern. Given that Taseko has no source of significant revenue, this assumption is always subject to the further assumption that there will continue to be investment interest in funding large tonnage metal deposits, which are not known to be economic in the current environment. Taseko can give no assurance that it will continue to be able to raise sufficient funds and should it be unable to continue to do so, may be unable to realize on the carrying value of its resource projects and

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the net realizable value could be materially less than Taseko’s liabilities with a potential for total loss to Taseko shareholders.

Taseko does not believe that it is significantly impacted by the effects of inflation and the Canadian dollar has fluctuated in a relatively narrow band to the United States dollar (ranging from 1.33 to 1.61 C$/US$) during the last few years. During the years presented, the Company has not entered into foreign currency forward contracts or other derivatives to mitigate the impact of exchange rate fluctuations on its operating results. For additional details respecting the five-year historical exchange rates, see Item 3. Taseko has not been significantly affected by government economic, fiscal, monetary or political policies, and the outlook for Taseko’s assets primarily relate to the outlook for gold and copper. For information relating to the historical prices for copper and gold, see “Item D, Trend Information” below.

A.            Operating Results

Fiscal 2003 Compared to Fiscal 2002

Most costs have decreased when compared to fiscal 2002; the exceptions are consulting fees and office and administration that increased in the fourth quarter relating to financing and planning for the re-start of the Gibraltar mine, and stock-based compensation expense, which is a mandatory change in the accounting for stock-based compensation (see notes to the financial statements). Higher costs in fiscal 2002 were attributable to the activities associated with financing the copper refinery studies, in particular, interest and finance charges (2003 - $201,942; 2002 - $507,790) and legal accounting and audit costs (2003 - $169,356; $2002 - 334,492).

The main expenditures in fiscal 2003 were on exploration, which includes both the cost of care and maintenance and the exploratory drilling activities at Gibraltar and ongoing environmental monitoring, property assessment and claim fees and mine planning studies for Prosperity and Harmony. Of the $2,029,529 in exploration expenditures, $1,913,712 was spent on Gibraltar, $88,500 was spent on Prosperity and $27,317 was spent on Harmony.

The Company’s loss for the year is $3.5 million, as compared to $6.5 million loss in fiscal 2002. The Company has no revenue from metal sales as the Gibraltar Mine is currently in a "care-and-maintenance" mode. Decreased expenses due to decreased activity, particularly in refinery studies, and an increase in both interest income (2003 - $721,480; 2003 - $551,842) and from a gain on the sale of equipment (2003 - $131,638; 2002 - $1,314) resulted in the Company’s improved performance in fiscal 2003.

Hunter Dickinson Inc. (“HDI”) of Vancouver, British Columbia, is a private company with certain directors in common that provides investor relations, geological, corporate development, administrative and management services to, and incurs third party costs on behalf of, the Company pursuant to a December 1996 agreement. In the year ended September 30, 2003, Taseko and its subsidiaries paid $253,859 to HDI for services rendered as compared to $574,892 in the previous year (see also Items 7 and 19)

Fiscal 2002 Compared with Fiscal 2001

During the 2002 fiscal year, Taseko received $551,842 in interest income, as compared to $1,110,431 for the 2001 fiscal year. Interest income decreased in 2002 due to lower yields on investments.

Expenditures in fiscal 2002 were $6.5 million, which were significantly decreased from the $11.5 million spent in fiscal 2001. The main decreases in fiscal 2002 were for exploration (2002 - $2.1 million; 2001 - $3.9 million) and the refinery project (2002 - $1.7 million; 2001 - $3.6 million). Essentially all of the exploration expenditures in 2002 related to Gibraltar for mine planning, associated with the monitoring concentrate contracts and other opportunities for re-start of the mine, and assessing other projects such as the landfill site; and site activities, including reclamation and equipment maintenance.

Expenditures also decreased in the following areas in fiscal year 2002: legal, accounting and audit (2002 – $0.3 million; 2001 - $0.5 million), consulting (2002 - $0.1 million; 2001 - $1.8 million) and office and administration (2002 - $0.2 million; 2001 - $0.7 million).

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The Company’s loss for the year is $6.5 million compared to $58.2 million in 2001. The loss in 2001 was due primarily to asset write downs. Taseko previously held an interest in the Harmony Gold Project that was valued at $0.6 million. This interest was written down as part of the acquisition of the remaining interest in the project in fiscal 2002, and constitutes part of the loss for the year.

B.            Liquidity and Capital Resources

Overview

Historically Taseko’s sole source of funding was the sale of equity securities for cash primarily through private placements to sophisticated investors and institutions. As a consequence of the acquisition of the Gibraltar Mine in 1999, Taseko also received funding pursuant to a $17 million convertible debenture financing commitment executed by Boliden Westmin (Canada) Ltd. Of this $17 million commitment, Taseko received $4 million in fiscal 1999, $4.5 million in fiscal 2000 and the $8.5 million balance in fiscal 2001. Taseko also issued common share capital in each of fiscal 2000 and 1999 pursuant to private placement financings and upon the exercise of warrants and/or options. Taseko’s access to exploration financing is always uncertain. Taseko has no assurance of continued access to significant equity funding.

Fiscal 2003 Compared to Fiscal 2002

As a consequence of the acquisition of the Gibraltar Mine in 1999, Taseko received funding pursuant to a $17 million non-interest-bearing convertible debenture financing by Boliden Westmin (Canada) Ltd. As Taseko has the right and the intention to convert the debenture into common shares, the $17 million Gibraltar debenture is classified as equity rather than as a liability on the Company's balance sheet.

Reclamation deposits totaling $16.8 million including interest, are to be used at a later date for reclamation purposes at Gibraltar and at Harmony.

The reclamation liability of $32.7 million related to the Gibraltar Mine is secured by reclamation deposits and plant and equipment. The tracking preferred shares of Taseko's subsidiary, Gibraltar, is the net book value of 12,483,916 shares which were issued as part of the cost to acquire the Harmony Gold Project from Misty Mountain Gold Limited. The tracking preferred shares are designed to track and capture the value of the Harmony Gold Project and will be convertible into common shares of the Company upon a realization event such as a sale to a third party or commercial production at the Harmony Gold Project. As Taseko has the right and the intention to settle these preferred shares with common shares of the Company, they have been included in shareholders’ equity on the balance sheet.

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

(i)	2,185,000 common shares at $0.30 per share for net proceeds of $0.65 million;
(ii)	4,232,001 units at $0.30 per unit for net proceeds of $1.25 million.
(iii)	5,787,500 flow-through units at $0.40 per unit for net proceeds of $2.15 million. Effective December 31, 2002, the Company renounced $2.315 million in Canadian Exploration Expenditures ("CEE") to the flow-through investors. Accordingly, the Company was required to spend $2.315 million on qualified CEE by December 31, 2003. At September 30, 2003, the Company had spent $0.731 million.

In April 2003, the Company acquired the remaining business of the GESL Partnership under a plan of arrangement. In fiscal 2002, the Company had acquired a 38% initial position in these assets comprising primarily of technological and operating rights. The fiscal 2003 transaction resulted in a reduction of certain Taseko liabilities by $3 million. Further, the acquisition consolidated the Company’s 100% ownership of the copper refinery engineering business of the GESL Partnership. Upon receiving TSX Venture Exchange and judicial approvals the Company issued 7,446,809 common shares having a deemed value of $0.47 per share, for total consideration of $3.5 million.

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At September 30, 2003, Taseko had working capital of $2.3 million, as compared to $3.4 million at the end of the previous quarter, and a working capital deficiency of $4.3 million at the end of the 2002 fiscal year. The Company also had 53,880,973 common shares issued and outstanding.

Several other financings were arranged subsequent to the year ended September 30, 2003. The proceeds of these financings will be used to fund activities towards re-start of the Gibraltar mine and for working capital purposes. These include:

(i)	6,700,000 units, consisting of one common share and one common share purchase warrant exercisable at $0.75 for a two year period, were issued at $0.60 per unit for gross proceeds of $4.02 million;
(ii)	850,000 options were exercised for gross proceeds of $0.39 million;
(iii)	8,387,447 warrants were exercised for gross proceeds of $4.21 million; and
(iv)	an agreement in principle to privately place 3,900,000 units at a price of $2.00 for gross proceeds of $7.8 million was announced.
(ii)	Gibraltar Reclamation Trust Limited Partnership (the “GRT Partnership”) closed a financing of $18.60 million to partially fund a planned re-start of the Gibraltar Mine. Of the financing proceeds, approximately $17.1 million was contributed to a qualifying environmental trust, which permitted the Company to have the reclamation deposit of $16.7 million, held by the Government of British Columbia, released into trust for the re-start. As part of the arrangement with GRT Partnership, the Company advanced $4.6 million into trust for the re-start. Further details on the GRT Partnership are provided in the Limited Partnership Financing Structures (below).

In order to facilitate financing for mine re-start, refinery feasibility and other exploration work at Gibraltar, Taseko has sponsored the formation of several limited partnerships.

The Gibraltar Engineering Services Limited (“GESL”) Partnership was formed to conduct engineering and contract operation service support for a determination of the feasibility of the hydrometallurgical copper refinery process, developed by Cominco Engineering Services Limited (“CESL”) to be potentially used at Gibraltar and possibly, other similar copper deposits in British Columbia, owned by third parties, but which also produce copper in concentrate.

The GESL Partnership business expenses are shown in the Consolidated Schedule of Refinery Project Expenses. This amount represents work carried out by personnel at Taseko, Gibraltar, HDI and third party contractors retained by the GESL Partnership and billed by those parties to the GESL Partnership. The Company incurred accumulated expenditures of approximately $5.8 million for the Refinery Project (See Consolidated Schedule of Refinery Project Expenses in the Financial Statements). In January 2002, Taseko announced that it would acquire GESL Partnership, and acquired a 38% initial position in these assets, comprising primarily of technology rights, during fiscal 2002. In the third quarter of fiscal 2003, the Company acquired the remaining business of the GESL Partnership under a plan of arrangement.) The premium paid for this acquisition is also shown in the Consolidated Schedule of Refinery Project Expenses.) This transaction resulted in a reduction of certain liabilities by $3 million and consolidated the Company’s 100% ownership of the copper refinery engineering business held by the GESL Partnership.

On December 31, 2003, the Company reached agreements with Gibraltar Reclamation Trust Limited Partnership (the “GRT Partnership”), a largely arm’s-length private Vancouver-based mining investment partnership which completed a financing to raise proceeds of $18.6 million to partially fund a planned re-start of the Gibraltar copper mine owned by a subsidiary of the Company, Gibraltar Mines Ltd. As part of the financing the GRT Partnership entered into a Joint Venture arrangement with Gibraltar to proceed towards restarting the Gibraltar open pit copper mine. Gibraltar, as its contribution to the Joint Venture, agreed to contribute the use of its mine assets and fund the start-up expenses of the Gibraltar mine, and the GRT Partnership funded a qualifying environmental trust (“QET”), which has allowed Gibraltar to access other funds currently held by the Government of British Columbia as a security for the mine’s environmental reclamation obligations. Under the Joint Venture agreement, the GRT Partnership became entitled to certain revenues or production share from the Gibraltar mine following the resumption of production.

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In related agreements, the Company obtained the exclusive right (the “Purchase Option”) to purchase the GRT Partnership for a fixed price of 130% of the total amount of the net financing proceeds, which were actually contributed by the GRT Partnership to the QET being an amount of $18.6 million.). The Purchase Option was payable in common shares of the Company valued at the prevailing market price of the Company’s shares at the time the Company decides to trigger the purchase, or the price can be paid in cash by the Company. The investors in the GRT Partnership also acquired the right to sell the GRT Partnership to the Company for the appraised value of the GRT Partnership payable, at the Company’s election, in cash or in shares of the Company valued at the higher of the then-prevailing market (less a stated discount), and the undiscounted market price of the Company’s shares on December 31, 2003 (Cdn$2.15). To facilitate the start-up transactions, five directors and officers of the Company have personally guaranteed certain obligations (each as to one fifth) to third parties on behalf of the Company to the extent of $4.5 million, inclusive of a pledge of a cash deposit of $2 million. In consideration of the guarantee, they will each receive compensation equal to 10% of the amount guaranteed, calculated as 45,000 shares having a value of $2.00 each. In March 2004 Taseko elected to exercise its call rights for the GRT Partnership and issued 7,967,742 million shares valued at $2.79 each to acquire it. These shares were subject to resale restrictions in Canada until May 1, 2004. Certain directors and officers participated as investors in the GRT Partnership in the aggregate amount of $1,300,000. These directors and officers received shares as a consequence of Taseko exercising the call right (see items 7 and 19). The acquisition of the GRT Partnership provides Taseko with 100% control of those elements necessary for a mine restart decision and will eliminate the royalty held by the GRT Partnership.

Fiscal 2002 Compared to Fiscal 2001

As a consequence of the acquisition of the Gibraltar Mine in 1999, Taseko received funding pursuant to a $17 million non-interest bearing convertible debenture financing by Boliden Westmin (Canada) Ltd. Due to the convertibility of the debenture into common shares at the holder’s or Taseko’s option, the $17 million Gibraltar debenture is classified in the equity rather than debt accounts of Taseko’s balance sheet.

The asset shown as reclamation deposits, totalling $18.6 million, including interest, is to be used at a later date for reclamation purposes at Gibraltar and Harmony. As a result of progressive reclamation work and a landfill project reducing liability costs at Gibraltar, $2.5 million was released from the cash reclamation fund in December 2002.

At September 30, 2002, the reclamation liability was estimated at $32.7 million and is secured by reclamation deposits and plant and equipment. The equity item shown as tracking preferred shares is the book value of the 12,483,916 tracking preferred shares of Gibraltar which were part of the cost to acquire the Harmony gold project from Misty Mountain Gold Ltd. The tracking preferred shares are designed to track and capture the value of the Harmony Gold Project and are convertible into common shares of the Company upon a realization event such as a sale to a third party or commercial production at the Harmony Gold Project.

On March 28, 2002, the Company announced that it had agreed to privately place 2.1 million shares with arm’s length creditors in order to settle $840,000 of liabilities, and subsequently received approval from the TSX Venture Exchange. The settlement was completed during the third quarter of fiscal 2002.

At the end of August 2002, the Company completed a financing which privately placed 414,850 units at a price of $0.50 per unit with sophisticated investors and institutions outside of Canada. Each unit was comprised of one common share and a common share purchase warrant exercisable at $0.55 until December 27, 2003. The common share purchase warrants were subject to a regulatory four month hold period and are subject to an accelerated 45-day expiry if the closing price of the common shares as traded on the TSX Venture Exchange is at least $0.83 for any 10 consecutive trading days.

At September 30, 2002, Taseko had a working capital deficiency of $4.3 million, as compared to a deficiency of $3.59 million at the end of the third quarter. The Company had 33,921,663 issued and outstanding common shares.

Subsequent to year-end, in December 2002, Taseko closed equity private placements with Canadian investors of its securities totaling $4.24 million. The placements included $655,500 of common shares at a subscription price of $0.30 per common share, $1,269,600 of units at a price of $0.30 per unit, and $2,315,000 of flow-through units at a subscription price of $0.40 per flow-through unit. Each unit consisted of one common share and one non-transferable common share purchase warrant. Each flow-through unit consisted of one flow-through common share and one-half of a non-transferable common share purchase warrant.

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Each whole common share purchase warrant entitles the holder to purchase one common share at a price of $0.50 until December 31, 2004. The common share purchase warrants are subject to a regulatory four month hold period and a 45-day accelerated expiry if the closing price of the common shares as traded on the TSX Venture Exchange is at least $0.75 for any 10 consecutive trading days, in which event the holder will be given notice of the expiry of the warrants.

Dundee Securities Corporation, to the extent of $1,725,000, and Strand Securities Corporation and certain other agents, to the extent of $250,000, have collectively acted as Agents for the private placement of flow-through units. The Agents’ compensation included a cash fee equal to 6% of the gross proceeds and broker warrants entitling them to purchase that number of common shares, which is equal to 6% of the number of flow-through units sold. The broker warrants are exercisable at $0.40 per common share and expire on December 31, 2003.

The common shares, the flow-through common shares, the warrant common shares and the broker warrant common shares are subject to a hold period in Canada, which expires May 1, 2003.

The net proceeds of the units and common shares will be used for general working capital and corporate purposes. Taseko will utilize the gross proceeds of the flow-through financing to undertake a program to follow up on deposit-scale targets outlined by geophysical surveys completed on the Gibraltar property, and to evaluate other potential exploration projects that may be of interest.

The Gibraltar Engineering Services Limited Partnership (“GESL Partnership”) was formed to conduct engineering and contract operation service support for a determination of the feasibility of the CESL hydrometallurgical copper refinery process to be potentially used at Gibraltar and possibly, other similar copper deposits in British Columbia, owned by third parties, but which also produce copper in concentrate.

Partnership business expenses are shown in the Consolidated Schedule of Refinery Project Expenses. As previously disclosed, $4.85 million was expended on the Gibraltar Refinery Project in fiscal 2001. This amount represents work carried out by Taseko, Gibraltar, and HDI personnel and third party contractors retained by the GESL Partnership, and billed by all those parties to the GESL Partnership. Of this work, $1.85 million was actually funded by GESL Partnership investors as of December 31, 2001 and the balance by HDI, which is owed the funds at that date by Hunter Dickinson Group Inc.(“HDGI”) a private company owned by family trusts of certain of Taseko’s insiders.. HDGI had an investment in the GESL Refinery Process (“GRP”) Partnership, and owned the majority of the remaining outstanding units of the GESL Partnership. HDGI subsequently sold its interest in GESL in 2002 at its cost of $3 million, payable in tranches until 2005, to a Vancouver businessman in an arms'-length transaction. As a consequence of Taseko’s decision to purchase this interest in GESL from the investor in 2003, Taseko will record a net decrease in its accounts payable at that time of the equivalent to about $3 million. As at September 30, 2002, the Company had incurred accumulated expenditures of $5.3 million for the Refinery Project, compared to $3.6 million at September 30, 2001.

Financial Instruments

Taseko financed its activities from 1966 through 1999 primarily through the issuance of equity shares through private and public distributions. Certain of these financings were structured to provide a Canadian income tax incentive to make the securities more attractive. The Income Tax Act (Canada) provides certain incentives to encourage exploration on Canadian resource properties including the deductibility of a defined class of “Canadian Exploration Expenses” and “Canadian Development Expenses” which provide deductible pools of resource expenditures deductible against other sources of income. In 1999, Taseko also issued a convertible debenture in conjunction with the acquisition of the Gibraltar Mine, which raised $17 million with a 10-year repayment horizon and with provisions that permit the debenture to be repaid at any time on conversion of the liability into common shares or repaid in cash at Taseko’s option after the fifth year. Accordingly, the debenture has been recorded as part of shareholders’ equity in the accompanying financial statements rather than a liability as would a conventional debenture.

Taseko keeps its financial instruments denominated in Canadian dollars and does not currently engage in any hedging operations with respect to currency or in-situ minerals. Funds that are excess to Taseko’s current needs are invested in government of Canada or like debt obligations and other short term near cash investments pending the need for the funds.

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Other than a high capacity electric mining shovel with a cost of approximately US$10 million, which was committed to in March 2004, Taseko does not have any material commitments for capital expenditures. The Company is currently examining various alternatives for the financing of this shovel. Accordingly the Company, can remain somewhat flexible in gearing its exploration activities to the availability of funds (although administrative expenses are likely to remain at $200,000 per month and Gibraltar Mine standby costs will likely remain in the $200,000 to $300,000 per month range).

Subsequent to the year end, in December 2003, the Company closed equity private placements of its securities totalling $4 million. In March 2004, the Company closed a private placement totalling $7.8 million.

C.            Research Expenditures

Taseko is a resource expenditure based corporation and, accordingly, does not have a program of intellectual property development or patenting or licensing issues. Taseko has effectively incurred, in conjunction with Cominco Engineering Services Ltd., and via Gibraltar Engineering Services Limited Partnership, $5.3 million to explore the feasibility of employing an advanced hydrometallurgical process at the Gibraltar Mine. These expenditures, while funded by third party investors, were eventually borne by Taseko as it ultimately purchased the businesses that incurred the expenditures for shares of Taseko in 2002 and 2003.

D.            Trend Information

As a natural resource exploration company, Taseko’s activities are somewhat cyclical as metals prices have traditionally been cyclical in nature.

Copper prices increased substantially in 2003, and averaged US$0.81/lb for the year compared with US$0.71/lb in 2002. Copper has been trading at US$1.00/lb or more since December 2003, and some forecasters are projecting prices of US$1.10/lb for the next two years.

Gold prices also improved significantly in 2003, increasing from an average price of US$310/oz in 2002 to about US$364/oz in 2003. Some market analysts have forecast the average price of gold for 2004 to be US$400/oz or more.

E.            Critical Accounting Policies

Mineral property interests

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

The effect of a change in accounting policy would cause amounts deferred to be charged to operations, increasing net losses and loss per share, in the period.

Reclamation liabilities

The Company records reclamation liabilities based on an estimate of cost which is agreed to by management and the Ministry of Energy and Mines. The estimate is subject to change as factors in the determination of the liability change.

Going concern

The financial statements are prepared on the basis that the Company will continue as a going concern. If the Company is unable to obtain adequate additional financing, the Company will be required to curtail operations and exploration activities. The financial statements do not reflect adjustments, which could be material, to the carrying values of assets and liabilities which may be required should the Company be unable to continue as a going concern.

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Acquisition of Special Purpose Financing Entities

Taseko has since 1999 sponsored various special purpose investment partnerships pursuant to which funding has been raised from investors for property exploration and for copper refining engineering studies on terms where the investors receive the tax write-offs associated with this work. Taseko has later caused these partnerships to be purchased for its common shares. These acquisitions have not been capitalized as the activities, which these partnerships were pursuing would, themselves, have been expensed had Taseko funded the work itself.

ITEM 6                     DIRECTORS AND SENIOR MANAGEMENT

A.            Directors and Senior Management

Name, Position and		Shares Beneficially
Place of Residence	Period a Director of the Issuer	Owned or Controlled(1)
David James COPELAND	Since March 1994	263,800 Shares
Director		680,000 Options
Vancouver, BC, Canada		122,000 Warrants
T. Barry COUGHLAN	Since February 2001	100,000 Shares
Director
Vancouver, BC, Canada
Scott Dibblee COUSENS	Since October 1992	616,666 Shares
Director		680,000 Options
Vancouver, BC, Canada		200,000 Warrants
Robert Allan DICKINSON(2)	Since January 1991	530,000 Shares
Chairman of the Board and Director		250,000 Warrants
Lions Bay, BC, Canada
Jeffrey Robert MASON	Since March 1994	85,300 Shares
Chief Financial Officer, Corporate Secretary		520,000 Options
and Director		85,000 Warrants
Vancouver, BC, Canada
Thomas E. MILNER	Since March 2003	3,812 Shares
Director		680,000 Options
Williams Lake, BC, Canada
Ronald William THIESSEN	Since October 1993	302,300 Shares
President, Chief Executive Officer and		680,000 Options
Director		220,000 Warrants
West Vancouver, BC, Canada
TOTAL SHARES HELD BY DIRECTORS		1,901,878 Shares
AND SENIOR MANAGEMENT

(1)	The information as to shares beneficially owned or controlled is as has been furnished by insiders in their public disclosures and is as of March 31, 2004.
(2)	Certain of these shares are held indirectly in the name of United Mineral Services Ltd., a private company controlled by Robert A. Dickinson.

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⁽³⁾ As of March 31, 2004, the total beneficial security holdings of the current directors and officers are 1,901,878 shares (which represents approximately 2.3% of the current issued and outstanding shares) plus 3,490,000 options exercisable at various prices from $0.25 to $0.55 per share expiring at various dates to September 29, 2006.

Principal Occupation of Current Management of Taseko

ROBERT A. DICKINSON, B.Sc., M.Sc. – Chairman of the Board of Directors

Robert A. Dickinson is an economic geologist who serves as a member of management of several mineral exploration companies, primarily those for whom Hunter Dickinson Inc. provides services. He holds a Bachelor of Science degree (Hons. Geology) and a Master of Science degree (Business Administration - Finance) from the University of British Columbia. Mr. Dickinson has also been active in mineral exploration over 36 years. He is a director of Hunter Dickinson Inc. He is also President and Director of United Mineral Services Ltd., a private investment company.

RONALD W. THIESSEN, CA – President, Chief Executive Officer and Director

Ronald W. Thiessen is a Chartered Accountant in Canada and, for the past several years has had, as his principal occupation, serving as a director and/or officer of several publicly-traded mineral exploration companies. Mr. Thiessen is contracted by Hunter Dickinson Inc. (see Item 7), a company providing management and administrative services to several publicly-traded companies including Taseko, and he focuses on directing corporate development and financing activities. He is also a director of Hunter Dickinson Inc.

JEFFREY R. MASON, CA – Chief Financial Officer, Corporate Secretary and Director

Jeffrey R. Mason holds a Bachelor of Commerce degree from the University of British Columbia and obtained his Chartered Accountant designation while specializing in the mining, forestry and transportation sectors at the international accounting firm of Deloitte & Touche. Following comptrollership positions at an international commodity mercantilist and the Homestake Mining Group of companies including responsibility for North American Metals Corp. and the Eskay Creek Project, Mr. Mason has spent the last several years as a corporate officer and director to a number of publicly-traded mineral exploration companies. Mr. Mason is also employed as Chief Financial Officer and director of Hunter Dickinson Inc. and his principal occupation is the financial administration of the public companies for which Hunter Dickinson Inc. provides services.

SCOTT D. COUSENS - Director

Scott D. Cousens provides management, technical and financial services to a number of publicly traded companies. Mr. Cousens’ focus for the past 14 years has been the development of relationships within the international investment community. Substantial financings and subsequent corporate success has established strong ties with North American, European and Asian investors. In addition to financing initiatives he also oversees the corporate communications programs for the public companies for which Hunter Dickinson Inc. (to which he is a director) provides services.

DAVID J. COPELAND, P.Eng. - Director

David J. Copeland is a geological engineer who graduated in economic geology from the University of British Columbia. With over 30 years of experience, Mr. Copeland has undertaken assignments in a variety of capacities in mine exploration, discovery and development throughout the South Pacific, Africa, South America and North America. His principal occupation is President and Director of CEC Engineering Ltd., a consulting engineering firm that directs and co-ordinates advanced technical programs for exploration on behalf of Taseko and other companies for which Hunter Dickinson Inc. provides services. He is also a director of Hunter Dickinson Inc.

BARRY COUGHLAN, B.A. - Director

Barry Coughlan is a self-employed businessman and financier who, for over 18 years, has been involved in the financing of companies on the Vancouver, Toronto and NASDAQ Stock Exchanges. His principal occupation is President and Director of TBC Investments Ltd., a private investment company. He is not employed by nor is he a director of Hunter Dickinson Inc. Mr. Coughlan served as president of the general partner of Concentrated Exploration Limited Partnership.

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THOMAS E. MILNER, P.Eng. - Director

Tom Milner is a Professional Engineer with a Bachelors degree in Civil Engineering and a Masters Degree in Mining Engineering, who has 30 years of experience in mine project development and mine operations management in British Columbia and the Philippines. Mr. Milner has been with the Gibraltar Mine since 1994, and is currently Chief Operating Officer and Director of Gibraltar Mines Ltd., a wholly-owned subsidiary of Taseko Mines Limited.

B.            Compensation

During Taseko’s financial year ended September 30, 2003 the aggregate direct remuneration paid or payable to Taseko’s directors and senior officers by Taseko and its subsidiaries, all of whose financial statements are consolidated with those of Taseko, was $233,739. This figure includes any portion of remuneration received by the named person as an officer or employee of Hunter Dickinson Inc. that is attributable to Taseko’s affairs. The direct remuneration paid or payable to Company’s directors and senior officers by subsidiaries of Taseko, whose financial statements are not consolidated with those of Taseko was $nil.

Ronald W. Thiessen, President, Chief Executive Officer and a director of Taseko, Jeffrey R. Mason, Taseko’s Secretary, Chief Financial Officer and a director of Taseko, and Thomas E. Milner, Chief Operating Officer and Director of Gibraltar Mines Ltd, a wholly-owned subsidiary of Taseko, are each a “Named Executive Officer” of Taseko for the purposes of the following disclosure.

The compensation paid to each of the Named Executive Officers during Taseko’s three most recently completed financial years is as set out below:

SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Annual Compensation			Long Term Compensation			All Other Compensa- tion ($)
		Salary ($)	Bonus ($)	Other Annual Compensa- tion ($)	Awards		Payouts
					Securities Under Options/ SARs Granted (#)	Restricted Shares or Restricted Share Units ($)	LTIP Payouts ($)
Ronald W. Thiessen Chief Executive Officer, President and Director	2003 2002 2001	37,175 14,463 12,539	Nil Nil Nil	Nil Nil Nil	Nil 400,000 Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Jeffrey R. Mason Secretary and Chief Financial Officer and Director	2003 2002 2001	28,785 14,463 12,539	Nil Nil Nil	Nil Nil Nil	Nil 400,000 Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Thomas E. Milner Chief Operating Officer and Director of Gibraltar Mines Ltd, a wholly-owned subsidiary	2003 2002 2001	Nil Nil Nil	Nil Nil Nil	113,640 101,920 100,955	350,000 50,000 Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil

Termination of Employment, Change in Responsibilities and Employment Contracts

There are no compensatory plans or arrangements with respect to the Named Executive Officers resulting from the resignation, retirement or any other termination of employment of the officer’s employment or from a change of the Named Executive Officer’s responsibilities following a change in control.

Securities Held By Insiders

As at March 31, 2004, the directors and officers of Taseko and their affiliates held as a group, directly and indirectly, own or control an aggregate of 1,901,978 common shares (2.3%) and held 3,240,000 options and 877,000 warrants to acquire an aggregate of an additional 4,117,000 common shares. To the knowledge of the directors and

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officers of Taseko, as at such date, there were no persons exclusive of directors and officers holding more than 10% of the issued common shares.

C.            Board Practices

All directors were re-elected at the March 31, 2004 annual general meeting and have a term of office expiring at the next annual general meeting of Taseko expected to be held in March 2005. All officers have a term of office lasting until their removal or replacement by the Board of Directors.

There are no arrangements under which directors were compensated by Taseko and its subsidiaries during the financial year ended September 30, 2003 for their services in their capacity as directors and consultants except as herein disclosed. For the year ended September 30, 2003, Taseko compensated its directors directly for services by paying them an aggregate of $233,739 cash.

Ronald W. Thiessen, David J. Copeland and Scott D. Cousens are members of the Company’s audit committee. The audit committee is elected annually by the directors of Taseko at the first meeting of the board held after Taseko’s annual general meeting. Its primary function is to review the financial statements of the Company before they are submitted to the board for approval. The audit committee is also available to assist the board if required with matters relating to the appointment of the Company’s auditor and the overall scope and results of the audit, internal financial controls, and financial information for publication for various purposes. The Company has no remuneration or nomination committee.

D.            Employees

At March 31, 2004, Taseko had 15 direct employees working for Gibraltar. Taseko’s administrative and exploration functions are primarily administered through Hunter Dickinson Inc. (see Item 7).

E.            Share Ownership

As at March 31, 2004, an aggregate of 5,089,000 shares have been reserved for issuance pursuant to Taseko’s Share Incentive Plan, described below, which reserves up to 10% of the outstanding number of shares for issuance.

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(a)            Incentive Options

			Exercise	Number of
	Grant Date	Expiry Date	Price	options
Employees and consultants	December 19, 2000	September 24, 2004	$0.50	35,000
	February 12, 2001	September 24, 2004	$0.50	15,000
	June 11, 2001	September 24, 2004	$0.50	29,500
	May 22, 2002	September 24, 2004	$0.50	261,500
	December 10, 2002	December 20, 2004	$0.40	22,500
	April 1, 2003	March 31, 2005	$0.30	100,000
	May 8, 2003	May 9, 2005	$0.38	20,000
	October 10, 2003	September 29, 2006	$0.55	685,000
	November 3, 2003	September 20, 2005	$0.65	25,500
	November 3, 2003	September 20, 2005	$0.81	45,000
	December 3, 2003	September 20, 2005	$1.40	100,000
	January 14, 2004	September 20, 2005	$1.65	70,000
				1,409,000
Directors and Officers	May 22, 2002	September 24, 2004	$0.50	1,600,000
	June 17, 2003	September 24, 2004	$0.50	300,000
	July 8, 2003	July 29, 2005	$0.25	50,000
	October 10, 2003	September 29, 2006	$0.55	1,730,000
				3,680,000
Total				5,089,000

(b)           Share Incentive Plan

At the Company’s annual general meeting held on March 28, 1998, shareholders approved an amendment to the Company’s share option plan in which 8,200,000 common shares were reserved for issuance under such amendment. The current share option plan is a “fixed’ plan in that 8,200,000 common shares, representing 20% of the Company’s issued and outstanding shares at the record date of the March 28, 2003 annual general meeting, were reserved for issuance as options. At the Company's Annual General Meeting held on March 31, 2004, a resolution was passed amending its existing share option plan and to restate it as the 2004 Share Option Plan (the “Plan”) which will use a “rolling” number of shares rather than a “fixed” number of shares. Under the Plan, a maximum of 10% of the issued and outstanding common shares of the Company at the time an option is granted, less common shares reserved for issued in the Plan, are reserved for issuance as options to be granted at the discretion of the Company’s board of directors to eligible optionees (the “Optionees”) under the Plan. In other words, while the Plan is in effect, there can never be more than 10% of the Company’s issued and outstanding common shares reserved for issuance under the Plan at any point in time. It is the responsibility of the Company’s board of directors to ensure that the provisions of the Plan are adhered to.

This type of Plan is called a "rolling" plan. The Plan requires shareholder and TSX Venture Exchange ("TSXV") approval.

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Eligible Optionees

Under the policies of TSXV, to be eligible for the issuance of a stock option under the Plan an Optionee must either be a director, officer, employee or consultant providing management or other services to the Company or a subsidiary at the time the option is granted.

Options may be granted only to an individual or to a non-individual that is wholly owned by individuals eligible for an option grant. If the option is granted to a non-individual, it must provide TSXV with an undertaking that it will not permit any transfer of its securities, nor issue further securities, to any individual or other entity as long as the option remains in effect, without the consent of TSXV.

