Minco Capital 20F 2003 Annual report

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 20-F

Registration Statement Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2003

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 0-22617

MINCO MINING & METALS CORPORATION

(Exact name of registrant as specified in its charter)

Province of British Columbia (Canada)

(Jurisdiction of incorporation or organization)

Suite 1980, 1055 West Hastings Street

Vancouver, British Columbia, Canada V6E 2E9

(Address of principal executive offices)

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

N/A

Title of each class

N/A

Name of each exchange

on which registered

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

Common Shares without par value

(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report. 27,614,029

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

Yes P

No _______

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

Item 17 P

Item 18 _______

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 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. Yes No Not Applicable

TABLE OF CONTENTS

		Page


Introduction And Use of Certain Terms			3
Forward-Looking Statements			3
Glossary of Mining Terms			3

PART I
Item 1.	Identity of Directors, Senior Management and Advisers		5

Item 2.	Offer Statistics and Expected Timetable		6

Item 3.	Key Information		6

Item 4.	Information on the Company		10

Item 5.	Operating and Financial Review and Prospects		43

Item 6.	Directors, Senior Management and Employees		47

Item 7.	Major Shareholders and Related Party Transactions		51

Item 8.	Financial Information		53

Item 9.	The Offer and Listing		54

Item 10.	Additional Information		55

Item 11.	Quantitative and Qualitative Disclosures About Market Risk		64

Item 12.	Description of Securities Other than Equity Securities		65

PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies		66

Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		66

Item 15.	Controls and Procedures		66

Item 16.	Audit Committee Financial Expert		66

PART III
Item 17.	Financial Statements		68

Item 18.	Financial Statements		68

Item 19.	Exhibits		68

Signatures			69

Introduction And Use of Certain Terms

Minco Mining & Metals Corporation is a corporation incorporated under the laws of the province of British Columbia, Canada. As used herein, except as the context otherwise requires, the term "we", "us", "our", "Minco" or the "Company" refers to Minco Mining & Metals Corporation and its consolidated subsidiaries. The Company's consolidated financial statements are prepared in accordance with Canadian generally accepted auditing standards and are presented in Canadian dollars. Unless otherwise indicated, reference to dollar amounts in this Annual Report shall refer to Canadian dollars.

Minco Mining & Metals Corporation files reports and other information with the Securities and Exchange Commission located at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies of Minco's filings with the SEC by accessing their website located atwww.sec.gov. Further, Minco also files reports under Canadian regulatory requirements on SEDAR. You may access Minco's reports filed on SEDAR by accessing their website atwww.sedar.com.

The principal executive office of the Company is located at Suite 1980, 1055 West Georgia Street, Vancouver, British Columbia, Canada V6E 2E9, and its telephone number is 604-688-8002.

Forward-Looking Statements

The following discussion contains forward-looking statements regarding events and financial trends which may affect the Company's future operating results and financial position. Such statements are subject to risks and uncertainties that could cause the Company's actual results and financial position to differ materially from those anticipated in forward looking statements. These factors include, but are not limited to, the fact that the Company is in the exploration stage, will need additional financing to develop its properties and will be subject to certain risks since its prospects are located in China, all of which factors are set forth in more detail in the section entitled "Risk Factors" in Item 3.D. and "Operating and Financial Review and Prospects" at Item 5.

Glossary of Mining Terms

Alteration

changes in the chemical or mineralogical composition of a rock, generally produced by weathering or hydro-thermal solutions.

Anomalous

inconsistent with or deviating from what is usual, normal or expected.

Anomaly

the geographical area corresponding to anomalous geochemical or geophysical values.

Assay

a chemical test performed on a sample of ores or minerals to determine the amount of valuable metals contained.

Back-in rights

providing financing assistance in exchange for the right to regain an interest at a later time under predetermined terms.

Carried interest

an interest which does not require funding.

Chalcopyrite

Drift

copper sulphide mineral.

an underground passage, approximately horizontal, often along a mineralized zone.

Drilling - diamond drilling

a drilling procedure using diamond-tipped bits which result in recovery of a drill core cylindrical section of rock from beneath the earth's surface.

Fault

a fracture in a rock across which there has been displacement.

Felsic intrusions

an intrusion of granite into surrounding rocks.

Geochemical sampling

trace element analysis of residual soils which may be interpreted to predict the composition of the underlying bedrock.

Geology

a science that deals with the history of the earth and its life especially a recorded in rocks.

Geophysical survey

means an exploration method that measures magnetic, electrical or other physical characteristics of the earth, the results of which can be interpreted and used to predict the possibility of economic mineral concentrations beneath the surface of the earth.

Grade

the concentration of an ore metal in a rock sample, given either as weight percent for base metals or in grams per tonne (g/t) or ounces per short ton (oz/t) for precious metals. The grade of an ore deposit is calculated, often using sophisticated statistical procedures, as an average of the grades of a very large number of samples collected from throughout the deposit.

Ground magnetometer survey

a geophysical survey carried out from the ground.

Heap leach

a process whereby valuable metals are leached from a heap or pad of crushed ore by leaching solutions percolating down through the heap and collected from a sloping, impermeable liner below the pad.

Highly anomalous

an anomaly, which is 50 to 100 times average background.

Horizon

layer (as in massive sulphide horizon).

Intrusive

mineralization within a rock type that was once molten and has "intruded" into other rocks in that state, after which it cools.

Mineralization

Net smelter royalty

minerals of value occurring in rocks.

a share of the net revenues received from a

smelter generated by the sale of metal produced by a mine.

Ore

a natural aggregate of one or more minerals which may be mined

and sold at a profit, or from which some part may be profitably

separated.

Ore lenses

a lenticular concentration of valuable material.

Sedimentary exhalative (or SedEx) typedeposit

a type of deposit consisting of layers of massive sulphide (a rock composed of at least 60% sulphide minerals) interbedded with layers of sedimentary rock.

Skarn

type of altered rock which in some areas contains

commercially-recoverable amounts of metals.

Sulphide

a compound of sulphur and some other elements.

Smelter

the treatment of sulphide concentrates to produce metal.

Surficial oxide zone

the top portion of a deposit which has been oxidized by surface

weathering.

Trenching

trenches excavated to bedrock which may be made by hand

or by machine.

PART 1

Item 1.

Identity of Directors, Senior Management and Advisers

A. Directors and Senior Management

The following table sets forth as of April 30, 2004, the names, business addresses and functions of Minco's directors and senior management.

Name

Business Address

Position

Ken Cai

Suite 1980 - 1055 West Hastings Street

Vancouver, British Columbia

Canada V6C 1X8

President, Chief Executive Officer and Director

William Meyer

Suite 1980 - 1055 West Hastings Street

Vancouver, British Columbia

Canada V6C 1X8

Chairman and Director

Robert M. Callander

43 Delhi Avenue

North York, Ontario, Canada

M5M 3B8

Director

Hans Wick

Robert Gayton

Michael Legg

Gartenstr. 7

Zurich, Switzerland CH8002

1550 - - 1185 West Georgia Street

Vancouver, B.C., Canada

V6E 4E6

525-2050 Scotia Street, Vancouver, B.C., Canada V5T 4T1

Director

Officer

B. Advisers

The Company's transfer agent and registrar for its common shares is Computershare Trust Company of Canada (formerly Montreal Trust Company of Canada), 510 Burrard Street, Vancouver, British Columbia, Canada V6C 3B9. Computershare acquired Montreal Trust in July 2000.

The Company's legal advisors are Bartel Eng & Schroder, 300 Capitol Mall, Suite 1100, Sacramento, CA 95814 and Salley Bowes Harwardt, 1750 - 1185 West Georgia Street, Vancouver, British Columbia, Canada V6E 4E6.

C. Auditors

The Company's auditors are Ellis Foster, Chartered Accountants. Their address is 1650 West 1^st Avenue, Vancouver, British Columbia Canada V6J 1G1. Ellis Foster has been the Company's auditor for at least the past six years.

Item 2. Offer Statistics and Expected Timetable

Not Applicable

Item 3. Key Information

Selected Financial Data

The following selected financial information for the fiscal years ended December 31, 1999, 2000, 2001, 2002 and 2003 are derived from the financial statements of Minco which is reported in Canadian dollars and should be read in conjunction with the financial statements and the notes thereto attached to this Annual Report. Minco's financial statements are prepared in accordance with Canadian Generally Accepted Accounting Principles ("GAAP"). There are significant differences between Canadian GAAP and U.S. GAAP including the recording of exploration costs, recognition of compensation expense upon release of the escrow shares and issuance of stock options and the recording of marketable securities. For a discussion between Canadian GAAP and United States GAAP, see note 15 to the Company's financial statements.

*****Canadian GAAP, as previously reported*****

At December 31

1998

2003

2002

2001

2000

1999

Operations

Interest and Sundry Income $ 38,044

$ 27,160 $ 77,023

116,205

144,042

Exploration Expense 308,858

494,813 168,835

Mineral Interests written off -

- -

579,088

Loss for Period (1,769,195)

(1,288,209) ( 706,007)

(624,679)

(1,506,108)

Income (loss) from Continuing

Operations per Common Share ($0.08)

($0.07) ($0.04)

($0.04)

($0.09)

Common Shares used in

Calculations 20,875,129

17,682,041 16,380,123

16,335,178

16,154,986

Consolidated Balance Sheet Data

Total Assets $ 6,982,050

$ 286,701 $ 998,331

3,912,973

4,382,428

Mineral Interests 100

100 100

2,281,470

1,835,376

Total Liabilities 357,670

431,444 401,608

328,873

284,749

Share Capital $19,201,871

$10.836,933 $10,286,933

10,286,933

10,175,833

The Company has changed its accounting policy for mineral interests to write-off exploration cost as incurred until such are proven. (Previously the Company's policy was to capitalize exploration costs until it had been determined that economically proven reserves are located on the property). The change has been accounted for retroactively with prior years being restated. The effect of the restatement is as follows:

***** Canadian GAAP, as restated *****

At December 31

2003

2002 2001

2000 1999

Operations

Interest and Sundry Income $ 38,044

$ 27,160

77,023

116,205

144,042

Exploration Expense 308,858

494,813

168,835

446,094

759,871

Mineral Interests written off

Operating Loss (1,769,195)

(1,288,209)

(715,412)

(1,070,773)

(1,570,542)

Loss for Period (1,769,195)

(1,288,209)

(715,412)

(1,070,773)

(1,686,891)

Income (loss) from Continuing

Operations per Common Share

($0.08)

($0.07)

($0.04)

($0.07)

($0.10)

Common Shares used in

Calculations 20,875,129

17,682,041

16,380,123

16,335,178

16,154,986

Consolidated Balance Sheet Data

Total Assets 6,982,050

286,701

988,926

1,631,603

2,547,152

Mineral Interests

100

Total Liabilities 357,670

431,444

401,608

328,873

284,749

Share Capital $19,201,871

$10,836,933

10,286,933

10,175,833

United States GAAP

At December 31

2003

2002

2001

2000

1999

Operations

Interest and Sundry Income $ 38,044 $ 27,160

77,023

116,205

144,042

Exploration Expense 308,858

494,813

168,835

446,094

759,871

Loss for Year (1,769,195)

(1,288,209)

(915,264)

(1,070,773)

(2,544,584)

Income (loss) from Continuing

Operations per Common Share ($0.10)

($0.07)

($0.08)

($0.21)

Common Shares used in

Calculations 17,883,807

14,690,719

13,388,801

12,828,232

12,189,894

Consolidated Balance Sheet Data

Total Assets 6,981,086

286,601

992,036

1,648,933

2,547,052

Mineral Interests

Total Liabilities 357,670

431,444

401,608

328,873

284,749

Share Capital $19,201,871 $ 10,836,933

$ 14,610,766

14,410,914

14,299,814

Exchange Rates

The following table sets forth information as to the period end, average, the high and the low exchange rate for Canadian Dollars and U.S. Dollars for the periods indicated based on the noon buying rate in New York City for cable transfers in Canadian Dollars as certified for customs purposes by the Federal Reserve Bank of New York (Canadian dollar =U.S. $1).

Year Ended: December 31 2003	Average 1.46	Period End 1.35	High 1.59	Low 1.33
2002	1.57	1.58	1.61	1.51
2001	1.54	1.59	1.60	1.49
2000	l.48	1.49	1.55	1.43
1999	1.48	1.44	1.52	1.45

On April 30, 2004, the exchange rate of Canadian dollars into United States dollars, based upon the noon buying rate in New York City for cable transfers payable in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York, was US$1.00 equals Cdn$1.37.

Month	High	Low
April 2004	1.37	1.31
March 2004	1.35	1.31
February 2004	1.34	1.31
January 2004	1.33	1.27
December 2003	1.34	1.29
November 2003	1.34	1.30

Capitalization and indebtedness

The Company's capitalization as of December 31, 2003, is as follows:

Consolidated Balance Sheet Data		December 31, 2003
Long-Term Debt	$	0
Shareholder's Equity	$	6,624,380
Share Capitalization	$	21,014,276

Reasons for the Offer and Use of Proceeds

Not Applicable.

Risk Factors

In addition to the other information presented in this Annual Report, the following should be considered carefully in evaluating the Company and its business. This Annual Report contains forward-looking statements that involve risks and uncertainties. The Company's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed below and elsewhere in this Annual Report.

The Company Has Incurred Losses. Since its reorganization in 1996, the Company has incurred net losses and will continue to incur losses until it can derive sufficient revenues from its projects.

The Company Is In Exploration Stage And Has No Proven Reserves. None of the properties in which the Company has interests are in commercial production, or contain reserves. In order to obtain more reliable information on which to base decisions about possible development of a property, it is necessary to expend significant time and money, and many such properties will turn out not to be worth further expense. The Company may thus expend significant amounts of financing and effort on any or all of its properties without finding reserves or reaching a stage of commercial production.

The Company Must Obtain Additional Financing to Conduct Exploration on Its Properties. Because the Company is in the exploration stage, it does not have sufficient financial resources available to undertake extensive exploration or, if warranted, development programs. Further exploration or commercial development, if warranted, would require additional financing. There can be no assurance that needed future financing will be available in a timely or economically advantageous manner, or at all.

The Company's Interests in Its Joint Ventures Will Be Subject to Dilution. Under the terms of its joint venture agreements, the Company may earn a specified percentage in the joint venture provided that the Company spends a required amount on project expenditures for the joint venture. In the event the Company ceases to make its project expenditures, its interest in the joint venture will be subject to dilution.

The Company's Interest In Projects Will Be Diluted Pursuant to the Teck-Cominco Agreements. The Teck-Cominco Agreements grant those companies the right to become the operators of an aggregate of two future properties of the Company as well as rights of first refusal to acquire interests in other future projects for a period of three years. The exercise of those earn-in-rights by Teck Cominco will dilute the Company's interest in those projects. See Item 4. - "Information on the Company", "The Teck-Cominco Agreements".

The Mining Industry Is Highly Speculative. The Company is engaged in the exploration for minerals which involves a high degree of geological, technical and economic uncertainty, because of the inability to predict future mineral prices, as well as the difficulty of determining the extent of a mineral deposit and the feasibility of extracting it without the expenditure of considerable money. There is a high level of risk involved.

It May Be Difficult to Enforce Civil Liabilities Against the Company. Because all of the assets of the Company and its subsidiary, as well as the Company's jurisdiction of incorporation and the residences of its officers and directors are located outside of the United States, it may be difficult or impossible to enforce judgments granted by a court in the United States against the assets of the Company and its subsidiaries or the directors and officers of the Company who reside outside the United States.

Penny Stock Rules May Make It More Difficult to Trade the Company's Common Shares. The Securities and Exchange Commission has adopted regulations which generally define a "penny stock" to be any equity security that has a market price, as defined, less than U.S.$5.00 per share or an exercise price of less than U.S.$5.00 per share, subject to certain exceptions. The Company's securities may be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors such as, institutions with assets in excess of U.S.$5,000,000 or an individual with net worth in excess of U.S.$1,000,000 or annual income exceeding U.S.$200,000 or U.S.$300,000 jointly with his or her spouse. For transactions covered by this rule, the broker-dealers must make a special suitability determination for the purchase and receive the purchaser's written agreement of the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell the Company's securities and also affect the ability of the Company's investors to sell their shares in the sec ondary market.

The Company is a Passive Foreign Investment Company for United State Federal Income Tax Purpose. The Company believes that it is a passive foreign investment company ("PFIC") for United States Federal income tax purposes because it earns 75% or more of its gross income from passive sources. As a result, United States holders of the Company's common shares could be subject to increased tax liability, possibly including an interest charge, upon the sale or other disposition of the United States holders common shares, or upon receipt of "excess distributions," unless such

holder of common shares elected to be taxed currently on his or her pro rata portion of the Company's income, whether or not the income was distributed in the form of dividends or otherwise. The election requires certain conditions to be met such as filing on or before the due date, as extended, for filing the shareholder's income tax return for the first taxable year to which the election will apply. Otherwise, the election may only partially apply. Further, the elections will increase the administrative and regulatory burden of the Company. See Item 10.E. "Taxation - United States Tax Consequences - Passive Foreign Investment Companies."

Risks Related to Doing Business in China. Various matters that are specific to doing business in China may create additional risks or increase the degree of such risks associated with the Company's activities. These risks are discussed below.

The Company Must Seek Governmental Approval to Develop Mines. The establishment, operation and terms of the joint ventures through which any particular mineral property is to be explored or operated are all subject to obtaining Chinese governmental approvals at various levels and for particular matters, including mining rights, importation of equipment, hiring of labor, and environmental regulations. Currently, the joint ventures formed to explore and, if warranted, develop the White Silver Mountain and Gobi Gold projects have obtained a license to conduct mineral exploration activities, but will be required to obtain a mining license to, if warranted, develop and conduct operations at the property. Depending on the scope of the operation, its location and the particular issues involved, the level of government from which approvals must be sought and the process involved may vary, potentially restrict ing the joint venture's operation.

Environmental Regulations May Adversely Affect the Company's Projects. The Company's operations are subject to environmental regulations promulgated by various Chinese government agencies from time to time. Violation of existing or future Chinese environmental rules may result in various fines and penalties. As China's economy modernizes and expands, it is expected that regulations covering environmental protection and the reclamation and remediation of industrial sites would be strengthened which could increase the operation costs in China.

It is industry practice for North American mining companies like Teck Cominco to apply the more stringent standards of their home countries to foreign operations regardless of local practices. Should Teck or Cominco choose to initiate production of a property in joint venture with the Company, its operations would be carried out using North American environmental standards. It is common practice for the estimated costs of reclamation and remediation of mine sites to be included in the capital cost of a project. A project would have to be able to provide an adequate return on all capital, including estimated reclamation costs, to be considered viable. The Company's current projects all surround active mining operations, which add additional considerations that would be dealt with on a case-by-case basis. See the "Environmental Considerations" section under the individual property description in Item 4. D. - "Property, Plants and Equipment" for more details.

Politics of China May Adversely Affect the Company's Investments. The Company's investments may be adversely affected by political, economic and social uncertainties in China. Changes in leadership, social or political disruption or unforeseen circumstances affecting China's political, economic and social structure could adversely affect the Company's joint venture interest or restrict its operations.

Lack Of A Legal System May Produce Inconsistent Results. Enforcement, operation and interpretation of existing laws may be uncertain, sporadic or inconsistent. China's judiciary is relatively inexperienced in enforcing laws that do exist, leading to a higher than usual degree of uncertainty as to the outcome of any litigation. Even where adequate law exists in China, it may be impossible to obtain swift and equitable enforcement of such law, or to obtain enforcement of the judgment by a court of another jurisdiction. As a result, if the Company is adversely affected, the Company may be unable to seek legal address in China.

Property Information May Be Uncertain. Much of the information on which the Company and its consultants have based their decisions regarding the Company's mineral prospects is based on information provided by Chinese governmental officials, geologists and mining engineers and cannot be independently confirmed. Accordingly, the reliability of geological and mineral information regarding the properties, the costs of labor, operation and construction may be uncertain since it has not been independently verified by the Company.

Item 4. Information on the Company

Introduction

Minco Mining & Metals Corporation is a British Columbia corporation whose common shares trade on the Toronto Stock Exchange ("TSX") under the trading symbol MMM. The principal executive office of the Company is located at Suite 1980 - 1055 West Hastings Street, Vancouver, British Columbia, Canada V6E 2E9, and the Company's telephone number is 604-688-8002. Through joint ventures with Chinese governmental entities, and others, the Company is engaged in the acquisition, exploration and development of precious and base metal mineral projects in the People's Republic of China. The Company has no affiliation with 3M Corporation, which company's trading symbol in the United States is MMM. The Company's wholly-owned subsidiary, Triple Eight Mineral Corporation ("Temco"), is a British Virgin Islands corporation also engaged in the acquisition and exploration of mineral projects in China. See Item 4, C - "Organizat ional Structure."

At present, all of the Company's properties are in the exploration stage and further exploration will be required before final evaluations as to the economic and legal feasibility can be determined. None of the Company's properties has a known body of commercial ore, nor are any such properties at the commercial development or production stage. No assurance can be given that commercially viable mineral deposits exist on any of the Company's properties. Further, Minco's interest in joint ventures, which own properties, will be subject to dilution if the Company fails to expend further funds on the projects. The Company has not generated cash flows from operations. These facts increase the uncertainty and risks faced by investors in the Company. See Item 3, D - "Risk Factors."

The Company was incorporated under the laws of the Province of British Columbia on November 5, 1982, under the name "Caprock Energy Ltd." On February 19, 1996, current management acquired its interests in the Company pursuant to the following agreements: the "PCR Agreement," and the "Teck-Cominco Agreements," described below under Item 4, B - "Business Overview"; "The PCR Agreement" and "The Teck-Cominco Agreements." The purpose of the PCR Agreement was to transfer Pacific Canada Resources, Inc.'s ("PCR") assets to the Company allowing the Company to explore and evaluate mineral properties in China for potential acquisition, and if warranted development.

Business Overview

Background

Since the signing of its first co-operation agreement on the Chapuzi project in China in 1995, the Company has been active in mineral exploration and property evaluations in China. The Company intends to build a portfolio of base metals and precious metals properties in China. As discussed below, a strategic alliance was formed with Teck Corporation and its 50.1% subsidiary, Cominco Ltd., for mineral exploration and acquisition in China. The Company has conducted exploration work on properties located in Sichuan, Xinjiang, Hebei, Inner Mongolia, and Gansu provinces of China. Currently, the Company has interests in three Sino-Foreign co-operative joint ventures with Chinese mining organizations to hold mineral rights in China.

At present the Company has no income from its operations and none of its properties have reserves or are in production. The Company's ability to finance the exploration and development, if warranted, of its mineral properties, to make concession payments and to fund general and administrative expenses is therefore dependent upon the Company's ability to secure financing (see "Business Overview", "Financial"). The equity markets for junior mineral exploration companies are unpredictable. Alternatively, the Company may enter into cost sharing arrangements through joint venture agreements. While management believes that the quality of the concessions now held by Minco will attract joint venture partners in the short-term and medium-term, there is no guarantee that the terms would be as favorable as management would like.

A summary of the Company's exploration operations in China for fiscal years 2003 follows. For detailed property descriptions please refer to section D. Description of Property.

Yangshan Gold Field - - Anba Property

In November, 2003, the Company announced it had executed several agreements with the Gansu Provincial government and two other companies in the Gansu Province for the exploration and development of the Anba gold deposit in the Yangshan Gold Field. Minco, through its joint venture company, Gansu Keyin Mining Co. Ltd., will have the right to acquire a 40% equity interest in the Yangshan Gold Mining Co., Ltd., ("YGM") a joint venture company. YGM will acquire a 100% interest in the Anba gold deposit for US$6 million, consisting of a 40% initial payment (US$2.4 mil) and the balance of 60% (US$3.6 mil) will be paid over a five year period.