Material Terms of the Plan

The following is a summary of the material terms of the Plan:

• all options granted under the Plan are non-assignable and non-transferable and for a period of up to 5 years;
  
  
• for stock options granted to employees or service providers (inclusive of management company employees), the Company must ensure that the proposed Optionee is a bona fide employee or service provider (inclusive of management company employees), as the case may be, of the Company or any subsidiary;
  
  
• if an Optionee ceases to be employed by the Company (other than as a result of termination with cause) or ceases to act as a director or officer of the Company or a subsidiary of the Company, any option held by such Optionee may be exercised within 90 days after the date of such Optionee ceases to be employed as an officer or director or, as the case may be, or within 30 days if the Optionee is engaged in Investor Relations Activities;
  
  
• the minimum exercise price of an option granted under the Plan must not be less than the Discounted Market Price (as defined in the policies of the TSXV); and
  
  
• no Optionee can be granted an option or options to purchase more than 5% of the outstanding listed shares of the Company in any one year period.

ITEM 7                     MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.            Major Shareholders

Taseko’s securities are recorded on the books of its transfer agent in registered form. However, the majority of such shares are registered in the name of intermediaries such as brokerage houses and clearing houses on behalf of their respective brokerage clients, and Taseko does not have knowledge or access to information about of the beneficial owners thereof. To the best of its knowledge, Taseko is not directly or indirectly owned or controlled by a corporation or foreign government. As of March 31, 2004 Taseko had authorized 200,000,000 common shares without par value of which 83,442,662 were issued and outstanding.

As of March 31, 2004, the only registered holder, other than brokerage clearing houses, of 5% or more of the common shares of Taseko were:

Shareholder	Number of shares held	Percentage of total
Mr. Norman Cressey	6,000,511	7.2%

As of March 31, 2004, directors and officers of Taseko as a group (7 persons) owned or controlled an aggregate of 1,901,878 shares (2.3%) of Taseko, or 3,545,121 shares (7.6%) on a fully diluted basis.

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Under the British Columbia Securities Act insiders (generally officers, directors, holders of 10% or more of Taseko's shares) are required to file insider reports of changes in their ownership in the next 10 days following a trade in Taseko's securities. Copies of such reports are available for public inspection at the offices of the British Columbia Securities Commission, 701 West Georgia Street, Vancouver, British Columbia V7Y 1L2 (phone (604) 899-6500) or at the British Columbia Securities Commission web site (www.bcsc.bc.ca).

The following lists the geographical distribution of shareholders at March 31, 2004, to the best of Taseko’s knowledge:

	Number of
	registered
	shareholders of	Number of	Percentage of
Location	record	shares	total shares
Canada	248	63,322,044	75.9%
United States	479	15,830,168	19.0%
Other	46	4,290,450	5.1%
	773	83,442,662

Shares registered in intermediaries were assumed to be held by residents of the same country in which the clearing house is located.

The only potential change of control affecting Taseko is the convertible debenture for $17 million issued to Boliden (see Gibraltar – Acquisition Terms). Taseko has no reason to believe Boliden has any intention of converting the debenture or exercising any control over Taseko in the foreseeable future. Boliden does not have, and has not requested, representation on Taseko’s board of directors. To the best of the Company's knowledge, a private Vancouver businessman, Mr. Norman Cressey, owned 6,000,511 common shares of Taseko at March 31, 2004. Mr Cressey has no stated intention to exercise any control over Taseko and has no representative on the board.

B.            Related Party Transactions

No director or senior officer, and no associate or affiliate of the foregoing persons, and no insider has or has had any material interest, direct or indirect, in any other transactions, or in any other proposed transaction, which in either such case has materially affected or will materially affect Taseko or its predecessors during the year ended September 30, 2003, except as follows:

(a)           Arrangements with Hunter Dickinson Inc.

Taseko does not have full-time management or employees. Gibraltar Mines Ltd has 14 full- and part-time employees. Hunter Dickinson Inc. (“HDI”) provides management and other services to Taseko, pursuant to a geological and administrative services agreement dated for reference December 31, 1996. HDI is one of the larger independent mining exploration groups in North America and as of March 31, 2004, employs or retains on a substantially full-time basis, twenty-five geoscientists (of which nine are professional geologists/PGeo, and five are geological engineers/PEng and two are PhDs), six licensed professional mining, mechanical or civil engineers (PEng), seven accountants (including four CAs, and two CMAs) and twenty administrative and support personnel. It has supervised mineral exploration projects in Canada (British Columbia, Manitoba, Ontario and Quebéc) and internationally in Brazil, Chile, Nevada and Alaska USA, Mexico and South Africa. HDI allocates the costs of staff input into projects like Gibraltar based on time records of involved personnel. The shares of HDI are owned equally by each of the participating corporations (including Taseko) as long as HDI services are being provided however such participant surrenders its single share at the time of termination of the “Services Agreement” described below. HDI is managed by the directors of Taseko and who are generally the controlling directors of the other corporate participants in the arrangements with of HDI.

During the fiscal year ended September 30, 2003 Taseko paid $253,859 to HDI for services pursuant to this Agreement.

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(b)           Initiatives respecting copper refining technology research

Taseko insiders have had a financial interest in two initiatives to advance the copper refining engineering for potential use with a possible recommencement of Gibraltar Mine operations. By agreement dated for reference October 31, 2000 between Taseko and Gibraltar and a British Columbia limited partnership to be renamed Procorp Services Limited Partnership (“Procorp”), Procorp was to establish a specialized exploration limited partnership to provide technical, financial, management and marketing services with the objective of securing up to $60 million which would be used to fund the estimated restart costs at Gibraltar ($30 million) and approximately $30 million to fund Gibraltar’s share of construction and initial operations of a refining plant which would employ the CESL technology being reviewed by the Company together with CESL pursuant to the Memorandum of Agreement described herein. Procorp was initially established by the directors of Taseko (excluding Mr Milner) whose family trusts are the initial beneficial limited partners with a view that Procorp would seek additional investment via additional limited partners who would fund business expenses in furtherance of the restart and CESL costs entitling them to tax deductions for initial expenses as well as a share of profits in the event of a successful Gibraltar Mine restart. Procorp received a payment of US $900,000, which was charged to operations as an administrative expense in 2002. These insiders also have an interest in Hunter Dickinson Group Inc. and its transactions in respect of GESL described in Items 4 and 5b.

(c)           Acquisition of the Harmony Gold Project

On March 29, 2001, shareholders of Taseko approved the acquisition by Taseko of a 100% interest in the Harmony Gold Project from Continental (see Item 4). A majority of directors of Taseko are also directors and shareholders of Continental. Robert A. Dickinson, a director of Taseko, is a shareholder of Continental Minerals Corporation and a former director (See Item 4 and Taseko’s Annual Report on Form 20-F for the year ended September 30, 2000 for further details.)

(d)           Participation in the Gibraltar Reclamation Trust Limited Partnership (“GRT Limited Partnership”)

As more particularly described in Item 5 (Liquidity and Capital Resources- Fiscal 2003 compared to 2002) Taseko completed agreements on December 31, 2003 whereby the GRT Limited Partnership provided funding for Gibraltar’s reclamation obligations and by doing so triggered a release of funding to Taseko from the existing deposit and GRT Limited Partnership became entitled to a royalty on production from Gibraltar. The financing agreements gave Taseko the right to repurchase the investors' interests in the GRT Limited Partnership which Taseko completed in March, 2004 by issuing approximately 7,967,942 shares valued at the then-market price of $2.79 per share. Certain directors and officers of Taseko, or companies or trusts controlled by them, received 556,227 shares as a consequence of funding participation in the GRT Limited Partnership of $1,300,000. These shares were received on the same basis as all other participants in the GRT Limited Partnership.

(e)           Guaranty Bonus

In connection with the transaction described in (d) above, five directors of Taseko gave personal guarantees to Taseko to back-stop Taseko’s guarantee to the Province of British Columbia in order to facilitate completion of the transaction; which personal guarantees aggregated $4.5 million and in respect of which Taseko agreed to issue a bonus of $450,000 in shares (being 225,000 shares with a deemed value of $2.00 each). The recipients of the shares were Messrs Thiessen, Cousens, Dickinson, Mason and Copeland, each as to 45,000 shares.

(f)           Farm-outs with Northern Dynasty Minerals Ltd and Rockwell Ventures Inc

By agreements dated for reference December 1, 2003 Taseko caused its subsidiary, Gibraltar to enter into two farm-in agreements which allowed Northern Dynasty Minerals Ltd. (“NDM”) and Rockwell Ventures Inc. (“RCW”) to farm in to Gibraltar’s exploration properties in consideration of NDM and RCW agreeing to expend a total of $850,000 on exploring the properties ($650,000 to NDM and $200,000 to RCW respectively). NDM and RCW could earn an interest in the properties proportional to prior expenditures on these mineral properties by Gibraltar. The farm-in agreements also contained a right on Taseko’s part to repurchase these earned interests by issuing shares to NDM and RCW within certain time periods. In March 2004, Taseko exercised this call right agreeing to issue to NDM 232,975 shares of Taseko and to RCW 71,685 shares of Taseko, thus reacquiring these interests from NDM and RCW. Taseko effectively issued these shares for consideration of $2.79 per share, based on the expenditures made by NDM and RCW on Taseko's mineral properties. NDM and RCW have a majority of directors in common with Taseko.

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C.            Interests of Experts and Counsel

Not applicable.

ITEM 8                     FINANCIAL INFORMATION

A.            Consolidated Statements and Other Financial Information

See “Item 17 Financial Statements”.

Legal Proceedings

Taseko is not involved in any actual litigation or legal proceedings and to Taseko’s knowledge, no material legal proceedings involving Taseko or its subsidiaries are to be initiated against Taseko.

Dividend Policy

The Company has not paid any dividends on its outstanding common shares since its incorporation and does not anticipate that it will do so in the foreseeable future. All funds of Taseko are being retained for exploration of its Projects.

B.            Significant Changes

There have been no significant changes to the accompanying financial statements since September 30, 2003 which are not disclosed in those statements.

ITEM 9                     THE OFFER AND LISTING

A.            Offer and Listing Details

Trading Markets

TSX VENTURE:			NASDAQ:
TKO – Trading in Canadian Dollars			TKOCF - Trading in United States Dollars
	High	Low		High	Low
	($)	($)		($)	($)
Annual (by calendar year)			Annual (by calendar year)
2004 (to March 31, 2004)	3.01	1.65	2004 (to March 31, 2004)	2.30	1.33
2003	2.15	0.25	2003	1.67	0.19
2002	0.85	0.36	2002	0.60	0.20
2001	1.69	0.36	2001	1.16	0.24
2000	3.10	1.20	2000	2.25	0.56
1999	5.45	1.80	1999	4.00	1.00

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TSX VENTURE:			NASDAQ:
TKO – Trading in Canadian Dollars			TKOCF - Trading in United States Dollars
	High	Low		High	Low
	($)	($)		($)	($)
By Quarter			By Quarter
Calendar 2004			Calendar 2004
First Quarter	3.01	1.65	First Quarter	2.30	1.33
Calendar 2003			Calendar 2003
Fourth Quarter	2.15	0.42	Fourth Quarter	1.67	0.31
Third Quarter	0.52	0.25	Third Quarter	0.40	0.19
Second Quarter	0.48	0.25	Second Quarter	0.31	0.19
First Quarter	0.65	0.38	First Quarter	0.44	0.25
Calendar 2002			Calendar 2002
Fourth Quarter	0.47	0.36	Fourth Quarter	0.31	0.20
Third Quarter	0.63	0.40	Third Quarter	0.44	0.26
Second Quarter	0.85	0.36	Second Quarter	0.60	0.24
First Quarter	0.60	0.36	First Quarter	0.40	0.23
Monthly			Monthly
March 2004	2.93	2.02	March 2004	2.22	1.50
February 2004	3.01	2.07	February 2004	2.30	1.55
January 2004	2.58	1.65	January 2004	2.03	1.33
December 2003	2.15	1.40	December 2003	1.67	1.08
November 2003	1.49	0.78	November 2003	1.04	0.58
October 2003	0.83	0.42	October 2003	0.64	0.31
September 2003	0.52	0.43	September 2003	0.40	0.30
August 2003	0.43	0.35	August 2003	0.32	0.25

B.            Plan of Distribution

Not applicable.

C.            Markets

The shares of Taseko have traded in Canada on the TSX Venture Exchange (successor exchange to the Canadian Venture Exchange and the Vancouver Stock Exchange) since March 10, 1969, (symbol-TKO) and since March 1992 on the National Association of Securities Dealers Automated Quotation (NASDAQ) System, "Regular Market.” On November 30, 1994, the shares of Taseko were listed on the NASDAQ National Market and since July 6 2001, have been listed in the Over-the-Counter Bulletin Board (symbol TKOCF).

D.            Selling Shareholders

Not applicable.

E.            Dilution

Not applicable.

F.            Expenses of the Issue

Not applicable.

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ITEM 10                    ADDITIONAL INFORMATION

A.            Share Capital

Taseko’s share capital consists of one class only, namely common shares without par value, of which 200,000,000 shares are authorized and 53,880,973 common shares without par value are issued and outstanding as of September 30, 2003 and 83,442,662 outstanding as at March 31, 2004. At the Annual General Meeting held on March 23, 2004 shareholders approved an increase in authorized share capital from 100 million to 200 million common shares. The notes to the accompanying audited financial statements provide details of all share issuances effected by Taseko in the issue price per share for the three previous fiscal years. There are no shares of Taseko that are held by or on behalf of Taseko. There have been no changes in the classification of common shares (reclassifications, consolidations, reverse splits or the like) within the previous five years. All common shares of Taseko rank pari passu for the payment of any dividends and distributions in the event of a windup. A summary of Taseko’s dilutive securities (convertible or exercisable into common shares) is as follows:

(a)           Warrants

The following share purchase warrants are outstanding as of March 31, 2004. All warrants were issued as part of a unit private placement comprising a share and a warrant. All warrants are non-transferable.

No. of Warrants	Exercise Price	Expiry Date
3,900,000	2.25	May 10, 2005
6,700,000	0.75	December 31, 2005
375,000	0.40	January 8, 2006
10,975,000

Other Potential Share Issuances

A summary of Taseko’s diluted share capital as follows:

(a)	Outstanding as of March 31, 2004	83,442,662
(b)	Options outstanding	5,089,000
(c)	Warrants outstanding	10,975,000
(d)	Boliden convertible debenture (maximum issuable)	4,106,280
Fully diluted at March 31, 2004		103,612,942

See Item 6E for information regarding Taseko’s Share Incentive Plan.

The number of Taseko shares potentially issuable on conversion of the Gibraltar Shares pursuant to the Harmony Gold Project Acquisition cannot currently be determined exactly due to the uncertainty of future events at the Harmony Gold Project, however the figure is in the range of 2 to 18 million Taseko Shares (see Item 4 – Acquisition of the Harmony Gold Project). See also Item 7B - proposed transaction with Procorp which may result in the issuance of 3.4 million warrants exercisable at a price of $1.70 each.

B.            Memorandum and Articles of Association

Taseko’s corporate constituting documents comprising Articles of Association and Memorandum are registered with the British Columbia Registrar of Companies under Corporation No. 69082. A copy of the Articles of Association and Memorandum were filed as an exhibit with Taseko’s initial registration statement on Form 20-F in 1994.

Objects and Purposes

Taseko’s Memorandum of Incorporation and Articles of Association (“Articles”) do not specify objects or purposes. Under British Columbia corporate law (the British Columbia Company Act or herein “BCCA”), a British Columbia corporation generally has all the legal powers of a natural person. British Columbia corporations may not undertake

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certain limited business activities such as operating as a trust company or railroad without alterations to its form of articles and specific government consent.

Directors – Powers and Limitations

Taseko’s Articles do not specify a maximum number of directors (the minimum under British Columbia law for a public company is three). The number of directors is fixed, annually, by shareholders at the annual Shareholders meeting and all directors are elected at that time - there are no staggered directorships. Under the BCCA, directors are obligated to abstain from voting on matters in which they may be financially interested after disclosing in writing such interest. Directors’ compensation is not a matter on which they must abstain. Directors must be of the age of majority (18), and meet eligibility criteria including being mentally competent, not an undischarged bankrupt, no fraud related convictions in the previous five years and a majority of directors must be ordinarily resident in Canada. There is no mandatory retirement age either under Taseko’s Articles or under the BCCA.

Directors’ borrowing powers are not generally restricted where the borrowing is in Taseko’s best interests, but the directors may not authorize Taseko to provide financial assistance for any reason where Taseko is insolvent or the providing of the guarantee would render it insolvent. Directors need not own any shares of Taseko in order to qualify as directors.

The Articles specify that the number of directors shall be the number of directors fixed by shareholders, annually, or the number which are actually elected at a general shareholders meeting. The number of directors is determined, annually, by shareholders at the annual Shareholders meeting and all directors are elected at that time. Under the Articles the directors are entitled between successive annual general meeting to appoint one or more additional directors but not more than one-third of the number of directors fixed at a shareholders or actually elected at the preceding annual shareholders’ meeting. Directors automatically retire at the commencement of each annual meeting but may be re-elected thereat.

Under the Articles, a director who is any way directly or indirectly interested in a proposed contract or transaction with Taseko or who holds any office or possesses any property whereby directly or indirectly a duty might be created which would conflict with his duty or interest as a director shall declare in writing the nature and extent of such interest in such contract or transaction. A director shall not vote in respect of any such contract or transaction if the company in which he is interested and if he should vote his vote shall not be counted but shall be counted in the quorum present at the meeting. Similarly, under the BCCA directors are obligated to abstain from voting on matters in which they may be financially interested after fully disclosing such interest. Directors must abstain from voting in such circumstances both under the Articles and under the BCCA.

Changes to Rights of Common Shareholders

Changes to the Articles and memorandum of Taseko require a shareholders’ “special resolution” being a resolution passed by not less than 75% of the shares voted in person or by proxy at a duly convened shareholders meeting. Some organic corporate changes including amalgamation with another company, sale of substantially all of Taseko’s assets, redomiciling out of the jurisdiction of British Columbia, creation of new classes of shares not only require such 75% approval but generally also give rise to a dissent right which is the right to be paid the fair value of the stockholder’s shares in cash if the required special resolution is actually passed and Taseko elects to proceed with the matter notwithstanding receipt of dissent notices. A notice of a shareholders meeting at which such an organic change action is intended to be considered must include a prominent notice of the dissent right. Dissent provisions are governed by the BCCA and not by the Articles of Taseko.

Shareholders Meetings

Shareholders meetings are governed by the Articles of Taseko but many important shareholder protections are also contained in the Securities Act (British Columbia) and the BCCA. The Articles provide that Taseko will hold an annual shareholders’ meeting, will provide at least 21 days’ notice and will provide for certain procedural matters and rules of order with respect to conduct of the meeting. The Securities Act (British Columbia) and the BCCA superimpose requirements that generally provide that shareholders meetings require not less than a 60 day notice period from initial public notice and that Taseko makes a thorough advanced search of intermediary and brokerage registered shareholdings to facilitate communication with beneficial shareholders so that meeting proxy and information materials can be sent via the brokerages to unregistered but beneficial shareholders, The form and content of information circulars and proxies and like matters are governed by the Securities Act and the BCCA.

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This legislation specifies the disclosure requirements for the proxy materials and various corporate actions, background information on the nominees for election for director, executive compensation paid in the previous year and full details of any unusual matters or related party transactions. Taseko must hold an annual shareholders meeting open to all shareholders for personal attendance or by proxy at each shareholder's determination. The meeting must be held within 13 months of the previous annual shareholders meeting and must present audited statements which are no more than 180 days old at such meeting.

Shares Fully Paid

All Taseko shares must, by applicable law, be issued as fully paid for cash, property or services. They are, therefore, non-assessable and not subject to further calls for payment.

Redemption

Taseko has no redeemable securities authorized or issued. Therefore, Taseko has no sinking fund or like security redemption fund.

Pre-emptive Rights

There are no pre-emptive rights applicable to Taseko which provide a right to any person to participate in offerings of Taseko’s equity or other securities

Rights to Profits and Liquidation Rights

All common shares of Taseko participate rateably in any net profit or loss of Taseko and share rateably any available assets in the event of a winding up or other liquidation.

No Limitation on Foreign Ownership

There are no limitations under Taseko’s Articles or in the BCCA on the right of persons who are not citizens of Canada to hold or vote common shares. (See also “Exchange Controls”.)

Dividends

Dividends may be declared by the Board out of available assets and are paid rateably to holders of common shares. No dividend may be paid if Taseko is, or would thereby become, insolvent.

Voting Rights

Each Taseko share is entitled to one vote on matters to which common shares ordinarily vote including the annual election of directors, appointment of auditors and approval of corporate changes. There are no cumulative voting rights applicable to Taseko.

Change in Control

Taseko has not implemented any shareholders’ rights or other “poison pill” protection against possible take-over. Taseko does not have any agreements which are triggered by a take-over or other change of control. There are no provisions in its articles triggered by or affected by a change in outstanding shares which gives rise to a change in control. There are no provisions in Taseko’s material agreements giving special rights to any person on a change in control.

Insider Share Ownership Reporting

The articles of Taseko do not require disclosure of share ownership. Share ownership of director nominees must be reported annually in proxy materials sent to Taseko’s shareholders. There are no requirements under British Columbia corporate law to report ownership of shares of Taseko but the Securities Act (British Columbia) requires disclosure of trading by insiders (generally officers, directors and holders of 10% of voting shares) within 10 days of

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the trade. Controlling shareholders (generally those in excess of 20% of outstanding shares) must provide seven days advance notice of share sales.

Securities Act (British Columbia)

This statute applies to Taseko and governs matters typically pertaining to public securities such as continuous quarterly financial reporting, immediate disclosure of material changes, insider trade reporting, take-over protections to ensure fair and equal treatment of all shareholders, exemption and resale rules pertaining to non-prospectus securities issuances as well as civil liability for certain misrepresentations, disciplinary, appeal and discretionary ruling matters. All Taseko shareholders regardless of residence have equal rights under this legislation.

Subsidiary – Gibraltar Mines Ltd.

The common shares of Gibraltar are wholly owned by Taseko and Gibraltar has constituting documents ordinary to a British Columbia corporation pursuing mining activities. Gibraltar has a class of of preference shares outstanding which are owned by Continental Minerals Corporation and which were received for transferring to Gibraltar the Harmony Gold Project. These preference shares are convertible into Taseko shares in the event of a liquidation event in connection with the Harmony Gold Project.

C.            Material Contracts

Taseko’s material contracts are:

(a)	Convertible Debenture July 21, 1999 in the principal amount of CDN $17,000,000 issued by Gibraltar to Boliden Westmin (Canada) Limited pursuant to the acquisition of the Gibraltar Mine (see Item 4 “The Gibraltar Mine”) filed with 20-F in March 30, 2000;
(b)	Geological Management and Administration Services Agreement with Hunter Dickinson Inc. dated for reference December 31, 1996 filed with Form 20-F for fiscal year 1999 filed on March 30, 2000 (See Item 7 “Interest of Management in Certain Transactions”);
(c)	Arrangement Agreement dated February 22, 2001 among Taseko, Misty Mountain Gold Limited and Gibraltar Mines Ltd. whereby Taseko caused Gibraltar to acquire the 3 million ounce Harmony Gold Project (see Item 4) in consideration of the issuance of Preferred Shares of Gibraltar which are convertible into Taseko shares in the event of a liquidation event in connection with the Harmony Gold Project.;
(d)	Agreements with the GRT Limited Partnership described in Items 4 , 7 and 19.

The Company has also entered into an agreement to purchase a mining shovel for approximately US$10.1 million, of which US$1.8 million has been paid as an initial deposit.

D.            Exchange Controls

Taseko is a Province of British Columbia, Canada corporation. There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of Common Shares, other than withholding tax requirements. Any such remittances to United States residents are generally subject to withholding tax, however no such remittances are likely in the foreseeable future. See “Taxation”, below.

There is no limitation imposed by the laws of Canada or by the charter or other constituent documents of Taseko on the right of a non-resident to hold or vote its common shares, other than as provided in the Investment Canada Act (Canada) (the “Investment Act”). The following discussion summarizes the material features of the Investment Act for a non-resident who proposes to acquire a controlling number of Taseko’s common shares. It is general only, it is not a substitute for independent advice from an investor’s own advisor, and it does not anticipate statutory or regulatory amendments. Taseko does not believe the Investment Act will have any affect on it or on its non-Canadian shareholders due to a number of factors including the nature of its operations and Taseko’s relatively small capitalization.

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The Investment Act generally prohibits implementation of a “reviewable” investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture (each an “entity”) that is not a “Canadian” as defined in the Investment Act (i.e. a “non-Canadian”), unless after review the Director of Investments appointed by the minister responsible for the Investment Act is satisfied that the investment is likely to be of net benefit to Canada. The size and nature of a proposed transaction may give rise to an obligation to notify the Director to seek an advance ruling. An investment in Taseko’s common shares by a non-Canadian (other than a “WTO Investor” as that term is defined in the Investment Act and which term includes entities which are nationals of or are controlled by nationals of member states of the World Trade Organization) when Taseko was not controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of Taseko and the value of the assets of Taseko, as determined in accordance with the regulations promulgated under the Investment Act, was over a certain figure, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canada’s cultural heritage or national identity, regardless of the value of the assets of Taseko. An investment in the Common Shares by a WTO Investor, or by a non-Canadian when Taseko was controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of Taseko and the value of the assets of Taseko, as determined in accordance with the regulations promulgated under the Investment Act, was not less than a specified amount, which for 2000 exceeds Cdn$192 million. A non-Canadian would acquire control of Taseko for the purposes of the Investment Act if the non-Canadian acquired a majority of the Common Shares. The acquisition of less than a majority but one-third or more of the Common Shares would be presumed to be an acquisition of control of Taseko unless it could be established that, on the acquisition, Taseko was not controlled in fact by the acquiror through the ownership of the Common Shares.

The foregoing assumes Taseko will not engage in the production of uranium or own an interest in a producing uranium property in Canada, or provide any financial service or transportation service, as the rules governing these businesses are different.

Certain transactions relating to the Common Shares would be exempt from the Investment Act, including

(a)	an acquisition of the Common Shares by a person in the ordinary course of that person’s business as a trader or dealer in securities,
(b)	an acquisition of control of Taseko in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Act, and
(c)	an acquisition of control of Taseko by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of Taseko, through the ownership of the Common Shares, remained unchanged.

E.            Taxation

Material Canadian Federal Income Tax Consequences for United States Residents

The following, in management’s understanding summarizes the material Canadian federal income tax consequences generally applicable to the holding and disposition of Common Shares by a holder (in this summary, a “U.S. Holder”) who, (a) for the purposes of the Income Tax Act (Canada) (the “Tax Act”), is not resident in Canada, deals at arm’s length with Taseko, holds the Common Shares as capital property and does not use or hold the Common Shares in the course of carrying on, or otherwise in connection with, a business in Canada, and (b) for the purposes of the Canada-United States Income Tax Convention, 1980 (the “Treaty”), is a resident solely of the United States, has never been a resident of Canada, and has not held or used (and does not hold or use) Common Shares in connection with a permanent establishment or fixed base in Canada. This summary does not apply to traders or dealers in securities, limited liability companies, tax-exempt entities, insurers, financial institutions (including those to which the mark-to-market provisions of the Tax Act apply), or any other U.S. Holder to which special considerations apply.

This summary is based on the current provisions of the Tax Act including all regulations thereunder, the Treaty, all proposed amendments to the Tax Act, the regulations and the Treaty publicly announced by the Government of Canada to the date hereof, and the current administrative practices of the Canada Customs and Revenue Agency. It has been assumed that all currently proposed amendments will be enacted as proposed and that there will be no other

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relevant change in any governing law or administrative practice, although no assurances can be given in these respects. This summary does not take into account provincial, U.S., state or other foreign income tax law or practice. The tax consequences to any particular U.S. Holder will vary according to the status of that holder as an individual, trust, corporation, partnership or other entity, the jurisdictions in which that holder is subject to taxation, and generally according to that holder’s particular circumstances. Accordingly, this summary is not, and is not to be construed as, Canadian tax advice to any particular U.S. Holder.

Dividends

Dividends paid or deemed to be paid to a U.S. Holder by Taseko will be subject to Canadian withholding tax. Under the Treaty, the rate of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross amount of the dividend (or 5% if the U.S. Holder is a corporation and beneficially owns at least 10% of Taseko’s voting shares). Taseko will be required to withhold the applicable withholding tax from any such dividend and remit it to the Canadian government for the U.S. Holder’s account.

Disposition

A U.S. Holder is not subject to tax under the Tax Act in respect of a capital gain realized on the disposition of a Common Share in the open market unless the share is “taxable Canadian property” to the holder thereof and the U.S. Holder is not entitled to relief under the Treaty. A Common Share will be taxable Canadian property to a U.S. Holder if, at any time during the 60 months preceding the disposition, the U.S. Holder or persons with whom the U.S. Holder did not deal at arm’s length alone or together owned, or had rights to acquire, 25% or more of Taseko’s issued shares of any class or series.

A U.S. Holder whose Common Shares do constitute taxable Canadian property, and who might therefore be liable for Canadian income tax under the Tax Act, will generally be relieved from such liability under the Treaty unless the value of such shares at the time of disposition is derived principally from real property situated in Canada.

United States Tax Consequences

United States Federal Income Tax Consequences

The following is, in management’s understanding, a discussion of the material United States federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of common shares of Taseko. This discussion does not address all potentially relevant federal income tax matters and it does not address consequences peculiar 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 “Taxation – Canadian Federal Income Tax Consequences” above). Accordingly, holders and prospective holders of common shares of Taseko should consult their own tax advisors about the specific federal, state, local, and foreign tax consequences to them of purchasing, owning and disposing of common shares of Taseko, based upon their individual circumstances.

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 and which are subject to differing interpretations. This discussion does not consider the potential effects, both adverse and beneficial, of any proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.

U.S. Holders

As used herein, a “U.S. Holder” means a holder of common shares of Taseko 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, an entity created or organized in or under the laws of the United States or any political subdivision thereof which has elected to be treated as a corporation for United States Income Tax Purposes (under Treasury Regulation section 301.7201-3), an estate whose income is taxable in the United States irrespective

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of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described Section 7701(a)(30) of the Code. 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, non-resident alien individuals, persons or entities that have a “functional currency” other than the U.S. dollar, shareholders subject to the alternative minimum tax, shareholders who hold common shares as part of a straddle, hedging or 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 and who own (directly and indirectly, pursuant to applicable rules of constructive ownership) no more than 5% of the value of the total outstanding stock of Taseko. 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. In addition, this summary does not address special rules applicable to United States persons (as defined in Section 7701(a)(30) of the Code) holding common shares through a foreign partnership or to foreign persons holding common shares through a domestic partnership.

Distribution on Common Shares of Taseko

In general, U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of Taseko 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 distributions on the date of receipt (based on the exchange rate on such date), to the extent that Taseko 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 Taseko, 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 property. 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, provided that there are no expenses associated with the transaction that meet the requirements 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 Taseko generally will not 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 and which owns shares representing at least 10% of the voting power and value of Taseko may, under certain circumstances, be entitled to a 70% (or 80% if the U.S. Holder owns shares representing at least 20% of the voting power and value of Taseko) deduction of the United States source portion of dividends received from Taseko (unless Taseko qualifies as a “foreign personal holding company” or a “passive foreign investment company,” as defined below). Taseko does not anticipate that it will earn any United States income, however, and therefore does not anticipate that any U.S. Holder will be eligible for the dividends received deduction.

Under current Treasury Regulations, dividends paid on Taseko’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 and the proceeds from a sale of Taseko’s common shares paid 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 28% 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.

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Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of Taseko 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 generally 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 source 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 Taseko 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 Taseko should consult their own tax advisors regarding their individual circumstances.

Disposition of Common Shares of Taseko

In general, U.S. Holders will recognize gain or loss upon the sale of common shares of Taseko 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 Taseko. Preferential tax rates apply to long-term capital gains of U.S. Holders which are individuals, estates or trusts. In general, gain or loss on the sale of common shares of Taseko will be long-term capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder and are held for more than one year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders which are not corporations, any unused portion of such 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.

Other Considerations

Set forth below are certain material exceptions to the above-described general rules describing the United States federal income tax consequences resulting from the holding and disposition of common shares:

Foreign Personal Holding Company

If at any time during a taxable year more than 50% of the total combined voting power or the total value of Taseko’s outstanding shares is owned, directly or indirectly (pursuant to applicable rules of constructive ownership), by five or fewer individuals who are citizens or residents of the United States and 60% or more of Taseko’s gross income for such year is derived from certain passive sources (e.g., from certain interest and dividends), Taseko may be treated as a “foreign personal holding company.” In that event, U.S. Holders that hold common shares would be required to include in gross income for such year their allocable portions of such passive income to the extent Taseko does not actually distribute such income. Taseko does not believe that it currently qualifies as a foreign personal holding company. However, there can be no assurance that Taseko will not be considered a foreign personal holding company for the current or any future taxable year.

Foreign Investment Company

If 50% or more of the combined voting power or total value of Taseko’s outstanding shares is 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 Taseko 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 Taseko 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. Taseko does not believe that it currently qualifies as a foreign

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investment company. However, there can be no assurance that Taseko will not be considered a foreign investment company for the current or any future taxable year.

Passive Foreign Investment Company

United States income tax law contains rules governing “passive foreign investment companies” (“PFIC”) which can have significant tax effects on U.S. Holders of foreign corporations. These rules do not apply to non-U.S. Holders. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the United States if, for any taxable year, either (i) 75% or more of its gross income is “passive income,” which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the corporation is not publicly traded and either is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of “passive income” is 50% or more. Taseko appears to have been a PFIC for the fiscal year ended September 30, 2003, and at least certain prior fiscal years. In addition, Taseko expects to qualify as a PFIC for the fiscal year ending September 30, 2004 and may also qualify as a PFIC in future fiscal years. Each U.S. Holder of Taseko is urged to consult a tax advisor with respect to how the PFIC rules affect such U.S. Holder’s tax situation.

Each U.S. Holder who holds stock in a foreign corporation during any year in which such corporation qualifies as a PFIC is subject to United States federal income taxation under one of three alternative tax regimes at the election of such U.S. Holder. The following is a discussion of such alternative tax regimes applied to such U.S. Holders of Taseko. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a “controlled foreign corporation” (as defined below) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation (See more detailed discussion at “Controlled Foreign Corporation” below).