Yangshan Gold Field - - Western Extension Properties - Guanniuwan, Hongyangou and Guojiagou Areas

In December, 2003, the Company announced it had executed a Cooperation Agreement with No. 2 Exploration Institute of the Gansu Bureau of Geological Exploration ("GBGE") for the exploration and development of mineral resources also in Gansu Province of China. Minco and GBGE will establish a new sino-foreign joint venture to explore for gold in three areas: the Guanniuwan, Hongyangou and Guojiagou. All of these areas are located in the Yangshan Gold Field. Minco will have the right to earn a 75% equity interest in the three areas through a joint venture. The total initial investment in the joint venture will be 7.5 million RMB (approx. US$960,000), 75% contributed by the Company and 25% contributed by GBGE (being the consideration for vending in the Exploration Permits they hold on the three areas). A joint venture contract was signed subsequently on March 1, 2004.

BYC Gold Project

On November 18, 2002, the Company reached an agreement with the Inner Mongolian Bureau of Non-Ferrous Metals and Exploration to acquire the majority interest in the BYC gold project, an advanced-stage gold exploration project, located in central Inner Mongolia. In July 2003 a joint venture, called Inner Mongolia Huayu-Minco Mining Co. Ltd., was formed between Minco and Inner Mongolia Bureau of Nonferrous Metal Exploration for the BYC project. Under the agreement, Minco can earn a 75% interest in the BYC project by spending approximately C$2.4 million (12 million RMB) on exploration and development on the property. Currently, the Company and its Chinese partner obtained required business licenses and other approval from the Chinese government in December 2003.

In November 2003, the Company entered into a Joint Venture Letter Agreement with New Cantech Ventures Inc. ("New Cantech"), whereby New Cantech acquired the right to earn a 51% interest in the BYC Gold Project by spending C$2.4 million on exploration over a three year period. A further 9% could be earned by bringing the property to pre-feasibility. New Cantech's first year's commitment is C$400,000.

Gobi Gold Project

The Company acquired its earn-in rights to the Gobi Gold project, located in western Inner Mongolia in the south Gobi Desert, China, in 1999. Minco has the right to acquire a 75% equity interest in Damo Mining Co. Ltd., who was assigned the licenses on the project, by spending approximately US$2,500,000 million on exploration and development over four years. Total expenditures funded by Minco from inception to December 31, 2003 is $1,375,551. Minco earned a 54% project interest.

In 2000 the Gobi Gold project field program included regional scale geological and geochemical sampling programs followed by detailed ground magnetometer surveys and geological mapping in a 20 square kilometer area. Detailed rock geochemical sampling focused on a seven square kilometer area within this broader area. Rock samples were assayed for gold and seven other elements common to gold-skarn systems. The combination of geology, intrusive centers interpreted from magnetic data and geochemistry indicates a typical gold skarn system in a belt 1,500 meters long and 300 meters wide where rock geochemical samples grade two grams per ton gold or better.

A new discovery was made during the year 2000 in an area within sand covering 1,000 meters to the east of the main gold zone near another interpreted intrusive center. A six-meter wide zone was exposed in a trench which returned an average grade of six grams per ton gold. Minco believes that geochemical values of two grams of gold per tonne are considered highly anomalous and could be an indication of economic concentrations of gold in the sub-surface. Values of six grams per tonne are potentially economic if found in large enough volumes to be economically extracted.

The year 2001 program consisted of expanded sampling programs by a drilling and/or trenching program prior to designing an extensive diamond-drilling program. The program consisted of detailed structural mapping, trenching in selected areas, and IP and/or TEM surveys in sand-covered areas which resulted in a substantial gold/copper discovery. The Zhulazhaga License was one of eight acquired and the most extensively explored because of the initial success. The remaining seven licenses were examined in 2000 in a regional reconnaissance fashion. Three license areas returned positive results in terms of favourable geology, alteration and geochemically anomalous gold values.

During 2002, the Company completed a phase one drilling program consisting of 14 holes, designed to test the gold zone at depth and laterally to the southwest. The Company also continued detailed exploration on three additional licenses, which had the same geological environment, which had exceptional early stage success. Data from the 2002 exploration program has been reviewed and a 2000-meter drill program was proposed for the 2003 field season. The 2003 drilling program was designed to trace the contact between the mineralized fault zone controlling mineralization and the permissive calcareous siltstone horizon which hosts the bulk of the mineralization at both the Chinese mine and Minco's Discovery Pit.

In February 2003, the Company completed 1,173 meters of drilling in nine holes. The program targeted the extension to the Discovery Pit area and four geophysical anomalies. Four holes, drilled in and around the Discovery Pit area, encountered mineralization in the 0.5 to 2.7 gram per tonne range in 1 to 5 meter widths. Testing of new geophysical targets did not lead to any new mineralized zones. The Company is now reviewing its options on its main license as well as the adjoining license where gold mineralization has been exposed by trenching over a distance of 500 meters but has never been systematically explored.

No assurance can be given that the sufficient amounts of gold will be found on the Gobi Gold project to be economically mined.

White Silver Mountain Project

The Company acquired its interest in the White Silver Mountain, a polymetallic project located in Gansu Province, China, in 1998. Minco has the right to acquire an 80% equity interest in the project by spending approximately US$4.8 million on exploration and development over six years. Pursuant to the White Silver Mountain Teck Agreements, described above, Teck Cominco Lmited has been the operator at the White Silver Mountain project since 1999 and has funded exploration expenditures at its sole discretion.

The year 2000 exploration program consisted of 230 meters of underground excavation to establish drill stations from which 2,730 meters of diamond drilling in five holes which was carried out with the objective of outlining the downward extensions of the known massive sulphide horizons. The drilling further outlined the extensions of the western lobe of massive sulphide mineralization. The eastern lobe remains open and will require additional drilling to define its extent. In addition to the underground program, an extensive surface program was carried out in the area of geology perspective for the occurrence of massive sulphide mineralization. Approximately 207 line-kilometers of geophysical surveys (comprising magnetic and electromagnetic surveys) were completed. A number of anomalies were outlined, of which three occur in highly perspective geology and require testing by drilling. These three areas were sc heduled for testing in 2001 by six surface diamond drill holes aggregating 2,700 meters at an estimated cost of $400,000 and additional drilling will be contingent on results of the six-hole program.

During 2001, Teck completed a total of 2,763 meters of diamond drill holes in nine surface drill holes. The holes targeted magnetic and electromagnetic anomalies outlined in the course of district sale geological and geophysical surveys completed in 2000. While favorable alteration and some sulphide mineralization were intersected in a number of holes, no economic grade mineralization was intersected and no further exploration work was done on the project during 2001.

In March 2002, Teck Cominco advised the Company that it had decided to withdraw from the project and would retain no interest in the property. Teck Cominco Limited had been the operator and funded the projects exploration to year end 2001 and advised the Company that it would not fund the project in 2002. Teck Cominco had recommended that the 2002 exploration program should focus on an underground drill program to follow up the down-dip extensions of the known ore bodies intersected by previous underground drill programs beneath the existing Xiaoteishan Mine with a goal to define a 5 million tonne reserve, which holds a potential 10 million tonne reserve potential, with a view to establishing a project that can be placed into production in a cost effective and timely manner. As the primary focus of the Company's

2002 exploration program was the Gobi Gold project, the Company decided to defer the drilling program until completion of additional financing.

The withdrawal by Teck Cominco resulted in the Company's interest in the White Silver Mountain increasing to 41.4%. In August 2003, the Company entered into an amendment agreement to the original joint venture contract with Baiyin Non-Ferrous Metal Cooperation to stop the earn-in process on the White Silver Mountain. Pursuant to the terms of the joint venture contract, Minco has earned a 61% equity interest on the White Silver Mountain and Baiyin Nonferrous Metals Company of the People's Republic of China 39%.

Financial

As outlined above, the focus of the Company's exploration for the past three years has been on exploration at the Gobi gold and White Silver Mountain projects. At present the Company has no income from its operations and none of its properties have reserves or are in production. The Company's ability to finance the exploration and development, if warranted, of its mineral properties, to make concession payments and to fund general and administrative expenses is therefore dependent upon the it's ability to secure financing. The equity markets for junior mineral exploration companies are unpredictable. Alternatively, the Company may enter into cost sharing arrangements through joint venture agreements. While the Company's management believes that the quality of the concessions now held by Minco will attract joint venture partners in the short-term and medium-term, there is no guarantee that the terms would be a s favorable as management would like.

For the years ended 2003 and 2002, the Company funded exploration costs of its Gobi Gold project and Teck Cominco Limited funded exploration expenditures at the White Silver Mountain project. In 2003, the Company signed an agreement allowing Minco the right to earn a 75% interest in the BYC gold project and also signed a Co-operation Agreement to enter into a joint venture agreement to explore and develop the Caodi gold project. See Item 4 - "Information on the Company, "Property, Plant and Equipment".

As at year end December 31, 2003, the Company had working capital of $6,558,219. compared to C$(227,515) at December 31, 2002.

On May 31, 2002, the Company completed a non-brokered private placement of C$550,000 consisting of 2,200,000 shares at a price of C$0.25 per share. The shares issued are subject to a statutory one-year hold period expiring on May 31, 2003. As a result, Minco had sufficient working capital to fund its operations and conduct a two-phase exploration on the Gobi Gold project during fiscal year 2002.

On January 6, 2003 the Company announced its plan to complete a private placement of C$500,000 by way of a 10% Redeemable Convertible Debenture Due January 31, 2008. The Debenture coupon will pay interest semi-annually of 10% and mature in five years from the date of issue. The Debenture will be convertible at any time at the option of the Debenture holders into common shares of Minco at a conversion price of C$0.40 per share. The Debenture calls for the redemption or conversion into Minco common shares should the common shares trade at an average closing price of 100% or greater than the conversion price of the Debenture for a period of 30 consecutive trading days. The Company also holds the option to pay interest on the Debenture in the form of cash or common shares. The maximum number of shares that may be issued under the offering was an aggregate 1,451,000 common shares, excluding any interest payments. On February 27, 2003, the Company announced the oversubscription of this private placement to C$580,000 with all other terms remaining unchanged. On March 6, 2003 the Company announced the closing of this private placement. In November, 2003, pursuant to Section 3(b) of the Debenture, the Company notified the Debenture holders it was shortening the conversion period. The principal and interest amounts owing were converted into an aggregate of 1,461,750 common shares and paid out to all Debenture Holders in January, 2004.

On June 9, 2003, the Company announced that it proposes to complete another financing of C$1,500,000.00 at a price of Cdn$0.35 per unit. Each unit will consist of one common share and one half non-transferable share purchase warrant. Each whole warrant will entitle the warrant holder to purchase one common share of the Company for a period of two years. Each whole warrant is exercisable on payment of Cdn$0.40 into one common share of the Company in the first year and Cdn$0.60 per common share if exercised in the second year. The Company will pay a finder's fee associated with this financing. On July 29, 2003, the Company closed this private placement.

Proceeds from this financing will be used for advancing exploration on the Company's Gobi and BYC gold projects in China and for general corporate working capital.

On November 14, 2003 the Company announced its plan to complete a bought deal financing for 2,500,000 Units at a price of $2.00 with a provision for an additional 500,000 Units. Each Unit will comprise one Common Share of the Company plus one-half of one common share purchase warrant. Each whole Warrant is exercisable by the holder at any time for a period of twenty four months to acquire one Common Share at a price of $2.50. On November 19, 2003, the Company announced this private placement would be increased by 1,248,848 Units with all other terms remaining unchanged. On December 10, 2003, the Company closed this private placement of Cdn$6,373,041.60 at $1.70 per Unit. Each whole Warrant would be exercisable by the holder at any time for a period of twenty four months from the date of Closing at a price of $2.15.

Proceeds from this financing will be used for payment and exploration expenditures on the ANBA property, Yangshan Gold Belt, Gobi Gold expenditures and general working capital.

As at April 30, 2004, the Company had working capital of C$6.2 million. The Company believes that it has sufficient working capital to fund certain exploration commitments on the Gobi Gold and Yangshan property for fiscal year 2004. As of the date of this filing, the Company has not finalized its 2004 Budget and Exploration Program and cannot yet determine what its funding requirements will be if exploration work is also undertaken on Minco's newly acquired projects. The Company will require additional financing for future working capital and also to fund future exploration programs on its properties. Additional capital would be required if any major exploration efforts were conducted on any of the Company's properties.

The Company continues to seek out and evaluate projects of demonstrative merit in China with the objective of advancing projects and arranging joint ventures to fund and operate the properties. Teck Cominco Limited maintains its earn-in right on two future projects acquired by Minco in China.

The Company does not believe that there are particular environmental regulations that will materially impact its current or future operations.

The PCR Agreement

On February 19, 1996, the Company entered into an agreement with Pacific Canada Resources, Inc. ("PCR"). PCR was a private company controlled by Ken Cai and Donald Hicks, both of whom became directors of Minco upon completion of the transaction. Prior to that time, PCR, Ken Cai and Donald Hicks were not affiliated with Minco. Mr. Hicks is no longer a director of the Company. Pursuant to the PCR Agreement, Minco acquired rights to PCR's entire portfolio of precious and base metal property agreements and acquisition rights in China, some of which were held directly and some of which were held by PCR's subsidiary, Temco. At that time, Temco was a joint venture, of which Minco held a 60% equity interest and China Clipper Gold Mines, Ltd. ("China Clipper"), a publicly traded Ontario corporation, held the remaining 40% equity interest. On February 27, 1997, Minco purchased China Clipper's 40% equity interest in Tem co for $175,000, which was believed to be the fair market value at the time. PCR is currently the largest and the controlling shareholder of Minco, and has no other operations other than its ownership in Minco.

The Teck-Cominco Agreements

Simultaneously, and in connection with the PCR agreement, Minco and PCR entered into separate, but related agreements respectively dated February 19 and February 20, 1996 (collectively the "Teck-Cominco Agreements") with Teck Corporation ("Teck") and its 50.1% owned subsidiary, Cominco Ltd. ("Cominco"), which were both public Canadian mining companies traded on the Toronto Stock Exchange. On September 10, 2001 Teck acquired Cominco by giving Cominco shareholders 1.8 Teck common shares plus $6.00 cash for each one Cominco share and the company was renamed Teck Cominco Limited.

Pursuant to these agreements, Teck and Cominco each invested $500,000 in Minco, and received 625,000 units, each unit consisting of one common share of Minco and one half of a non-transferable common share purchase warrant, each whole

share purchase warrant entitling the holder to acquire one additional common share at a price of $1.20 on or before February 20, 1997, or $1.38 on or before February 20, 1998. The shares purchased by Teck and Cominco were "restricted shares" under the rules of the British Columbia Securities Commission until February 20, 1997. Teck exercised its warrants to purchase 125,000 common shares at $1.20 per share prior to February 20, 1997. The warrants issued to Cominco expired under their terms.

As partial consideration for the investments by Teck and Cominco, they received "earn-in rights" as to the Non-Chinese Interest ("NCI") in any two mineral property rights acquired by Minco in China after the date of the Teck-Cominco Agreements until March 1, 2004. The Non-Chinese Interest with respect to a property represents the direct or indirect interest in a property that is available for a non-Chinese entity or a foreigner to acquire under Chinese Law. As of March 1, 2004, Teck Cominco did not exercise their earn-in rights and therefore the Teck-Cominco agreements have expired.

As of April 30, 2004, Teck Cominco continues to hold 2,546,429 common shares representing an 8.52% share interest in the Company and continues as Minco's strategic partner in China.

The White Silver Mountain Teck Agreement

On June 15, 1998, Teck exercised its option with respect to the White Silver Mountain Project (see Item 4 - Description of Property) under which it has the right to acquire up to 70% of Minco's interest in, or a net 56% in, the White Silver Mountain Project by purchasing 375,000 common shares of Minco at a price of $2.00 per share, which occurred on July 10, 1998, and by exercising warrants to purchase 125,000 common shares of Minco at a price of $3.00 per share, within one year, and funding all of Minco's obligations on the White Silver Mountain project up to the point of production. These warrants were not exercised. As a part of the transaction, warrants were issued to Teck allowing it to buy an additional 125,000 shares at a price of $2.00 per share, for one year, and warrants to buy a further 125,000 shares at a price of $3.45 per share for two years. Cominco has "back-in rights" with respect to this project to earn up to a 20% working interest in the Non-Chinese interest in the property up to the pre-feasibility stage by repaying Teck and Minco one and one-half times the total project expenditures up to the date of exercise of its rights and thereafter funding its pro-rata share of feasibility and development costs. If Cominco exercises these back in rights, Minco's interest would be reduced to a 19% carried interest. Teck & Cominco have since merged to form Teck Cominco Limited which company has withdrawn from the project with no retained interest in the project leaving Minco with a 41.4% interest in the project since March 2002.

The White Silver Mountain agreements with Teck and Cominco are separate from the Earn-In Rights that are detailed in the section above. The White Silver Mountain Agreement does not constitute an exercise of either Teck's or Cominco's first right of refusal, which remain intact.

In August 2003, the Company entered into an amendment agreement to the original joint venture contract with Baiyin Non-Ferrous Metal Cooperation to stop the earn-in process on the White Silver Mountain. Pursuant to the terms of the Joint Venture Contract, Minco has earned 61% equity interest on the White Silver Mountain and Baiyin Nonferrous Metals Company of the People's Republic of China 39%.

People's Republic of China - Background Information

The following is a general description of China's foreign investment in China and the history of gold mining therein.

Foreign Investment

Direct foreign investment in China usually takes the form of equity joint ventures ("EJVs"), co-operative joint ventures ("CJVs") and wholly-foreign-owned enterprises. These investment vehicles are collectively referred to as foreign investment enterprises ("FIEs").

An EJV is a Chinese legal person and consists of at least one foreign party and at least one Chinese party. The EJV generally takes the form of a limited liability company. It is required to have a registered capital to which each party to the EJV subscribes. Each party to the EJV is liable to the EJV up to the amount of the registered capital subscribed by it. The profits, losses and risks of the EJV are shared by the parties in proportion to their respective contributions to the

registered capital. There are also rules and regulations governing specific aspects of EJVs or FIEs, including capital contribution requirements, debt-equity ratio, foreign exchange control, labor management, land use and taxation.

Unlike an EJV, a CJV may be, but need not be, incorporated as a separate legal entity. The relationship between the parties is contractual in nature. The rights, liabilities and obligations of the parties are governed by the CJV contract, as is each party's share of the goods produced or profits generated. A CJV is considered a legal person with limited liability.

The establishment of FIEs requires the approval of various Chinese government authorities. Generally, the approval authority is determined on the basis of the total amount of investment involved and the location of the project in question. The State Council must approve any foreign investment projects having an investment of U.S.$30 to U.S.$100 million or more. The State Development Planning Commission and the Ministry of Foreign Trade and Economic Co-operation are authorized by the State Council to approve foreign investment projects of between U.S.$30 million and U.S.$100 million. Provincial authorities are authorized to approve projects less than U.S.$30 million.

Gold Mining in China

Gold has been produced in China for over 4,000 years. In less than ten years China has grown into the 4^th largest gold producer. In 2003, gold production was over 200 tonnes. It is presumed that early Chinese production was from placer deposits, and placer reserves still account for over 15% of China's total gold production. The primary gold producing provinces in China are Shandong, Henan, Hebei, Shaanxi, Heilongjiang, Liaoning and Nei Mongol Provinces. In 2003 there were 800 gold mines in China with stable production capacity of 150 tonnes per year.

The Chinese mining industry has traditionally been closed to foreign participation. However, a change in the Mineral Resources Law has been implemented by China's Central Government which permits foreign participation. The regulation of mining, including gold mining, in China is in a state of evolution from a totally planned, state-controlled condition to free market conditions as experienced in developed and most developing countries.

In 2003, exploration rights for 334 properties were awarded to foreign companies. Mining companies from ten countries are currently investing in exploration and mine acquisition in China.

The Ministry of Geology and Mineral Resources, which formerly administered geological exploration and also carried out exploration through its own personnel, has been replaced by the new Ministry of Lands and Mineral Resources.

Chinese-Foreign Co-Operative Joint Ventures

Minco has entered into three joint ventures to explore, and if warranted, to develop the BYC, and Gobi gold projects and the White Silver Mountain project. It may soon enter into a fourth joint venture agreement to develop the Yangshan - - West Extension gold projects. Minco believes that each of the joint ventures has complied with the required statutory regulations.

The following is a general description of the legal framework for Sino-foreign co-operation joint ventures pursuant to which the Company's business is carried on in China or will be regulated.

Legal Framework. Each of the various joint venture entities through which the Company will carry on business in China has been or will be formed under the laws of China as a Chinese-foreign co-operative joint venture enterprise and is or will be a "legal person" with limited liability. All joint ventures entered into, or to be entered into, by the Registrant must be approved by both the Ministry of Foreign Trade and Economic Co-operation ("MOFTEC") and the State Planning Commission ("SPC") in Beijing or their provincial bureaus.

The establishment and activities of each of the Company's joint venture entities are governed by the Law of the People's Republic of China on Chinese-foreign co-operative Joint Ventures and the regulations promulgated thereunder (the "China Joint Venture Law"). As with all Chinese-foreign co-operative joint venture enterprises, the Company's joint venture enterprises will be subject to an extensive and reasonably well-developed body of statutory law relating to

matters such as establishment and formation, distribution of revenues, taxation, accounting, foreign exchange and labor management.

On January 1, 1997, an amendment to the Mineral Resources Law of China became effective. Among other things, the amended law deals with foreign ownership of Chinese mines and mineral rights, and allows, under some circumstances, the transfer of exploration rights and mining rights. Pursuant to this law, new regulations were made effective on February 12, 1998. These new regulations have effectively removed the limitations formerly imposed on foreign investment in gold mining.

Restructuring within central government bureaucracies dealing with resources has resulted in the formation of one new ministry, the Ministry of Land and Resources ("MLR"), which replaces the old Ministry of Geology and Mineral Resources, State Bureau of Land Administration, State Bureau of Oceanic Administration and the State Bureau of Survey. This new ministry administers a new computerized central mineral title registry established in Beijing. This change has streamlined the application for exploration and mining permits so that a maximum 40-day response time is now guaranteed.

Under existing laws, in order to form a mining joint venture, foreign companies must complete three levels of agreements. In general, the first level of agreement is a Letter of Intent or a Memorandum of Understanding, which sets forth broad areas of "mutual co-operation." The second level of agreement is a more detailed Co-operation Agreement which outlines the essential terms of the joint venture which will ultimately be formed. The third level of agreement is a Joint Venture Contract that sets out the entire agreement among the parties and contemplates the establishment of a "Chinese Legal Person," a separate legal entity.

Before a joint venture can be created, an assessment or feasibility study of the proposed joint venture must be prepared and approved by the State Development Planning Commission (the "SDPC") or its provincial bureau. Therefore, upon completing a Co-operation Agreement, the parties prepare a feasibility study of the proposed joint venture and submit this feasibility study along with the Co-operation Agreement to the SDPC for what may be described as an approval in principle, the granting of which depends upon whether the proposed project broadly conforms to the economic policy issued by the government and any prescribed regulations.

Upon receiving this approval in principle, the parties then negotiate and prepare a Joint Venture Contract and submit it to the Ministry of Foreign Trade and Economic Cooperation ("MOFTEC"), or its provincial bureaus, which approves the specific terms of all Joint Venture Contracts between Chinese and foreign parties. Within one month after the receipt of a certificate of approval from MOFTEC, a joint venture must register with the State Administration of Industry and Commerce (the "SAEC"). Upon registration of the joint venture, a business license is issued to the joint venture. The joint venture is officially established on the date on which its business license is issued. Following the receipt of its business license, the joint venture applies to the MLR to approve and grant to the joint venture its exploration permits and/or mining licenses.