A U.S. Holder who elects to treat Taseko as a qualified electing fund (“QEF”) will be subject, under Section 1293 of the Code, to current federal income tax for any taxable year to which the election applies in which Taseko qualifies as a PFIC on his pro rata share of Taseko’s (i) “net capital gain” (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain, and (ii) “ordinary earnings” (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income, in each case, for the shareholder’s taxable year in which (or with which) Taseko’s taxable year ends, regardless of whether such amounts are actually distributed. A U.S. Holder’s tax basis in the common shares will be increased by any such amount that is included in income but not distributed.

The procedure a U.S. Holder must comply with in making an effective QEF election, and the consequences of such election, will depend on whether the year of the election is the first year in the U.S. Holder’s holding period in which Taseko is a PFIC. If the U.S. Holder makes a QEF election in such first year, i.e., a “timely” QEF election, then the U.S. Holder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files his tax return for such first year. If, however, Taseko qualified as a PFIC in a prior year during the U.S. Holder’s holding period, then, in order to avoid the Section 1291 rules discussed below, in addition to filing documents, the U.S. Holder must elect to recognize under the rules of Section 1291 of the Code (discussed herein), (i) any gain that he would otherwise recognize if the U.S. Holder sold his stock on the qualification date or (ii) if Taseko is a controlled foreign corporation, the U.S. Holder’s pro rata share of Taseko’s post-1986 earnings and profits as of the qualification date. The qualification date is the first day of Taseko’s first tax year in which Taseko qualified as a QEF with respect to such U.S. Holder. For purposes of this discussion, a U.S. Holder who makes (i) a timely QEF election, or (ii) an untimely QEF election and either of the above-described gain-recognition elections under Section 1291 is referred to herein as an “Electing U.S. Holder.” A U.S. Holder who holds common shares at any time during a year of Taseko in which Taseko is a PFIC and who is not an Electing U.S. Holder (including a U.S. Holder who makes an untimely QEF election and makes neither of the above-described gain-recognition elections) is referred to herein as a “Non-Electing U.S. Holder.” An Electing U.S. Holder (i) generally treats any gain realized on the disposition of his Taseko common shares as capital gain; and (ii) may either avoid interest charges resulting from PFIC status altogether, or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of Taseko’s annual realized net capital gain and ordinary earnings subject, however, to an interest charge. If the U.S. Holder is not a corporation, any interest charge imposed under the PFIC regime would be treated as “personal interest” that is not deductible.

In order for a U.S. Holder to make (or maintain) a valid QEF election, Taseko must provide certain information regarding its net capital gains and ordinary earnings and permit its books and records to be examined to verify such information. Taseko intends to make the necessary information available to U.S. Holders to permit them to make

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(and maintain) QEF elections with respect to Taseko. Taseko urges each U.S. Holder to consult a tax advisor regarding the availability of, and procedure for making, the QEF election.

A QEF election, once made with respect to Taseko, applies to the tax year for which it was made and to all subsequent tax years, unless the election is invalidated or terminated, or the IRS consents to revocation of the election. If a QEF election is made by a U.S. Holder and Taseko ceases to qualify as a PFIC in a subsequent tax year, the QEF election will remain in effect, although not applicable, during those tax years in which Taseko does not qualify as a PFIC. Therefore, if Taseko again qualifies as a PFIC in a subsequent tax year, the QEF election will be effective and the U.S. Holder will be subject to the rules described above for Electing U.S. Holders in such tax year and any subsequent tax years in which Taseko qualifies as a PFIC. In addition, the QEF election remains in effect, although not applicable, with respect to an Electing U.S. Holder even after such U.S. Holder disposes of all of his or its direct and indirect interest in the shares of Taseko. Therefore, if such U.S. Holder reacquires an interest in Taseko, that U.S. Holder will be subject to the rules described above for Electing U.S. Holders for each tax year in which Taseko qualifies as a PFIC.

In the case of a Non-Electing U.S. Holder, special taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be realized by reasons of a pledge) of his Taseko common shares and (ii) certain “excess distributions,” as defined in Section 1291(b), by Taseko.

A Non-Electing U.S. Holder generally would be required to pro rate all gains realized on the disposition of his Taseko common shares and all excess distributions on his Taseko common shares over the entire holding period for the common shares. All gains or excess distributions allocated to prior years of the U.S. Holder (excluding any portion of the holder’s period prior to the first day of the first year of Taseko (i) which began after December 31, 1986, and (ii) for which Taseko was a PFIC) would be taxed at the highest tax rate for each such prior year applicable to ordinary income. The Non-Electing U.S. Holder also would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-Electing U.S. Holder that is not a corporation must treat this interest charge as “personal interest” which, as discussed above, is wholly non-deductible. The balance, if any, of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution, and no interest charge will be incurred with respect to such balance. In certain circumstances, the sum of the tax and the PFIC interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the U.S. Holder.

If Taseko is a PFIC for any taxable year during which a Non-Electing U.S. Holder holds Taseko common shares, then Taseko will continue to be treated as a PFIC with respect to such Taseko common shares, even if it is no longer definitionally a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such Taseko common shares had been sold on the last day of the last taxable year for which it was a PFIC.

Effective for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders who hold (actually or constructively) marketable stock of a foreign corporation that qualifies as a PFIC may elect to mark such stock to the market annually (a “mark-to-market election”). If such an election is made, such U.S. Holder will generally not be subject to the special taxation rules of Section 1291 discussed above. However, if the mark-to-market election is made by a Non-Electing U.S. Holder after the beginning of the holding period for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions on and other amounts taxable with respect to Taseko common shares. A U.S. Holder who makes the mark-to market election will include in income for each taxable year for which the election is in effect an amount equal to the excess, if any, of the fair market value of the common shares of Taseko as of the close of such tax year over such U.S. Holder’s adjusted basis in such common shares. In addition, the U.S. Holder is allowed a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax basis in the common shares over the fair market value of such shares as of the close of the tax year, or (ii) the excess, if any, of (A) the mark-to-market gains for the common shares in Taseko included by such U.S. Holder for prior tax years, including any amount which would have been treated as a mark-to-market gain for any prior tax year but for the Section 1291 rules discussed above with respect to Non-Electing U.S. Holders, over (B) the mark-to-market losses for shares that were allowed as deductions for prior tax years. A U.S. Holder’s adjusted tax basis in the common shares of Taseko will be adjusted to reflect the amount included in or deducted from income as a result of a mark-to-market election. A mark-to-market election applies to the taxable year in which the election is made and to each subsequent taxable year, unless Taseko common shares cease to be marketable, as specifically defined, or the IRS consents to revocation of the election. Because the IRS has not established procedures for making a mark-to-market election, U.S. Holders should consult their tax advisor regarding the manner of making

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such an election. No view is expressed regarding whether common shares of Taseko are marketable for these purposes or whether the election will be available.

Under Section 1291(f) of the Code, the IRS has issued Proposed Treasury Regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. Generally, in such cases the basis of Taseko common shares in the hands of the transferee and the basis of any property received in the exchange for those common shares would be increased by the amount of gain recognized. Under the Proposed Treasury Regulations, an Electing U.S. Holder would not be taxed on certain transfers of PFIC stock, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. The transferee’s basis in this case will depend on the manner of the transfer. In the case of a transfer by an Electing U.S. Holder upon death, for example, the transferee’s basis is generally equal to the fair market value of the Electing U.S. Holder’s common shares as of the date of death under Section 1014 of the Code. The specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the common shares are transferred. Each U.S. Holder of Taseko is urged to consult a tax advisor with respect to how the PFIC rules affect his or its tax situation.

Whether or not a U.S. Holder makes a timely QEF election with respect to common shares of Taseko, certain adverse rules may apply in the event that both Taseko and any foreign corporation in which Taseko directly or indirectly holds shares is a PFIC (a “lower-tier PFIC”). Pursuant to certain Proposed Treasury Regulations, a U.S. Holder would be treated as owning his or its proportionate amount of any lower-tier PFIC shares, and generally would be subject to the PFIC rules with respect to such indirectly-held PFIC shares unless such U.S. Holder makes a timely QEF election with respect thereto. Taseko intends to make the necessary information available to U.S. Holders to permit them to make (and maintain) QEF elections with respect to each subsidiary of Taseko that is a PFIC.

Under the Proposed Treasury Regulations, a U.S. Holder who does not make a timely QEF election with respect to a lower-tier PFIC generally would be subject to tax (and the PFIC interest charge) on (i) any excess distribution deemed to have been received with respect to his or its lower-tier PFIC shares and (ii) any gain deemed to arise from a so-called “indirect disposition” of such shares. For this purpose, an indirect disposition of lower-tier PFIC shares would generally include (i) a disposition by Taseko (or an intermediate entity) of lower-tier PFIC shares, and (ii) any other transaction resulting in a dilution of the U.S. Holder’s proportionate ownership of the lower-tier PFIC, including an issuance of additional common shares by Taseko (or an intermediate entity or the lower tier PFIC). Accordingly, each prospective U.S. Holder should be aware that he or it could be subject to tax even if such U.S. Holder receives no distributions from Taseko and does not dispose of its common shares.

Taseko strongly urges each prospective U.S. Holder to consult a tax advisor with respect to the adverse rules applicable, under the Proposed Treasury Regulations, to U.S. Holders of lower-tier PFIC shares.

Certain special, generally adverse, rules will apply with respect to Taseko common shares while Taseko is a PFIC unless the U.S. Holder makes a timely QEF election. For example under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such shares.

Controlled Foreign Corporation

If more than 50% of the total combined voting power of all classes of shares entitled to vote or the total value of the shares of Taseko is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporation, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), each of which own, actually or constructively, 10% or more of the total combined voting power of all classes of shares entitled to vote of Taseko (“United States Shareholder”), Taseko could be treated as a controlled foreign corporation (“CFC”) 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 United States Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States 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 increases in 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 Taseko which is or was a United States Shareholder at any time during the five-year period ending on the date of the sale or exchange is treated as ordinary income to the extent of earnings and profits

- 52 -

of Taseko 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, a more detailed review of these rules is outside of the scope of this discussion. Taseko does not believe that it currently qualifies as a CFC. However, there can be no assurance that Taseko will not be considered a CFC for the current or any future taxable year.

F.            Dividends and Paying Agents

Not applicable.

G.            Statement by Experts

Not applicable.

H.            Documents on Display

Exhibits attached to this Form 20-F are also available for viewing at the offices of Taseko, Suite 1020 – 800 West Pender Street, Vancouver, British Columbia V6C 2V6 or on request of Taseko at 604-684-6365, attention: Shirley Main. Copies of Taseko’s 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. Taseko’s only material subsidiary, Gibraltar Mines Ltd., is also a British Columbia corporation and the foregoing discussion of articles and memorandum is generally applicable.

I.            Subsidiary Information

Not applicable.

ITEM 11                    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A.            Transaction Risk and Currency Risk Management

Taseko’s operations do not employ financial instruments or derivatives which are market sensitive and Taseko does not have financial market risks.

B.            Exchange Rate Sensitivity

Taseko’s operations are in Canada and hence it is not significantly affected by exchange rate risk. Its liabilities are all denominated in Canadian dollars.

C.            Interest Rate Risk and Equity Price Risk

Taseko is equity financed and does not have any debt which is subject to interest rate change risks. Its only long term liability, the Boliden Debenture, is non-interest bearing.

D.            Commodity Price Risk

While the value of Taseko’s resource properties can always be said to relate to the price of gold and copper and the outlook for same, Taseko does not have any operating mines and hence does not have any hedging or other commodity based risks respecting its operations.

- 53 -

ITEM 12                    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A.            Debt Securities

Not applicable. (Taseko has a single outstanding debenture issued to Boliden – see Item 2 and Exhibits.)

B.            Warrants and Rights

Not applicable. (No market exists for Taseko’s warrants and options. Taseko has issued no rights.)

C.            Other Securities

Not applicable.

D.            American Depositary Shares

Not applicable.

PART II

ITEM 13                     DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14                     MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS            

Not applicable.

ITEM 15                     CONTROLS AND PROCEDURES

As of March 31, 2004, an evaluation was carried out under the supervision of, and with the participation of the Corporation’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Act of 1934). Based on that evaluation the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective.

No changes were made in the Company's internal control over financial reporting that has materially affected or is reasonably likely to materially affect the Company's internal control over financial reporting subsequent to the date of their evaluation.

- 54 -

ITEM 16                     AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES, AND EXEMPTIONS

A.            Audit Committee Financial Expert

The designated Audit Committee "financial expert" is Mr. Ronald W. Thiessen, who is also the President and Chief Executive Officer of the Company. Accordingly, Mr. Thiessen is not "independent", as the term is defined by the American Stock Exchange which is a national securities exchange. Mr. Thiessen is a Chartered Accountant.

B.            Code of Ethics

The Company has adopted a code of ethics that applies to the Company's chief executive officer, the chief financial officer, and other members of senior management. The Code of Ethics is appended as an exhibit to this Form 20-F.

C.            Principal Accountant Fees and Services

The following table discloses the aggregate fees billed for each of the last two fiscal years for professional services rendered by the Company's audit firm for various services:

		Year ended		Year ended
		September 30,		September 30,
Services:		2003		2002
Audit services	$	44,000	$	41,500
Audit-related services		–		9,000
Tax services		11,291		1,000
All other services		–		–
	$	55,291	$	51,500

From time to time, management of the Company recommends to and requests approval from the audit committee for non-audit services to be provided by the Company's auditors. The audit committee routinely considers such requests at committee meetings, and if acceptable to a majority of the audit committee members, pre-approves such non-audit services by a resolution authorizing management to engage the Company's auditors for such non-audit services, with set maximum dollar amounts for each itemized service. During such deliberations, the audit committee assesses, among other factors, whether the services requested would be considered "prohibited services" as contemplated by the US Securities and Exchange Commission, and whether the services requested and the fees related to such services could impair the independence of the auditors.

As 2003 was the first year of the audit committee pre-approval process, only the audit and tax services rendered in the year ended September 2003 were pre-approved by the audit committee.

D.            Exemptions from Listing Standards for Audit Committees

Not applicable.

E.            Purchases Of Equity Securities by the Issuer and Affiliated Purchasers

None.

PART III

ITEM 17                     FINANCIAL STATEMENTS

The following attached financial statements are incorporated herein:

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(1)        Auditors’ Report on the consolidated balance sheets as at September 30, 2003 and 2002, and the consolidated statements of operations, deficit and cash flows for each of the years in the three-year period ended September 30, 2003;

(2)       Consolidated balance sheets as at September 30, 2003 and 2002;

(3)       Consolidated statements of operations and deficit for each of the years in the three-year period ended September 30, 2003;

(4)       Consolidated statements of cash flows for the periods referred to in (3) above;

(5)        Notes to the consolidated financial statements;

ITEM 18                     FINANCIAL STATEMENTS

NOT APPLICABLE. See Item 17.

ITEM 19                     EXHIBITS

Key to the following document types:

1.	Articles of Incorporation and Registered Incorporation Memorandum of Taseko.
2.	Other Instruments defining the rights of the holders of equity or debt securities.
3.	A.	Agreements to which Directors, Officers, promoters voting trustees or security holders or their affiliates named in the Registration Statement are parties other than contracts involving only the purchase or sale of current assets having a determinable market price.
	B.	Material contracts not made in the ordinary course of business or which are to be performed in whole or in part at or after the filing of the Registration Statement or which was entered into not more than two years before filing.

The following Exhibits were filed with Taseko’s Annual Report on Form 20-F in previous years:

Type of Document	Description
1 & 2	Articles of incorporation, bylaws and instruments defining rights of common shareholders have been previously filed with the 20-F filed in 1994.
3B.1	Convertible Debenture July 21, 1999 in the principal amount of CDN $17,000,000 issued by Gilbraltarco to Boliden Westmin (Canada) Limited pursuant to the acquisition of the Gibraltar Mine (see Item 4 “The Gibraltar Mine”) filed with 20-F in March 30, 2000.
3A.1	Geological Management and Administration Services Agreement dated for reference December 31, 1996 filed with Form 20-F for fiscal year 1999 on March 30, 2000 (See Item 7 “Interest of Management in Certain Transactions”).
3A.2	Amended Share Incentive Plan dated for reference March 20, 2000 (See Item 6 “Share Incentive Plan”).

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3B.2

Arrangement Agreement dated February 22, 2001 among Taseko, Misty Mountain Gold Limited and Gibraltar Mines Ltd., whereby Taseko caused Gibraltar to acquire the 3 million ounce Harmony Gold Project in consideration of the issuance of Preferred Shares of Gibraltar which are convertible into shares of Taseko in the event of a liquidation event in connection with the Harmony Gold Project (see Item 4) (filed with Taseko’s Annual Report on Form 20-F for the year ended September 30, 2000 filed on March 31, 2001).

3A.3

Memorandum of Agreement dated for reference December 1, 2000 pursuant to which Procorp Services Limited Partnership (“Procorp”) and Taseko have agreed that Procorp will seek to finance engineering of a processing plant using the CESL technology and other services in consideration of $900,000 US cash (initial payment made), $900,000 cash on successful start up of the Gibraltar Mine plus 3.4 million Taseko Warrants, subject to regulatory acceptance (filed with Taseko’s Annual Report on Form 20-F for the year ended September 30, 2000 filed on 31, 2001)

The following Exhibits are filed with this Annual Report on Form 20-F:

Type of Document	Description
3A.4	Code of Ethics
3A.5	Joint Venture Agreement with the GRT Limited Partnership, dated December 30, 2003 described in Items 4 and 7t
3A.6	Put/Call Agreement among the partners of GRT Limited Partnership and Taseko dated December 30, 2003 described in Items 4 and 7t
3A.7	Guarantee Bonus Agreement dated December 30, 2003 whereby Taseko will issue 225,000 shares to certain insiders in consideration of them back-stopping Taseko’s Guarantee Agreement with the Province of British Columbia as described in Item 7
3B.3	Guarantee Agreement between Taseko and Province of British Columbia dated December 30, 2003 described in Item 4
3B.4	Farm-In Agreement with Northern Dynasty Minerals Ltd and Rockwell Ventures Inc whereby these related party companies expended $850,000 exploring Gibraltar’s mineral properties and subsequently sold the earned interests in the properties to Taseko for 304,660 Taseko shares valued at $2.79 each, as described in Item 7.
12.1	CEO Section 302 Certification
12.2	CFO Section 302 Certification
13.1	Section 906 Certification

- 57 -

SIGNATURES

Taseko certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

TASEKO MINES LIMITED

Per:

/s/ Jeffrey R. Mason

JEFFREY R. MASON
Chief Financial Officer

DATED April 15, 2004

TASEKO MINES LIMITED
CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003

(Expressed in Canadian Dollars)

AUDITORS' REPORT

To the Board of Directors
Taseko Mines Limited

We have audited the consolidated balance sheets of Taseko Mines Limited as at September 30, 2003 and 2002 and the consolidated statements of operations, deficit and cash flows for each of the years in the three-year period ended September 30, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at September 30, 2003 and 2002 and the results of its operations and its cash flows for each of the years in the three-year period ended September 30, 2003 in accordance with Canadian generally accepted accounting principles.
 

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada
February 2, 2004

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCE

In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Company’s ability to continue as a going concern, such as those described in note 1 to the consolidated financial statements. Our report to the Board of Directors dated February 2, 2004, is expressed in accordance with Canadian reporting standards which do not permit a reference to such conditions and events in the auditors’ report when these are adequately disclosed in the financial statements.
 

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada
February 2, 2004

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

		September 30,			September 30,
		2003			2002
					(restated - note 8(c))
Assets
Current assets
Cash and equivalents	$	2,424,221		$	39,104
Amounts receivable		1,049,093			336,247
Advances to related parties (note 11)		224,538			-
Supplies inventory		2,278,096			2,282,954
Prepaid expenses		134,207			103,631
		6,110,155			2,761,936
Property, plant and equipment (note 5)		9,554,186			10,158,525
Reclamation deposits (notes 4, 6(a), 8(c) and 12(d))		16,757,274			18,576,524
Mineral property interests (note 6)		28,813,296			28,813,296
	$	61,234,911		$	60,310,281
Liabilities and Shareholders' Equity
Current liabilities
Operating line of credit (note 7)	$	1,993,396		$	2,000,000
Accounts payable and accrued liabilities		1,857,740			1,569,288
Advances from related parties (note 11)		-			3,469,168
		3,851,136			7,038,456
Reclamation liability (note 5)		32,700,000			32,700,000
		36,551,136			39,738,456
Shareholders' equity
Share capital (note 8)		99,446,319			91,889,200
Convertible debenture (note 8(c))		19,599,520			18,710,697
Tracking preferred shares (note 4)		26,641,948			26,641,948
Contributed surplus (note 8(d))		65,344			-
Deficit		(121,069,356	)		(116,670,020	)
		24,683,775			20,571,825
Continuing operations (note 1)
Commitments (notes 6 and 8(b)(iii))
Subsequent events (notes 8 and 12)
	$	61,234,911		$	60,310,281

See accompanying notes to consolidated financial statements.

Approved by the Board of Directors

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

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

		Years ended September 30,
		2003			2002			2001
Expenses
Conference and travel	$	43,398		$	44,429		$	72,981
Consulting		178,104			133,672			1,750,662
Corporation taxes		76,135			577,228			211,486
Depreciation		711,170			714,065			714,857
Exploration (schedule)		2,029,529			2,071,885			3,860,176
Interest and finance charges		201,942			507,790			73,058
Legal, accounting and audit		169,356			334,492			483,653
Office and administration		292,853			247,061			674,783
Refinery project (schedule)		500,000			1,698,826			3,571,942
Shareholder communication		74,687			90,835			73,523
Stock-based compensation (note 8(d))		65,344			-			-
Trust and filing		21,113			36,802			51,155
		4,363,631			6,457,085			11,538,276
Other items
Interest and other income		721,480			551,842			1,110,431
Gain on sale of property, plant and equipment		131,638			1,314			-
Write down of mineral property acquisition costs		-			(600,000	)		(44,224,214	)
Write down of supplies inventory		-			-			(3,509,465	)
		853,118			(46,844	)		(46,623,248	)
Loss for the year	$	(3,510,513	)	$	(6,503,929	)	$	(58,161,524	)
Basic and diluted loss per common share (notes 3 and 8(c))	$	(0.09	)	$	(0.24	)	$	(2.35	)
Weighted average number of
common shares outstanding		46,984,378			30,338,098			25,067,697
Consolidated Statements of Deficit
(Expressed in Canadian Dollars)
		Years ended September 30,
		2003			2002			2001
Deficit, beginning of year
As original reported	$	(114,959,323	)	$	(108,455,394	)	$	(50,293,870	)
To adjust for the accounting for the convertible debenture (note 8(c))		(1,710,697	)		(902,676	)		(253,486	)
As restated		(116,670,020	)		(109,358,070	)		(50,547,356	)
Loss for the year		(3,510,513	)		(6,503,929	)		(58,161,524	)
Accretion expense on convertible debenture		(888,823	)		(808,021	)		(649,190	)
Deficit, end of year	$	(121,069,356	)	$	(116,670,020	)	$	(109,358,070	)

See accompanying notes to consolidated financial statements.

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

		Years ended September 30,
Cash provided by (used for):		2003			2002			2001
Operating activities
Loss for the year	$	(3,510,513	)	$	(6,503,929	)	$	(58,161,524	)
Items not involving cash
Accrued interest on reclamation deposits		(680,750	)		(546,632	)		(837,062	)
Depreciation		711,170			714,065			714,857
Stock-based compensation		65,344			-			-
Write down of mineral property acquisition costs		-			600,000			44,224,214
Write down of supplies inventory		-			-			3,509,465
Gain on sale of property, plant and equipment		(131,638	)		(1,314	)		-
Acquisition premium paid for Gibraltar Refinery (2002) Ltd.		-			314,330			-
Acquisition premium paid for remaining business
of GESL Partnership		500,000			-			-
Shares issued for loan guarantee		-			400,000			-
Changes in non-cash operating working capital
Amounts receivable		(712,846	)		(104,815	)		1,542,111
Supplies inventory		4,858			117,046			62,968
Prepaid expenses		(30,576	)		(76,448	)		102,702
Accounts payable and accrued liabilities		288,452			764,478			(430,256	)
		(3,496,499	)		(4,323,219	)		(9,272,525	)
Investing activities
Cash paid on acquisition of Harmony Gold Property		-			(2,230,000	)		-
Mineral property interests, net		-			-			(1	)
Purchase of property, plant and equipment		(135,193	)		-			-
Proceeds on sale of mineral property interests		-			1			-
Proceeds received on sale of property, plant and equipment		160,000			9,802			-
Reclamation deposits		2,500,000			-			(8,500,000	)
		2,524,807			(2,220,197	)		(8,500,001	)
Financing activities
Bank operating loan		(6,604	)		2,000,000			-
Advances from related parties		(3,693,706	)		2,185,389			2,663,188
Advances from Gibraltar Engineering Services
Limited Partnership		3,000,000			1,849,000			-
Common shares issued for cash, net of issue costs		4,057,119			465,835			-
Convertible debenture (note 8(c))		-			-			8,500,000
		3,356,809			6,500,224			11,163,188
Increase (decrease) in cash and equivalents		2,385,117			(43,192	)		(6,609,338	)
Cash and equivalents, beginning of year		39,104			82,296			6,691,634
Cash and equivalents, end of year	$	2,424,221		$	39,104		$	82,296

Supplementary cash flow disclosures (note 10)

See accompanying notes to consolidated financial statements.

TASEKO MINES LIMITED
Consolidated Schedules of Exploration Expenses
(Expressed in Canadian Dollars)

		Property
Year ended September 30, 2003		Prosperity			Gibraltar		Harmony			Total
Exploration expenses
Assays and analysis	$	27,727		$	354	$	3,177		$	31,258
Claim staking		-			500		-			500
Drilling		-			439,950		-			439,950
Equipment rentals		2,746			6,000		-			8,746
Geological		3,965			174,508		1,309			179,782
Mine planning		38,023			190,010		16,875			244,908
Site activities		16,039			1,102,390		5,956			1,124,385
Exploration expenses during the year		88,500			1,913,712		27,317			2,029,529
Cumulative expenses, beginning of year		41,487,910			8,988,583		-			50,476,493
Cumulative expenses, end of year	$	41,576,410		$	10,902,295	$	27,317		$	52,506,022
		Property
Year ended September 30, 2002		Prosperity			Gibraltar		Westgarde			Total
Exploration expenses
Assays and analysis	$	7,352		$	367	$	-		$	7,719
Equipment rentals		6,546			-		-			6,546
Geological		-			39,830		-			39,830
Mine planning		(50,800	)		215,900		-			165,100
Site activities		1,044			2,081,645		-			2,082,689
Recovery of exploration expenses incurred on sale (note 4)		-			-		(229,999	)		(229,999	)
Exploration expenses (recovery) during the year		(35,858	)		2,337,742		(229,999	)		2,071,885
Cumulative expenses, beginning of year		41,523,768			6,650,841		210,976			48,385,585
Cumulative expenses, end of year	$	41,487,910		$	8,988,583	$	(19,023	)	$	50,457,470
		Property
Year ended September 30, 2001		Prosperity			Gibraltar		Westgarde			Total
Exploration expenses
Assays and analysis	$	88,679		$	147,209	$	10,016		$	245,904
Equipment rentals		72,873			18,723		-			91,596
Geological		72,339			546,123		167,392			785,854
Mine planning		149,068			18,700		-			167,768
Option payment		-			-		30,000			30,000
Site activities		626			2,503,963		-			2,504,589
Transportation		3,350			27,547		3,568			34,465
Exploration expenses during the year		386,935			3,262,265		210,976			3,860,176
Cumulative expenses, beginning of year		41,136,833			3,388,576		-			44,525,409
Cumulative expenses, end of year	$	41,523,768		$	6,650,841	$	210,976		$	48,385,585

TASEKO MINES LIMITED
Consolidated Schedules of Refinery Project Expenses
(Expressed in Canadian Dollars)

		Years ended September 30,
Refinery Project Expenses		2003		2002		2001
Concentrate production	$	-	$	-	$	168,381
Engineering		-		403,494		1,649,375
Environmental and permitting		-		57,988		352,421
Interest		-		73,289		121,011
Metallurgy		-		10,883		363,098
Pilot plant testwork		-		290,680		508,759
Support services		-		548,162		408,897
Acquisition premium paid for Gibraltar Refinery (2002) Ltd.		-		314,330		-
Acquisition premium paid for remaining business of GESL Partnership		500,000		-		-
Expenses during the year		500,000		1,698,826		3,571,942
Cumulative expenses, beginning of year		5,270,768		3,571,942		-
Cumulative expenses, end of year	$	5,770,768	$	5,270,768	$	3,571,942

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

1.

Continuing operations Taseko Mines Limited ("Taseko" or the "Company") is incorporated under the laws of the Province of British Columbia. Its principal business activities are the operations of the Gibraltar Copper Mine, which is currently on standby care and maintenance, and the exploration of the Company’s 100% owned Prosperity Gold-Copper Property and the Harmony Gold Property. The Gibraltar Mine and the Prosperity Gold Property are located in south central British Columbia, Canada, near the City of Williams Lake. The Harmony Gold Property is located on Graham Island, Queen Charlotte Islands - Haida Gwaii, British Columbia. The Company’s continuing operations and the underlying value and recoverability of the amounts shown for the Prosperity and Harmony mineral property interests are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of its mineral property interests, and upon future profitable production or proceeds from the disposition of its mineral property interests. The recoverability of the amounts shown for the Gibraltar Mine mineral property interest and related plant and equipment and supplies inventory is dependent upon the ability of the Company to obtain the necessary financing to re-start operations of the mine, should metal prices and other factors warrant it, and upon future profitable production or proceeds from the disposition of the mine. These financial statements are prepared on the basis that the Company will continue as a going concern. The Company has recorded significant losses and operating cash flow deficiencies in each of the last three fiscal years. Management recognizes that the Company must generate additional financial resources in order to meet liabilities as they come due and to enable it to continue operations. The Company and its financial advisors are actively targeting sources of additional funding through alliances with financial, exploration and mining entities or other business and financial transactions which would generate sufficient resources to assure continuation of the Company’s operations and exploration programs. However, there can be no assurances that the Company will obtain additional financial resources and/or achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, the Company will be required to curtail operations and exploration activities. These financial statements do not reflect adjustments, which could be material, to the carrying values of assets and liabilities which may be required should the Company be unable to continue as a going concern.

2.

Basis of presentation and principles of consolidation These financial statements have been prepared in accordance with Canadian generally accepted accounting principles. The results of applying measurement accounting principles generally accepted in the United States are set out in note 12. These consolidated financial statements include the accounts of Taseko, its wholly-owned subsidiary, Gibraltar Mines Ltd. (note 6(a)), and its 70% owned subsidiary Cuisson Lake Mines Ltd. All material intercompany accounts and transactions have been eliminated.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

3.	Significant accounting policies
(a)	Cash and equivalents Cash and equivalents consist of cash and highly liquid investments, having maturity dates of three months or less from the date of acquisition, that are readily convertible to known amounts of cash.
(b)	Supplies inventory Supplies inventory is reported at the lower of moving average cost and net realizable value.
(c)	Property, plant and equipment Plant and equipment are stated at cost less accumulated depreciation. Depreciation is recorded over the estimated economic life of the plant and equipment on a straight line basis at annual rates ranging from 1.3% to 16.5%, except for the solvent extraction/electrowinning plant and equipment included in Gibraltar Mine plant and equipment (note 5), which are depreciated on a straight line basis at rates from 20% to 50% per annum.
(d)	Mineral property interests The Company defers mineral property acquisition costs on a property-by-property basis. Exploration expenditures and option payments incurred prior to the determination of the feasibility of mining operations are charged to operations as incurred. Development expenditures incurred subsequent to such determination, to increase production, or to extend the life of existing production are capitalized, except as noted below. Such acquisition costs and deferred development expenditures are amortized and depreciated over the estimated life of the property, or written off to operations if the property is abandoned, allowed to lapse, or if there is little prospect of further work being carried out by the Company or its option or joint venture partners. All costs incurred by the Company during the standby care and maintenance period at the Gibraltar Mine are expensed as incurred. Mineral property acquisition costs include the cash consideration and the fair market value of common shares, based on the trading price of the shares at the agreement date, issued for mineral property interests, pursuant to the terms of the relevant agreement. Payments relating to a property acquired under an option or joint venture agreement, where such payments are made at the sole discretion of the Company, are recorded in the accounts upon payment. Costs related to feasibility work and the development of processing technology are expensed as incurred. Costs incurred subsequent to the determination of the feasibility of the processing technology will be capitalized and amortized over the life of the related plant. Administrative expenditures are expensed as incurred.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

	The amount presented for mineral property interests represents costs incurred to date and the accumulated fair value of shares issued to date relating to acquisition costs, less write-downs (note 5), but does not necessarily reflect present or future values.
(e)	Share capital The Company records proceeds from share issuances net of issue costs. Shares issued for consideration other than cash are valued at the quoted market price on the date the agreement to issue shares was reached. The proceeds, net of issue costs, from common shares issued pursuant to flow-through share financing agreements are credited to share capital and the tax benefits of these exploration expenditures are transferred to the purchaser of the shares.
(f)	Share-based compensation (see also note 3(g)) The Company has a share option plan which is described in note 8(d). The Company accounts for all non-cash share-based payments and awards that are direct awards of stock, that call for settlement in cash or other assets, or that are share appreciation rights which call for settlement by the issuance of equity instruments, granted on or after October 1, 2002, using the fair value based method. Under the fair value based method, share-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of non-cash share-based payments is periodically re-measured until counterparty performance is complete, and any change therein is recognized over the period and in the same manner as if the Company had paid cash instead of paying with or using equity instruments. The cost of non-cash share-based payments that are fully vested and non-forfeitable at the grant date is measured and recognized at that date. Under the fair value based method, compensation cost attributable to awards that are direct awards of shares, or share appreciation rights which call for settlement by the issuance of equity instruments, is measured at fair value at the grant date and recognized over the vesting period. Compensation cost attributable to awards which call for settlement in cash or other assets is measured at fair value at the grant date and recognized over the vesting period. For awards that vest at the end of a vesting period, compensation cost is recognized on a straight-line basis; for awards that vest on a graded basis, compensation cost is recognized on a pro-rata basis over the vesting period. Consideration received upon the exercise of share options is credited to share capital.
(g)	Change in Accounting Policy – Share-Based Compensation Effective October 1, 2002, the Company adopted the new Recommendations of the Canadian Institute of Chartered Accountants relating to the accounting for stock-based compensation and other stock-based payments. Under the new standard, payments to non-employees, and to employee awards that are direct awards of stock, that call for settlement in cash or other assets, or

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

	that are stock appreciation rights which call for settlement by the issuance of equity instruments, are accounted for using the fair value method and the related compensation expense is included in operations, with an offset to contributed surplus. No compensation expense is required to be recorded for all other non-cash stock-based employee compensation awards; however the Company is permitted to, and has elected to, include these costs in operations. Prior to the adoption of the new standard, no compensation expense was recorded for the Company's share-based incentive plans when the options were granted. Any consideration paid by those exercising share options was credited to share capital upon receipt. The new Recommendations have been applied prospectively. The adoption of this new standard has resulted in no changes to mounts previously reported.
(h)	Income taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are computed based on differences between the carrying amounts of assets and liabilities on the balance sheet and their corresponding tax values, generally using the substantively enacted income tax rates expected to apply to taxable income in the years in which those temporary difference are expected to be recovered or settled. Future income tax assets also result from unused loss carry forwards, resource-related pools, and other deductions. Future tax assets are recognized to the extent that they are considered more likely than not to be realized. The valuation of future income tax assets is adjusted, if necessary, by the use of a valuation allowance to reflect the estimated realizable amount.
(i)	Loss per common share Basic loss per common share is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during the period. For all periods presented, loss available to common shareholders equals the reported loss. Diluted loss per share is calculated using the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding used for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. In the Company’s case, diluted loss per share is the same as basic loss per share as the effect of the outstanding options and warrants would be anti-dilutive.
(j)	Fair value of financial instruments The carrying amounts of cash and equivalents, amounts receivable, prepaids, reclamation deposits, bank operating loan and accounts payable and accrued liabilities, approximate their fair values due to their short term nature. The fair values of the convertible debenture and the tracking preferred shares are not readily determinable with sufficient reliability due to the difficulty in obtaining appropriate market information. It is not practicable to determine the fair

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

	values of the advances due to/from related parties because of the related party nature of such amounts and the absence of a secondary market for such instruments. Details of the terms of these financial instruments are disclosed in these notes to the financial statements.
(k)	Use of estimates The presentation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant areas requiring the use of management estimates relate to the impairment of mineral property interests and plant and equipment, the balance of reclamation liability, rates for depreciation and the assumptions used in determining share-based compensation. Actual results could differ from these estimates.
(l)	Segment disclosures The Company operates in a single reportable operating segment, the exploration, development and operation of mineral property interests, within the geographic area of British Columbia, Canada.
(m)	Comparative figures Certain of the prior years’ comparative figures have been restated to conform with the presentation adopted for the current year.
4.	Arrangement agreement In October 2001, the Company and its subsidiary Gibraltar Mines Ltd. (“Gibraltar") completed the acquisition of the Harmony Gold Property and related assets from Continental Minerals Corporation ("Continental"), a British Columbia company with certain directors in common with Taseko, for 12,483,916 series "A" non-voting tracking preferred shares of Gibraltar and $2.23 million cash. The tracking preferred shares are designed to track and capture the value of the Harmony Gold Property and will be converted into common shares of Taseko upon a realization event, such as a sale to a third party or commercial production at the Harmony Gold Property, or at the option of Gibraltar, if a realization event has not occurred within ten years. Accordingly, the tracking preferred shares have been classified within shareholders’ equity on the consolidated balance sheet.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

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

Assets acquired		Amount
Property and equipment	$	8,488
Reclamation deposit		175,000
Mineral property interests		28,811,296
	$	28,994,784
Consideration given
Cash	$	2,230,000
12,483,916 tracking preferred shares of Gibraltar		26,641,948
114,800 common shares of the Company to a dissenting shareholder		122,836
	$	28,994,784

As previously noted, the Gibraltar tracking preferred shares are redeemable for common shares of Taseko upon the occurrence of certain value realization events for the Harmony Gold Property. The tracking preferred shares are redeemable at specified prices per common share of Taseko starting at $3.39 and escalating by $0.25 per year. If a realization event does not occur on or before October 16, 2011, Gibraltar has the right to redeem the tracking preferred shares for Taseko common shares at a deemed price equal to the greater of the average 20 day trading price of the common shares of Taseko and $10.00. The Taseko common shares to be issued to Continental upon a realization event will in turn be distributed pro-rata, after adjustment for any taxes, to the holders of redeemable preferred shares of Continental that were issued to Continental shareholders at the time of the Arrangement Agreement.