Governance and Operations. Governance and operations of a Sino-foreign cooperative joint venture enterprise are governed by the Chinese Joint Venture Law and by the parties' joint venture agreement and the Articles of Association of each joint venture entity. Pursuant to relevant Chinese laws, certain major actions of the joint venture entity require unanimous approval by all of the directors present at the meeting called to decide upon actions such as: amendments to the joint venture agreement and the Articles of Association; increase in, or assignment of, the registered capital of the joint venture; a merger of the joint venture with another entity; or the termination and dissolution of the joint venture enterprise.

Term. Under the joint venture agreement, the parties will agree to a term of the joint venture enterprise from the date a business license is granted. However, the term may be extended with the unanimous approval of the board of directors of the joint venture entity and the approval of the relevant Chinese governmental entities.

Employee Matters. Each joint venture entity is subject to the Chinese-Foreign Co-operative Joint Venture Enterprise Labor Management Regulations. In compliance with these regulations, the management of the joint venture enterprise may hire and discharge employees and make other determinations with respect to wages, welfare, insurance and discipline of its employees.

Generally, in the joint venture agreement, the standard of salary, social welfare insurance and traveling expenses of senior management will be determined by the board of directors of the joint venture entity. In addition, the joint venture will establish a special fund for enterprise development, employee welfare and incentive fund, and a general reserve. The amount of after-tax profits allocated to the special funds is determined at the discretion of the board of directors on an annual basis.

Distributions. After provision for a reserve fund, enterprise development fund and employee welfare and incentive fund, and after provision for taxation, the profits of a joint venture enterprise will be available for distribution to the Company and the relevant Chinese governmental entity, such distribution to be authorized by the board of directors of the joint venture entity.

Assignment of Interest. Under joint venture agreements and the Chinese Joint Venture Law, any assignment of an interest in a joint venture entity must be approved by the relevant governmental authorities. The China Joint Venture Law also provides for pre-emptive rights and consent of the other party for proposed assignments by one party to a third party.

Liquidation. Under the Chinese Joint Venture Law and joint venture agreements, the joint venture entity may be liquidated in certain limited circumstances including the expiry of its term or any term of extension, inability to continue operations due to severe losses, failure of a party to honor its obligations under the joint venture agreement and Articles of Association in such a manner as to impair the operations of Chinese governmental entitles and force majeure.

Resolution of Disputes. In the event of a dispute between the parties, attempts will be made to resolve the dispute through friendly consultation. This is the practice in China and the Company believes that its relationship with Chinese governmental entities is such that it will be able to maintain a good working relationship with respect to the operations of its joint venture enterprises. In the absence of a friendly resolution of any dispute, the parties have agreed or will agree that the matter will first be referred to the Foreign Economics and Trade Arbitration Commission of China Council ("FETAL") for the Promotion of International Trade for Arbitration. Awards of FETAL are enforceable in accordance with the laws of China before Chinese courts. Resort to Chinese courts to enforce a joint venture contract or to resolve disputes between the parties over the terms of the contract is permissible. However, the parties' may jointly select another internationally recognized arbitration institution to resolve disputes. All of the Company's joint venture agreements stipulate that disagreements between the parties will be arbitrated by an arbitration institution in Singapore.

Expropriation. The Chinese Joint Venture Law also provides that China generally will not nationalize and requisition enterprises with foreign investment. However, in special circumstances where demanded by social public interest, enterprises with foreign investment may be requisitioned by legal procedures, but appropriate compensation will be paid.

Division of Revenues. Revenues derived from operating joint ventures, once all necessary agreements, permits and licenses are obtained, will be divided between the Company and the Chinese governmental entity or entities which are parties to the joint venture according to the terms of each individual joint venture, which terms will vary from project to project. The Company will be subject to various taxes on its revenues.

Organizational Structure

Minco Mining & Metals Corporation (the "Company or Minco") was incorporated under the laws of the Province of British Columbia on November 5, 1982, under the name "Caprock Energy Ltd." On February 19, 1996, current management acquired its interests in Minco pursuant to the "PCR Agreement," and the "Teck-Cominco Agreements,". The Company has one wholly owned subsidiary, Triple Eight Mineral Corporation ("Temco"), a corporation organized on September 1, 1995, under the laws of the British Virgin Islands and having a statutory office at Arawak Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands.

The following chart sets forth the Company's corporate structure, including its subsidiary, related parties and their jurisdictions of incorporation along with the various mineral properties held by each of them:

(1)

License acquired in December 2003 to form Inner Mongolia Huayu-Minco Mining Co. Ltd., a Chinese state-owned company. Minco has the right to earn up to a 75% interest in joint venture.

(2)

Owned by the Sichuan Bureau of Metallurgical Exploration. Under a Co-operation Agreement with Sichuan Bureau of Metallurgical Exploration Minco has a right of first refusal to enter into a joint venture agreement to explore and develop the Caodi Project. Minco has not yet finalized the joint venture agreements.

(3)

Formed by Minco and the Exploration Institute of Land and Resources of Inner Mongolia ("EILR"), a department of the Chinese government. As of February 28, 2003, Minco has not yet earned its 75% interest.

(4)

Formed by Minco and Baiyin Non-Ferrous Metals Corporation ("BNMC"), a Chinese state-owned company. Teck Corporation waived its right to earn 70% of Minco's interest for a net 56% interest. As of December 31, 2003, Minco has earned a direct 61% interest in the WSM project.

(5)

Owned by BNMC. Under a Co-operation Agreement with BNMC, Minco has the right to earn up to a 75% interest in joint venture. As of December 31, 2003, Minco has not yet earned its 75% interest.

(6)

Formed by Minco and Baiyin Non-Ferrous Metals Corporation ("BNMC"), a Chinese state-owned company. Formed in August, 2003. No interest earned as of December 31, 2003.

(7)

Formed by Minco and No. 2 Geological Exploration Academy of Gansu Bureau of Geological Exploration. No interest earned as of December 31, 2003.

D. Description of Property

A detailed description of each of the Company's projects follows:

Gobi Gold Project

A regional exploration and property evaluation was carried out on the Inner Mongolia (Gobi Gold project) during 1998 culminating in the joint venture agreement in 1999 between Minco and the Exploration Institute of Land and Resources of Inner Mongolia ("EILR"). In 1999, Minco and EILR created Inner Mongolia Damo Mining Co. Ltd., a fully-licensed Sino-Foreign co-operative joint venture ("Damo Mining"), to explore for metallic mineral deposits within the Inner Mongolia Autonomous Region. Initially, Damo Mining will focus on exploring its existing license holding that covers 550 km². The Damo Mining joint venture agreement allows Minco to earn up to a 75% interest in joint venture by spending US$2.5 million on exploration on the Gobi Gold project over four years. In the event Minco does not spend the specified amounts, its interest in the joint venture agreement may be subject to being capped by a predetermined formula as set out in the Joint Venture Agreement.

Inner Mongolia Damo Mining Co., Ltd.

Damo Mining was formed and operates pursuant to a Sino-Foreign co-operative joint venture contract between EILR and Minco. Under the terms of the joint venture contract, Damo Mining's board of directors consists of seven directors of which Minco has the right to select four directors, including the chairman. Minco has selected Messrs. Ken Cai, William Meyer, Robert Callander and Ruijin Jiang as its representatives. EILR has the right to select the remaining three directors.

Because of Minco's majority ownership and majority representatives on Damo Mining's board, Minco controls Damo Mining's operations in the ordinary course of business. However, the following transactions by Damo Mining requires the unanimous approval by its board: (1) terminating or dissolving Damo Mining; (2) selling or mortgaging assets that have a value of 10% of Damo Mining's assets; (3) increasing or decreasing Damo Mining's registered capital; (4) borrowing by Damo Mining; (5) merging Damo Mining; (6) guaranteeing on behalf of Damo Mining; and (7) establishing organizations under the board.

Location, History, Geology and Exploration Potential

The 550 square kilometer Gobi Gold project is located in the Gobi Desert of western Inner Mongolia, about 300 kilometres north of Yinchuan, the capital city of the neighboring Ningxia Province, and 900 kilometres northwest of Beijing, China.

The Gobi Gold project is situated along the eastern extension of the Tian Shan Gold Belt, which hosts important deposits in Uzbekistan and Kyrgystan to the west. World-class, sediment-hosted gold deposits occurring in the Tian Shan Gold Belt include Murantau with a resource of 140,000,000 ounces gold (site of the Newmont dump leach project), Kalmakya with 26,000,000 ounces gold and 13,000,000 tons of copper, and Kumtor with 13,000,000 ounces gold (a Cameco operated mine).

The Gobi Gold project is the culmination of a series of regional exploration programs undertaken by the Exploration Institute of Land and Resources of Inner Mongolia ("EILR"). EILR carried out a broad program of stream and drainage sampling. This program highlighted several areas with gold concentrations some of which were followed up by mapping, prospecting and more closely spaced geochemical sampling. Minco believes that the

potential for discovering more extensive, near surface skarn mineralization is good, given the limited exploration that has taken place beyond the surficial oxide zones. An initial program of detailed ground magnetic surveys combined with geological mapping was completed to give better resolution of features controlling mineralization.

Other prospects identified in the license blocks from regional geochemical surveys have had limited to no follow-up work. Known mineralization is developed in calcareous sedimentary units and proximal to small felsic intrusions. Field examination of two prospects visited in 1999 showed features indicative of skarn style mineralization. The exploration program for 2000 involved ground magnetic surveys and geological mapping over the two identified skarn prospects to establish drill targets. Field-checks of the remaining geochemical anomalies was conducted. During 2002 a drill program tested results from previous exploration programs and 2003 fieldwork involved more drilling on the most favorable targets. Total expenditures from inception to December 31, 2003, funded by Minco were approximately $1,375,551.

Environmental Considerations

The exploration activities proposed for the Gobi Gold project, including potential drill testing of new anomalies, will result in little surface disturbance, and standard reclamation procedures will be used for areas such as trenches or drill pads. Minco does not believe that there will be any potential environmental liability arising from these activities.

2001 and 2002 Exploration

The 2001 exploration program consisted of detailed structural mapping, IP and/or TEM surveys and trenching in selected areas. Compilation of this data outlined 17 exploration targets in the surveyed area, part of which is sand-covered. These programs resulted in a substantial gold/copper discovery. Gold values averaging 14.79 grams/tonne gold, 1.0 gram/tonne silver and 1.25% copper were encountered over a sample length of 9 metres in a 20 metre deep pit excavated at the site of the previous years discovery. Significantly the footwall of the gold bearing section consists of massive sulphides grading 20% copper. Coincident IP data indicated a large lateral extent to this style of mineralization making the zone a focus of on-going exploration.

Significant Drilling Results on Exploration Work 2000 to 2001

Sample No	Sample Length	Au g/t	Ag g/t	Cu%
X01	0.5 m	9.40	1.52	0.064
X02	0.5m	12.0	1.65	0.105
X03	0.6m	20.4	2.18	0.121
X04	0.8m	26.0	1.72	0.079
X05	1.0m	12.0	0.44	0.199
X06	0.6m	2.48	0.26	0.249
X07	1.0m	5.92	0.15	0.177
X08	0.6m	1.88	0.15	0.225
X09	0.8m	34.3	2.40	0.092
X10	1.0m	22.6	0.94	0.043
X11	1.0m	11.6	0.42	0.108
X12	0.5m	11.5	30.0	20.1

Average	8.9m (total)	14.79 g/t	0.998 g/t	1.25%

A trenching program was conducted over the southwestern extension of the 2000 gold discovery. All trenches encountered similar mineralization grading 5.6 grams per tonne gold over 13 metres, 8.7 grams per tonne gold over 14 meters, 3.5 grams per tonne gold over 12 meters, and 4.9 grams per tonne gold over 12 meters. The trenches were conducted on the strike extension of the original 20-meter deep discovery pit which returned 14.8 grams per tonne gold and 1.25% copper over 9 meters true width.

The Zhulazhaga License was one of eight acquired and the most extensively explored because of the initial success. The remaining seven licenses were examined in 2000 in a regional reconnaissance fashion. Three

other license areas returned positive results in terms of favourable geology, alteration and geochemically anomalous gold values. These three license areas are the No. 3 Zhonggashun License, No. 6 Bayanxibie License and No. 8 Shaolataohai License.

In 2002, test drilling of 2000 meters was conducted on the Zhulazhaga License to follow up the significant magnetic and IP anomalies and trace the strike extension of the gold occurrence revealed in the Discovery pit. Eight holes were drilled to a depth from 50 meters to 194 meters along strike of the sediment hosted mineralized horizon in the discovery pit and six holes intersected the mineralized zone with grade from 1g/t Au to 12 g/t Au (Figure 5). Best mineralization was detected in DDH G-9 where an oxidized ore zone of 7 meters with an average grade of 5.8g/t Au was intersected in a structurally brecciated zone. While all the known mineralization is defined as typical distal gold skarn, test drilling hole G170-1 over the strongest magnetic anomaly M-2 has lead to the recognition of a new type of gold mineralization, the proximal gold skarn, in the project area. A thick carbonate package is well mineralized to a maximum of 4.9g/t Au at its juxtaposition with a medium grained diorite at depth of 140 meters.

Exploration data from Phase-I drilling program was reviewed and a 2000-meter drill program was proposed for the field season of 2003. As the top priority, the 2003 drill program consisted of at least 3 fences of drill holes along the trace of the contact between the mineralized fault zone controlling mineralization and the permissive calcareous siltstone horizon which hosts the bulk of the mineralization at both the Chinese mine and Minco's Discovery Pit.

In 2003

A detailed IP survey further defined the drilling targets, particularly to pinpoint the extensions of the targeted feeder zones to the gold mineralizing systems partically explored by the 2002 drill program.

The Phase-II drilling program commenced in the summer of 2003 in the Zhulazhaga License area. Minco drilled approximately 1,173m in 9 holes. The program focused on the north-south structurally controlled feeder zone, which is the principal control of mineralization at the Discovery Pit and the Chinese operated heap leach mine to the north.

By the end of October, 2003, seven holes (G03-1 to G03-7) were completed in the Phase II drill program. Five holes (G03-1 to G03-5) were drilled to follow up the gold mineralization discovered in 2001 and initially drilled in 2002. The targeted structures and mineralized zone were intersected in 4 of the 5 holes located to the south and west of the "Discovery Pit" which yielded 14.89g/t gold over 9 meters.

Elsewhere, G03-6 was drilled to test anomaly M-8, which is located about 1000m northeast of the producing mine (1.3 million oz gold resource) operated by the local government. The hole entered the targeted mineralized zone at a depth of 244m and ended at 252m while still in mineralization. G03-6 had to be abandoned due to mechanical drilling difficulty in this highly fractured horizon. 700m further to the northeast, G03-7 has been drilled to test the magnetic and IP anomaly M-9 which has geophysical characteristic similar to anomaly M8.

Testing of new geophysical targets did not lead to any new mineralized zones.

Plans for 2004

Minco is reviewing its options on its main license as well as the adjoining license where gold mineralization is exposed in trenching over a distance of 500 meters but has never been systematically explored.

Coadi Gold Project

In February, 2003, the Company signed a Co-operation Agreement with the Sichuan Bureau of Metallurgical Exploration which gave Minco a right of first refusal to enter into a joint venture to explore and develop the Caodi gold project in Sichuan Province, China. This Agreement was subject to a full due diligence on the project conducted by Minco.

History & Location

There is a distribution of known gold mines in this gold triangle where more than 400 tonnes of gold has been reported. Within a distance of 200 km along the border of Sichuan and Gansu provinces, seven large size gold deposits of similar type have been discovered with proven resources according to Chinese estimates ranging from 20 tonnes gold to more than 100 tonnes gold. Widespread alluvial gold has also been found in most drainages in this area. One of the new and important deposits, theYangshan Gold Deposit, contains more than 100 tonnes gold and is approximately 50 km to the southeast of the Caodi deposit along the same tectonic trend.

The Caodi gold project is located in the well known Qinling Gold District 200 km north east of the capital city of Chengdu.

Deposit Type and Exploration Potential

The Caodi gold deposit consists of a number of Upper Paleozoic sediment-hosted and structurally controlled veins in an area of about 3 km². Mineralization types include brecciated dolomitic limestone, silicalite and marlite and mineralized granite porphyry dykes. The EW-trending faults across the area control the distribution of gold mineralization. Most of the surface gold veins are located in geochemical gold anomalous centers delineated by 200ppb Au in soil. Thirty-five gold showings have been delineated by surface mapping, trenching and adits in a core area of 3 km² within the large license area (45km²). With a cutoff of 1g/t Au, the surface extension of individual gold vein is from 190m to 866m in length and 1.6m to 24m in width. Average grade of surface trench samples is from 2g/t to 3.6g/t gold. Much wider and higher-grade mineralization zones have been intersected in sev eral adits from 50m to 100m below the surface outcrops. Typical results of fresh material in adit samples within the main zone returned values of 6.8 g/t Au over 9.2 meters (3g/t cutoff). The Chinese operator estimates that the gold resource on the project consists of approximately 8 tonnes of gold metal with a multi-million ounce resource potential. The Sichuan Bureau of Metallurgical Exploration has been operating a small-scale test heap leach on the project since 1997 with an average recovery rate of 90%. Detailed exploration has been focused on a 3 sq. km area, a very small part of the 45 sq. km license. Preliminary regional geochemical exploration of the whole license area indicates that the balance of the license area is equally prospective for similar style gold mineralization.

In 2003

Following a detailed technical due diligence and a site visit, the Company concluded that it could be difficult to develop a large-scale, open pit mine on the Caodi gold project. The Company's primary focus for 2003 exploration efforts were the Gobi Gold and BYC gold projects.

Plans for 2004

There are no current plans to pursue its interest in the Caodi Gold project. The Company did not incur significant expenses on the Caodi Gold project.

BYC Gold Project

On November 18, 2002, the Company signed an agreement with the Inner Mongolian Bureau of Non-Ferrous Metals and Exploration, the license holder of the BYC Project, to acquire a majority interest in the BYC gold project located in central Inner Mongolia, China. In July 2003 a joint venture, called Inner Mongolia Huayu-Minco Mining Co. Ltd., was formed between Minco and Inner Mongolia Bureau of Nonferrous Metal Exploration for the BYC project. The Company can earn a 75% interest in the BYC Project by spending 12 million RMB (approximately C$2.4 million).

History & Location

The BYC Project is located at the central section of the north margin of the North China Platform and the eastward extension of the well-known Tianshan metallogenic zone, one of the most important gold metallogenic zones in China and the world. The zone hosted several important gold-producing regions in North China and extends to the famous gold metallogenic zone in the former Soviet Union republics where several world-class gold deposits have been developed. The project area is about 50 km northwest of Baotou, the largest rare-earth producing city in the world, and very close to a railroad that connects to the national railway system.

The original discovery of gold was made in late 1980's by following up a major regional geochemical gold anomaly that covers an area of more than 100km². More than 100 surface gold showings were delineated in an area 12 km long and 3 km wide. Some of the showings returned very high values. Like many areas of new gold discoveries this triggered the widespread illegal artisanal mining activities for the surficial portions of the gold showings over the entire area. Recently, all the illegal mining activities at BYC were banned by the government as a nation wide law enforcement program.

Deposit Type and Exploration Potential

The BYC gold occurrence is a structurally controlled shear hosted auriferous vein system, which develops at or near the contact of a Mesozoic granodiorite with early Proterozoic sedimentary and volcanic rocks. All principal-mineralized zones on BYC concession are either shear hosted or extensional veins. Most of these structures are located within well-formed planar brittle-ductile shear zones with very good surface continuity. Based on the distribution of the auriferous veins at surface, at least four major structural and auriferous zones are identified with strike lengths ranging from 700 meters to more than 1,500 meters. Grade of auriferous veins occurred in the Proterozoic sedimentary and volcanic sequence are generally from 1 g/t to 8 g/t gold. Higher grades were detected where the auriferous veins occurred in the granodiorite intrusions (the inner contact zone) with significa nt values as high as 71 g/t Au over 9 meters and 14.5 g/t Au over 4 metres.

In 2003

The Company's initial program consisted of careful compilation of all the available assay data, detailed 1:5000 scale geological mapping with special emphasis on structural analysis, as well as outcrop and trench scale lithological mapping. The completed surface program defined several drill targets. During the second half of the 2003 field season, a drill program was conducted upon the completion of the initial program. Drilling focused on the "North Zone" at the west end of the host monzonite intrusion. This is the general area of an early trench sample yielding 71 g/t gold over 9 meters.

On March 20, 2003, Teck Cominco waived its back-in rights on the BYC project located in Inner Mongolia of

China. Therefore, the BYC gold project will not be a project that is subject to the Investment and Participation Agreement dated February 20, 1996. If Minco pursues the BYC project on its own, without a joint venture partner, and when Minco would like to bring a partner to the project, Minco will give Teck Cominco the rights to negotiate a participation agreement.

In November, 2003, the Company and New Cantech Ventures Inc. ("New Cantech") entered into a Letter of Intent whereby New Cantech acquired the right to earn a 51% interest by spending on exploration $2.4 million over a three year period. A further 9% can be earned by bringing the property to completion of a preliminary pre-feasibility study. The first year's commitment is $400,000. Minco will remain the operator of the exploration program.

Plans for 2004

Minco's initial exploration program will consist of a thorough compilation of available assay data, detailed geological mapping, topographic and legal surveying, sampling, trenching, magnetic surveying, and I.P. test survey and 3,000 to 4,000 meters of NQ drilling.

White Silver Mountain

Minco acquired its rights to the White Silver Mountain, a polymetallic project located in Gansu Province, China, pursuant to the "Co-operation Agreement for Mineral Exploration and Development" between the Company and Baiyin Non-Ferrous Metals Corporation ("BNMC") signed on November 17, 1997. A fully licensed Sino-Foreign joint venture company, Gansu Keyin Mining Co. Ltd. ("Gansu Keyin") was formed to hold the mineral interests. In order to earn up to an 80% interest in Gansu Keyin, which owns the rights to the White Silver Mountain project, Minco is required to spend a minimum of US$4.8 million (40 million Renminbi Yuan "RMB") on the White Silver Mountain property over a six-year period. If Minco fails to spend the minimum amount, Minco's interest in Gansu Keyin will be capped by a predetermined formula as set out in the Joint Venture Agreement. BNMC contributed the exploration permit held by it and the geological data and research results, including drill core samples and maps, for its 20% interest in Gansu Keyin. Following the completion of the above expenditures by Minco, each party shall ma ke contributions to Gansu Keyin in proportion to their respective beneficial interests. Pursuant to an option agreement dated December 22, 1999, with effective date of June 10, 1998, the date a letter agreement was entered into, Minco granted Teck an option to earn 70% of Minco's 80% interest, for a 56% net interest in Gansu Keyin, by assuming all of Minco's funding requirements until commercial production has been attained. Since inception to December 31, 2003, total expenditures on the White Silver Mountain project are Cdn$3.7 million, of which Cdn$2.3 million was funded by Teck Cominco but credited to Minco. Minco's interest under the agreement has now been capped at 61%.

Location and Description

The 180 square kilometer White Silver Mountain project includes exploration ground in or around a number of past and presently producing properties in the Baiyin Ore Field located close to the city of Baiyin, Gansu Province, China. Baiyin is located 1,000 kilometers west of Beijing. The area is fully serviced by road and rail and has the entire required infrastructure to support an active mining operation. The White Silver Mountain project is located near the Xiaotieshan deposit which is currently being mined and operated by BNMC. Gansu Keyin, the joint venture in which Minco has the right to earn an 80% interest, has concluded an agreement to explore the extensions of the mineralized zones being mined at Xiaotieshan as well as any new discoveries in the region. Drilling and underground exploration undertaken by Gansu Keyin has focused on the area immediately below the Xiaotieshan underground mine testing the downward extensions of the ore lenses being mined by BNMC. The agreement includes the areas immediately surrounding past and present mine workings

but excludes the workings themselves and the BNMC milling and/or smelting operations. Recent surface exploration and geological mapping has uncovered other prospective areas outside of the project boundary. In response to these finds, Gansu Keyin has applied for an additional 70 square kilometers of mineral rights, which was granted in March 2000.