In connection with this acquisition, Taseko sold its interest in the Westgarde Property to Continental for $0.23 million cash, which was presented as a recovery of exploration expenses incurred, and exchanged its 5% net profits interest, valued at $0.6 million, in the Harmony Project for a 1% working interest, valued at $0.6 million, in the Company’s Prosperity Property held by a limited partnership beneficially controlled by Continental. In connection with this Arrangement Agreement, the Company undertook a bank loan in the amount of $2.0 million, which is fully secured by a private company controlled by one of the directors of Taseko. In consideration for providing security for this loan, the Company issued 606,061 common shares (note 7) to the guarantor.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

5.  Property, plant and equipment

		September 30, 2003						September 30, 2002
Prosperity Property				Accumulated		Net book				Accumulated		Net book
Equipment		Cost		depreciation		value		Cost		depreciation		value
Field	$	11,879	$	10,162	$	1,717	$	11,879	$	9,426	$	2,453
Computer and office		15,172		13,871		1,301		15,172		13,314		1,858
Total Prosperity Property	$	27,051	$	24,033	$	3,018	$	27,051	$	22,740	$	4,311
Gibraltar Mine				Accumulated		Net book				Accumulated		Net book
Plant and equipment		Cost		depreciation		value		Cost		depreciation		value
Buildings and equipment	$	5,931,580	$	416,225	$	5,515,355	$	5,931,580	$	340,420	$	5,591,160
Mine equipment		5,589,193		2,063,493		3,525,700		5,454,001		1,591,652		3,862,349
Plant and equipment		962,061		541,935		420,126		1,015,303		441,911		573,392
Vehicles		152,854		90,680		62,174		152,854		70,045		82,809
Computer equipment		101,162		73,349		27,813		101,162		56,658		44,504
Total Gibraltar Mine	$	12,736,850	$	3,185,682	$	9,551,168	$	12,654,900	$	2,500,686	$	10,154,214
Total property, plant
and equipment	$	12,763,901	$	3,209,715	$	9,554,186	$	12,681,951	$	2,523,426	$	10,158,525

	In accordance with the Gibraltar mine permit, the Company has pledged the mine's plant and equipment which, combined with reclamation deposits (approximately $16.8 million at September 30, 2003), provide the Government of British Columbia with the required security for the estimated reclamation liability on the Gibraltar mine of $32.7 million.
6.	Mineral property interests

			September 30,
			2003 and 2002
	Gibraltar Copper Mine (note 6(a))	$	1,000
	Prosperity Gold-Copper Property (note 6(b))		1,000
	Harmony Gold Property (note 6(c))		28,811,296
		$	28,813,296
(a)	Gibraltar Copper Mine In 1999, the Company acquired a 100% interest in the Gibraltar Copper Mine mineral property, located near Williams Lake, British Columbia, Canada from Boliden Westmin (Canada) Limited ("BWCL"), for $3.3 million. The acquisition included plant and equipment and supplies inventory of the Gibraltar mine. As part of its operating permits, a subsidiary of the Company agreed to incur a total of $4,000,000 on reclamation and environmental programs during the six year period July 1999 to July 2005, of which a total of $2,131,650 had been incurred to September 30, 2003.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

In fiscal 2001, Gibraltar Mines Ltd., Gibraltar Engineering Services Limited Partnership (the "GESL Partnership") (see note 6(d)), and Cominco Engineering Services Ltd. ("CESL") concluded a Memorandum of Agreement ("MOA") to jointly complete an evaluation for a potential hydrometallurgical copper refinery at the Gibraltar Mine. The parties initially agreed to complete a $2.7 million detailed investigation of the feasibility of the refinery.

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

The GESL Partnership has the right to provide necessary engineering services relating to a startup of operations at the Gibraltar Mine, and for the final design, tendering, procurement and construction of the Gibraltar Refinery, as well as the right to become contract operator of the Gibraltar Mine, the Gibraltar Mine concentrator and the Gibraltar Refinery. In each case, the GESL Partnership will provide its services for a fixed fee equal to industry standard rates for such services, and such services will be provided pursuant to a definitive consulting and operating agreement negotiated in good faith between the parties and containing customary industry terms and conditions.

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

To September 30, 2002, the GESL Partnership incurred project costs of $4,956,438 (September 30, 2001 - $3,571,942), including expenses originally contemplated under the MOA. Expenses incurred in excess of the amounts agreed to in the original MOA were funded by the Company and the GESL Partnership. During fiscal 2002 and 2003, the Company acquired the business carried on by the GESL Partnership (note 6(d)).

The Company retained Procorp Services Limited Partnership ("Procorp") to provide technical, financial, management and marketing services related to all facets of the start-up, expansion and development of the Gibraltar Mine and the proposed hydrometallurgical refinery. Procorp is a mining services, financing and marketing partnership comprised of experienced, specialized independent contractors as well as members who are also directors and officers of the Company. Compensation to Procorp included an initial payment of US$0.9 million for services rendered in fiscal 2001 and 2002 (which has been paid) and a second payment of US$0.9 million upon successful recommencement of commercial production of the Gibraltar Mine. In addition, the

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

	Company agreed, subject to regulatory approval, to issue to Procorp 3.4 million warrants to purchase common shares of the Company at a price of $1.70 per share for five years upon successful recommencement of commercial production at the Gibraltar Mine. The Gibraltar Mine has been on care and maintenance since being acquired in 1999. During fiscal 2001, due to continued uncertainty regarding start-up and an extended cycle of depressed metal prices, the Company wrote down the accumulated mineral property interest acquisition costs of $5.9 million to a nominal $1,000. Part of the Gibraltar Mine consists of waste rock dumps which the Company has an obligation to reclaim. On November 1, 2002, the Company entered into a Landfill Management Agreement and an associated Partnering Agreement with the Cariboo Regional District (“CRD”), whereby the Company would construct and manage a municipal landfill on certain of the waste rock dumps for the CRD for the life of the landfill, expected to be in excess of 80 years. As a result of these agreements, the Company’s reclamation obligation was reduced and accordingly, during fiscal 2003, the Government of British Columbia released $2.5 million of the reclamation deposits held.
(b)	Prosperity Gold-Copper Property The Company owns 100% of the Prosperity Gold-Copper Property, located in the Clinton Mining Division, British Columbia, Canada, which was acquired prior to 1995 for total cash and share consideration of $28.66 million. During fiscal 2001, the Prosperity Project was written down to a nominal $1,000 to reflect the extended depressed conditions in the metal markets and the Company's intention to defer significant work on the project until a sustained recovery of metal prices had occurred.
(c)	Harmony Gold Property (note 4) In February 1999, the Company acquired a 5% net profits royalty on the Harmony Gold Property located in the Skeena Mining Division on Graham Island, Queen Charlotte Islands - Haida Gwaii, British Columbia, Canada, for $0.6 million, and purchased for $1, an exclusive farm-out right to earn up to a 10% working interest in the Harmony Property, by expending $0.6 million for each 1% working interest prior to January 1, 2001. The Harmony Gold Property was owned by Continental, a public British Columbia company with certain directors and officers in common with the Company. During fiscal 2001, the Company allowed this working interest option to expire, unexercised. Under the terms of an Arrangement Agreement (note 4), the Company acquired a 100% interest in the Harmony Gold Property in fiscal 2002.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

(d)	Acquisition agreements In December 2001, the GESL Partnership completed a private placement of limited partnership units for aggregate proceeds of $1.85 million. In February 2002, the Company issued 4,966,659 Taseko common shares at $0.44 per share to acquire Gibraltar Refinery (2002) Ltd., which had acquired certain of the private placement units of the GESL Partnership. The Company also issued 50,000 Taseko common shares to its financial adviser in connection with this acquisition. A further $3 million of expenditures were incurred by the GESL Partnership, which were financed by a separate partnership, the GESL Refinery Process ("GRP") Partnership, for a total financing amount of $4.85 million. In December 2002, a general partnership interest in the GRP Partnership was acquired and financed by a third party for $3.0 million. In April 2003, under a plan of arrangement, the Company issued 7,446,809 Taseko common shares for total consideration of $3.5 million to complete the acquisition of Gibraltar Engineering Services Limited ("GESL"), which had acquired the remaining business of the GESL Partnership.
7.	Operating line of credit During fiscal 2002, the Company negotiated a $2 million operating line of credit with a Canadian chartered bank at an interest rate of prime, with no fixed terms of repayment. A private company affiliated with a director provided a fully collateralized guarantee and received 606,061 common shares of the Company in exchange for the guarantee. The market value of the shares issued was included in interest expense in the fiscal 2002 consolidated statement of operations.
8.	Share capital
(a)	Authorized Authorized share capital of the Company consists of 100,000,000 common shares without par value.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

(b) Issued and outstanding

	Number
Common shares	of Shares		Amount
Balance, September 30, 2000 and 2001	25,067,697	$	87,897,199
Issued during the year
To a dissenting Continental shareholder in exchange for
Gibraltar preferred shares at $1.07 per share (note 4)	114,800		122,836
Loan guarantee at $ 0.66 per share (note 7)	606,061		400,000
Private placement at $0.50 per share	414,850		185,835
Private placement at $0.47 per share	276,596		130,000
Private placement at $0.40 per share	375,000		150,000
For acquisition of Gibraltar Refinery (2002) Ltd. at $0.44 per share,
net of issue costs (note 6(d))	4,966,659		2,163,330
For debt settlement at $0.40 per share	2,100,000		840,000
Balance, September 30, 2002	33,921,663	$	91,889,200
Issued during the year
Share purchase options at $ 0.50 per share	40,000		20,000
Private placement at $0.30 per share(i)	2,185,000		645,245
Private placement at $0.30 per share(ii)	4,470,001		1,253,654
Private placement at $0.40 per share(iii)	5,817,500		2,146,666
For acquisition of the remaining business of the GESL Partnership,
net of issue costs (note 6(d))	7,446,809		3,491,554
Balance, September 30, 2003	53,880,973	$	99,446,319

On December 31, 2002, the Company closed three equity private placements of its securities, as follows:
(i)	2,185,000 common shares at $0.30 per share, which were subscribed to by Hunter Dickinson Inc., a private company with certain directors in common (note 11). In connection with this private placement, the Company incurred issue costs of $180,334.
(ii)	4,232,001 units at $0.30 per unit. Each unit consisted of one common share and one non-transferable common share purchase warrant exercisable at $0.50 per share until December 31, 2004 (note 13(c)). Pursuant to this private placement, the Company issued to the agents 238,000 shares and 238,000 common share purchase warrants exercisable at $0.50 per share until December 31, 2004. In connection with this private placement, the Company incurred issue costs of $111,140.
(iii)	5,787,500 flow-through units at $0.40 per unit. Each unit consisted of one flow-through common share and one-half of a non-transferable common share purchase warrant. Each whole common share purchase warrant entitles the holder to purchase one common share at a price of $0.50 per share until December 31, 2004 (note 13(c)). Effective December 31, 2002, the Company renounced $2.315 million in qualified exploration expenditures to the flow-through share investors. The Company agreed to use its best efforts to incur $2.315 million on qualified exploration expenditures by December 31, 2003, of which at September 30, 2003 the Company had spent $0.731 million.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

		Subsequent to September 30, 2003 and prior to December 31, 2003 the Company completed its flow-through commitments. Pursuant to this private placement, the Company issued to the agents 30,000 shares and 30,000 common share purchase warrants exercisable at $0.50 per share until December 31, 2004.
	Subsequent to September 30, 2003, the Company completed an equity private placement of 6,700,000 units at $0.60 per unit for gross proceeds of $4.02 million. Each unit consisted of one common share and one common share purchase warrant exercisable at $0.75 per share until December 31, 2005. The warrants are subject to a 45-day accelerated expiry if the closing price of the Company's common shares, as traded on the TSX Venture Exchange, is at least $1.50 for ten consecutive trading days.
(c)	Convertible debenture

		September 30,		September 30,
		2003		2002
Present value of convertible debenture
Beginning of year	$	8,888,235	$	8,080,214
Accretion for the year		888,823		808,021
End of year		9,777,058		8,888,235
Conversion right		9,822,462		9,822,462
	$	19,599,520	$	18,710,697
Summary of the convertible debenture terms
Principal amount of convertible debenture	$	17,000,000	$	17,000,000
Price per common share of the unexercised conversion right	$	4.14	$	3.89
Number of common shares potentially issuable under
unexercised conversion right		4,106,280		4,370,180

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

From the commencement of the sixth year to the tenth year, the Company has the right to automatically convert the debenture into common shares at the then-prevailing market price.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

Since the Company has the right and the intention to settle the convertible debenture through the issuance of common shares, notwithstanding the Company’s right to settle the debenture with cash, it has been included as a separate component of shareholders’ deficiency on the balance sheet. Accounting standards in Canada for compound financial instruments require the Company to allocate the proceeds received from the convertible debenture between the fair value of the option to convert the debenture into common shares and the fair value of the future cash outflows related to the debenture. At issuance, the Company estimated the fair value of the conversion option by deducting the present value of the future cash outflows of the convertible debenture, from the face value of the principal of the convertible debenture. The residual carrying value of the convertible debenture is required to be accreted to the face value of the convertible debenture over the life of the debenture by, in the Company’s case, a direct charge to deficit. During the year ended September 30, 2003, the Company restated the prior year convertible debenture and deficit balances within shareholders’ equity on the balance sheet and the statements of deficit for the years ended September 30, 2002 and 2001 to reflect the required accretion of the convertible debenture. This change had no impact on total assets, liabilities, shareholders equity or earnings for the current or prior periods. However, prior years loss per share has been increased from $0.21 and $2.32 per share to $0.24 and $2.35 per share for the years ended September 30, 2002 and 2001, respectively, to reflect the effect of the annual accretion of the convertible debenture.

(d)

Share purchase option plan The Company has a share purchase option plan approved by the shareholders that allows it to grant up to 8,200,000 share purchase options, subject to regulatory terms and approval, to its employees, officers, directors and consultants. The exercise price of each option may be set equal to or greater than the closing market price of the common shares on the TSX Venture Exchange on the day prior to the date of the grant of the option, less any allowable discounts. Options have a maximum term of ten years and terminate 30 to 90 days following the termination of the optionee’s employment or term of engagement, except in the case of retirement or death. Vesting of options is at the discretion of the Board of Directors at the time the options are granted. The continuity of share purchase options is as follows:

	2003				2002				2001
	Number			Average	Number			Average	Number			Average
	of shares			Price	of shares			Price	of shares			Price
Opening balance	4,145,000		$	0.50	657,000		$	1.56	2,242,500		$	2.31
Granted during the year	770,000			0.41	4,042,500			0.50	218,500			1.07
Exercised during the year	(40,000	)		0.50	–			–	–			–
Expired/cancelled during year	(190,000	)		0.50	(554,500	)		1.38	(1,804,000	)		2.43
Closing balance	4,685,000		$	0.48	4,145,000		$	0.50	657,000		$	1.56
Contractual remaining life (years)				1.03				1.96				1.21
Range of exercise prices	$0.25-$0.50				$0.50				$1.65-$3.64

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

As at September 30, 2003, 4,600,000 of the options outstanding had vested with optionees.

Subsequent to September 30, 2003, a total of 3,010,500 options at exercise prices ranging from $0.55 to $1.65 were granted, and a total of 850,000 options were exercised for gross proceeds of $390,000.

The exercise prices of all share purchase options granted during the year were equal to the market price at the grant date. Using an option pricing model with the assumptions noted below, the $65,344 estimated fair value of all options granted during the year has been reflected in the statement of operations as stock-based compensation, with the offsetting credit to contributed surplus.

The weighted-average assumptions used to estimate the fair value of options granted during the period were:

Risk free interest rate	3%
Expected life	2.5 years
Expected volatility	145%
Expected dividends	nil

(e) Share purchase warrants The continuity of share purchase warrants is as follows:

		Outstanding			Outstanding
	Exercise	September 30,			September 30,
Expiry dates	price	2002	Issued	Expired	2003
October 19, 2003	$0.58	276,596	–	–	276,596
December 27, 2003	$0.55	414,850	–	–	414,850	( i)
January 8, 2006	$0.40	375,000	–	–	375,000
December 31, 2003	$0.40	–	302,250	–	302,250
December 31, 2004 (note 8(b))	$0.50	–	7,393,751	–	7,393,751	(ii)
		1,066,446	7,696,001	–	8,762,447

(i)	Subject to a 45-day accelerated expiry if the closing price of the Company's common shares, as traded on the TSX Venture Exchange, is at least $0.83 for ten consecutive trading days.
(ii)	Subject to a 45-day accelerated expiry if the closing price of the Company's common shares, as traded on the TSX Venture Exchange, is at least $0.75 for ten consecutive trading days.
Subsequent to September 30, 2003, a total of 6,700,000 warrants at an exercise price of $0.75 expiring December 31, 2005 were issued as part of a unit financing (note 8(b)), and a total of 8,387,447 warrants were exercised for gross proceeds of $4.21 million.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

The continuity of share purchase warrants during the previous fiscal year is as follows:

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

9. Income taxes Substantially all of the difference between the actual income tax expense (recovery) of $nil (2002 - $nil) and the expected statutory corporate income tax recovery relates to losses not recognized. As at September 30, 2003 and 2002, the tax effect of the significant components within the Company’s future tax assets were as follows:

		2003			2002
Mineral property deductions	$	–		$	1,555,000
Loss carry forwards		1,778,000			3,211,000
Equipment		1,085,000			840,000
Other tax pools		775,000			716,000
		3,638,000			6,322,000
Valuation allowance		(3,638,000	)		(6,322,000	)
Net future income tax asset (liability)	$	–		$	–

At September 30, 2003, the Company’s tax attributes include non-capital losses for income tax purposes in Canada totaling approximately $5.0 million, expiring in various periods from 2004 to 2010, and certain resource related and other tax pools. The Gibraltar tracking preferred shares issued to Continental have initially been recorded for Canadian tax purposes at a paid up amount of $62.77 million, but such amount is subject to adjustment based on the fair value of Taseko common shares ultimately received by Continental (note 4).

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

10. Supplementary cash flow disclosures In addition to the non-cash operating, financing and investing activities primarily disclosed, the Company’s non-cash operating, financing and investing activities were as follows:

		September 30,		September 30,		September 30,
		2003		2002		2001
Issuance of tracking preferred shares of Gibraltar Mines
Ltd. on acquisition of Harmony Gold Property (note 4)	$	–	$	26,764,784	$	–
Issuance of common shares on acquisition of Gibraltar
Refinery (2002) Ltd. (note 6(d))		–		2,163,330		–
Issuance of common shares on acquisition of remaining
business of GESL Partnership		3,500,000		–		–
Issuance of common shares on redemption of Gibraltar
tracking preferred shares held by a dissenting
Continental shareholder (note 4)		–		122,836		–
Issuance of common shares for loan guarantee (note 7)		–		400,000		–
Issuance of common shares settlement of debt (note 8(b))		–		840,000		–
Accretion of convertible debenture (note 8(c))		888,823		808,021		649,190

		September 30,		September 30,		September 30,
		2003		2002		2001
Supplemental cash flow information
Cash paid during the year for
Interest	$	101,942	$	107,790	$	–
Taxes	$	6,135	$	117,333	$	150,888

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

11. Related party transactions and advances

		September 30,			September 30,			September 30,
Transactions		2003			2002			2001
Hunter Dickinson Inc
Services rendered to the Company and its subsidiaries
and reimbursement of third party expenses (a)	$	253,859		$	574,892		$	768,710
Services rendered to GESL Partnership (b)	$	–		$	1,384,496		$	3,571,942
Hunter Dickinson Group Inc
Consulting services rendered to the Company (c)	$	9,600		$	–		$	–
		September 30,			September 30,			September 30,
Advances		2003			2002			2001
Advances to (from) (e)
Hunter Dickinson Inc. (a)	$	229,129		$	(468,168	)	$	(1,283,779	)
Hunter Dickinson Group Inc. (c)		(4,591	)		(3,001,000	)		–
Advances to (from) related parties	$	224,538		$	(3,469,168	)	$	(1,283,779	)

(a)	Hunter Dickinson Inc. ("HDI") is a private company with certain directors in common that provides geological, corporate development, administrative and management services to, and incurs third party costs on behalf of, the Company and its subsidiaries on a full cost recovery basis pursuant to an agreement dated December 31, 1996.
(b)	During fiscal 2001 and 2002, Hunter Dickinson Inc. provided engineering and other services to the GESL Partnership at industry standard rates.
(c)	Hunter Dickinson Group Inc. is a private company with certain directors in common that provides consulting services to the Company, at market rates.
(d)	Equity private placement (note 8(b)(i)).
(e)	Advances are non-interest bearing and due on demand.

12.	Differences between Canadian and United States GAAP These financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). A description of United States generally accepted accounting principles (“US GAAP”) and rules prescribed by the United States Securities and Exchange Commission (“SEC”) that result in material measurement differences from Canadian GAAP follows:
	(a)	United States Statement of Financial Accounting Standards No. 123 (“SFAS 123”), "Accounting for Stock-Based Compensation", requires that stock-based compensation be accounted for based on a fair value methodology, although in certain instances, it allows the effects to be disclosed in the notes to the financial statements rather than in the

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

	statement of operations. SFAS 123 also allows an entity to continue to measure compensation costs for stock-based compensation plans using the intrinsic value based method of accounting as prescribed by APB Opinion No. 25 (“APB 25”), which is comparable to Canadian GAAP prior to October 1, 2002. To September 30, 2002, the Company had elected to measure compensation cost for those plans using APB 25 for US GAAP purposes. United States Statement of Financial Accounting Standards 148 ("SFAS 148"), "Accounting for Stock-Based Compensation - Transition and Disclosure - an amendment of FASB Statement No. 123", permits the Company to adopt a fair value methodology on a prospective basis. Effective October 1, 2002, for US GAAP purposes the Company prospectively adopted the fair value method of accounting for stock-based compensation, a treatment consistent with the accounting treatment used for Canadian GAAP. For all periods presented, under US GAAP, stock options granted to non-employees for services rendered to the Company are required to be accounted for based on the fair value of the services provided or the consideration issued. The compensation cost is to be measured based on the fair value of stock options granted, with the compensation cost being charged to operations. The stock-based compensation expense in respect of stock options granted to non-employees, under US GAAP, based upon the fair value of the options using a Black Scholes option pricing model, was $546,000 for the year ended September 30, 2002 (2001 - $109,000). For the year ended September 30, 2003, the fair value of stock options granted to non-employees is included in stock-based compensation expense in the statement of operations (note 8(d)).
(b)	Under Canadian GAAP, the present value of the convertible debenture disclosed in note 8(c) is presented as equity, whereas under US GAAP, would be presented as a long-term liability. Under Canadian GAAP, the accretion of the residual carrying value of the convertible debenture to the face value of the convertible debenture over the life of the debenture is charged directly to deficit. Under US GAAP, such accretion would be charged to operations.
(c)	In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations” (“SFAS 143”). SFAS 143 requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The Company also records a corresponding asset which is amortized over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation will be adjusted at the end of each period to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying the obligation (asset retirement cost). For purposes of the reconciliation, the Company adopted SFAS 143 effective October 1, 2002.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

Canadian GAAP requires the Company make an estimation of future site reclamation costs based on undiscounted future cash outflows. Previously, US accounting principles for asset retirement obligations were comparable to Canadian accounting principles.

Under US GAAP, on adoption of SFAS 143 on October 1, 2002, the Company would have recorded income of $11,651,262 million as the cumulative effect of the change in accounting principles, a net decrease of $2,282,954 to inventories, a net decrease of $10,154,214 to property, plant and equipment, and a decrease in the provision for site closure and reclamation of $24,088,430 to reflect the effect of this change in the method of accounting for asset retirement obligations compared to the amounts previously recorded in the Company’s financial statements prepared under Canadian and US GAAP.

For the year ended September 30, 2003, under US GAAP, the Company would have recorded a net increase of $861,157 in the provision for site closure and reclamation with respect to accretion, and a net decrease to depreciation expense of $668,606 as a result of the reduced cost to be amortized.

The continuity of the reserve for site closure and reclamation under US GAAP for the year ended September 30, 2003 would be as follows:

Balance, beginning of year	$	8,611,570
Liabilities incurred in the current year		–
Site closure and reclamation costs incurred		–
Accretion expense		861,157
Balance, end year	$	9,472,727

Effective October 1, 2004, the Company will be adopting the new Canadian accounting standard for asset retirement obligations, which is substantively the same as SFAS 143. On adoption of the Canadian standard, the amount of the adjustment to site closure and reclamation will be measured retroactively and recognized on October 1, 2004. Accordingly, the above difference between Canadian and United States accounting principles is expected to be eliminated for fiscal 2005 and future periods.

(d)

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

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

	adopted SFAS 144 on October 1, 2002, on a prospective basis, and there are no material differences between the treatment under Canadian and US GAAP.
(e)	Under Canadian income tax legislation, 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 issue of flow-through shares by crediting share capital for the amount of the proceeds received, in accordance with Canadian GAAP. For US GAAP, the premium paid in excess of the fair value of non-flow-through shares is credited to other liabilities and included in operations over the period in which the Company incurs the qualified expenditures. 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 and cash equivalents under US GAAP. As at September 30, 2003, unexpended flow-through funds were $1,584,000 (2002 and 2001– $Nil), which would be presented as "restricted cash" in current assets under US GAAP.
(f)	Under US GAAP, mineral properties without proven and probable reserves are classified as intangible assets, subject to amortization over the earlier of their useful life or the expiry of the mineral claim (without consideration of any renewal periods). Accordingly, the Harmony Property and the Prosperity Property are being amortized over ten years. This would have resulted in additional amortization expense of $2,881,230 (2002 -$2,881,230; 2001 - $nil). As at September 30, 2003 the accumulated amortization is $5,762,460 (2002 - $2,881,230). Under Canadian GAAP, mineral properties may be classified as capital assets and amortized once the mineral property is put into operation, or written off to operations when the property is abandoned or allowed to lapse, when the carrying value exceeds its fair value, or if there is little prospect of further exploration work being carried out.
(g)	Canadian GAAP allows the presentation of subtotals for "expenses" and "other items" in the consolidated statement of operations. No such subtotals would be presented under US GAAP.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

The material differences between Canadian GAAP and US GAAP are summarized below:

		Year ended			Year ended			Year ended
		September 30,			September 30,			September 30,
Consolidated Statements of Operations		2003			2002			2001
Loss for the year under Canadian GAAP	$	(3,510,513	)	$	(6,503,929	)	$	(58,161,524	)
Adjustments under US GAAP
Stock-based compensation (a)		–			(546,000	)		(109,000	)
Convertible debenture accretion expense (b)		(888,823	)		(808,021	)		(649,190	)
Depreciation (c)		668,606			–			–
Exploration (c)		4,858			–			–
Reclamation accretion expense (c)		(861,157	)		–			–
Amortization of flow-through share premium (e)		182,750			–			–
Amortization of mineral properties (f)		(2,881,230	)		(2,881,230	)		–
Income (loss) for the year under US GAAP before
cumulative effect of change in accounting policy		(7,285,509	)		(10,739,180	)		(58,919,714	)
Cumulative adjustment for change in accounting
policy for asset retirement obligations (c)		11,651,262			–			–
Income (loss) for the year under US GAAP	$	4,365,753		$	(9,931,159	)	$	(58,919,714	)
Income (loss) per share for the year under US GAAP	$	0.09		$	(0.35	)	$	(2.35	)
Diluted income (loss) per share for the year under US GAAP	$	0.09		$	(0.35	)	$	(2.35	)

		As at			As at
		September 30,			September 30,
Consolidated Balance Sheets		2003			2002
Total assets under Canadian GAAP	$	61,234,911		$	60,310,281
Adjustments under US GAAP
Supplies inventory (c)		(2,278,096	)		–
Property, plant and equipment (c)		(9,485,608	)		–
Accumulated amortization of mineral claims (f)		(5,762,460	)		(2,881,230	)
Total assets under US GAAP	$	43,708,747		$	57,429,051

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

		As at			As at
		September 30,			September 30,
Consolidated Balance Sheets		2003			2002
Total liabilities under Canadian GAAP	$	36,551,136		$	39,738,456
Adjustments under US GAAP
Convertible debenture presented as debt (b)		9,777,058			8,888,235
Reclamation liability (c)		(23,227,273	)		–
Premium on issuance of flow-through shares (f)		578,750			–
Amortization of flow-through share premium (f)		(182,750	)		–
Total liabilities under US GAAP	$	23,496,921		$	48,626,691
Total shareholders' equity under Canadian GAAP	$	24,683,775		$	20,571,825
Adjustments under US GAAP
Convertible debenture presented as debt (b)		(9,777,058	)		(8,888,235	)
Reclamation liability (c)		11,463,569			–
Premium on issuance of flow-through shares (e)		(578,750	)		–
Amortization of flow-through share premium (e)		182,750			–
Accumulated amortization of mineral claims (f)		(5,762,460	)		(2,881,230	)
Total shareholders' equity under US GAAP	$	20,211,826		$	8,802,360

	There are no material differences between Canadian GAAP and US GAAP in the consolidated statements of cash flows, except that for US GAAP restricted cash of $1,584,000 at September 30, 2003 would be excluded from cash and equivalents with a corresponding decrease in financing activities.
13.	Subsequent events Subsequent to September 30, 2003:
	(a)	6,700,000 units, consisting of one common share and one common share purchase warrant exercisable at $0.75 per share for a two year period, were issued at $0.60 per unit for gross proceeds of $4.02 million (note 8(b) and 8(e)).
	(b)	3,010,500 options were granted at exercise prices ranging from $0.55 to $1.65, and 850,000 options were exercised for gross proceeds of $0.39 million (note 8(d)).
	(c)	8,387,447 warrants were exercised for gross proceeds of $4.21 million (note 8(e)).
	(d)	the Company announced an agreement in principle, subject to definitive agreements and regulatory approval, to privately place 3,900,000 units at a price of $2.00 for gross proceeds of $7.8 million. Each unit consists of one common share and one common share purchase warrant exercisable at $2.25 per share for a one year period from issuance of the units.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the year ended September 30, 2003
(Expressed in Canadian Dollars)

(c) Gibraltar Reclamation Trust Limited Partnership (“GRTLP”) informed the Company that it closed a $18.6 million financing to partially fund a planned re-start of the Gibraltar Mine. Of the financing proceeds, approximately $17.1 million was contributed to a qualifying environmental trust, which permitted the Company to have the balance of the reclamation deposits of $16.7 million, held by the Government of British Columbia, released into trust to finance the re-start of the Gibraltar Mine. In addition, as required, the Company advanced $4.6 million into trust to assist with the re-start of the Gibraltar Mine. In connection with this transaction, the Company entered into a put/call option agreement with the limited partners of GRTLP whereby the Company may issue up to 8,661,395 common shares to acquire GRTLP.

EX-3.A4

TASEKO MINES LIMITED
(the “Company”)

CODE OF ETHICS

1.	Introduction and Purpose This Code of Ethics sets out the ethical and behavioural standards expected of the Company's directors, officers, employees and contractors. The purpose of the Code is to underpin and support the Company's vision and values that govern our individual and collective behaviour. The vision and values set out below are an integral part of the Company's Code of Ethics.
2.	The Company’s Corporate Focus The Company's focus is to be a successful, modern and sustained mineral exploration, development and mining corporation. To achieve this vision we include the following values in all our activities:
	•	responsibly explore for, develop and mine mineral resources;
	•	be respectful of the environment;
	•	be among the industry leaders and participate in industry organizations devoted to improving the industry;
	•	be a strong and honest competitor;
	•	be a responsible corporate citizen and contribute to the community;
	•	deal fairly with our customers, suppliers and joint venture participants;
	•	provide a safe and rewarding work environment; and
	•	deliver value to shareholders.
3.	Integrity and Objectivity We have an obligation to be straightforward, honest and sincere in our approach to our work and to avoid improper personal benefits as a result of our position. We have an obligation to ensure that our individual interests do not interfere, or appear to interfere, with the Company's interests. We will be impartial, intellectually and morally honest and minimize actual and perceived conflicts of interest. We will be fair and not allow prejudice or bias to override our objectivity.

- 2 -

	We will not have undisclosed and unapproved business relationships, including with joint venture participants, suppliers, customers or competitors, that might impair, or appear to impair, the independence of any judgement that we may make on behalf of the Company. We will not pay or accept any bribe, or other improper inducements in the course of our business dealings on behalf of the Company.
4.	Fair Dealing, Due Care We will honest and fair in our dealings with the Company's shareholders, joint venture participants, customers, suppliers, professional advisors, competitors and other stakeholders. We will maintain a high standard of competence, only undertaking work that we can expect to complete with professional capability. We will strive to complete our obligations and work with due care and in a timely manner in accordance with the high technical and professional standards appropriate to that work. We will use diligence in our recruitment and employment practices, and treat colleagues with respect and dignity.
5.	Use of Company Assets and Property We will endeavour to protect and insure, where reasonably practical, the Company's assets and property in our control for the legitimate business purposes of the Company, and will not use that property for any other purpose, including for personal gain.
6.	Use of Company Information We will use the Company's corporate information gained during our relationship with the Company only in the best interests of the Company and not for personal gain. We will keep the Company's corporate information confidential. We will trade our shares in the Company in compliance with all applicable laws and where required, will properly and timely report such trading. We will ensure that the Company provides full, true, plain and timely disclosure in reports and documents publicly disclosed, so that the public is properly informed and not misled by statements or omissions.
7.	Compliance with Laws, Regulations and Rules We will act honestly and in good faith, and comply with applicable laws, including legislation, regulations, local by-laws and Rules and codes of practice in the countries in

- 3 -

	which the Company operates or where it has registered issuer status. We will ensure that our exploration, development and mining practices not only comply with all applicable laws and regulations but strive to be among the “best in class” standards.
8.	Professional Behaviour, Compliance with Corporate Policies We will conduct ourselves, both at work and outside of business hours, in a manner consistent with the good reputation of the Company and refrain from any conduct that might bring discredit to the Company. In particular, all staff will refrain from taking any action that improperly influences, coerces, manipulates, or misleads the firm engaged in the performance of the audit of the financial statements of the Company (and subsidiaries). We will behave and conduct ourselves in a manner that is consistent with the Company's vision and values set out in this Code, and will comply with Corporate Policies.
9.	Compliance with Code of Ethics This Code forms part of every one of the Company's employees' conditions of employment and for all officers and directors as well. Failure to comply with the Code can result in disciplinary action including, where appropriate, dismissal. Compliance with this Code shall be taken into account on a regular basis when assessing individual performance. Failure of contractors to comply with this Code may result in termination of the contractor’s contract for services with the Company. If any person becomes aware of a breach, or suspected breach, of this Code, they must report it immediately to their manager and company secretary for action. If this is inappropriate or uncomfortable for the individual, the breach, or suspected breach, should be reported to another member of the senior management team and the Company secretary for action. No action will be taken against any individual reporting a breach, or suspected breach, by virtue of that report. Subject to any legal restriction, the name of the person disclosing the information pertaining to breach, or suspected breach, of this Code will be kept confidential.
10.	CEO and Senior Financial Officers The Sarbanes Oxley Act 2002 (USA) encourages all corporations subject to SEC regulations to maintain a code of ethics covering senior financial officers, including the CEO. The ethical and behavioural standards reflected in that Act are the basic tenets of ethical and professional conduct adopted by the Company in this Code for all its staff and contractors, and as such apply equally to the CEO and CFO, and any other senior finance staff.

EX-3.A5

JOINT VENTURE AGREEMENT

AMONG

GIBRALTAR MINES LTD.

AND

GIBRALTAR RECLAMATION TRUST LIMITED PARTNERSHIP

AND

TASEKO MINES LIMITED

December 30, 2003

Table of Contents

Description	Page #
ARTICLE 1 – INTERPRETATION	2
ARTICLE 2 – FORMATION OF THE JOINT VENTURE	6
ARTICLE 3 – CONTRIBUTIONS AND DEDICATION OF ASSETS	7
ARTICLE 4 – MANAGEMENT COMMITTEE	7
ARTICLE 5 – APPOINTMENT AND RENEWAL OF OPERATOR	9
ARTICLE 6 – RIGHTS, DUTIES AND STATUS OF OPERATOR	10
ARTICLE 7 – RESTARTING THE GIBRALTAR MINE	11
ARTICLE 8 – INFORMATION AND DATA	12
ARTICLE 9 – LIABILITY OF THE OPERATOR	12
ARTICLE 10 – INSURANCE	12
ARTICLE 11 – RELATIONSHIP OF PARTIES	13
ARTICLE 12 – SHARING OF PRODUCTION AND REVENUE	13
ARTICLE 13 – TASEKO SUPPORT	15
ARTICLE 14 – TERMINATION	15
ARTICLE 15 – NOTICE	16
ARTICLE 16 – GENERAL	16

Schedules
Schedule 1 -	Twelve-Year Mining Plan
Schedule 2 -	Property
Schedule 3 -	Mine Restarting Works/ Mine Restart Program
Schedule 4 -	Revenue Share

JOINT VENTURE AGREEMENT

THIS AGREEMENT made as of December 30, 2003

AMONG:

GIBRALTAR MINES LTD., a company incorporated under the laws of British Columbia

(“Gibraltar”)

AND:

GIBRALTAR RECLAMATION TRUST LIMITED PARTNERSHIP, a limited partnership formed under the laws of British Columbia

(“Gibraltar LP”)

AND:

TASEKO MINES LIMITED, a company incorporated under the laws of British Columbia

 (“Taseko”)

BACKGROUND:

A.	Gibraltar, a wholly-owned subsidiary of Taseko, owns the Gibraltar Mine (this term and all other defined terms in these Recitals are defined below in Article 1), which has been inactive since 1998, due to low copper prices.
B.	Gibraltar and the Gibraltar LP believe that, as a result of recent and anticipated increases in the price of copper, the operation of the Gibraltar Mine will soon become economic.
C.	Gibraltar and Gibraltar LP wish to establish this joint venture as a single purpose, limited duration joint venture for the purposes of funding and carrying out the work necessary to restart the Gibraltar Mine and, thereafter, sharing production and/or revenues from the Gibraltar Mine.
D.	Gibraltar has agreed to dedicate the Gibraltar Mine and the Mine Assets to the purposes of the Joint Venture.
E.	Gibraltar and the Gibraltar LP have agreed to contribute cash funding to accomplish the objectives of the Joint Venture.
F.	Taseko is a party to this Agreement for purposes of guaranteeing the performance by Gibraltar of its obligations hereunder.

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NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and of the mutual covenants and agreements herein contained the Parties hereto have agreed and do hereby agree as follows:

ARTICLE 1 – INTERPRETATION

1.1	In this Agreement the following words, phrases and expressions will have the following meanings:
	(a)	“Affiliate” will have the meaning attributed to it in the Company Act (British Columbia);
	(b)	“Agreement” means this Joint Venture Agreement, as amended from time to time;
	(c)	“Chairman” means the chairman of the Management Committee, as appointed pursuant to Section 4.7;
	(d)	“Change of Control” means:
		(i)	the acquisition by any Person or by Persons acting jointly or in concert (“acting jointly or in concert” as defined in Securities Act (British Columbia) as at the date of this Agreement) of a sufficient number of the voting rights attached to all outstanding voting securities of Taseko to affect materially the control of Taseko;
		(ii)	the acquisition by any Person or by Persons acting jointly or in concert of any right, option, warrant, convertible security or similar securities, that, if exercised, would give such Person or Persons a sufficient number of the voting rights attached to all outstanding voting securities of Taseko to materially affect the control of Taseko; or
		(iii)	a change of the composition of 50% or more of the board of directors of Taseko, unless such change is approved by the existing board of directors of Taseko,
		and for purposes of the foregoing, the holding of more than 20% of the outstanding voting securities of Taseko (or rights, options, warrants, convertible securities or similar securities that entitle the holders thereof, if exercised or converted or otherwise, as the case may be, to hold more than 20% of the voting securities of Taseko) will be deemed, in the absence of evidence to the contrary, to be a sufficient number of voting securities of Taseko to materially affect the control of Taseko;
	(e)	“Completion Date” means the date on which it is demonstrated to the satisfaction of the Management Committee in accordance with the Mine Restart Program and the Twelve-Year Mining Plan that the preparing and equipping of the Gibraltar

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	Mine for restarting open pit mining has been completed and that sustainable full production from the Gibraltar Mine has resumed;
(f)	“Gibraltar” means Gibraltar Mines Ltd.;
(g)	“Gibraltar LP” means Gibraltar Reclamation Trust Limited Partnership;
(h)	“Gibraltar Mine” means the open pit mine located 17 kilometres northeast of McLeese Lake, near Williams Lake, British Columbia in the Caribou Mining Division of British Columbia;
(i)	“Gibraltar Reclamation Trust” means a “qualifying environmental trust” within the meaning of the Income Tax Act (Canada) established pursuant to the terms and conditions of the Gibraltar Reclamation Trust Indenture, which trust was established subsequent to the establishment of this Joint Venture to secure and carry out the reclamation obligations of Gibraltar in respect of Gibraltar Mine;
(j)	“Gibraltar Reclamation Trust Indenture” means the Gibraltar Reclamation Trust Indenture among Gibraltar LP, Gibraltar, the Province and the Trustee to be dated on or about December of 2003;
(k)	“Joint Venture” means the joint venture formed between Gibraltar and Gibraltar LP pursuant to Article 2;
(l)	“Joint Venture Bank Account” means a bank account of the Joint Venture with HSBC Bank Canada in Vancouver, British Columbia;
(m)	“Management Committee” means the management committee established pursuant to Article 4;
(n)	“Material Default” means:
	(i)	the bankruptcy, insolvency, liquidation or dissolution of Gibraltar;
	(ii)	the occurrence of any event which would permit a trustee or receiver to administer the affairs of Gibraltar;
	(iii)	the failure by Gibraltar to meet its funding obligations pursuant to Section 3.3., where such default continues for 10 Business Days after receipt by Gibraltar from Gibraltar LP of written notice thereof;
	(iv)	the failure by Gibraltar to obtain the approval of the Management Committee in respect of major decisions pursuant to Section 4.1, where such default continues for 10 Business Days after receipt by Gibraltar from Gibraltar LP of written notice thereof; or

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(o)	the failure by Gibraltar to pay the Revenue Share to Gibraltar LP pursuant to Section 12.2, where such default continues for 10 Business Days after receipt by Gibraltar from Gibraltar LP of written notice thereof;
(p)	“Mine Assets” means all tangible and intangible goods, chattels, improvements or other items of the Gibraltar Mine, including, without limiting the generality of the foregoing, land (including the Property and other land, leases, permits and mineral interests), buildings and all mine equipment;
(q)	“Mine Restarting Works” means every kind of work necessary to restart open pit mining operations at the Gibraltar Mine done by or on behalf of the Operator on or in respect of the Property in accordance with the Mine Restart Program and the Twelve-Year Mining Plan, or as otherwise directed from time to time by the Management Committee, including:
	(i)	operating expenditures in respect of:
		A.	mine works (consisting of drilling, blasting, loading and hauling), haul roads, pit dewatering, portable crushers, general services and mine electrical expenditures;
		B.	mill works, consisting of general mill repairs, primary crushing, secondary crushing, grinding, flotation, dewatering, tailing disposal, reclaiming water, process control and moly circuit expenditures;
		C.	plant services, consisting of general plant works, salvage yard, fresh water system, yards, roads and fences, heating services, maintenance shops and building maintenance expenditures;
		D.	administration, consisting of general administration, employee benefits, warehouse, engineering and geology, employee relations, computer services, safety, training, effluent treatment and environmental monitoring;
		E.	expense projects, consisting of truck, grader, bulldozer, loader and service vehicles fuel and lubricants, engines, hydraulics, consumable wear items, chassis, cab and suspension, tires and chains, electrics, wheel motors and services purchased and plant services, including wall repairs, impact wrenches, tool crib restart and protective relaying;
		F.	mill repairs and maintenance for crushers, chutes, conveyers and cell feed boxes, grinding mill alarm and repairs, upgrade conveyer drives, surge tank agitators and conveyer belt repairs, repair/replace crusher and rod mill/regrind mill liners; and

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		G.	mill DCS system, preview maintenance contract and controller card, assay lab repairs, fresh water fire connection and tailings works;
	(ii)	capital expenditures in respect of the mine, consisting of shovels or undercarriages, five new or used 205 ton haul trucks, Pollyanna fuel farm and GPS survey equipment; and
	(iii)	capital expenditures in respect of the mill, consisting of primary dump pocket engineering, cyclone feed box, pump, moly circuit upgrade, closed loop air compressor reduction, mill pumpbox piping, mill reclaim gland water system and courier 6l analyzer,
	including, without limiting the generality of the foregoing, investigating, developing, property maintenance, preparing reports, estimates and studies, designing, equipping, improving, surveying, construction and mining, milling concentrating, rehabilitation, reclamation and environmental protection, as summarized in Schedule 3;
(r)	“Mine Restart Program” means the program to implement the Mine Restarting Works, as amended from time to time, a copy of which is attached as Schedule 3;
(s)	“Net Smelter Returns” means net smelter returns as defined Section 12.3;
(t)	“Operator” means the Party or other person appointed as the Operator in accordance with Article 5;
(u)	“Party” or “Parties” means the parties to this Agreement;
(v)	“Permit M-40” means Permit M-40 issued to Gibraltar with respect to the Gibraltar Mine on July 21, 1999, as amended;
(w)	“Person” means any individual, partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, trust, trustee, executor, administrator, or other legal personal representatives, regulatory body or agency, government or governmental agency, authority or entity howsoever designated or constituted;
(x)	“Property” means the mineral properties described in Schedule 2 (owned properties, leased properties and properties subject to mining claims) and any additional mineral properties that become part of the Property for the duration of this Agreement;
(y)	“Province” means Her Majesty the Queen in Right of the Province of British Columbia, as represented by the Minister of Energy and Mines;
(z)	“Revenue Share” means the revenue share or production share that Gibraltar LP is entitled to in accordance with Article 12;

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	(aa)	“Taseko” means Taseko Mines Limited;
	(bb)	“Trustee” means HSBC Trust Company (Canada);
	(cc)	“Twelve-Year Mining Plan” means the twelve-year mining plan dated March of 2003, which details the procedure for the restarting of the Gibraltar Mine for open pit mining, a copy of which is attached as Schedule 1; and
	(dd)	“$” means Canadian dollars.
1.2	The words “Article”, “Section”, “Subsection”, “herein” and “hereunder” refer to this Agreement. The words “this Agreement” include every Schedule attached hereto.
1.3	The captions and the emphases of the defined terms have been inserted for convenience and do not define the scope of any provision.
ARTICLE 2 – FORMATION OF THE JOINT VENTURE
2.1	The Parties hereby agree to participate together for the sole purpose of restarting the Gibraltar Mine for open pit mining in accordance with the terms and conditions of the Mine Restart Program and the Twelve-Year Mining Plan and sharing production and/or revenue therefrom (the “Joint Venture”).
2.2	Except as expressly provided in this Agreement, each Party will have the right to independently engage in and receive full benefits from business activities whether or not competitive with the Joint Venture without consulting any other Party. The doctrines of “corporate opportunity” or “business opportunity” will not be applied to any other activity, venture or operation of any Party with respect to any opportunity to acquire any assets outside of the Property at any time, or within the Property after the termination of this Agreement.
2.3	Gibraltar and Gibraltar LP expressly disclaim any intention to create a partnership or to carry on business together with a view to profit, nothing in this Agreement will constitute Gibraltar and Gibraltar LP as partners.
2.4	Neither Gibraltar nor Gibraltar LP will have, or represent to have the authority or power to act for or to undertake or create any obligation or responsibility, express or implied, on behalf of, or in the name of the other or will be, or represent that it is the agent or legal representative of the other, except as otherwise specifically provided in this Agreement or in any other written agreement executed by Gibraltar and Gibraltar LP.
2.5	Gibraltar and Gibraltar LP agree that each party will retain its separate interests in all property dedicated to the purposes of the Joint Venture and any residual interests in such property including the residual beneficial interest of Gibraltar LP in the Gibraltar Reclamation Trust and the interests of Gibraltar in the Mine Assets, and the Gibraltar Mine.

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ARTICLE 3 – CONTRIBUTIONS AND DEDICATION OF ASSETS
3.1	Gibraltar dedicates the Gibraltar Mine and the Mine Assets as of the date hereof to the purposes of the Joint Venture.
3.2	After the execution hereof, Gibraltar LP will contribute up to $32,700,000 to the Gibraltar Reclamation Trust pursuant to the terms and conditions of the Gibraltar Reclamation Trust Indenture.
3.3	Gibraltar agrees to fund up to a maximum of $25,756,560 of the Joint Venture expenses to be incurred to restart the Gibraltar Mine, estimated as of the date hereof to be $21,463,800, in accordance with the terms and conditions of the Twelve-Year Mining Plan, the Mine Restart Program and this Agreement, and will be solely responsible for funding all on-going maintenance cost of the Gibraltar Mine. Concurrently with the execution of this Agreement and the formation of the Joint Venture, Gibraltar will deposit or cause to be deposited $4,563,800 into the Joint Venture Bank Account and $16,900,000 into the Joint Venture Bank Account upon release of the equivalent amount of funds from existing reclamation security arrangements between Gibraltar and the Province. These funds will be invested at the discretion of the Operator and, in the event that either Gibraltar LP fails to settle the Gibraltar Reclamation Trust by December 31, 2003, or this Joint Venture terminates, such funds, or any remaining portion thereof, together with interest, will be returned to Gibraltar.
ARTICLE 4 – MANAGEMENT COMMITTEE
4.1	Gibraltar and Gibraltar LP will, forthwith on the execution of this Agreement, establish the Management Committee which will direct and control the operations of the Joint Venture and make, on behalf of the parties, all major decisions in respect of the Mine Restarting Works, including, without limitation:
	(a)	capital expenditure items requiring expenditures in excess of $50,000 in aggregate;
	(b)	Mine Restarting Works expenditures in excess of $50,000 in aggregate;
	(c)	the voluntary suspension of Mine Restarting Works, for more than 30 days in any 12 month period;
	(d)	the terms of engagement of the Operator, other than the agreed upon charges referred to in Article 5;
	(e)	the abandonment, sale or other disposition of any asset or series of related assets contributed by the Parties to the Joint Venture having an aggregate fair market value in excess of $50,000 in aggregate;
	(f)	the aggregate borrowing of secured or unsecured debt in excess of $50,000 in aggregate;

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	(g)	any decision to act or not to act which would breach any instrument or agreement under which title to the Property or any of the Assets is held;
	(h)	the entry into any material contract or commitment by the Operator with itself or an Affiliate which is not accompanied by evidence of the competitive nature of the pricing thereof;
	(i)	the settlement of any lawsuit, claim or demand involving an aggregate amount or value exceeding $10,000; and
	(j)	any material modification of the Mine Restart Program or the Twelve-Year Mining Plan.
4.2	Each of Gibraltar and Gibraltar LP will appoint two representatives to the Management Committee, which representatives may be replaced from time to time by the Party appointing them, at such Party’s sole discretion. For Gibraltar, Tom E. Milner and Bruce W. Jenkins are appointed representatives and for Gibraltar LP, Laird G. Branham and Donald W. Smetheram are appointed representatives. After the Completion Date, Gibraltar LP will be entitled to one representative on the Management Committee.
4.3	The Operator will call a Management Committee meeting at least once every month and, in any event, within 14 days of being requested to do so by any representative.
4.4	The Operator will give notice specifying the time, place of and the agenda for the meeting to all representatives at least two days before the time appointed for the meeting.
4.5	Notice of a meeting will not be required if all representatives are present and unanimously agree upon the agenda.
4.6	A quorum for any Management Committee meeting will be present if the representatives of each of Gibraltar and Gibraltar LP are present. If a quorum is present at the meeting, the Management Committee will be competent to exercise all of the authority, power and discretion herein bestowed upon it. The Management Committee will not transact any business at a meeting unless a quorum is present at the commencement of the meeting and the quorum must be present throughout the meeting. A meeting at which a quorum is not present will be adjourned to the same time and place as the adjourned meeting one week later, at which adjourned meeting the quorum will be one representative of each of Gibraltar and Gibraltar LP.
4.7	Prior to the Completion Date, a representative of Gibraltar LP will be the Chairman of Management Committee meetings, and has the sole discretion to reappoint such Chairman from time to time. After the Completion Date, a representative of Gibraltar will be the chairman of Management Committee meetings, and has the sole discretion to reappoint such Chairman from time to time.
4.8	The Management Committee will decide every question submitted to it by a vote with each Party’s representative being entitled to cast one vote. The Management Committee

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	will make all decisions by majority vote. The Chairman will have the casting vote in the event of a deadlock.
4.9	The secretary of the Management Committee will be appointed by the Chairman and will take minutes of that meeting and circulate copies thereof to each representative.
4.10	The Management Committee may make decisions by obtaining the consent in writing of the representatives of all Parties which consent may be in one or more counterparts which together will be deemed to constitute one consent. Any decision so made will be as valid as a decision made at a duly called and held meeting of the Management Committee.
4.11	Management Committee decisions made in accordance with this Agreement will be binding upon all of the Parties.
4.12	The Management Committee will approve appropriate fee compensation for the services of the Operator.
4.13	Each Party will bear the expenses incurred by its representatives in attending meetings of the Management Committee.
4.14	The Management Committee may establish such other rules of procedure, not inconsistent with this Agreement, as the Management Committee deems fit.
ARTICLE 5 – APPOINTMENT AND RENEWAL OF OPERATOR
5.1	Gibraltar and Gibraltar LP agree to designate Gibraltar as the Operator of the Joint Venture for GST purposes and to file form GST 21E with Canada Customs and Revenue Agency as required.
5.2	Gibraltar will be the Operator until it:
	(a)	resigns pursuant to Section 5.3; or
	(b)	is removed by the Management Committee pursuant to Section 5.4,
	and a successor is appointed by the Parties hereto.
5.3	The Operator may resign as Operator by giving notice (the “Resignation Notice”) to all of the Parties at least 90 days before its resignation, provided however that such resignation will not be effective until a successor Operator is appointed. The Parties will upon receipt of the Resignation Notice and acting reasonably select another Operator not later than the 90th day after receipt of the previous Operator’s notice of resignation. Notwithstanding the foregoing, the Operator will remain as Operator until such time as a new Operator is appointed by the Parties.
5.4	The Management Committee may remove an Operator by six months notice in writing and will appoint a new Operator. If the Operator has failed to perform in a manner that is consistent with the industry standards in the mining industry or is in default of its duties

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	and responsibilities under this Agreement and the Management Committee or another Party has given to the Operator written notice setting forth particulars of the Operator’s default and the Operator has not within 30 days of such notice commenced to remedy the default and thereafter to proceed continuously and diligently to complete all required remedial action, the other Party will become the Operator.
5.5	Upon the Operator making a voluntary or involuntary assignment into bankruptcy or taking advantage of any legislation for the winding-up or liquidation of the affairs of insolvent or bankrupt companies, the Operator will automatically cease to be the Operator and the other Party who is not the Operator or its nominee, will be appointed as Operator.
5.6	The new Operator will assume all of the rights, duties, liabilities and status of Operator as provided in this Agreement. The new Operator will have no obligation to hire any employees of the former Operator.
5.7	Upon ceasing to be Operator, the former Operator will forthwith deliver to the new Operator, the custody of all Assets, Property, books, records and other property both real and personal relating to this Agreement.
ARTICLE 6 – RIGHTS, DUTIES AND STATUS OF OPERATOR
6.1	The Operator in its operations hereunder will be deemed to be an independent contractor. The Operator will not act or hold itself out as agent for any of the Parties nor make any commitments on their individual behalf, unless specifically permitted by this Agreement or directed in writing by such Party.
6.2	Subject to any specific provision of this Agreement and subject to it having the right to reject any direction on reasonable grounds by virtue of its status as an independent contractor, the Operator will perform its duties hereunder in accordance with the Mine Restart Program, the Twelve-Year Mining Plan and this Agreement.
6.3	The Operator will manage and carry out such Mine Restarting Works as set out in the Mine Restart Program, the Twelve-Year Mining Plan and this Agreement and as the Management Committee may direct from time to time and in connection therewith will notify the Parties of any change in Mine Restarting Works which the Operator considers material and, if it is not reasonably possible, the Operator will notify the Parties so soon thereafter as is reasonably possible.
6.4	Subject to Section 4.1, the Operator will have the exclusive authority to make all decisions relating to the day-to-day operations at the Gibraltar Mine.
6.5	Subject to Section 4.1, the Operator will have the sole and exclusive right and authority to manage and carry out all Mine Restarting Works and to enter into contracts and subcontracts on behalf of the Joint Venture with third parties in respect thereof and incur the costs required for that purpose. In so doing the Operator will, unless it obtains the approval of the Management Committee:

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	(a)	comply with the provisions of all agreements or instruments of title under which the Property or Assets are held;
	(b)	pay all costs properly incurred promptly as and when due;
	(c)	prosecute claims or, where a defence is available, defend litigation arising out of the Mine Restarting Works provided that any Party may join in the prosecution or defence at its own expense;
	(d)	perform such assessment work or make payments in lieu thereof and pay such rentals, taxes or other payments and do all such other things as may be necessary to maintain the Property in good standing including, without limiting the generality of the foregoing, staking and restaking mining claims, and applying for licenses, leases, grants, concessions, permits, patents and other rights to and interests in the minerals; and
	(e)	maintain accounts in accordance with accounting principles generally accepted and consistently applied in the mining industry in Canada.
6.6	Subject to Section 4.1, the Operator will be entitled to make all operational decisions with respect to the methods and extent of mining and processing of ore, concentrate and metal produced from the Gibraltar Mine (for example, without limitation, the decision to process by heap leaching rather than conventional milling).
6.7	The Operator will, at all times, perform its duties and obligations hereunder in a sound and workmanlike manner in accordance with sound mining and engineering practices and in substantial compliance with all applicable federal, state, provincial, territorial and municipal laws, by-laws, ordinances, rules and regulations and this Agreement.
ARTICLE 7 – RESTARTING THE GIBRALTAR MINE
7.1	Upon a decision by the Board of Directors of Taseko to re-start the Gibraltar Mine, without limitation, the Operator will carry out on behalf of the Joint Venture, all works and undertakings necessary to restart the Gibraltar Mine in accordance with the Mine Restart Program and the Twelve-Year Mine Plan including the following:
	(a)	hiring and training of qualified operating personnel, including negotiation of union contracts, if applicable;
	(b)	preparing, inspecting, upgrading and repairing all equipment, including shovels, trucks, earth-moving equipment and all other equipment;
	(c)	inspecting, upgrading and repairing all mine and plant buildings, including roads and the SX-EW plant;
	(d)	purchasing any additional equipment required;

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	(e)	securing transportation, storage, loading, unloading and processing services for the copper concentrate; and
	(f)	administrative services, including hiring and training a personnel, upgrades to computer equipment and software, insurance arrangements and the formulation of employee benefit plans.
ARTICLE 8 – INFORMATION AND DATA
8.1	At all times during this Agreement, the duly authorized representatives of each Party will, at its and their sole risk and expense and at reasonable intervals and times, have access to the Property and to all technical records and other factual engineering data and information relating to the Property which is in the possession of the Operator.
8.2	The Operator will furnish the Parties with monthly progress reports and with a final report within thirty days of the Completion Date. The final report will show the Mine Restart Program completed and any other changes or developments affecting the Gibraltar Mine that the Operator considers are material.
ARTICLE 9 – LIABILITY OF THE OPERATOR
9.1	The Operator will indemnify and save Gibraltar LP and its officers, employees or agents harmless from and against any loss, liability, claim, demand, damage, expense, injury or death, including, without limiting the generality of the foregoing, legal fees, resulting from any acts or omissions of the Operator or its officers, employees or agents and any reclamation obligations in respect of the Gibraltar Mine whatsoever.
9.2	Notwithstanding the foregoing, Gibraltar LP will not be indemnified or held harmless by any of the Parties for any loss, liability, claim, damage, expense, injury or death, including, without limiting the generality of the foregoing, legal fees, resulting from the gross negligence or wilful misconduct of Gibraltar LP or its officers, employees or agents.
9.3	Gibraltar LP and its officers, employees or agents will not be liable to any other Party nor will any Party be liable to the Gibraltar LP and its officers, employees or agents in contract, tort or otherwise for special or consequential damages, including, without limiting the generality of the foregoing, loss of profits or revenues.
ARTICLE 10 – INSURANCE
10.1	The Operator will, at all times, place and maintain with a reputable insurer or insurers such insurance as is the industry standard in order to protect the Parties together with such other insurance as any Party may by notice reasonably request, and will have Gibraltar LP named as a named insured on such insurance policies, as its interest may appear. The Operator will, upon the written request of any Party, provide it with evidence of that insurance.