History, Deposit Type and Exploration Potential

The White Silver Mountain deposits are of the Volcanogenic Massive Sulphide (VMS) type. VMS deposits are formed in undersea settings by the precipitation of metal rich fluids expelled by volcanic vents. VMS deposits display a characteristic "zoning" with more copper-rich deposits found near the location of the original volcanic vents and more zinc-rich deposits found at a distance to them, though the pattern is often obscured by later faulting and folding of the rocks that contain them. VMS deposits are "syngenetic," meaning they form at the same time as the rocks that enclose them and they usually occur in clusters over a 20 to 40 km radius. Deposits are found where the volcanic rock has changed to a distinctive quartz rich rock units known as "exhalitives." These are indicators of VMS deposit forming activity; exploration for new deposits in known VMS camps therefore often focuses on finding the exhalative horizons then exploring within them for economic concentrations of metals. Geological mapping undertaken as part of the 1999 exploration program has located five separate exhalitive horizons, including the one that hosts the mined deposits. To the best of Minco's knowledge, there had been virtually no past exploration of the property away from the mines.

Environmental Considerations

The Gansu Keyin joint venture agreement specifically excludes any areas of past or present mining activity. Minco foresees no direct or indirect liabilities arising from the activities of BNMC on its own mine sites. In the White Silver Mountain underground exploration area, Teck hired BNMC as a contractor to undertake all underground excavation. BNMC was responsible for the disposal of all mining waste (mainly barren rock) in an environmentally sound manner. Similarly, it is expected that BNMC would be retained as the mining contractor if the joint venture makes a positive production decision. BNMC would have operational management of the project and would be responsible for adherence to sound environmental practice. If smelting is done by BNMC, it would be governed by a standard commercial contract under which the handling and safe disposal of any attendant waste products wo uld be BNMC's sole responsibility.

Gansu Keyin Mining Co. Ltd.

Gansu Keyin Mining Co. Ltd was formed and operates pursuant to a Sino-Foreign co-operative joint venture contract between Baiyin Non-Ferrous Metals Corporation of the People's Republic of China and Minco. Under the terms of the joint venture contract, Gansu Keyin's board of directors consists of seven directors of which Minco has the right to select four directors, including the chairman. Minco has selected Messrs. Ken Cai, William Meyer, Hans Wick and Fred Daley as its representatives. Baiyin has the right to select the remaining three directors.

Because of Minco's majority ownership and majority representatives on the Gansu Keyin's board, Minco controls Gansu Keyin's operations in the ordinary course of business. However, the following transactions by Gansu Keyin requires the unanimous approval by its board: (1) terminating or dissolving Gansu Keyin; (2) selling or mortgaging assets that have a value of 10% of Gansu Keyin's assets; (3) increasing or decreasing Gansu Keyin's registered capital; (4) borrowing by Gansu Keyin; (5) merging Gansu Keyin; (6) guaranteeing on behalf of Gansu Keyin; and (7) establishing organization under the board.

In August, 2003, an amendment agreement to the original joint venture contract ("JVC") was entered into between Minco and Baiyin Non-Ferrous Metal Cooperation to stop the earn-in process on the White Silver

Mountain project. Pursuant to the terms of the JVC, Minco has earned 61% equity interest on the White Silver Mountain project.

2001 & 2002 Exploration

The White Silver Mountain project program for 2000 consisted of 250 meters of underground excavation, establish drill stations, approximately 2,000 meters of underground drilling and a surface program which included geological mapping and approximately 200 line kilometers of electromagnetic surveying. The mapping and electromagnetic surveys generated new targets for a surface drilling campaign to be undertaken in 2001 after Keyin has received and interpreted the results of the surface work and the current underground drill program. The cost of this program was approximately C$400,000 and was funded by Teck.

In April 2001, Teck commenced a surface diamond drilling program comprising an estimated 2,700 meters, targeting priority zones based on a combination of electromagnetic conductors with coincident surface alteration zones and mineralization in geological setting prospective for volcanogenic massive sulphide minerals. Results were mixed in that the target horizon was intersected in a number of holes, no ore grade mineralization was encountered.

In 2003

The Company's interest has now been capped at 61%. The Company will seek a joint venture partner to continue a proposed underground drilling program.

Plans for 2004

The Company did not incurred significant expenditures on this project in 2002 nor 2003. In 2004, however, there has been a significant increase in all metal prices leading to a review of the Company's options relating to the re-activation of this project.

Changba-Lijiagou Project

Minco does not have plans for future work programs on the Changba-Lijiagou project because the focus of the Company's 2004 exploration program will be on the Yangshan Gold Belt projects.

Background

Minco acquired its rights to the Changba-Lijiagou Lead Zinc project located in Ganzu Province, China, through the "Cooperation Agreement Regarding the Development of the Changba Lijiagou Lead Zinc Deposit" between Minco and BNMC signed on November 17, 1997. Under this agreement, Minco and BNMC will form a Chinese joint venture company to explore, and, if warranted, develop and exploit the lead and zinc deposits of Changba and Lijiagou and the joint area between them by taking the project through development, to production at a rate of 3,500 tonnes of ore per day. If a joint venture agreement is entered into, Minco will contribute capital and advance equipment to develop a 3,500 tonne per day underground mine for a 75% interest in the joint venture. BNMC operated the Changba-Lijiagou project as a 3,500 tonne per day open pit mine until the collapse of the underground workings forced the downsizing of the operation to 750 tonnes per day. BNMC will contribute the mining rights relating to Changba and Lijiagou and net values of total assets at the Changba milling system for a 25% interest in the join t venture.

Since entering into the agreement, Minco has concentrated its efforts on the Lijiagou mineralization. The work undertaken to date is of a preliminary nature. Further third party work and a complete feasibility study

would be required prior to any production decision. No exploration activities were conducted in 2001, 2002, 2003 and none are planned for 2004 and no joint venture has yet been entered into.

Minco is however currently seeking opportunities to option or joint venture this project and has held discussions with third parties who are interested in earning a portion of Minco's interest in the project by further funding it. There can be no assurance that an offer will be obtained that will enhance shareholder value.

History, Geologic Model and Exploration Potential

BNMC originally moved into the Changba area in the 1940's after the discovery of copper in the region. BNMC started up operations at two copper mines soon afterwards, which are now virtually depleted. The search for new copper reserves in the area lead to the discovery of the Changba, then Lijiagou zinc/lead mineralization.

The Changba-Lijiagou project is located in Gansu province in northwestern China. The project took its name from the town of Changba, a small regional agricultural/government center before the arrival of the miners. Changba is 350 kilometers east of the provincial capitol of Lanzhou and 400 kilometers by road and rail north to Baiyin, the headquarters town of BNMC and location of the smelting complex.

Changba and Lijiagou are Sedimentary Exhalative (or SedEx) type deposits. SedEx deposits are characteristically zoned in a pattern with zinc rich material in the center. The Changba-Lijiagou deposits are zinc rich. They are open and substantially untested to depth, as well as laterally along trend. Though exploratory drilling is needed to confirm this, the zinc rich nature of the ore and the long trend length indicate potential for further discoveries in the area. BNMC has completed approximately 250 surface drill holes to test Changba to depth and to outline the Lijiagou mineralization and to test the intervening area at depth.

Environmental Considerations

All areas of past and present mining activities are specifically excluded from the joint venture. Should Minco and/or its partners decide to put all or part of the project into production, there would be an operating agreement negotiated with BNMC. In negotiating the joint venture agreement, Minco will request that a provision be included that will absolve the partners from any environmental hazards arising from BNMC's mining activities prior to the date of the joint venture contract to be negotiated and finalized. The structure of the agreement with BNMC allows Minco to earn a direct interest in the mill site and other infrastructure. Should Minco make a positive production decision, it would have to negotiate an agreement that defines its responsibilities concerning the ultimate rehabilitation of the mill site and include those costs in its decision-making.

Plans for 2004

Minco does not propose to undertake further exploration and development work on the Changba-Lijiagou project at this time, as the Company's primary focus will be on the Yangshan Gold Belt projects. The Changba project is not a high priority, however, this situation could change with the improvement in base metal prices.

Yangshan Gold Belt - - Anba Property

Property Description and Location

The license area is 1.45km² and is located at about 30 km north of the county town of Wenxian County. Highway 212, a two lane asphalt highway, passes through the license area and the nearest railway station lies 186 km from the area. The license area is defined by the following geographic coordinates:

(1)

104^o39'27", 33^o02'27";

(2)

104^o39'17"; 33^o02'47";

(3)

104^o40'50", 33^o02'47"; and

(4)

104^o40'40", 33^o03'06".

In November 2003, the Company signed several agreements with the Gansu Provincial government and two other companies in Gansu for the exploration and development of the Anba gold deposit in the Yangshan Gold Field, Gansu, China. Minco, through its joint venture company, Gansu Keyin Mining Co. Ltd. ("Keyin") has the right to acquire a 40% equity interest in the Yangshan Gold Mining Co., Ltd. ("YGM"), a joint venture company to be established for the exploration and development of the Anba gold deposit.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The license area is 1.45 km² and is located about 30 km north of the country town of Wenxian County, Gansu Province, China. Highway 212, a two lane asphalt highway passes through the license area and the nearest railway station lies 186 km from the area.

The Yangshan district is located in the southern terminus of Gansu Province in a region dominated by north-northwest trending major valleys and moderate population density. Climate is moderate, with temperatures ranging from - -13^o C to 0^o C in the coldest winter month, January, increasing to 16^o C to 28^o C during the summer month, July. Total annual rainfall in the district averages between 300 - - 350 mm, and dryland agricultural methods are common in this area. Estimates of population density in the southern Gansu area place it at approximately 100 - - 249 people per square kilometer.

The area is a deeply dissected, mountainous area of moderate relief. The mean elevation of the concession is approximately 2000 m, local differences in relief are in the 400 to 500m range. Small towns occur and other resource extraction plants, principally for industrial minerals, are located within a few kilometers of the concession area. Agriculture is the main local economy and, as is similar throughout China, virtually all-arable land is under active cultivation. Water and power supplies are close at hand, and with some improvements, would meet the needs of any potential mining operations.

History

Active exploration in the Yangshan district has had the following chronological development:

1967 - - 1970: 1:200,000 geological mapping was completed by the regional geological survey team of Shaanxi province. Since then exploration activities for copper, iron, manganese and barite were conducted at different scales by different geological teams.

1982 - - 1984: Regional geochemical stream sediment sampling was conducted by the Gansu Geochemical Survey Team (now restructured as No. 2 Geo-exploration Institute). Strong geochemical; Au, As, Sb and Hg anomalies were delineated along the regional arcform faults. These programs were part of a continent scale geochemical exploration program instituted by the Chinese government beginning in 1979 and

covering greater than 5 million square kilometers of Chinese territory.

From 1985 to the present follow-up of the regional geochemical anomalies and detailed geological exploration has been carried out by different geological organizations in the Yangshan area. These activities have led to some important discoveries such as Caodi, Xinguan, and Yangshan gold deposits.

Most recently, diamond drilling on the property has been conducted over the past three year period using one large Russian model diamond drill rig which has successfully completed 22 vertical diamond holes. Drilling is largely completed during the months March to October with an extended field break taken during the winter months. During this same period, underground drifting, metallurgical samples and preliminary resource calculations have been undertaken.

Geological Setting

In the Qinling area, the principal hosts to Carlin style mineralization are Devonian sedimentary formations. These rocks are flanked to the north by the Hubei Craton and intruded by a sequence of younger Mesozoic calc-alkaline intrusive rocks. These sequences may be divided into three principal units with an overall east-west orientation and reflect three sub-basins. The northern assemblage is the Tangzang-Shanyang sub-basin and the southern assemblage is the Hueixian-Xunyang sub-basin. Most of the mineral occurrences within this belt are contained with the Fengxian-Zhengan, sub-basin.