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10.2	A Party may place, for its own account, insurance for greater or other coverage than that placed by the Operator.
ARTICLE 11 – RELATIONSHIP OF PARTIES
11.1	The rights, duties, obligations and liabilities of the Parties will be several and not joint nor joint and several.
11.2	Nothing herein contained will be construed as creating a partnership of any kind or as imposing upon any Party any partnership duty, obligation or liability to any other Party.
11.3	No Party will, except when required by this Agreement or by any law, by-law, ordinance, rule, order or regulation, use, suffer or permit to be used, directly or indirectly, the name of any other Party for any purpose related to the Property.
ARTICLE 12 – SHARING OF PRODUCTION AND REVENUE
12.1	Subject to this Section 12.2, Gibraltar will be entitled to all production from the Gibraltar Mine and to all proceeds from the sale of such production.
12.2	Gibraltar LP will be entitled to a revenue share (“Revenue Share”) of production from the Gibraltar Mine equal to a maximum 20% Net Smelter Return for a term commencing on the Completion Date of production from the Gibraltar Mine in accordance with the Revenue Share percentages set out in Schedule 4 and terminating after twelve years and, thereafter, to a Revenue Share equal to 3% Net Smelter Return for the succeeding 5 years. Gibraltar LP will be entitled to take its Revenue Share in kind as an equivalent value of production.
12.3	For the purposes of determining the Revenue Share, “Net Smelter Returns” will be calculated by taking the gross revenues from the sale of all ore mined from the Gibraltar Mine and from the sale of concentrate and metal derived from ore mined at the Gibraltar Mine, and deducting therefrom:
	(a)	all smelting and refining costs, sampling, assaying and treatment charges and penalties, including but not limited to metal losses, penalties for impurities and charges for refining, selling and handling by the smelter, refinery or other purchaser (including price participating charges by smelters and by refiners);
	(b)	costs of handling, transporting, securing and insuring such material from the Gibraltar Mine or from a concentrator, whether situated on or off the Gibraltar Mine, to a smelter, refinery or other place of treatment, and in the case of gold or silver concentrates, security costs;
	(c)	ad valorem taxes and taxes based upon sales or production, but not income taxes; and

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	(d)	marketing costs, including sales commissions paid to arm’s length parties in amounts that are in accordance with rates customary in the industry, incurred in selling ore, concentrate and metal produced from the Gibraltar Mine.
	For the purposes of determining Net Smelter Returns, all receipts and disbursements in a currency other than Canadian will be converted into Canadian currency on the day of receipt or disbursement, as the case may be.
12.4	Gibraltar will provide to Gibraltar LP a quarterly report commencing on completion of the full first quarter, and within 30 days of each quarter thereafter, following the recommencement of commercial production at the Gibraltar Mine, which will include the calculation of production from the Gibraltar Mine, Net Smelter Returns and the Revenue Share for such period, determined in accordance with this Section, certified to be correct by the Chief Executive Officer and the Chief Financial Officer of Gibraltar and of Taseko.
12.5	Payments on account of the Revenue Share will be made by Gibraltar to Gibraltar LP on a quarterly basis in Canadian dollars at a Canadian chartered bank designated by Gibraltar LP, from time to time (the “Payment Bank”), commencing with the month end date that is not more than three months after the date of the first commercial shipment of production from the Gibraltar Mine.
12.6	If the Payment Bank (or any successor bank) fails, liquidates or is succeeded by another bank, or for any reason fails or refuses to accept any payment, Gibraltar will not be held in default for failure to make such payment until 30 days after Gibraltar LP has notified Gibraltar of the name of another bank which will act as Gibraltar LP’s agent to receive the payments.
12.7	Gibraltar may, but will not be under any duty to, engage in price protection (hedging) or speculative transactions such as futures contracts and commodity options in its sole discretion covering all or part of production from the Gibraltar Mine and, except in the case where products are actually delivered and a sale is actually consummated under this price protection or speculative transactions, neither the profits or losses from such transactions will be taken into account in calculating Net Smelter Returns or any interest therein.
12.8	Gibraltar will ensure that reasonable practices and procedures are adopted and employed for weighing, determining moisture content, sampling and assaying and determining recovery factors.
12.9	Gibraltar LP will be entitled, from time to time, to review all of the books and records in the possession of or under the control of Gibraltar or Taseko in respect of the Revenue Share, and to conduct an audit of all such books and records. If Gibraltar LP undertakes any such review or audit, each of Gibraltar and Taseko will provide, to Gibraltar LP or its agent, all books and records in the possession of or under the control of Gibraltar or Taseko and that are relevant to such review and audit. If, as a result of such review and audit, and amount is determined to be payable by Gibraltar to Gibraltar LP in respect of

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	the Revenue Share that exceeds the amounts that have been paid by Gibraltar to Gibraltar LP in respect of the Revenue Share by three per cent (3%), Gibraltar will pay and reimburse and indemnify and save Gibraltar LP harmless from all costs and expenses incurred by Gibraltar LP in the conduct of such review and audit.
12.10	All amounts payable by Gibraltar to Gibraltar LP under this Article 12 which are not paid when due will bear interest at the prime rate from time to time of HSBC Bank Canada (calculated and compounded monthly) from the date such amounts are to be paid until such amounts, and interest as aforesaid, are paid.
ARTICLE 13 – TASEKO SUPPORT
13.1	Taseko hereby consents and agrees to the terms, covenants, provisions, stipulations, conditions and representations and warranties of Gibraltar contained in this Agreement and becomes a party to this Agreement severally as well as jointly in the same manner and to the same extent as if Taseko were a party hereto, and without restricting the generality hereof, Taseko covenants and agrees to observe and perform all of the covenants and provisions contained herein and on the part of Gibraltar herein to be observed and performed. Taseko agrees with Gibraltar LP that Taseko will, under this Section, be and be deemed to be a party to the Agreement as if Taseko had executed the same as “Gibraltar” herein and not merely a surety and, accordingly, Taseko will not be discharged nor will the liability of Taseko be affected by any giving of time or substitution of any new covenant or any variation expressed or implied in any of the terms or provisions of the Agreement or any omissions on the part of Gibraltar LP to enforce any covenant or stipulation contained in the Agreement and on the part of Gibraltar to be performed or observed, or any arrangement or dealing between Gibraltar and Gibraltar LP or the performance or observance of any of Gibraltar LP’s covenants herein contained, or any other act or thing or omission or means whereby the liability of Taseko or a party would not have been discharged, nor will Taseko be entitled to any previous demands or notice of any kind.
13.2	Taseko will use all commercially reasonable efforts to cause Gibraltar to satisfy its duties to carry out obligations under this Agreement to the extent that the same are under its control.
ARTICLE 14 – TERMINATION
14.1	The Joint Venture and this Agreement will terminate on the earlier of the following to occur:
	(a)	August 1, 2004, if the Gibraltar Mine has not been restarted by such date;
	(b)	a Change of Control, but only on the election of Gibraltar LP;
	(c)	a Material Default, but only on the election of Gibraltar LP;
	(d)	the expiration of Gibraltar LP’s Revenue Share as provided in Section 12.2; or

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	(e)	the bankruptcy, insolvency, liquidation or dissolution of Gibraltar LP or the occurrence of any other event which would permit a trustee or receiver to administer the affairs of Gibraltar LP.
ARTICLE 15 – NOTICE
15.1	Any notice, direction or other instrument required or permitted to be given under this Agreement will be in writing and will be given by the delivery of same or by sending it by telecopier or other similar form of communication, in each case addressed to the intended recipient at the address of the respective Party set out on the first page hereof.
15.2	Any notice, direction or other instrument aforesaid will, if delivered, be deemed to have been given and received on the day it was delivered, and, if sent by telecopier or other similar form of communication, on the day it was actually received.
15.3	Any Party may, at any time, give notice in writing to the others of any change of address, and from and after the giving of such notice, the address therein specified will be deemed to be the address of such Party for the purposes of giving notice hereunder.
ARTICLE 16 – GENERAL
16.1	No waiver of any breach of this Agreement will be binding unless evidenced in writing executed by the Party against whom waiver is claimed. Any waiver will extend only to the particular breach so waived and will not limit any rights with respect to any future breach.
16.2	This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof. An amendment or variation of this Agreement will only be binding upon a Party if evidenced in writing executed by that Party.
16.3	Unless earlier terminated by agreement of Gibraltar and Gibraltar LP, the Joint Venture and this Agreement will remain in full force and effect until the Completion Date.
16.4	Time is of the essence of this Agreement.
16.5	This Agreement will enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

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16.6 This Agreement will be governed by and interpreted in accordance with the laws of British Columbia and the laws of Canada applicable therein and the Parties hereto irrevocably attorn to the jurisdiction of the courts of British Columbia.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first above written.

GIBRALTAR MINES LTD.

By:

GIBRALTAR RECLAMATION TRUST
LIMITED PARTNERSHIP, By Its General
Partner, Gibraltar Reclamation Trust Limited

By:

TASEKO MINES LIMITED

By:

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SCHEDULE 1

TWELVE-YEAR MINING PLAN

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SCHEDULE 2

PROPERTY

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SCHEDULE 3

MINE RESTARTING WORKS/ MINE RESTART PROGRAM

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SCHEDULE 4

REVENUE SHARE PERCENTAGES

Amount of Gross Subscriptions for Units in Gibraltar LP	Percentage of Net Smelter Returns
Less than $19,000,000	11%
Less than $20,000,000	11%
Less than $21,000,000	12%
Less than $22,000,000	13%
Less than $23,000,000	13%
Less than $24,000,000	14%
Less than $25,000,000	14%
Less than $26,000,000	15%
Less than $27,000,000	15%
Less than $28,000,000	16%
Less than $29,000,000	16%
Less than $30,000,000	17%
Less than $31,000,000	18%
Less than $32,000,000	18%
Less than $33,000,000	19%
Less than $34,000,000	19%
Equal to or greater than 34,000,000	20%

EX-3.A6

PUT/CALL OPTION AGREEMENT

AMONG

TASEKO MINES LIMITED

AND

THE LIMITED PARTNERS FROM TIME TO TIME OF THE GIBRALTAR
RECLAMATION TRUST LIMITED PARTNERSHIP, AS REPRESENTED BY THEIR
AGENT AND ATTORNEY, GIBRALTAR RECLAMATION TRUST LIMITED

December 30, 2003

Table of Contents

Description		Page #
ARTICLE 1 DEFINITIONS AND INTERPRETATION		1
1.1	DEFINITIONS.	1
1.2	INTERPRETATION.	5
1.3	PROPER LAW.	6
ARTICLE 2 CALL OPTION		6
2.1	GRANT OF CALL OPTION.	6
2.2	EXERCISE OF CALL OPTION.	6
2.3	EXERCISE PRICE.	6
2.4	PAYMENT OF CALL OPTION EXERCISE PRICE.	7
2.5	TERMINATION	7
2.6	ACKNOWLEDGEMENT BY THE LIMITED PARTNERS.	7
2.7	CALL OPTION CLOSING.	7
2.8	CALL OPTION CLOSING PROCEDURE.	7
ARTICLE 3 PUT OPTION		8
3.1	GRANT OF PUT OPTION	8
3.2	EXERCISE OF PUT OPTION	9
3.3	PUT OPTION EXERCISE PRICE.	9
3.4	PAYMENT OF PUT OPTION EXERCISE PRICE	9
3.5	TERMINATION	10
3.6	ACKNOWLEDGEMENT BY THE LIMITED PARTNERS.	10
3.7	PUT OPTION CLOSING	10
3.8	PUT OPTION CLOSING PROCEDURE	10
3.9	PRE-EMPTIVE RIGHT OF TASEKO	11
3.10	PUT OPTION ANTI-DILUTION	12
ARTICLE 4 ARRANGEMENT		14
4.1	COVENANT TO UNDERTAKE ARRANGEMENT	14
4.2	ADDITION COVENANTS OF TASEKO	14
4.3	COVENANTS OF GRT LTD.	15
ARTICLE 5 REPRESENTATIONS AND WARRANTIES AND COVENANTS		16
5.1	TASEKO’S REPRESENTATIONS AND WARRANTIES.	16
5.2	COVENANTS OF TASEKO	19
5.3	LIMITED PARTNERS REPRESENTATIONS AND WARRANTIES	21
ARTICLE 6 GENERAL		21
6.1	SURVIVAL OF REPRESENTATIONS.	21
6.2	NOTICES.	21
6.3	TIME OF ESSENCE.	22
6.4	FURTHER ASSURANCES.	22
6.5	BENEFIT AND BINDING NATURE OF THE AGREEMENT.	22
6.6	WAIVERS.	23
6.7	ASSIGNMENT.	23
6.8	ENTIRE AGREEMENT	23
6.9	AMENDMENT.	23
6.10	COUNTERPARTS	23

PUT/CALL OPTION AGREEMENT

THIS AGREEMENT made as of the 30th day of December, 2003

AMONG:

TASEKO MINES LIMITED, a company incorporated under the laws of British Columbia and having its principal place of business in Vancouver, British Columbia

(“Taseko”)

AND:

The LIMITED PARTNERS from time to time of the GIBRALTAR RECLAMATION TRUST LIMITED PARTNERSHIP (the “Gibraltar LP”), as represented by their agent and attorney GIBRALTAR RECLAMATION TRUST LIMITED (“GRT Ltd.”), the GENERAL PARTNER OF THE PARTNERSHIP

(the “Limited Partners”)

BACKGROUND:

A.	Gibraltar, a wholly-owned subsidiary of Taseko, owns the Gibraltar Mine (this term and all other defined terms in these Recitals are defined below) which has been inactive since 1998, due to low copper prices.
B.	Gibraltar and the Gibraltar LP believe that, as a result of recent and anticipated increases in the price of copper, the operation of the Gibraltar Mine will soon become economic.
C.	Gibraltar and Gibraltar LP have agreed pursuant to the Joint Venture Agreement to fund and carry out the work necessary to re-start the Gibraltar Mine.

     NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of $10 now paid by each party to the other (the receipt and sufficiency of which is hereby acknowledged) and for other good and valuable consideration, the parties agree as follows:

ARTICLE 1

DEFINITIONS AND INTERPRETATION

1.1               Definitions.

In this Agreement, unless there is something in the subject matter inconsistent therewith:

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(a)	“Affiliate” has the meaning ascribed thereto in the Securities Act (British Columbia);
(b)	“Alternate Transaction” means the public announcement of any amalgamation, merger or other form of business combination involving Taseko, any sale, lease, exchange or transfer of all or a substantial portion of the assets of Taseko (on a consolidated basis), or any takeover bid, reorganization, recapitalization, liquidation or winding-up of or other business combination or transaction involving Taseko with any Person;
(c)	“Arrangement” has the meaning set forth in Section 4.1;
(d)	“Associate” has the meaning ascribed thereto in the Securities Act (British Columbia)
(e)	“Business Day” means any day other than a Saturday, Sunday or a day that is a statutory holiday in British Columbia;
(f)	“Call Option” has the meaning set forth in Section 2.1;
(g)	“Call Option Closing” has the meaning set forth in Section 2.7;
(h)	“Call Option Closing Date” has the meaning set forth in Section 2.7
(i)	“Call Option Exercise Price” has the meaning set forth in Section 2.3;
(j)	“Call Option Notice” means the written notice by Taseko to GRT Ltd., as agent for and on behalf of the Limited Partners, of its intention to exercise the Call Option, as further defined in Section 2.2;
(k)	“Call Option Period” means from and including March 1, 2004 to and including December 31, 2004;
(l)	“Change of Control” means:
	(i)	the acquisition by any Person or by Persons acting jointly or in concert (“acting jointly or in concert” as defined in Securities Act (British Columbia) as at the date of this Agreement) of a sufficient number of the voting rights attached to all outstanding voting securities of Taseko to affect materially the control of Taseko;
	(ii)	the acquisition by any Person or by Persons acting jointly or in concert of any right, option, warrant, convertible security or similar securities, that, if exercised, would give such Person or Persons a sufficient number of the voting rights attached to all outstanding voting securities of Taseko to materially affect the control of Taseko; or

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	(iii)	a change of the composition of 50% or more of the board of directors of Taseko, unless such change is approved by the existing board of directors of Taseko,
	and for purposes of the foregoing, the holding of more than 20% of the outstanding voting securities of Taseko (or rights, options, warrants, convertible securities or similar securities that entitle the holders thereof, if exercised or converted or otherwise as the case may be, to hold more than 20% of the voting securities of Taseko) will be deemed, in the absence of evidence to the contrary, to be a sufficient number of voting securities of Taseko to materially affect the control of Taseko;
(m)	“Circular” has the meaning set forth in Section 4.2(b);
(n)	“Company Act” means the Company Act (British Columbia), as amended or replaced from time to time;
(o)	“Contribution” means the actual contribution of up to $32,700,000 made by Gibraltar LP to settle the Gibraltar Reclamation Trust pursuant to the Gibraltar Reclamation Trust Indenture and pursuant to the Joint Venture Agreement;
(p)	“Disinterested Limited Partners” means the Limited Partners who are not directors, officers, employees or consultants of Taseko or any Affiliate of Taseko or any Associate of any such Person;
(q)	“Extraordinary Resolution” means a resolution passed, at a duly constituted meeting of the Limited Partners, or any adjournment thereof, by Disinterested Limited Partners holding not less than 66 2/3% of the Units voted in respect of such resolution, or a resolution consented to in writing by Disinterested Limited Partners representing not less than 66 2/3% of the Units outstanding who would have been entitled to vote on the resolution at a meeting of Limited Partners duly called and constituted;
(r)	“Final Order” has the meaning set forth in Section 4.2(d);
(s)	“Financial Statements” has the meaning set forth in Section 5.1(o);
(t)	“Gibraltar” means Gibraltar Mines Ltd.;
(u)	“Gibraltar LP” means Gibraltar Reclamation Trust Limited Partnership;
(v)	“Gibraltar Mine” means the mine located 17 Kilometres Northeast of McLeese Lake, near Williams Lake, British Columbia, in the Cariboo Mining Division of British Columbia;
(w)	“Gibraltar Reclamation Trust” means a “qualifying environmental trust” within the meaning of the Income Tax Act (Canada) established to secure and carry out

- - 4 -

	reclamation obligations in respect of Gibraltar Mine, as established pursuant to the terms and conditions of the Gibraltar Reclamation Trust Indenture;
(x)	“Gibraltar Reclamation Trust Indenture” means the Gibraltar reclamation trust indenture among Gibraltar, Gibraltar LP, the Trustee and the Province dated December of 2003;
(y)	“GRT Ltd.” means Gibraltar Reclamation Trust Limited, the General Partner of the Gibraltar LP;
(z)	“Interim Order” has the meaning set forth in Section 4.2(a);
(aa)	“Joint Venture Agreement” means the joint venture agreement between Gibraltar and Gibraltar LP dated as of December of 2003;
(bb)	“Limited Partners” means the limited partners of Gibraltar LP;
(cc)	“Material Default” has the meaning set forth in Section 1.1(n) of the Joint Venture Agreement;
(dd)	“Minimum Price” has the meaning set forth in Section 3.4;
(ee)	“Person” means any individual, partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, trust, trustee, executor, administrator, or other legal personal representatives, regulatory body or agency, government or governmental agency, authority or entity howsoever designated or constituted;
(ff)	“Province” means Her Majesty the Queen in Right of the Province of British Columbia, as represented by the Minister of Energy and Mines;
(gg)	“Public Record” has the meaning set forth in Section 5.1(l);
(hh)	“Put Option” has the meaning set forth in Section 3.1;
(ii)	“Put Option Closing” has the meaning set forth in Section 3.7;
(jj)	“Put Option Closing Date” has the meaning set forth in Section 3.7;
(kk)	“Put Option Exercise Price” has the meaning set forth Section 3.3;
(ll)	“Put Option Notice” means the written notice by GRT Ltd., as agent and attorney on behalf of the Limited Partners, to Taseko of its intention to exercise the Put Option, as further defined in Section 3.2;
(mm)	“Put Option Period” means from and including April 1, 2004, unless prior to such date an Alternative Transaction, Change of Control or Material Default occurs in which case such period commences immediately upon the happening of such event, to and including December 31, 2004 (provided that in the event of an

- - 5 -

	Alternative Transaction that is not completed prior to April 1, 2004, the Put Option Period will continue to December 31, 2004 and the Put Option will be deemed not to have been exercised);
(nn)	“Reporting Jurisdictions” has the meaning set forth in Section 5.1(e);
(oo)	“Taseko Meeting” has the meaning set forth in Section 4.2(a);
(pp)	“Taseko Shareholders” has the meaning set forth in Section 4.2(a);
(qq)	“Taseko Shares” means the Common shares in the capital of Taseko, as constituted as of the date hereof, and any shares of Taseko into which such shares may be converted, exchanged or otherwise changed from time to time, and the shares of any successor to Taseko for which such Taseko Shares may be exchanged as a result of any amalgamation, merger, consolidation, arrangement or other form of corporate reorganization;
(rr)	“Triumvir” means Triumvir Capital Corporation;
(ss)	“Trustee” means HSBC Trust Company (Canada); and
(tt)	“Units” means the units of Gibraltar LP.

1.2	Interpretation.
For the purposes of this Agreement, except as otherwise provided herein:
	(a)	“this Agreement” means this put/call agreement;
	(b)	all references in this Agreement to a designated article, section, subsection, paragraph, or other subdivision, is to the designated article, section, subsection, paragraph or other subdivision of this Agreement unless otherwise specifically stated;
	(c)	the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, subsection or other subdivision;
	(d)	the singular of any term includes the plural and vice versa and the use of any term is equally applicable to any gender and where applicable to a body corporate;
	(e)	the word “or” is not exclusive and the word “including” is not limiting (whether or not non-limiting language such as “without limitation” or “but not limited to” or other words of similar import are used with reference thereto);
	(f)	the headings to the sections of this Agreement are inserted for convenience only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof;

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(g)	any reference to a corporate entity includes and is also a reference to any corporate entity that is a successor to such entity; and
(h)	the parties acknowledge that this Agreement is the product of arm’s length negotiation between the parties, each having obtained its own independent legal advice, and that this Agreement will be construed neither strictly for nor strictly against any party irrespective of which party was responsible for drafting this Agreement.

1.3               Proper Law.

This Agreement will be construed and enforced in accordance with, and the rights of the parties will be governed by the laws of British Columbia and the laws of Canada applicable therein.

ARTICLE 2

CALL OPTION

2.1               Grant of Call Option.

The Limited Partners hereby grant to Taseko an option to purchase all, but not less than all, of the issued Units (the “Call Option”) during the Call Option Period for the Call Option Exercise Price pursuant to the provisions of this Article 2, which Call Option may be exercised by Taseko at its absolute discretion. Taseko has the further right to exercise the Call Option pursuant to Section 3.9.

2.2               Exercise of Call Option.

The Call Option may be exercised by Taseko providing to GRT Ltd., as agent on behalf of the Limited Partners, written notice stating Taseko’s intention to exercise the Call Option (the “Call Option Notice”) and indicating whether the Call Option Exercise Price will be paid in cash pursuant to Section 2.4(a) or in Taseko Shares pursuant to Section 2.4(b) to GRT Ltd., as agent on behalf of the Limited Partners. If Taseko has not advised GRT Ltd. of the manner in which it will pay the Call Option Exercise Price, prior to the Call Option Closing Date, Taseko will be deemed to have elected to pay the Call Option Exercise Price pursuant to Section 2.4(b).

2.3               Exercise Price.

Upon exercise of the Call Option, the exercise price (the “Call Option Exercise Price”) payable by Taseko to the Limited Partners for all of the Units will be 130% of the Contribution.

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2.4               Payment of Call Option Exercise Price.

The Call Option Exercise Price will be payable, at the option of Taseko, to the Limited Partners either by:

(a)	a cash payment in the form of a certified cheque, bank draft or solicitor’s trust cheque; or
(b)	the allotment and issuance to the Limited Partners of Taseko Shares, valued at the prevailing ten-day average closing price weighted by volume as quoted on TSX Venture Exchange for the period ending on the day immediately prior to Taseko’s election to exercise the Call Option.

2.5               Termination.

The Call Option will terminate if it has not been exercised by Taseko during the Call Option Period.

2.6               Acknowledgement by the Limited Partners.

Subject to Article 4, GRT Ltd., as agent on behalf of the Limited Partners, hereby acknowledges and agrees that, if, as and when Taseko elects to pay the Call Option Exercise Price with Taseko Shares, such shares may be subject to the applicable Canadian statutory hold period of four months calculated from the date of this Agreement. The Taseko Shares issued on the exercise of the Call Option will not be tradeable in the United States or through the OTCBB.

2.7               Call Option Closing.

The closing of the exercise of the Call Option (the “Call Option Closing”) will occur on a date (the “Call Option Closing Date”) agreed to in writing by the parties hereto, and failing such agreement, on a date which is not more than 10 days following receipt by GRT Ltd., as agent on behalf of the Limited Partners, of the Call Option Notice. Notwithstanding the forgoing, if Taseko undertakes an Arrangement pursuant to Article 4, the Call Option Closing will occur within the reasonable time required for completion of such Arrangement.

2.8               Call Option Closing Procedure.

The Call Option Closing will take place at the offices of Davis & Company, at 2800 Park Place, 666 Burrard Street, Vancouver, British Columbia at 9:00 a.m. (Vancouver Time) on the Call Option Closing Date. On or before the Call Option Closing Date, unless otherwise indicated:

(a) Taseko will deliver, or cause to be delivered to GRT Ltd., as agent for the Limited Partners, the following:

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	(i)	if the Call Option Exercise Price is being paid pursuant to Section 2.4(a), a certified cheque, bank draft or solicitor’s trust cheque payable to GRT Ltd. in the amount of the Call Option Exercise Price; or
	(ii)	if the Call Option Exercise Price is being paid pursuant to Section 2.4(b) or deemed to be so paid, share certificates representing the Taseko Shares registered in the name of the respective Limited Partners pursuant to the direction of GRT LP, as agent for the Limited Partners; and
	(iii)	a copy, certified as a true copy by an officer of Taseko, of a resolution of the directors of Taseko approving the issuance and allotment of the Taseko Shares to the Limited Partners and authorizing the issue of the corresponding share certificates;
(b)	GRT LP, as agent for the Limited Partners, will deliver, or cause to be delivered to Taseko:
	(i)	if the Call Option Exercise Price is being paid pursuant to Section 2.4(b):
		A.	at least three days before the Closing Date, a written direction confirming the number of Taseko Shares that each Limited Partner is entitled to based on the number of Units held by each such Limited Partner immediately prior to the Call Option Closing Date; and
		B.	originals of all Unit certificates and such other documentation showing that Taseko is acquiring good title, free of encumbrances to the Units, as Taseko may reasonably require;
	(ii)	a receipt confirming the delivery of the Call Option Exercise Price by Taseko to GRT Ltd., as agent on behalf of the Limited Partners; and
	(iii)	confirmation that the representations and warranties set out in Section 5.2 are true and correct on the Closing Date.

ARTICLE 3

PUT OPTION

3.1               Grant of Put Option.

Taseko hereby grants to GRT Ltd., as agent and on behalf of the Limited Partners, a put option entitling the Limited Partners, by Extraordinary Resolution, to require Taseko to purchase all, but not less than all, of the outstanding Units (the “Put Option”) during the Put Option Period for the Put Option Exercise Price.

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3.2               Exercise of Put Option.

The election to exercise the Put Option will be determined by Extraordinary Resolution, which resolution will be binding upon all of the Limited Partners, regardless of whether or not they voted or were entitled to vote in favour of the resolution. The Put Option will be exercised by GRT Ltd., as agent for and on behalf of the Limited Partners, providing to Taseko written notice stating the intention of the Limited Partners to exercise the Put Option (the “Put Option Notice”). Taseko will advise GRT Ltd., as agent on behalf of the Limited Partners, in writing of the manner in which the Put Option Exercise Price will be paid by Taseko to GRT Ltd., as agent on behalf of the Limited Partners, pursuant to Section 3.4 prior to the Put Option Closing Date. If Taseko has not advised GRT Ltd. of the manner in which it will pay the Put Option Exercise Price prior to the Put Option Closing Date, Taseko will be deemed to have elected to pay the Put Option Exercise Price pursuant to Section 3.4(b).

3.3               Put Option Exercise Price.

The exercise price for the Put Option (the “Put Option Exercise Price”) will be the fair market value of the Units on the date that the Put Option Notice is received by Taseko, such fair market value as determined by an independent business valuator (the “Valuator”) jointly appointed by Taseko and Triumvir to determine the fair market value of such Units. In the event that Taseko and Triumvir cannot agree on a Valuator for the purposes of this Section 3.3 within fifteen days following the receipt of the Put Option Notice, then each of Triumvir, as agent on behalf of the Limited Partners, and Taseko will select their own Valuator and the Put Option Exercise Price will be the average of the valuations of the two Valuators. The cost of the valuation in the event that one Valuator is used will be shared between the parties, in the event that two Valuators are used, each party will pay the cost of their own Valuator. In determining fair market value, the Valuator or Valuators, as the case may be, will use the discounted cashflow method, together with and such other valuation methods as considered appropriate by the Valuator or Valuators, as the case may be.

3.4               Payment of Put Option Exercise Price.

The Put Option Exercise Price will be payable at the option of Taseko by either:

(a)	a cash payment in the form of a certified cheque, bank draft or solicitor’s trust cheque; or
(b)	the allotment and issuance to the Limited Partners of Taseko Shares, valued as follows:
	(i)	if the Taseko Shares are free trading, such shares will be valued at the prevailing ten-day average closing price weighted by volume as quoted on TSX Venture Exchange for the period ending on the day immediately prior to the delivery by GRT Ltd., as agent on behalf of the Limited Partners, to Taseko of the Put Option Notice; and
	(ii)	if the Taseko Shares are subject to a statutory hold period, such shares will be valued at the prevailing ten-day average closing price weighted by

- 10 -

volume as quoted on TSX Venture Exchange for the period ending on the day immediately prior to the delivery by GRT Ltd., as agent on behalf of the Limited Partners, to Taseko of the Put Option Notice, less such maximum discount in respect of the Taseko Shares as at the date of the exercise of the Put Option corresponding to the “Discounted Market Price” definition of the TSX Venture Exchange, pro-rated to reduce such Discounted Market Price in proportion to the number of whole months remaining in the hold period and assuming the maximum discount is applicable to a four month hold period,

subject in both cases to a minimum price (the “Minimum Price”) for the Taseko Shares equal to the closing trading price of the Taseko Shares on the date on which this Agreement is executed and the transaction contemplated by this Agreement is announced by Taseko by way of press release.

3.5               Termination.

The Put Option will terminate if it has not been exercised by GRT Ltd., as agent on behalf of the Limited Partners, during the Put Option Period.

3.6               Acknowledgement by the Limited Partners.

Subject to Article 4, GRT Ltd., as agent on behalf of the Limited Partners, hereby acknowledges and agrees that if Taseko elects to pay the Put Option Exercise Price with Taseko Shares pursuant to Section 3.4(b), such Taseko Shares may be subject to the applicable Canadian statutory hold period of four months calculated from the date of this Agreement. The Taseko shares issued on the exercise of the Put Option will not be tradeable in the United States or through the OTCBB.

3.7                Put Option Closing.

The closing of the exercise of the Put Option (the “Put Option Closing”) will occur on a date (the “Put Option Closing Date”) agreed to in writing by the parties hereto, which is not more than 10 days following the later of receipt by Taseko of the Put Option Notice and the date the valuation of the Units pursuant to Section 3.3 is settled by the Valuator or Valuators, as the case may be. The Put Option Closing Date may be extended by any period reasonably necessary to obtain TSX Venture Exchange acceptance or with the written consent of all the parties hereto. Notwithstanding the forgoing, if Taseko undertakes an Arrangement pursuant to Article 4, the Put Option Closing will occur within the reasonable time required for completion of such Arrangement.

3.8               Put Option Closing Procedure.

The Put Option Closing will take place at the offices of Davis & Company, at 2800 Park Place, 666 Burrard Street, Vancouver, British Columbia at 9:00 a.m. (Vancouver Time) on the Put Option Closing Date. At the Put Option Closing Date, unless otherwise indicated:

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(a)	Taseko will deliver, or cause to be delivered to GRT Ltd., as agent for the Limited Partners, the following:
	(i)	if the Put Option Exercise Price is being paid pursuant to Section 3.4(a), a certified cheque, bank draft or solicitor’s trust cheque payable to GRT Ltd. in the amount of the Put Option Exercise Price; or
	(ii)	if the Put Option Exercise Price is being paid pursuant to Section 3.4(b) or deemed to be so paid, share certificates representing the Taseko Shares registered in the name of the respective Limited Partners pursuant to the direction of GRT Ltd., as agent for the Limited Partners; and
	(iii)	a copy, certified as a true copy by an officer of Taseko, of a resolution of the directors of Taseko approving the issuance and allotment of the Taseko Shares to the Limited Partners and authorizing the issue of the corresponding share certificates;
(b)	GRT Ltd., as agent for the Limited Partners, will deliver, or cause to be delivered to Taseko:
	(i)	if the Put Option Exercise Price is being paid pursuant to Section 3.4(b):
		A.	at least three days before the Closing Date, a written direction confirming the number of Taseko Shares that each Limited Partner is entitled to based on the number of Units held by each such Limited Partner immediately prior to the Put Option Closing Date; and
		B.	originals of all Unit certificates and such other documentation showing that Taseko is acquiring good title, free of encumbrances to the Units, as Taseko may reasonably require;
	(ii)	a receipt confirming the delivery of the Put Option Exercise Price by Taseko to GRT Ltd.;
	(iii)	a certificate of an officer of GRT Ltd. confirming there has been no material changes in the Partnership since the date of the valuation or agreement respecting the valuation pursuant to Section 3.3; and
	(iv)	confirmation that the representation and warranties set out in Section 5.2 are true and correct on the Closing Date.

3.9               Pre-emptive Right of Taseko

In the event that GRT Ltd., as agent for and on behalf of the Limited Partners, has delivered the Put Option Notice pursuant to an election to exercise the Put Option on the occurrence of an Alternative Transaction, the Limited Partners hereby grant to Taseko the right during five days from the date of receipt by Taseko of the Put Option Notice from GRT Ltd., to elect to exercise

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the Call Option and, in the event that Taseko so exercises the Call Option prior to the expiry of such five day period, the Put Option Notice will be cancelled and GRT Ltd.’s exercise of the Put Option will be revoked and will be null and void.

3.10               Put Option Anti-dilution

(a)	If and whenever at any time and from time to time Taseko will:
	(i)	subdivides, redivides or changes its then outstanding Taseko Shares into a greater number of Taseko Shares;
	(ii)	reduces, combines or consolidates or changes its then outstanding Taseko Shares into a lesser number of Taseko Shares; or
	(iii)	issues Taseko Shares (or securities exchangeable or convertible into Taseko Shares) to the holders of all or substantially all of its then outstanding Taseko Shares by way of stock dividend or other distribution (any of such events being herein called “Common Share Reorganization”), the Minimum Price will be adjusted effective immediately after the record date at which the holders of Taseko Shares are determined for the purpose of the Common Share Reorganization by multiplying the Minimum Price in effect on such record date by the quotient obtained when:
		A.	the number of Taseko Shares outstanding after the completion of such Common Share Reorganization (but before giving effect to the issue of any Taseko Shares issued after such record date otherwise than as part of such Common Share Reorganization) including, in the case where securities exchangeable or convertible into Taseko Shares are distributed, the number of Taseko Shares that would have been outstanding had such securities been exchanged for or converted into Taseko Shares on such record date,
		is divided by:
		B.	the number of Taseko Shares outstanding on such record date before giving to the Common Share Reorganization.
(b)	If and whenever at any time Taseko will fix a record date for the making of a distribution (including a distribution by way of stock dividend) to the holders of all or substantially all of its outstanding Taseko Shares of:
	(i)	shares of Taseko of any class other than Taseko Shares (and shares convertible into Taseko Shares referred to in subclause (a);
	(ii)	evidence of its indebtedness (excluding indebtedness convertible into Taseko Shares referred to in subclause (a)); or

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(iii)	assets (other than with respect to (b)(i), (b)(ii) and (b)(iii) above and a Common Share Reorganization),
(any such event herein called a “Special Distribution”) then, in each such case, the Minimum Price will be adjusted effective immediately after the record date at which the holders of Taseko Shares are determined for the purposes of the Special Distribution by multiplying the Minimum Price in effect in such record date by the quotient obtained when:
		A.	the product obtained when the number of Taseko Shares outstanding on the record date is multiplied by the prevailing ten-day average closing price weighted by volume for the Taseko Shares as quoted on TSX Venture Exchange for the period ending on the day immediately prior such record date,
		is divide by:
		B.	the difference obtained when the amount by which the aggregate fair market value (as determined by the board of directors, which determination will be conclusive) of the shares, rights, options, warrants, evidences of indebtedness or assets, as the case may be, distributed in the Special Distribution exceeds the fair market value (as determined by the board of directors, which determination will be conclusive) of the consideration, if any, received therefor by Taseko, is subtracted from the product obtained when the number of Taseko Shares outstanding on the day immediately prior to the public announcement of such Special Distribution is multiplied by the prevailing ten-day average closing price weighted by volume for the Taseko Shares, as quoted on TSX Venture Exchange for the period ending on the day immediately prior such record date,
provided that no such adjustment will be made if the result of such adjustment would be to decrease the Minimum Price in effect immediately before such record date. Any Taseko Shares owned by or held for the account of Taseko will be deemed not to be outstanding for the purpose of any such computation. Such adjustment will be made successively whenever such a record date is fixed. To the extent that such distribution is not made, the Minimum Price will be readjusted effective immediately to the Minimum Price which would then be in effect based upon such shares or rights, options or warrants or evidences of indebtedness or assets equally distributed.

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ARTICLE 4

ARRANGEMENT

4.1               Covenant to Undertake Arrangement

4.2               Addition Covenants of Taseko

If Taseko undertakes an Arrangement pursuant to Section 4.1, Taseko covenants and agrees as soon as reasonably practicable in order to implement the Arrangement:

(a)	to apply to the British Columbia Supreme Court pursuant to the applicable sections of the Company Act, as the case may be, for the interim order (the “Interim Order”) providing for, among other things, the calling and holding of a meeting (the “Taseko Meeting”) of the shareholders of Taseko (the “Taseko Shareholders”) for the purpose of considering and approving the Arrangement;
(b)	to prepare the information circular (the “Circular”) in respect of the Arrangement together with any other documents required by applicable securities law in connection with the Arrangement and cause the Circular and other documentation required in connection with the Taseko Meeting to be sent to each Taseko Shareholder and filed as required by the Interim Order or applicable laws;
(c)	to ensure that the Circular complies with all applicable laws and, without limiting the generality of the foregoing, that the Circular does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made (other than with respect to any information relating to and provided by GRT Ltd., as agent on behalf of the Limited Partners). Without limiting the generality of the foregoing, Taseko will ensure that the Circular provides the Taseko Shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters to be placed before them at the Taseko Meeting;
(d)	if approval by the Taseko Shareholders is obtained, take the necessary steps to submit the Arrangement to the British Columbia Supreme Court and apply for a final order (the “Final Order”) of such court approving the Arrangement;
(e)	subject to obtaining the Final Order, file the Final Order with the British Columbia Registrar of Companies, together with such other documents as may be required under the Company Act to give effect to the Arrangement; and
(f)	to obtain all orders required from the applicable securities authorities to permit the issuance and first resale of the Taseko Shares to be issued pursuant to the Arrangement without the qualification with, or the approval of, or the filing of any document including any prospectus or similar document or the taking of any

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proceeding with, or the obtaining of any further order, ruling or consent from, any governmental entity or regulatory authority under applicable securities laws or pursuant to the rules and regulations of any regulatory authority administering such laws, or the fulfilment of any other legal requirement in any such jurisdiction (other than, with respect to such first resales, any restrictions on transfer by reason of, among other things, a holder being a “control person” of Taseko for purposes of Canadian provincial or territorial securities laws).

4.3               Covenants of GRT Ltd.

GRT Ltd., as agent and attorney on behalf of the Limited Partners, covenants and agrees to cooperate in:

(a)	the preparation of any application for the Interim Order and the Final Order and the preparation of the Circular and any other documents reasonably deemed by Taseko to be necessary to discharge their respective obligations under applicable laws in connection with the Arrangement and all other matters contemplated by this Agreement;
(b)	the taking of all such action as may be required under applicable laws in connection with the Arrangement and all other matters contemplated by this Agreement;
(c)	furnish all such information concerning it, the Limited Partners and Gibraltar LP as may be required in connection with the consummation of the Arrangement and ensure that no untrue statement of a material fact or omit to state a material fact required to be stated in any such document or necessary in order to make any information so furnished for use in any such document not misleading in the light of the circumstances in which it is furnished or to be used; and
(d)	promptly notify Taseko if at any time it becomes aware that the Circular or an application for any order contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made, or that otherwise requires an amendment or supplement to the Circular or such application. In any such event GRT Ltd. will cooperate in the preparation of a supplement or amendment to the Circular or such other document, as required and as the case may be, and, if required, will cause the same to be distributed to their respective shareholders and/or filed with the relevant securities regulatory authorities.

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ARTICLE 5

REPRESENTATIONS AND WARRANTIES AND COVENANTS

5.1               Taseko’s Representations and Warranties.

Taseko represents and warrants to Gibraltar LP as follows:

(a)	Taseko is a company duly incorporated under the laws of British Columbia, is a reporting company, is traded on the TSX Venture Exchange and the Over-the-Counter Bulletin Board (OTCBB) of the NASD in the United States, and is a valid and subsisting company in good standing with the Office of the Registrar of Companies of British Columbia;
(b)	Taseko has the corporate power to own the properties owned by it and to carry on the its business and is duly qualified to carry on business in British Columbia;
(c)	this Agreement has been duly executed and delivered by Taseko and is a valid and binding obligation of Taseko enforceable in accordance with its terms;
(d)	Taseko is a resident of Canada, as defined in the Income Tax Act (Canada);
(e)	Taseko is a reporting issuer in good standing under the securities laws of the Provinces of British Columbia, Alberta and Ontario (the “Reporting Jurisdictions”) and no material change relating to Taseko has occurred with respect to which the requisite material change report has not been filed under any applicable securities laws in the Reporting Jurisdictions and no such disclosure has been made on a confidential basis;
(f)	Taseko has full corporate power and authority to issue Taseko Shares pursuant to this Agreement;
(g)	the Taseko Shares issued pursuant to this Agreement will be duly and validly authorized, allotted and issued as fully paid and non-assessable shares in the capital to Taseko and the Taseko Shares and will be free of all liens, charges and encumbrances;
(h)	the authorized capital of Taseko consists of an unlimited number of common shares, without nominal or par value, of which 62,430,850 common shares are issued and outstanding as at the date hereof;
(i)	except as has been disclosed in the Public Record, no person has any agreement, option, right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, options, warrants or convertible obligations of any nature, for the purchase, subscription, allotment or issuance of any unissued shares or other securities of Taseko;

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(j)	Taseko has full corporate power and authority to enter into this Agreement and to perform its obligations set out herein and this Agreement will be upon execution and delivery thereof, duly authorized, executed and delivered by Taseko and constitutes, or will constitute when executed and delivered, a legal, valid and binding obligation of Taseko enforceable in accordance with its respective terms;
(k)	Taseko is not in default or breach of, and the execution and delivery of this Agreement, and the performance of the transactions contemplated hereby will not result in a breach of, and do not create a state of facts which, after notice or lapse of time or both, will result in a breach of, and do not and will not conflict with, any of the terms, conditions or provisions of the constating documents or resolutions of Taseko or any material indenture, contract, agreement (written or oral), instrument, lease or other document to which Taseko is a party or by which Taseko is or will be contractually bound;
(l)	Taseko has prepared and filed all documents required to be filed by it with the British Columbia Securities Commission in connection with its status as a “reporting issuer” under the Securities Act (British Columbia) and other applicable legislation and with those other jurisdictions in Canada where it is a reporting issuer or the equivalent as required to be filed by it in connection with such status (collectively, the “Public Record”) and such documents, as of the date they were filed, complied in all material respects with applicable laws and did not fail to state a material fact required to be stated in order to make the statements contained therein not misleading in light of the circumstances in which they were made. No adverse material change (as defined in the Securities Act (British Columbia)) has occurred in relation to Taseko that is not disclosed in the Public Record and Taseko has not filed any confidential material change reports as part of the Public Record that continue to be confidential;
(m)	no consent, approval, order or authorization of, or registration, or declaration with, any applicable federal, provincial, governmental or other regulatory authority with jurisdiction over Taseko or Gibraltar is required to be obtained by Taseko or Gibraltar in connection with the execution and delivery of this Agreement or the consummation of the Put Option or the Call Option, and the issue of the Taseko Shares that may be issued upon the exercise of the Put Option or the Call Option except for those consents, orders, authorizations, declarations, registrations or approvals which have been obtained;
(n)	except as disclosed in the Public Record, no actions, suits, inquiries or proceedings are pending or, to the knowledge of Taseko, are contemplated or threatened to which Taseko is a party or to which the property of Taseko is subject that would result individually or in the aggregate in any material adverse change in the operations, business or condition (financial or otherwise) of Taseko;
(o)	the audited annual financial statements of Taseko as at and for the year ended September 30, 2002 and the consolidated unaudited financial statements for the period ended June 30, 2003 (collectively the “Financial Statements”) present

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	fairly, in all material respects, the financial position of Taseko as at the dates set out therein and the results of its operations and the changes in its financial position for the periods then ended, in accordance with generally accepted Canadian accounting principles, consistently applied;
(p)	other than as disclosed in Taseko’s audited annual financial statements for the year ended September 30, 2002 and all of Taseko’s quarterly reports subsequent to September 30, 2002, Taseko has no outstanding debts, bonds, debentures, mortgages, notes or other evidence of indebtedness and there are no outstanding agreements of Taseko to create or issue any debts, bonds, debentures, mortgages, notes or other evidence of indebtedness, except as incurred in the ordinary course of business;
(q)	the unaudited quarterly reports of Taseko subsequent to September 30, 2002 were prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and, subject to year-end adjustments, accurately and fairly present the financial condition and position and the revenue, earnings or losses, results of operations and changes in financial position of Taseko on a consolidated basis during the periods covered thereby;
(r)	except as disclosed in the Public Record, there has not been any material change in the assets, liabilities or obligations (absolute, accrued, contingent or otherwise) of Taseko, as set forth in the Financial Statements and there has not been any material adverse change in the business, operations or condition (financial or otherwise) or results of the operations of Taseko, since June 30, 2003 and since that date there have been no material facts, transactions, events or occurrences which could materially adversely affect the business of Taseko;
(s)	Taseko has conducted and is conducting its business in compliance with all (or except where such non-compliance would not have a material adverse effect) applicable laws, by-laws, rules and regulations of each jurisdiction in which its business is carried on and holds all licences, registrations, permits, consents or qualifications (whether governmental, regulatory or otherwise) required in order to enable its business to be carried on as now conducted or as proposed to be conducted, and all such licences, registrations, permits, consents and qualifications are valid and subsisting and in good standing and Taseko has not received any notice of proceedings relating to the revocation or modification of any such license, registration, permit, consent or qualification which, if the subject of an unfavourable decision, ruling or finding, would materially adversely affect the conduct of the business, operations, condition (financial or otherwise) or income of Taseko;
(t)	no order ceasing or suspending trading in securities of Taseko or prohibiting the sale of securities by Taseko has been issued and no proceedings for this purpose have been instituted, are pending, contemplated or threatened;

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	(u)	the issued and outstanding Taseko Shares are listed and posted for trading on the TSX Venture Exchange and such exchange has approved the listing of the Taseko Shares that may be issued by Taseko upon the exercise of the Put Option or the Call Option;
	(v)	Computershare Trust Company of Canada has been duly appointed as the transfer agent and registrar for all of the outstanding Taseko Shares;
	(w)	except as disclosed in the Public Record, Taseko and its subsidiaries (and their respective businesses and operations):
		(i)	are in compliance with any applicable environmental laws and environmental permits required of any government agency having environmental regulatory jurisdiction over Taseko and any of its subsidiaries; and
		(ii)	have obtained all environmental permits that are required to carry on their respective businesses and operations under all applicable and environmental laws,
		where non-compliance with such laws or permits or failure to obtain those permits could reasonably be expected to be, individually or in the aggregate, materially adverse to the financial condition, results of operations or prospects of Taseko or any of its subsidiaries; and
	(x)	Taseko has filed all documents that it is required to file under the continuous disclosure provisions of the applicable securities legislation, including annual and interim financial information and annual reports, press releases disclosing material changes and material change reports.
5.2	Covenants of Taseko
Taseko covenants and agrees with each of the Limited Partners:
	(a)	to give notice of a special resolution to be passed at the next meeting of shareholders of Taseko to increase the number of Taseko Shares that Taseko is authorized to issue to 200,000,000 Taseko Shares, to solicit proxies in favour of such special resolution, and if such resolution is approved, to immediately file such special resolution and other required documents with the Registrar of Companies of British Columbia;
	(b)	to recommend that its shareholders pass a special resolution to increase its authorized capital by special resolution at the next meeting of its members or in any event prior to March 31, 2004;
	(c)	subject to obtaining approval by way of special resolution as detailed in Section 5.2(a), it will reserve and keep available a sufficient number of Taseko Shares for

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	the purpose of enabling it to satisfy its obligations to issue Taseko Shares upon the exercise of the Call Option or the Put Option;
(d)	subject to obtaining approval by way of special resolution as detailed in Section 5.2(a), it will cause the Taseko Shares and the certificates representing the Taseko Shares from time to time subscribed and paid for pursuant to the exercise of the Call Option or the Put Option to be duly issued and delivered in accordance with the terms hereof;
(e)	all Taseko Shares which will be issued upon exercise of the Call Option or the Put Option herein provided for and the transfer of the Units to Taseko will be duly allotted and issued as fully paid and non-assessable shares in the capital of Taseko;
(f)	it will use its best efforts to maintain its corporate existence;
(g)	it will deliver to the Limited Partners copies of all financial statements and other information and material furnished to the holders of the Taseko Shares after the date of this Agreement;
(h)	it will not close its transfer books or take any other action which might deprive the Limited Partners of the opportunity of exercising their right to acquire Taseko Shares upon the exercise of the Call Option or the Put Option;
(i)	it will use all reasonable commercial efforts to maintain the listing of its Taseko Shares on the TSX Venture Exchange or such other stock exchange as is approved by the Limited Partners;
(j)	it will prepare and file, in a timely manner and before the time required under applicable law, all such reports, statements, and other material as may be required for it to maintain its status as a “reporting issuer” with the securities regulatory authorities with whom it is now a reporting issuer; and
(k)	in the event that Taseko exercises the Call Option or GRT Ltd., as agent for the Limited Partners, exercises the Put Option and the payment for the Units is to be made by the issuance of Taseko Shares pursuant to Sections 2.4(b) or 3.4(b) respectively, to prepare and file a joint election (the "Election") pursuant to section 85(1) of the Income Tax Act (Canada) with respect to the exchange of the Units for Taseko Shares with each Limited Partner on the following terms and conditions:
	(i)	the Limited Partner provides to Taseko written notice stating its intention to file an Election within 10 Business Days of the Call Option Notice or Put Option Notice, as the case may be;
	(ii)	the Limited Partner provides to Taseko all of the information and documentation required to effect the Election, including executed copies

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	of the prescribed forms within the period set out in the letter sent out by Taseko to the Limited Partner with respect to the Election; and
(iii)	the agreed amount with respect to the Election will be determined by each Limited Partner, in his, her or its absolute discretion, subject to the limits imposed by subsection 85(1) of the Income Tax Act (Canada).

5.3                Limited Partners Representations and Warranties.

GRT Ltd. represents and warrants, on behalf of each of the Limited Partners, that as at the date of the closing of the acquisition of his or her Units pursuant to an exercise of the Call Option or the Put Option, each Limited Partner:

(a)	owns his or her Units free and clear of any encumbrance; and
(b)	is not a non-resident of Canada within the meaning of the Income Tax Act (Canada).

ARTICLE 6

GENERAL

6.1               Survival of Representations.

The representations, warranties, covenants and agreements of the parties contained in this Agreement and any document or certificate given under this Agreement will survive the closing of the transactions contemplated by this Agreement and remain in full force and effect.

6.2               Notices.

In this Agreement:

(a)	any notice or communication required or permitted to be given under this Agreement will be in writing and will be considered to have been given if delivered by hand, transmitted by facsimile transmission or mailed by prepaid registered post in Canada, to the address or facsimile transmission number of each party set out below:
	(i)	if to Taseko: Suite 1020 – 800 West Pender Street Vancouver, B.C. V6C 2V6 Telephone:      604.684.6365 Fax:                   604.684.8092 Attention: President

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	(ii)	if to the Limited Partners: c/o Gibraltar Reclamation Trust Limited Suite 920 – 800 West Pender Street Vancouver, B.C. V6C 2V6 Telephone:      604.684.6365 Fax:                   604.681.2741 Attention: President of Gibraltar Reclamation Trust Limited
	or to such other address or facsimile transmission number as any party may designate in the manner set out above;
(b)	notice or communication will be considered to have been received:
	(i)	if delivered by hand during business hours on a Business Day, upon receipt by a responsible representative of the receiver, and if not delivered during business hours, upon the commencement of business on the next Business Day;
	(ii)	if sent by facsimile transmission during business hours on a Business Day, upon the sender receiving confirmation of the transmission, and if not transmitted during business hours, upon the commencement of business on the next Business Day; and
	(iii)	if mailed by prepaid registered post in Canada, upon the fifth Business Day following posting; except that, in the case of a disruption or an impending or threatened disruption in postal services every notice or communication will be delivered by hand or sent by facsimile transmission.

6.3               Time of Essence.

Time will be of the essence in this Agreement.

6.4               Further Assurances.

Each of the parties will execute and deliver such further documents and instruments and do such acts and things as may be reasonably required by another party to carry out the intent and meaning of this Agreement.

6.5               Benefit and Binding Nature of the Agreement.

This Agreement will enure to the benefit of and be binding upon the parties and their respective successors and permitted assigns.

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6.6               Waivers.

The failure of a party to insist upon the strict performance of any term of this Agreement, or to exercise any right, or remedy contained in this Agreement, will not be construed as a waiver or a relinquishment by that party for the future of that term, right, or remedy.

6.7               Assignment.

Neither party may assign this Agreement without the prior consent of the other party.

6.8               Entire Agreement.

This Agreement constitutes the entire agreement between the parties and there are no representations or warranties, express or implied, statutory or otherwise and no agreements collateral to this Agreement other than as expressly set out or referred to in this Agreement

.6.9               Amendment.

This Agreement may be amended or supplemented only by a written agreement signed by each party and that agreement need not be executed under seal.

6.10              Counterparts.

This Agreement may be signed by original or by facsimile and executed in any number of counterparts, and each executed counterpart will be considered to be an original. All executed counterparts taken together will constitute one agreement.

TO EVIDENCE THEIR AGREEMENT each of the parties have executed this Agreement on the date appearing below.

THE LIMITED PARTNERS OF THE

GIBRALTAR RECLAMATION TRUST

LIMITED PARTNERSHIP, By their duly

authorized agent and attorney, Gibraltar

Reclamation Trust Limited

By:

TASEKO MINES LIMITED

By:

EX-3.A7

GUARANTEE AGREEMENT

THIS AGREEMENT made effective the 30^th day of December, 2003.

BETWEEN:

TASEKO MINES LIMITED and its subsidiary, Gibraltar Mines Limited (“Gibraltar”), corporations existing under the laws of British Columbia and having their business offices at Suite 1020 – 800 West Pender Street, Vancouver, British Columbia V6C 2V6

(for convenience herein, together “Taseko”)

AND:

The Persons Who Have Executed This Agreement On Schedule A Hereto

(the “Guarantors”)

WHEREAS:

(A)                Pursuant to a Guarantee Agreement dated December 30, 2003 made by Gibraltar Mines Limited (“Gibraltar”), a wholly-owned subsidiary of Taseko, and Taseko, in favour of Her Majesty the Queen in Right of the Province of British Columbia (the “Province”) (the “Guarantee Agreement”) Gibratar and Taseko agreed to guarantee certain obligations relating to the proposed reactivation of the Gibraltar Mine;

(B)                The Guarantors who are insiders of Taseko have agreed to jointly and severally guarantee up to $4.5 million of Taseko’s obligations under the Guarantee Agreement (the “Taseko Guarantee”) subject to the terms and conditions hereof;

NOW THEREFORE THIS AGREEMENT WITNESSES:

Guarantee Consideration

1.                In consideration of the guarantee provided by Taseko to the Province, Taseko hereby agrees to grant to the Guarantors the following consideration (the “Bonus”):

(a)                the allotment and issuance, as fully paid and non-assessable, of 225,000 common shares of Taseko, such shares having an agreed value of $2.00 per share. The shares will be issued upon TSX Venture acceptance hereof; and

(b)                Taseko and Gibraltar shall provide, upon written request of the Guarantors, a registrable subordinated security interest on the present and after acquired property of the Company and Taseko shall grant by way of security agreement, mortgage or other like encumbrance, the requisite security at the time of such request.

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Term

2.                The term of the Guarantee hereby provided shall be a maximum of two years from the date of execution hereof. Taseko agrees to cause Gibraltar to discharge the Gibraltar Guarantee and consequently the Taseko Guarantee, within said period.

Borrower’s Additional Covenants

3.                  Taseko further covenants with the Guarantors that:

(a)                 Taseko will comply with the terms of the Taseko Guarantee and use its best efforts to discharge obligations arising thereunder as soon as possible after the date hereof and shall indemnify and save harmless the Guarantors from any loss or claim arising out of the Taseko Guarantee;

(b)                will keep insured its property and assets in a prudent fashion to the full extent of the value thereof and will provide the Guarantors with evidence of same; and

(c)                 will not dispose of any material portion of its properties or assets without the written consent of the Guarantors.

Default of Taseko Guarantee

4.                In the event the Guarantors are called upon to honour their guarantee as a result of a default by Taseko under the Taseko Guarantee or in the case of default by Taseko of any other term hereof and, in addition to the other obligations herein contained, Taseko agrees that:

(a)                 the Guarantors shall be entitled to interest at the rate of 21% per annum on any amounts actually paid to or seized by the Province until such time as such amounts are repaid by Taseko to the Province or the Guarantors and the Province releases the Guarantors’ security;

(b)                the Guarantors may, upon 60 days’ notice, immediately realize upon their security interest in and to the property and assets of Taseko and may appoint a receiver with authority to seize and dispose of same for the benefit of the Guarantors;

(c)                 the Guarantors shall be subrogated in all of the rights of the Province pursuant to the Taseko Guarantee and such subrogation shall be in addition to any other rights to which the Guarantors are entitled hereunder or by applicable law; and

(d)                Taseko will indemnify and save harmless the Guarantors from any loss, cost or claim hereunder or as a result of giving the Guarantee contemplated hereby.

Canadian Venture Exchange Acceptance

5.                The Bonus herein provided shall be subject to acceptance by the TSX Venture Exchange (“TSXV”) which Taseko shall use all reasonable efforts to obtain. If the TSXV does not accept the Bonus application, Taseko and the Guarantors shall negotiate in good faith to

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provide alternative compensation to the Guarantors economically equivalent to the Bonus, which alternative arrangement will also be subject to TSXV approval.

General Provisions

6.                This Agreement has been made in the Province of British Columbia and shall be construed and enforced in accordance with the laws of that Province.

7.                This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

8.                The rights of the Guarantors in this Agreement are in addition to and not in substitution of any other rights provided for guarantors under the Law and Equity Act.

9.                 This Agreement was prepared by Lang Michener acting for Taseko and each of the Guarantors will obtain independent legal advice with respect to this matter.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of the date first above-written.

TASEKO MINES LIMITED

Per:
	Authorized Signatory

GIBRALTAR MINES LIMITED

Per:
	Authorized Signatory

THE GUARANTORS

			Amount	Bonus
	Name	Signature	Guaranteed	Shares
(a)	Robert A. Dickinson		$900,000	45,000
(b)	Ronald W. Thiessen		$900,000	45,000
(c)	Jeffrey R. Mason		$900,000	45,000
(d)	Scott D. Cousens		$900,000	45,000
(e)	David J. Copeland		$900,000	45,000
			$4,500,000	161,790

EX-3.B3

GUARANTEE AGREEMENT

BETWEEN

GIBRALTAR MINES LTD.

AND

TASEKO MINES LIMITED

IN FAVOUR OF

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH
COLUMBIA, REPRESENTED BY THE MINISTER OF ENERGY AND MINES

December 30, 2003

Table of Contents

Description	Page #
ARTICLE 1 DEFINITIONS	2
ARTICLE 2 GUARANTEE	3
ARTICLE 3 SUBORDINATION AND POSTPONEMENT	4
ARTICLE 4 WAIVER BY TASEKO AND GIBRALTAR	5
ARTICLE 5 REPRESENTATIONS AND WARRANTIES	5
ARTICLE 6 GENERAL	6
6.1    GOVERNING LAW	6
6.2    TIME	7
6.3    PERSON, NUMBER AND GENDER	7
6.4    HEADINGS	7
6.5    NO OTHER AGREEMENTS	7
6.6    ENUREMENT	7
6.7    ASSIGNMENT	7
6.8    SEVERABILITY	7
6.9    WAIVER	7
ARTICLE 7 REMEDIES	8
ARTICLE 8 NOTICES	8
ARTICLE 9 RELEASE AND DISCHARGE OF THE GUARANTEE AGREEMENT	9

GUARANTEE AGREEMENT

THIS GUARANTEE AGREEMENT dated December 30 2003,

MADE BY:

GIBRALTAR MINES LTD., a company incorporated under the laws of British Columbia

(“Gibraltar”)

AND:

TASEKO MINES LIMITED, a company incorporated under the laws of British Columbia

(“Taseko”)

IN FAVOUR OF:

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA, represented by the Minister of Energy and Mines

(the “Province”)

BACKGROUND:

A.                 Gibraltar, a wholly-owned subsidiary of Taseko, owns the Gibraltar Mine (this defined term and all other defined terms referenced in these Recitals are defined below in Article 1).

B.                Gibraltar is obligated to carry out certain Reclamation Obligations with respect to the Gibraltar Mine.

C.                On July 21, 1999, in order to secure the Reclamation Obligations as required by the Province, Gibraltar deposited the Reclamation Security and executed the Reclamation Agreement and Asset Security Agreement in favour of the Province and Taseko and Gibraltar executed the Guarantee Agreement in favour of the Province, pursuant to which Taseko guaranteed the due and punctual payment and performance by Gibraltar of its Reclamation Obligations.

D.                The Gibraltar Mine has been closed since 1998 and Gibraltar wishes to restart the mine.

E.                In December of 2003, Gibraltar, Gibraltar Reclamation Trust Limited Partnership, HSBC Trust Company (Canada) and the Province agreed to form the Gibraltar Reclamation Trust to constitute a “qualifying environmental trust” within the meaning of the Income Tax Act (Canada) to replace the Reclamation Security as cash security for the Reclamation Obligations, which, in turn, would allow Gibraltar to use the Reclamation Security to fund the restart of the Gibraltar Mine.

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F.                The parties have agreed to execute this new guarantee in favour of the Province to replace the Guarantee Agreement and to extend the guarantee to the obligations set out in the Gibraltar Reclamation Trust Indenture.

               NOW THEREFORE, Taseko and Gibraltar, in consideration of the sum of $10.00 and other good and valuable consideration, the receipt and sufficiency of which both Gibraltar and Taseko acknowledge, agree with the Province as follows:

ARTICLE 1
DEFINITIONS

(a)	“Asset Security Agreement” means the asset security agreement made by Gibraltar in favour of the Province dated for reference July 21, 1999;
(b)	“Chief Inspector” means the Chief Inspector of Mines for the Province of British Columbia appointed pursuant to the Mines Act (British Columbia);
(c)	“Gibraltar” means Gibraltar Mines Ltd.;
(d)	“Gibraltar Mine” means the mine located 17 Kilometres Northeast of McLeese Lake, in the Cariboo Mining Division of British Columbia;
(e)	“Gibraltar Reclamation Trust Indenture” means the Gibraltar reclamation trust indenture dated December of 2003 among Gibraltar, Gibraltar Reclamation Trust Limited Partnership, HSBC Trust Company (Canada) and the Province;
(f)	“Guaranteed Obligations” means the reclamation obligations of Gibraltar detailed in Permit M-40, the Reclamation Agreement and the Asset Security Agreement, the obligations under the Gibraltar Reclamation Trust Indenture, and any other reclamation work which Gibraltar is required to carry out by law or agreement with the Province with respect to the Gibraltar Mine;
(g)	“Permit M-40” means the amended permit M-40 issued by the Chief Inspector to Gibraltar pursuant to the Mines Act (British Columbia), a copy of which is attached as Schedule “A” and all amendments thereto;
(h)	“Province” means Her Majesty the Queen in Right of the Province of British Columbia, as represented by the Minister of Energy and Mines;
(i)	“Reclamation Agreement” means the reclamation agreement dated for reference July 21, 1999 between the Province and Gibraltar;
(j)	“Reclamation Obligations” means all reclamation obligations set out in Permit M-40 and any other reclamation work which Gibraltar is required to carry out by law or agreement with the Province with respect to the Gibraltar Mine, including the reclamation obligations set out in the Reclamation Agreement;

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(k)

“Reclamation Security” means the amount of $16,500,000 plus any interest earned thereon set aside by Gibraltar to secure its Reclamation Obligations which has been held and invested pursuant to the terms and conditions of a Safekeeping Agreement, as well as certain tangible security, to secure the Reclamation Obligations as detailed in the Reclamation Agreement and the Asset Security Agreement; and

(l)

“Safekeeping Agreement” means the safekeeping agreement made March 14, 2003 amongst the Province, CIBC Wood Gundy and Gibraltar.

ARTICLE 2 GUARANTEE
2.1	Taseko hereby irrevocably and unconditionally guarantees to the Province the due and punctual payment and performance by Gibraltar of the Guaranteed Obligations and all costs and expenses incurred in connection therewith or in connection with a failure to perform such obligations.
2.2	Taseko agrees that the Guaranteed Obligations:
	(a)	are absolute, present, irrevocable and unconditional obligations without regard to any substitution, release or exchange of any other guarantee of or any security for the Guaranteed Obligations or any of them or to any other circumstances which might otherwise constitute a legal or equitable discharge of a surety or guarantor;=
	(b)	are in no way conditional upon any attempt by the Province to enforce performance or compliance by Gibraltar under the Asset Security Agreement; and
	(c)	are intended to be co-extensive with the obligations of Gibraltar under the Asset Security Agreement.
2.3	The obligations of Taseko under this Guarantee Agreement are not affected, reduced, modified or impaired upon the happening from time to time of any of the following events, whether or not with notice to or the consent of either of Taseko and Gibraltar:
	(a)	any defect or deficiency in the due incorporation, valid existence or corporate capacity of Gibraltar, or any defect or deficiency in the due authorization, execution and delivery by Gibraltar of the Asset Security Agreement or of any other agreement to which Gibraltar is a party;
	(b)	the failure of the Province to give notice to either of Taseko and Gibraltar of the occurrence of a default under the terms and provisions of the Asset Security Agreement.
	(c)	the modification or amendment (whether material or otherwise) of the Asset Security Agreement or of any obligation, covenant or agreement set forth in the Asset Security Agreement (including the addition or substitution of any person as an additional party to the Asset Security Agreement), provided the modification

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		or amendment is made in accordance with the terms of the Asset Security Agreement;
	(d)	any failure, omission, delay by, or inability on the part of, the Province to assert or exercise any right, power or remedy conferred on Province in the Asset Security Agreement or by this Guarantee Agreement;
	(e)	any change in the name of Gibraltar or in the objects, capital structure or constitution of Gibraltar, or the sale of the business of Gibraltar or any part thereof or by Gibraltar being amalgamated or merged with another corporation or otherwise reorganized or continued into another jurisdiction;
	(f)	the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets of Gibraltar, the marshalling of the assets and liabilities of Gibraltar, the receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with creditors, or readjustment of, or other similar proceedings affecting Taseko or Gibraltar or any of the assets of either of them; or
	(g)	any other cause or circumstance, foreseen or unforeseen, whether similar or dissimilar to any of the foregoing,
	it being the intent of each of Taseko and Gibraltar that its obligations hereunder and under the Asset Security Agreement are not discharged except by performance and discharge of the Guaranteed Obligations.
2.4	Notwithstanding any law, including any statute or regulation, or any rule of equity or any practice or procedure of any jurisdiction under which any cause of action is extinguished or prescribed or limiting the time for commencing any action or proceeding, including but not limited to any applicable statute of limitation, Taseko and Gibraltar waive, and covenant they shall not plead or rely upon, any defense to a claim made under this Guarantee Agreement to the effect that the commencement of any action or proceeding against Taseko and Gibraltar or either one in respect of that claim is time-barred or that the cause of action against Taseko and Gibraltar or either one in respect of that claim is extinguished, in either case by the effluxion of time, provided however that this Section 2.4 does not prevent or restrict Taseko and Gibraltar or either one from pleading or rely upon any defense to a claim made under this Guarantee Agreement to the effect that the commencement of any action or proceeding against each other for any breach of, or default under, the Guaranteed Obligations is time-barred or that the cause of action against the other for any breach of, or default under the Guaranteed Obligations is extinguished, in either case by the effluxion of time.
ARTICLE 3 SUBORDINATION AND POSTPONEMENT
3.1	Each of Taseko and Gibraltar covenant and agree that any subrogation rights of either of Taseko and Gibraltar and rights of either of Taseko and Gibraltar to reimbursement by the other or any claim by either of Taseko and Gibraltar against the property of the other

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	arising by reason of any payments made by either of Taseko and Gibraltar under this Guarantee Agreement, are subordinated and postponed to the performance and discharge of the Guaranteed Obligations by Taseko and Gibraltar.
3.2	Each of Taseko and Gibraltar acknowledges and agrees that the subordination and postponement in Section 3.1, are independent of this Guarantee Agreement and remains in full force and effect until complete performance and discharge of the Guaranteed Obligations.
3.3	Subject to the subordination and postponement by Taseko and Gibraltar in this Article 3, upon payment or discharge in full of the Guaranteed Obligations with respect to any particular claim under this Guarantee Agreement relating to the Guaranteed Obligations, each of Taseko and Gibraltar is fully subrogated as to that claim to the rights of Gibraltar under the Asset Security Agreement.
ARTICLE 4 WAIVER BY TASEKO AND GIBRALTAR
Each of Taseko and Gibraltar hereby unconditionally and irrevocably waives notice of:
	(a)	any modification or amendment of the Asset Security Agreement, provided that such modification or amendment has been made in accordance with the terms of the Asset Security Agreement;
	(b)	acceptance by Province of and reliance by Province on the terms of this Guarantee Agreement; and
	(c)	presentment, demand for performance, notice of non-performance, protest. notice of protest, notice of dishonour, and notice of acceptance of this Guarantee Agreement.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
Each of Taseko and Gibraltar jointly and severally represent and warrant to Province that:
	(a)	each of Taseko and Gibraltar is a company duly organized, validly existing and in good standing under the laws of British Columbia and is qualified to do business in all other jurisdictions where necessary in light of its business or properties, and has all requisite power and authority and all material governmental licenses, authorizations, consents and approvals necessary to conduct its business and to own its properties;
	(b)	there are no actions or proceedings now pending or threatened against Gibraltar or Taseko before any court or administrative agency that could have a materially adverse effect on the ability of either of them to perform its obligations under this Guarantee Agreement;

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	(c)	the execution, delivery and performance by Taseko or Gibraltar of this Guarantee Agreement and of the Asset Security Agreement do not and will not:
		(i)	require any consent or approval of any shareholder of Gibraltar or Taseko which has not been duly obtained;
		(ii)	violate any provision of any laws applicable to either of them; and
		(iii)	result in a breach of, or constitute a default under, any indenture, agreement, lease or instrument to which either Taseko or Gibraltar is a party or by which is or its properties may be bound or affected, including without limitation any loan covenant; and
		(iv)	result in, or require, the creation or imposition of any lien upon any of the properties owned by Taseko or Gibraltar, except in favour of the Province;
	(d)	neither Taseko nor Gibraltar is in default under any law referred to in clause (ii) or any indenture, agreement, lease or instrument referred to in clause (iii) which default or breach could have a materially adverse effect on their respective ability to perform their respective obligations under this Guarantee Agreement;
	(e)	each of Taseko and Gibraltar have all necessary corporate power and authority to execute, deliver and perform their respective obligations under this Guarantee Agreement and their execution, delivery and performance of this Guarantee Agreement have been duly authorized by all necessary corporate action of Taseko and Gibraltar, and this Guarantee Agreement has been duly and validly executed and delivered by each of them;
	(f)	this Guarantee Agreement constitutes the legal valid and binding obligation of each of Taseko and Gibraltar, enforceable against them in accordance with its terms; and
	(g)	all governmental approvals necessary for the execution, delivery and performance by Taseko and Gibraltar of their respective obligations under this Guarantee Agreement have been duly obtained, and are in full force and effect and not subject to appeal and there is no proceeding pending or threatened against either Taseko or Gibraltar that seeks to rescind, terminate, modify or suspend any such governmental approval.
ARTICLE 6 GENERAL
6.1	Governing Law
This Guarantee Agreement will be construed in accordance with the laws of British Columbia and the laws of Canada applicable therein.

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6.2                 Time

Time is of the essence of this Guarantee Agreement.

6.3                 Person, Number and Gender

In this Guarantee Agreement “person” includes a corporation. firm or association and wherever the singular or masculine is used it will be construed as if the plural or the feminine or the neuter, as the case may be, had been used where the context or the parties so require.

6.4                Headings

The headings or captions in this Guarantee Agreement are inserted for convenience only and in no way define, limit, alter or enlarge the scope or meaning of any provision of this Guarantee Agreement.

6.5                 No Other Agreements

There is no representation, warranty, guarantee, indemnity, condition or agreement or any condition or agreement applicable to, binding upon or enforceable against one party by the other with respect to the subject matter of this Guarantee Agreement save far those expressed in this Guarantee Agreement, the Reclamation Agreement and the Asset Security Agreement.

6.6                 Enurement

This Guarantee Agreement will enure to the benefit of the Province its successors and assigns and be binding upon each of Taseko and Gibraltar and their respective successors and permitted assigns.

6.7                 Assignment

Neither Taseko nor Gibraltar may assign this Guarantee Agreement or its obligations hereunder, except with the prior written consent of the Province.

6.8                 Severability

The invalidity or unenforceability of any one or more phrases, sentences, clauses or sections contained in this Guarantee Agreement does not affect the validity or enforceability at the remaining portions of this Guarantee Agreement, or any part thereof,

6.9                 Waiver

No consent or waiver, expressed or implied by one party to or of any breach or default by another party in the performance by the other party of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach of default by the other party.

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ARTICLE 7
REMEDIES

7.1	Except as provided herein, no remedy herein conferred upon or reserved to the Province hereunder is intended to be exclusive of any other available remedy or remedies, but each and every remedy is cumulative and is in addition to every other remedy given under this Guarantee Agreement or hereafter existing at law or in equity or by statute.
7.2	No delay or omission to exercise any right or power accruing upon any default, omission or failure of performance hereunder impairs any such right or power or may be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order for the Province to be entitled to exercise any remedy reserved to it in this Guarantee Agreement, it is not necessary that it exhaust its recourse against Gibraltar under the Asset Security Agreement, nor that it gives any prior notice under this Guarantee Agreement.
7.3	If any provision of this Guarantee Agreement is breached by a party and thereafter duly waived by the other party so empowered to act, that waiver is limited to the particular breach. No waiver, amendment, release or modification of this Guarantee Agreement may be established by conduct, custom or course of dealing, but solely by an instrument in writing duly executed by the party against whom the waiver, amendment, release or modification is enforced.
7.4	Taseko and Gibraltar shall reimburse the Province for reasonable legal fees, disbursements and costs of enforcement incurred by the Province in obtaining and enforcing against Taseko and Gibraltar or either one any judgment or order obtained by the Province against Taseko and Gibraltar or either one in any action or proceeding under or in relation to this Guarantee Agreement.

ARTICLE 8
NOTICES

Any notices to either Taseko or Gibraltar required or permitted under this Guarantee Agreement must be in writing and are deemed to be duly given or made when received if delivered by first class, certified or registered mail, by personal delivery, by delivery by recognized overnight delivery service or by facsimile at the following address:

Taseko Mines Limited or Gibraltar Mines Ltd.
# 1020 — 800 West Pender Street
Vancouver, B.C. V6C 2V6

Attention:        President
Facsimile No:   604.684.8092

Either Taseko or Gibraltar may change its address for receipt of notice by providing the Province with written notice of the changed address at the address of the Province provided under the Reclamation Agreement.

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ARTICLE 9
RELEASE AND DISCHARGE OF THE GUARANTEE AGREEMENT

9.1

At any time after Gibraltar has re-opened the Gibraltar Mine and operated the Gibraltar Mine for a continuous period of 24 months (which will require operation at an average of 65% of rated mill capacity over monthly periods) following the date of resumption of full production of the Gibraltar Mine, Taseko may give a written request to the Province requesting the Province to release and discharge Taseko from its obligations under this Guarantee Agreement.

9.2

Following receipt of a request under Section 9.1, if the Chief Inspector, in the sole discretion of the Chief Inspector is satisfied that the amount of Reclamation Security in place is adequate, then the Province will release and discharge Taseko from its obligations under this Guarantee Agreement.

                IN WITNESS WHEREOF this Guarantee Agreement has been executed by the parties hereto on the date first appearing in this Guarantee Agreement.

	TASEKO MINES LIMITED		GIBRALTAR MINES LTD.
By:		By:
	Authorized Signatory		Authorized Signatory
	Please Print Name and Title		Please Print Name and Title

SCHEDULE “A”

PERMIT M-40

EX-3.B4

FARMOUT AND JOINT VENTURE AGREEMENT

BETWEEN

TASEKO MINES LIMITED,

NORTHERN DYNASTY MINERALS LTD.,

AND

ROCKWELL VENTURES INC.

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION	1
ARTICLE 2 REPRESENTATIONS AND WARRANTIES	5
ARTICLE 3 OPTION AND EXPLORATION PROGRAMS	6
ARTICLE 4 JOINT VENTURE	7
ARTICLE 5 EARNED INTEREST AND TASEKO’S CALL	8
ARTICLE 6 ARBITRATION	8
ARTICLE 7 NOTICE	9
ARTICLE 8 FORCE MAJEURE	10
ARTICLE 9 GENERAL PROVISIONS	10
SCHEDULE 1:               DESCRIPTION OF PROPERTY
SCHEDULE 2:               FORM OF CALL NOTICE

THIS AGREEMENT dated for reference the 1^st day of December, 2003.

BETWEEN:

TASEKO MINES LIMITED having an office at, Suite 1020-800 West Pender Street, Vancouver British Columbia, V6C 2V6

(hereinafter called “Taseko”)

OF THE FIRST PART

AND:

NORTHERN DYNASTY MINERALS LTD., having an office at Suite 1020-800 West Pender Street, Vancouver, British Columbia, V6C 2V6

(hereinafter called “NDM”)

OF THE SECOND PART

AND:

ROCKWELL VENTURES INC., having an office at Suite 1020 – 800 West Pender Street, Vancouver, British Columbia, V6C 2V6

(hereinafter called “RCW”)

OF THE THIRD PART

WHEREAS:

(A)               Taseko beneficially owns, through Gibraltar Mines Ltd., 100% of the Property (as hereinafter defined).

(B)               Taseko has agreed to grant to NDM and RCW rights to earn working Interests in the Property by providing funds for exploration work to be conducted on the Property in conjunction with other exploration work Taseko is conducting on the Property.

(C)               For a period of 150 days after NDM and RCW have earned an Interest in the Property, Taseko will have the option of purchasing NDM and RCW’s Interest in the Property on the terms and conditions of this Agreement.

(D)                If Taseko does not exercise its option to purchase either NDM’s or RCW’s Interest in the Property, Taseko will form a joint venture with such Optionee to coordinate exploitation of their working interests and to consider further exploration and development of the Property.

NOW, THEREFORE, THIS AGREEMENT WITNESSES that, in consideration of $1.00 now paid by each of NDM and RCW to Taseko and the mutual covenants and agreements herein contained, the parties hereto mutually agree as follows:

ARTICLE 1

INTERPRETATION

Definitions

1.1               In this Agreement the following words and phrases shall have the following meanings:

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(a)               “Affiliate” means, in respect of a party hereto, a corporation with which that party is affiliated within the meaning of subsection 1(2) of the Securities Act (British Columbia).

(b)               “Associated Company” means, in respect of a party hereto:

(i)               any corporation which beneficially owns, directly or indirectly, securities carrying more than 30% of the voting rights attached to the outstanding securities of such party;

(ii)              any corporation in respect of which such party beneficially owns, directly or indirectly, securities carrying more than 30% of the voting rights attached to the outstanding securities of such corporation; or

(iii)             any corporation in respect of which corporations referred to in clauses (i) and (ii) hereof beneficially own, directly or indirectly, in the aggregate, more than 30% of the voting rights attached to the outstanding securities of such corporation.

For the purposes hereof, beneficial ownership shall include securities deemed beneficially owned within the meaning of subsection 1(4) of the Securities Act (British Columbia).

(c)               “Business Day” means a day, other than a Saturday, Sunday or Statutory Holiday on which the main branch of Canadian Imperial Bank of Commerce in Vancouver, British Columbia is open to the public for the transaction of business.

(d)               “Call” means Taseko’s right to purchase each Optionee’s Interest in the Property in certain events as described in Article 5.

(e)               “Call Notice” means notice in the form of Schedule “2”.

(f)               “Call Price” has the meaning set out in paragraph 5.3.

(g)               “CEDOE” means expenses that are prescribed to be Canadian exploration and development overhead expenses for the purposes of the Tax Act.

(h)               “CEE” means Canadian exploration expense as defined in s.66.1(6) of the Tax Act.

(i)               “Earn-In Date” means the dates that the Optionees have earned their respective Interests which shall be the date which is the earlier of:

(a)               the date the Optionee has advanced funds in the amount equal to its Extent of Participation to Taseko pursuant to Section 3.3 of this Agreement;

(b)               the date the Optionee ceases to provide funds to Taseko in accordance with Section 3.3 of this Agreement; and

(c)               the date the Optionee provides notification to Taseko that the Optionee will not be providing further funds to Taseko.

(j)               “Expenditures” means all costs, expenses, obligations and liabilities of whatever kind or nature spent or incurred or deemed incurred hereunder in connection with the exploration and development of the Property including, without limiting the generality of the foregoing:

(i)               monies expended in maintaining the Property in good standing, including any monies expended in doing and filing assessment work and any future vendor’s or royalty payments;

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(ii)               monies expended in doing geophysical, geochemical and geological surveys, drilling, assaying and metallurgical testing;

(iii)             monies expended in paying the fees, including legal and other professional fees and disbursements, wages, salaries, travelling expenses and fringe benefits (in an amount equal to 30% of salaries, whether or not required by law) of Optionee’s (or its affiliates’) personnel engaged directly in work with respect to and for the benefit of the Property;

(iv)              monies expended in paying for the food, lodging and other reasonable needs of the persons referred to in clause (ii) hereof;

(v)               monies expended or set aside for environmental remediation and reclamation;

(vi)              all costs and expenses related to the preparation of Programs and reporting as to the results thereof;

(vii)             all costs and expenses related to the preparation of a Feasibility Report;

(viii)            all costs and expenses related to preparation of a Production Program; and

(ix)              an overhead charge payable to the Operator equal to 10% of all Expenditures, other than the overhead charge referred to in this clause, for unallocable overhead and head office expenses and all other expenses relating to supervision and management of all work done with respect to and for the benefit of the Project. This overhead charge is reduced to 5% on Expenditures incurred with the consent of the Operator by any designee (including affiliate) of the Operator with such percentage to be added to the invoice of the Operator’s designee.

provided that such amounts expended shall be Qualified Expenditures; and

(x)               working capital requirements for the initial four months of operation of the Taseko Property as a mine or such longer period as may be reasonably justified in the circumstances.

(k)               “Extent of Participation” means $650,000 for NDM and $200,000 for RCW.

(l)               “Interest” means the undivided beneficial percentage working or participating interest earned by each of NDM or RCW in the Property (subject to any liabilities to which the Property are subject) calculated as follows:

Total amount of Expenditures funded by the Optionee
divided by
the total Expenditures on the Property since January 1, 2003 as of the Earn-In Date

(m)               “Joint Venture” means the joint venture to be formed as of the Participation Date between Taseko and the Participating Optionees in respect of the Property upon each Optionee having earned its Interest.

(n)               “Joint Venture Agreement” means the joint venture agreement to be entered into between Taseko and the Participating Optionees as provided for in Article 4 hereof.

(o)               “Optionee” means NDM or RCW.

(p)               “Operator” means Taseko or such other third party that Taseko appoints to carry out Expenditures.

(q)               “Other Tenements” means all surface rights of and to any lands within the perimeter of the Taseko Property including surface rights held in fee or under lease, licence, easement, right of way or other

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rights of any kind (and all renewals, extensions and amendments thereof or substitutions therefor) acquired by or on behalf of the parties with respect to the Taseko Property.

(r)               “Participant” means any party having an Interest and its successors and permitted assigns. “Participants” means collectively all parties having an Interest and their respective successors and permitted assigns.

(s)               “Participation Date” shall have the meaning determined in accordance with paragraph 3.8.

(t)               “Participating Optionees” means the Optionees who, following the Participation Date applicable to such Optionee, form the joint venture referred to in Article 4.

(u)               “Program” means, as the context requires:

(i)               any program to carry out work and incur Expenditures on the Property; or

(ii)              a document or documents wherein there is specified in reasonable detail an outline of any and all research, prospecting and exploration and development work proposed to be carried out during such Program, the estimated Expenditures to be incurred in carrying out such work and the area of the Property on which such work is to be undertaken;

and shall include any amendments to a Program as may be agreed upon by Taseko and the Optionees.

(v)               “TSX” means the TSX Venture Exchange.

(w)                “Property” means the mining properties, claims, interest and other rights comprised by the mineral claims more particularly described in Schedule 1 and shall include any renewal thereof and any other form of successor or substitute title therefor, and shall include any other mineral properties, claims or interest made part of the Property pursuant to this Agreement.

(x)               “Tax Act” means the Income Tax Act (Canada) as amended and in force from time to time.

(y)               “Qualified Expenditure” means an expense, incurred by the Issuer in carrying out any part of the Program, that qualifies as CEE.

1.2               This Agreement shall be read with such changes in gender or number as the context shall require.

1.3               The headings to the articles, paragraphs, parts or clauses of this Agreement and the table of contents are inserted for convenience only and shall not affect the construction hereof.

1.4               Unless otherwise stated, a reference herein to a numbered or lettered article, paragraph, clause or schedule refers to the article, paragraph, clause or schedule bearing that number or letter in this Agreement. A reference to “this” article, paragraph, clause or schedule means the article, paragraph, clause or schedule in which the reference appears. A reference to “this Agreement”, “hereof”, “hereunder”, “herein” or words of similar meaning, means this agreement including the schedules hereto, together with any amendments thereof.

1.5               All dollar amounts expressed herein refer to lawful currency of Canada.

1.6               Wherever interest is chargeable under this Agreement, unless otherwise specifically provided, interest will be at the specified per annum rate, calculated daily and compounded on the last day of each calendar month. For the purposes hereof, the Prime Rate in effect for each day of a month shall be equal to the Prime Rate declared at noon on the first Business Day of that month. For greater certainty, the daily interest rate chargeable will be the specified per annum rate divided by the number of days in that calendar year.

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1.7               A reference to a statute, regulation or other legislation herein shall be deemed to extend to and include any amendments thereto and successor legislation.

1.8               The following schedules are incorporated into this Agreement by reference:

Schedule	Description
1	Description of Property
2	Form of Call Notice

1.9               This Agreement shall be construed and governed by the laws in force in the Province of British Columbia and, except as provided in Article 16, the courts of said Province shall have exclusive jurisdiction to hear and determine all disputes arising hereunder. Each of the parties hereto irrevocably attorns to the jurisdiction of said courts and consents to the commencement of proceedings in such courts. This paragraph shall not be construed to affect the rights of a party to enforce a judgment or award outside the said Province, including the right to record or enforce a judgment or award in any jurisdiction in which Assets are situated.

1.10              If any provision of this Agreement is or shall become illegal, invalid or unenforceable, in whole or in part, the remaining provisions shall nevertheless be and remain valid and subsisting and the said remaining provisions shall be construed as if this Agreement had been executed without the illegal, invalid or unenforceable portion.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

2.1                Each party represents and warrants to the other parties with respect to such party that:

(a)               it is a body corporate duly incorporated, organized and validly subsisting under the laws of British Columbia;

(b)               it has full power and authority to carry on its business and to enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement;

(c)               neither the execution and delivery of this Agreement nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated conflict with, result in the breach of or accelerate the performance required by any agreement or instrument to which it is a party;

(d)                the execution and delivery of this Agreement and the agreements contemplated hereby will not violate or result in the breach of the laws of any jurisdiction applicable or pertaining thereto or of its constating documents or directors’ or shareholders’ resolutions or any judgement, order, law or governmental or administrative regulation or restriction applicable to it; and

(e)               all corporate authorizations have been obtained for the execution of this Agreement and for the performance of its obligations hereunder.

2.2               Taseko represents and warrants to the Optionees that:

(a)               the mineral claims and other interests comprising the Property are accurately described in Schedule 1, are presently in good standing under the laws of British Columbia and, except as noted in Schedule 1, are free and clear of all liens, charges and financial encumbrances;

(b)               Taseko owns 100% of the issued shares of Gibraltar Mines Ltd. and has the exclusive right to enter into this Agreement and to dispose of an interest in the Property in accordance with the terms of this Agreement;

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(c)               Gibraltar Mines Ltd. is, subject to any royalties held by third parties, the sole recorded holder of legal and beneficial title to the mineral claims referred to in Schedule 1;

(d)               any mineral claims included in the Property as described in Schedule 1 have been properly and legally staked, recorded,tagged and maintained;

(e)               there is no adverse claim or challenge against or to the ownership of or title to any of the mineral claims and other interests comprising the Property, nor to the knowledge of Taseko is there any basis therefore or interest therein, and there are no other agreements or options to acquire or purchase the Property or any portion thereof, and no person has any other royalty or other interest whatsoever in production from any part of the Property;

(f)               no proceedings are pending for and Taseko is unaware of any basis for the institution of any proceedings leading to the dissolution or winding-up of Taseko or the placing of Taseko into bankruptcy or subject to any other laws governing the affairs of insolvent persons;

(g)               the Property and its existing and prior uses comply with and Taseko is not in violation of and has not violated in connection with its ownership, use, maintenance or operation of the Property, any applicable federal, provincial, municipal or local laws, regulations, orders or approvals, including environmental, health safety and similar matters; and

(h)               the performance of this Agreement will not be in violation of or conflict the memorandum and articles of Taseko or any agreement to which Taseko is a party and will not give any person or company right to terminate or cancel any agreement or any right enjoyed by Taseko and will not result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever in favour of a third party upon or against the assets of Taseko.

2.3               The representations, warranties, covenants, agreements and conditions herein set out upon which the parties have relied in entering into this Agreement and shall survive the acquisition of any interest in the Property by the Optionees, and each party will indemnify and save the others harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation, warranty, covenant, agreement or condition made by them and contained in this Agreement (including, without limitation, legal fees and disbursements).

ARTICLE 3

OPTION AND EXPLORATION PROGRAMS

3.1               Taseko hereby grants to the Optionees the rights to earn Interests in the Property by providing Taseko with funds equal to their Extent of Participation, to be utilized by Taseko in making Expenditures on the Property for and on behalf of the Optionees.

3.2               The Interest earned by the Optionees hereunder will be deemed to be earned rateably as Expenditures are incurred by Taseko on behalf of the Optionees.

3.3               The Optionees will retain Taseko to incur or cause to be incurred on behalf and for the account of each Optionee, the Expenditures required pursuant to this Article 3 and Taseko may retain Hunter Dickinson Inc. or such other third party (herein referred to as a “Designee”) as it deems appropriate to incur, on behalf of the Optionees, the Expenditures required by this Article 3.

3.4               Taseko shall deliver to or cause to be delivered to each Optionee, on a monthly basis and within 20 days of the month-end, a statement of the Expenditures actually incurred during the preceding month. The Optionee may question the accuracy of any such statement, by written notice to Taseko delivered within thirty (30) days following the receipt by the Optionee of such statement. Upon delivery by Taseko of a notice questioning the accuracy of such statement, the matter shall be referred to Taseko’s independent Chartered Accountants for final

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determination. If Taseko’s independent Chartered Accountants are unable or unwilling to make such determination, the matter may be referred to arbitration in accordance with Article 6. If Taseko’s accountant or the arbitrator, as the case may be, determines that Taseko’s statement was accurate (within one percent (1%)), no other action shall be taken with respect thereto and the costs of such audit or arbitration, as the case may be, shall be borne by the Optionee. Otherwise the statement shall be corrected and Taseko will pay the audit or arbitration cost.

3.5               During the currency of the earn-in rights under this Article 3, Taseko or its Designee shall act as Operator for the purpose of carrying out work and incurring Expenditures. All such work and Expenditures shall be in accordance with one or more Programs prepared by Taseko in consultation with each Optionee and delivered to each Optionee at least five (5) Business Days prior to the date such work is to commence. Any amendments to any Program shall similarly be prepared by Taseko in consultation with each Optionee and delivered to each Optionee at least five (5) Business Days prior to the date such amendments are to take effect. Taseko shall have final decision over all Programs provided that the anticipated Expenditures shall at least be such as to allow each Optionee to earn its respective Interest in accordance with this Article 3.

3.6               During the currency of each Optionee’s rights pursuant to Article 3 hereunder, each Optionee or its representatives, at their own risk and expense, and upon giving Taseko reasonable prior notice, may access the Property at all reasonable times and inspect all records prepared by Taseko in connection with work done on or with respect to the Property, pursuant to this Agreement.

3.7               At any time prior to the Participation Date, each Optionee may, subject to Taseko’s Call right referred to in Article 6 of this Agreement, terminate this Agreement so long as it is not in default of any of its obligations under this Agreement by giving notice in writing to that effect to Taseko. In the event of termination, each Optionee shall have no further interest in the Property (except for any Interest each Optionee has earned before the termination of the Agreement); provided, however, that each Optionee shall remain liable solely for any amount owing respecting Expenditures incurred on its behalf and all other unsettled obligations arising from its activities carried on for its benefit in respect of the Property.

3.8               Subject to earlier termination hereunder and provided that Taseko has not exercised its Call right referred to in Article 5 of this Agreement, the Participation Date for each Optionee shall be that date which is the earliest of:

(a)               150 days after the date the Optionee has earned the maximum Interest available hereunder by incurring or having caused to be incurred in the aggregate the amount equal to that Optionee’s Extent of Participation in accordance with the terms of this Agreement;

(b)               150 days after the date the Optionee ceases to provide funding for further Expenditures; and

(c)               150 days after the date the Optionee refers to, in a notification to Taseko, that the Optionee will not incur further Expenditures on the Property.

3.9               At the close of business on the date which is the later of the Participation Date as between the Optionees the Participating Optionees shall, together with Taseko, form the Joint Venture referred to in Article 4.

ARTICLE 4

JOINT VENTURE

4.1               Following the Participation Date, Taseko and the Participating Optionees will form a Joint Venture for the purpose of carrying out further exploration, development and production work on the Property and will use their commercially reasonable best efforts to negotiate and execute a Joint Venture Agreement, said agreement to have standard Rocky Mountain Mineral Law Foundation terms and shall include, but not be limited to, the following provisions:

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(a)                the initial interests of each of the Participating Optionees in the Joint Venture will be the Interest each Optionee has earned pursuant to this Agreement and the interest of Taseko will be 100% less these amounts less any royalty interests held by third parties;

(b)               Taseko shall be the initial operator of the Joint Venture and Taseko shall be the operator as long as Taseko has at least 50%;

(c)               the operations of the Joint Venture will be overseen by a management committee, with each party to have voting rights on such committee equal to their Interest in the Joint Venture;

(d)               Parties will have 15 days following adoption of a work program to elect to participate therein and invoices rendered to participating parties in respect of any work program shall be payable within 30 days; and

(e)               Each party will grant to the others the right of first refusal with respect to the sale of such party’s interest in the Joint Venture.

ARTICLE 5

EARNED INTEREST AND TASEKO’S CALL

5.1               On the Earn-In Date NDM and RCW shall have undivided Interests determined according to Article 3 and Taseko shall have the remaining undivided Interest aggregating 100%.

5.2               For a period of 150 days after the Earn-In Date, Taseko shall have the exclusive right to purchase all, but not less than all (the “Call”), of each Optionee’s Interest in the Property providing such purchase is completed within 60 days from the Call Notice to each Optionee, subject to such 60 day period being extended by any period reasonably required by Taseko (using always its reasonable efforts to complete the Call) necessitated by the requirements of any regulatory authority or due to any delay in any Optionee providing information reasonably necessary to complete the Call or any delay caused by any other reason beyond the reasonable control of Taseko. The Call Notice shall be initiated in the form attached as Schedule 2.

5.3               The Call may be exercised in cash or in consideration of the issuance of Taseko common shares (at Taseko’s election). Subject to rateable adjustment for lesser Interests earned, the acquisition price of each Optionee’s called Interest to Taseko shall be equal to the sum of a number of Taseko shares (or cash equivalent) valued as provided for in Article 5.4 calculated as 110% of the Expenditures incurred by or for the account of each Optionee to earn its Interest, the total Taseko shares (or cash equivalent) hereof being herein the “Call Price”.

5.4               The common shares of Taseko to be issued upon exercise of the Call shall be valued at the weighted average 10-day trading prices (last trade price in the day times volume for the trade day over 10 days; then the sum divided by the total volume over the 10 day period) of Taseko’s common shares as quoted on the TSX for the 10 trading days prior to the date of the call notice after Taseko provides each Optionee with notice of its intention to exercise the Call.

ARTICLE 6

ARBITRATION

6.1               Any matter required or permitted to be referred to arbitration pursuant to this Agreement will be determined by a single arbitrator to be appointed by the parties hereto.

6.2               Any party may refer any such matter to arbitration by written notice to the others and, within ten days after receipt of such notice, the parties will agree on the appointment of an arbitrator. No person will be appointed as an arbitrator hereunder unless such person agrees in writing to act.

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6.3               If the parties cannot agree on a single arbitrator as provided in paragraph 6.1, or if the person appointed is unwilling or unable to act, either party may request the court to appoint a single arbitrator in accordance with the Commercial Arbitration Act of the Province of British Columbia (the “Act”).

6.4               Except as specifically provided in this Article, an arbitration hereunder shall be conducted in accordance with the Act. The arbitrator shall fix a time and place in Vancouver, British Columbia for the purpose of hearing the evidence and representations of the parties and he shall preside over the arbitration and determine all questions of procedure not provided for under such Act or this Article. After hearing any evidence and representations that the parties may submit, the arbitrator shall make an award and reduce the same to writing and deliver one copy thereof to each of the parties. The decision of the arbitrator will be made within 45 days after his appointment, subject to any reasonable delay due to unforeseen circumstances. The expense of the arbitration shall be paid as specified in the award. The parties agree that the award of the single arbitrator shall be final and binding upon each of them and shall not be subject to appeal.

ARTICLE 7

NOTICE

7.1               Any notice, direction or other communication required or permitted to be given under this Agreement shall be in writing and may be given by the delivery of the same or by mailing the same (first class postage prepaid) or by sending the same by facsimile transfer or other similar form of telecommunication, in each case addressed as follows:

(a)	If to Taseko, at: Suite 1020 – 800 West Pender Street, Vancouver, British Columbia, V6C 2V6 Attention: Ronald Thiessen Fax: (604) 684-8092
(b)	If to NDM, at: Suite 1020-800 West Pender Street, Vancouver, British Columbia, V6C 2V6 Attention: Bruce Youngman Fax: (604) 684-8092
(c)	If to RCW, at: Suite 1020-800 West Pender Street, Vancouver, British Columbia, V6C 2V6 Attention: Rene Carrier Fax: (604) 684-8092

7.2               Any notice, direction or other communication aforesaid shall, if delivered, be deemed to have been given and received on the day it was delivered and, if mailed, shall be deemed to have been given and received on the third Business Day following the day of mailing, except in the event of disruption of the postal service in which event notice shall be deemed to be received only when actually received and, if sent by facsimile transfer or other similar form of telecommunication, shall be deemed to have been given or received on the next Business Day following the day on which it was so sent.

7.3               Any party may at any time give to any other party notice in writing of any change of address of the party giving such notice or of notice of an assignment giving contact information of a new party, and from and after

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the giving of such notice, the address therein specified shall be deemed to be the address of such party for the purposes of giving notice hereunder. Any change of address notice shall include a contact number for the sending of notices by telecommunication hereunder.

ARTICLE 8

FORCE MAJEURE

8.1               No party will be liable for its failure to perform any of its obligations under this Agreement due to a cause beyond its control (except those caused by its own lack of funds) including, but not limited to: acts of God, fire, flood, earthquake, explosion, strikes, lockouts or other industrial disturbances, power line failures; laws, rules and regulations or orders of any duly constituted court or governmental authority; or nonavailability of materials or transportation (each an “Intervening Event”).

8.2               All time limits imposed by this Agreement will be extended by a period equivalent to the period of delay resulting from an Intervening Event described in this Article, plus an additional time period reasonable in the circumstances.

8.3               A party relying on the provisions of this Article will take all reasonable steps to eliminate any Intervening Event and, if possible, will perform its obligations under this Agreement as far as practical, but nothing herein will require such party to settle or adjust any labour dispute or to question or to test the validity of any law, rule, regulation or order of any duly constituted court or governmental authority or to complete its obligations under this Agreement if an Intervening Event renders completion impossible.

8.4               A party relying on the provisions of this Article shall give notice to the other party forthwith upon the occurrence of the Intervening Event and forthwith after the end of the period of delay when such Intervening Event has been eliminated or rectified.

8.5               No party claiming force majeure has any obligation to accede to labour demands in strike or lockout situations.

ARTICLE 9

GENERAL PROVISIONS

9.1               This Agreement constitutes the entire agreement between the parties and replaces and supersedes all prior agreements, memoranda, correspondence, communications, negotiations and representations, whether oral or written, express or implied, statutory or otherwise between the parties with respect to the subject matter herein. This Agreement may not be amended or modified except by an instrument in writing signed by each of the parties hereto.

9.2                No consent or waiver, express or implied, by any party to or of any breach or default by any other party of any or all of its obligations under this Agreement will:

(a)               be valid unless it is in writing and stated to be a consent or waiver hereunder;

(b)               be relied upon as a consent or waiver to or of any other breach or default of the same or any other obligation;

(c)               constitute a general waiver under this Agreement; or

(d)               eliminate or modify the need for a specific consent or waiver in any other or subsequent instance.

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9.3               The parties will execute such further and other documents and do such further and other things as may be necessary or convenient to carry out and give effect to the intent of this Agreement.

9.4               All payments to be made to any party hereunder may be made by cheque or draft mailed or delivered to such party at its address for notice purposes as provided herein, or for the account of such party at such bank or banks in Canada as such party may designate from time to time by written notice. Such bank or banks shall be deemed the agent of the designating party for the purpose of receiving, collecting and receipting such payment.

9.5               If any party (a “Defaulting Party”) is in default of any requirement herein set forth, the other party may give written notice to the Defaulting Party specifying the default. The Defaulting Party shall not lose any rights under this Agreement unless, within 30 days after the giving of notice of default by the other party, the Defaulting Party has failed to take reasonable steps to cure the default by the appropriate performance or the Defaulting Party fails to dispute the notice of default. Upon any such failure, the other party shall be entitled to seek any remedy it may have on account of such default.

9.6               Time shall be of the essence in the performance of this Agreement.

9.7               This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

9.8               If any right, power or interest of any party in any property under this Agreement would violate the rule against perpetuities, then such right, power, or interest shall terminate at the expiration of 20 years after the death of the last survivor of all the lineal descendants of Her Majesty, Queen Elizabeth II, living on the date of execution of this Agreement.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly effective and agreed to as of the 1^st day of December, 2003.

	TASEKO MINES LIMITED
Per:
	Ronald W. Thiessen
	Authorized Signatory

	NORTHERN DYNASTY RESOURCES LTD.
Per:
	Bruce Youngman
	Authorized Signatory

	ROCKWELL VENTURES INC.
Per:
	Rene Carrier
	Authorized Signatory

SCHEDULE 2

To a Farmout and Joint Venture Agreement between Taseko Mines Limited., Northern Dynasty Minerals Ltd. and Rockwell Ventures Inc. dated for reference the 1^st day of December, 2003.

CALL NOTICE

Date	•
TO:	• . which has acquired an Interest pursuant to the Farmout and Joint Venture Agreement dated for reference the 1st day of December, 2003.

Taseko hereby gives you notice that it intends to purchase your Interest in the Property by the issuance of • Taseko Shares valued at $• each. Our calculation pursuant to paragraphs 5.3 and 5.4 is attached.

Please confirm your preparedness to accept the foregoing consideration.

TASEKO MINES LIMITED
Per:
	Authorized Signatory

Receipt of the foregoing Call terms are acknowledged this ___ day of _______________ , 2003.

•
Per:
	Authorized Signatory

EX-12.1

SECTION 302 CERTIFICATION

I, Ronald W. Thiessen, certify that:

1.	I have reviewed this annual report on Form 20-F of Taseko Mines Limited;
2.	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;
3.	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;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
	(a)	designed such disclosure controls and procedures 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 annual report is being prepared;
	(b)	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
	(c)	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	(a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 15, 2004

/s/ Ronald W. Thiessen
Ronald W. Thiessen
Director, President, and Chief Executive Officer

EX-12.2

SECTION 302 CERTIFICATION

I, Jeffrey R. Mason, certify that:

1.	I have reviewed this annual report on Form 20-F of Taseko Mines Limited;
2.	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;
3.	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;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
	(a)	designed such disclosure controls and procedures 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 annual report is being prepared;
	(b)	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
	(c)	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	(a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 15, 2004

/s/ Jeffrey R. Mason
Jeffrey R. Mason
Director, Chief Financial Officer, and Secretary

EX-13.1

SECTION 906 CERTIFICATION
TASEKO MINES LIMITED
(the "Company")

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the Company, do hereby certify, to such officer’s knowledge, that:

• the Annual Report on Form 20-F for the year ended September 30, 2003 of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
   
• the information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 15, 2004	Date: April 15, 2004
/s/ Ronald W. Thiessen	/s/ Jeffrey R. Mason
Ronald W. Thiessen	Jeffrey R. Mason
Director and Chief Executive Officer	Director, Chief Financial Officer, and Secretary