The Fengxian-Shengan sub-basin contains the several Devonian aged carbonate sequences, most of the sequences are dominated by fine grained clastic sediments, calcareous sandstones, shales, medium to thick bedded micritic limestones and bioclastic limestones. Triassic aged assemblages may be structurally interleaved within the Devonian section. Very significantly, several important occurrences in this area, including Dongbeishai are hosted in fine grained black clastic sedimentary rocks with very high organic contents and significantly elevated regional background gold contents, 21.06 - - 30.70 ppb Au in rock, which is 10 - 15 times above the regional background. Throughout the Qinling basin, host rocks to most of the Chinese gold deposits are more common near the transitional zone between carbonate and siliceous clastic rocks, and many of the occurrences are hosted in sandstones and calcareous sandstones.

At least six large late Mesozoic granitic intrusions, several small Middle Paleozoic basic intrusions and locally andesitic porphyritic intrusions cut the Devonian to Triassic section in the Qinling area. Dyke rocks and small intrusions are locally gold mineralized including those in the Yangshan Anba area. These intrusive rocks have geochemical signatures in Sn, W, Mo and Bi.

The structural style in the western Qinling is dominated by rock fabrics and structural elements which are related to series of Palaeozoic and Mesozoic accretionary processes. The late Palaeozoic Variscan (405 - - 270 Ma) and Yanshanian (208 - 90 Ma) are the principal orogenic and collisional events which have deformed the host stratigraphy in the western Qinling area.

Significant, north verging thrust faults are common and some of these are closely related to major occurrences, eg the Dongbeizhai deposit forms in the silicified, brecciated and carbonaceous mudstones which characterize the footwall to the Kuashiya fault.

At the regional scale, the area is composed of two major tectonic units 1) the Metianling Anticlinorium, and 2) the south zone of the EW-trending West Qinling fold zone. The Metianling Anticlinorium exposes in its core a sequence of Precambrian intermediate-basic volcanic rocks which may host both copper and nickel occurrences and are also host to numerous structurally controlled orogenic auriferous quartz veins. The EW-trending west Qinling fold zone is an Upper Palaeozoic-Mesozoic fold and thrust belt. This orogenic event

compresses, and closes the Devonian, Carboniferous, Permian and Triassic sub-basins. The deformed sub-basins are now distributed subsequently along east to west axis with the youngest formations preserved in the north and the oldest in the south.

The distribution of the Palaeozoic rocks are controlled by a group of arcform, translational and north verging thrust faults. Major Carlin-type gold deposits including Yanshan, Xinguan, and Caodi are all found along the roughly EW-trending arcform faults.

Distribution of trace elements is closely associated with rock types in the area. Anomalous Cu , Pb, Zn and Ag occurred in the Precambrian volcanic rock units at the south part of the west Qinling gold belt. Geochemical gold anomalies were delineated in both Precambrian volcanic rocks where Carlin-type gold mineralization developed and Paleozoic sedimentary sequence where auriferous quartz veins were discovered. Significant anomalies of Au, As, and Sb occurred in proximal stream sediment drainages.

Exploration

Following the initial discovery of the Yangshan geochemical anomalies, and very early geological evaluations by the local Chinese geological brigades, the more detailed development and exploration of the Yangshan - - Anba occurrence was performed by a branch of the armed police, the "gold army" who specialize in gold exploration named Gold Headquarters("GH"). It is the mandate of the GH to find and explore precious metals deposits. Placing the occurrence into production is the mandate of another government branch within the non-Ferrous Bureau of Mines.

The previous exploration programs on the property were successful in:

i. Implementing a broad based diamond drill program, consisting of 22 diamond drill holes totaling 7964.86 m, and utilized a single diamond drill. The drill rig is of Russian design and utilizes a 12-m mast. Inclined drilling is possible but most boreholes were drilled vertically.

ii. Implementing 1262 meters of underground exploration development, which sampled portions of 2 zones.

iii. Creating a database so a resource calculation could be performed.

iv. Calculating a resource.

The following is an interpreted version of the methodology and results from the past programs used at the site from government reports;

Methodology

1.1.

The major vein of No.305 vein group is stratabound in form and 2100m in length. Gold is well evenly distributed in the ore vein. Exploration lines are surveyed in 400m space along the strike of the main vein. The ore zone was controlled with geological mapping, geophysical and geochemical survey, trenching and shallow pit at surface. Dip extension is controlled with drilling.

1.2.

Density of exploration works is increased gradually. Space between trenches is from 50 to 100 meter at surface. First phase drilling was conducted with a grid of 400X320-400m at depth. Drifting was conducted where it was suitable. In-fill drilling was carried out at 200m space to further test the continuity of the zone. Space of exploration lines was increased to 100 meters between Lines 7 to 11.

Quality of Exploration Works and Comments

1.3.

Trench: The opening of trench is from 1.2m to 2.5m and the width at bottom is 1m. Trenching is dug to 0.5m into the weathered bedrock and 0.3m into the fresh bedrock.

1.4.

Exploration Pit: Two exploration pits were dug with an opening of 1.5X1.5m in the area.

Most of the project area was covered with a Quaternary overburden from 7 to 100m in thickness and therefore, only 40% of the surface trenches and pits have generated useful results.

1.5.

Two levels of adit were devloped at levels 1920m from exploration lines 1 to 5 and 2171m from lines 31 to 35 respectively in order to test major ore veins 305 and 314. The opening size of drifts varies from 1.8X1.6 to 2.0X1.8m with a total length of 1263.1m including 447.3m of drift and 815.8m of cross cut.

1.6.

Drilling: 22 diamond holes were drilled with a total footage of 7964.86m. Gold mineralization was intersected in 18 holes (82% of the total holes).

Details of Drilling:

Technology: Diamond drill rig with wire coring was used. Hole opening is 110-130mm in Quaternary overburden and is transformed to 91mm after the overburden. The hole diameter was reduced to 75mm in fresh bedrock until the end of hole.

Inclination and Azimuth Measurement: Dip angle of vein group 305 is more than 60 degrees. Vertical holes were designed in consideration of the difficulty resulted from the widely fractured rocks. 86 measurements of inclination and azimuth were conducted in the 22 holes. Deviation of drill holes is generally less than 5 meters from exploration line.

Test of Depth: Depth of drill holes were tested every 100m.(Down hole survey Point)

Recovery Rate of Drill Cores: Total length of drill cores of bedrock is 4991.26 and the recovery rate of bedrock cores is from 86-99% with an average of 93.46%. Total length of drill cores of ore is 1356.28m and recovery rate of ore cores is from 86 to 100% with an average of 93.13%.

Hydrology Observation: Two observations of hydrological conditions are made in each shift. Water level was measured and recorded after 24 hours of the completion of drill hole. 1052 measurements were conducted.

Seal of Drill Hole: Holes were sealed with concrete and the center of each hole was marked with a cross. Serial number of the hole was painted on the pole.

Storage: All drill cores are kept in drill core storage at the camp.

Collection, Preparation, Analysis and Quality Monitoring of Samples

1.7.

Drill core samples: Drill core are split and half of the hole was sampled and assayed. The holes were sample for their entire length

1.8.

Trench and adit samples: Trench sampling was conducted in surface trenches and adits. Size of trench sample is 10X5cm with a length from 1 to 1.5m.

1.9.

SG Samples: Samples of different types of ore from surface trench, exploration pit, adit and drill holes were collected for measurement of specific gravity. Samples were sealed with wax and then sent to labs for SG measurement.

Drilling

In total, 7964.86 m of core, distributed among 22 holes, were drilled in past exploration programs.

Geotechnical data was collected, recovery and RQD and structural logging. It is unknown if photographs were taken of the core.

Collar locations were surveyed using EDM station with a survey accuracy of ±0.12m. The Chinese requirement is 0.30 m accuracy. Downhole surveys were conducted using a CQ-1 instrument which is a Chinese downhole instrument. Surveys measured, inclination and azimuth. Surveys were taken every 100 m. Drill hole deviation is less than 5 m.

For the geological interpretation cross sections at 1000 scale spaced 400 and 200 m apart were created. The sections include the trenching and underground data. The sections are interpretative in nature, because of the distance between pierce points on most sections or number of holes on a section. Further details on how work was performed are unavailable at this time.

Sampling and Analysis

Assay intervals were commonly based on 1.5 m intervals, although interval widths were also controlled by geological, structural or mineralogical contacts.

All core was half split by an member of the GH.The samples were transported by truck from the field to the Government labs in Chengdu by members of the GH.

No sample collection was permitted in the current due diligence study conducted in preparation of a 43-101 technical report previously submitted. As a consequence no independent assays are available for comparison with the Chinese data. For security the GH is a police branch and has the resources available to protect and secure its property as required.

Anecdotal information suggests that a system for duplicate samples was used as checks in the sampling system for the historical sampling on this project. Samples were sent to the main lab plus other check labs.

The Chinese summary data suggests that between 1999 and 2002, 197 samples were sent as check sample in seven Batches over three seasons. Results ranged between 78.9 % accuracy on one batch and 96.5% on another batch averaging 86.7% accuracy. Other labs checked 137 samples with a result of 87.6 %.

Mineral Resource and Mineral Reserve Estimates

The mineral resource estimate was made by the GH to a 1 gram per tonne gold cut off as 16,100,000 tonnes at a grade of 5.64 grams per tonne gold, equivalent to an in-situ resource of 91 tonnes gold (2.9 million ounces). The resource estimate was reviewed by an independent panel of Chinese professional experts and has been classed as inferred resources under CIM guidelines by an independent consultant ("Qualified Person"), Lyle Morganthaler, P.Eng. Then the resource calculation was evaluated and a valuation created by an independent group. The current resource can be classified as inferred resource under the CIM guidelines for resources and reserves due to the data on which the resources were calculated.

This group consisted of :

Appraisal Agency: Beijing Headmen Mining Rights Appraisal Firm (License No. 1100002367861(1-1)).

Appraisers:

Mr. Li Hongguang: Mining Rights Appraiser, bearing certificate issued by the Ministry of Land and Resources.

Mr. Peng Shaoxian: Mining Rights Appraiser, bearing certificate issued by the Ministry of Land and Resources.

The independent group reviewed the data and the procedure for the resource for suitability and national standards. They found the resource estimation to be conducted within their regulations and standards. The estimation adheres to "Classification of Solid Mineral Resources and Ore Reserves" promulgated by the State Monitoring Bureau of Quality and Technology of China.

The results as per the Chinese calculation for Yangshan ANBA property is shown below.

Vein#	Ore body#	Resource Category	Resource of Ore (t)	Average Grade (g/t)	Average Width	Gold Metal (t)
305	305-I	333	8453500	6.07	4.83	51.308
314	314-I	332	724921	5.89	9.24	4.267
314	314-I	333	5938028	5.36	5.51	31.799
307	307-I	333	13186	4.94	1.04	0.065
307	307-II	333	86716	3.22	1.41	0.279
313	313-I	333	481086	3.36	2.39	1.616
	313-II	333	13491	6.97	1.91	0.094
	313-III	333	327521	3.59	2.46	1.176
	313-IV	333	32687	3.2	5.56	0.125
319	319-I	333	8361	3.41	1.79	0.028
319	319-II	333	21720	3.35	1.62	0.073
322	322-II	333	18636	4.25	1.46	0.079
323	323-II	333	20552	4.00	3.27	0.082
TOTAL		332	724921	5.89		4.267
		333	15415484	5.62		86.724
		332+333	16140405	5.64		90.991

** Chinese Category 332 and 333 are considered to be inferred resources

The Chinese resource estimation was created using a polygonal method in vertical long section planes parallel to the general strike of the deposit. There were ten structural units estimated with 305 and 314 being the largest Zones. There were 68 individual polygons created for the Chinese estimate. It is assumed that the Chinese base their criteria on the Chinese mining and exploration experiences.

The following a list of criteria used to for the resource estimation

Cutoff for composite:³1g/t;
Minimum Polygon Grade:³3g/t;
Average Grade of Deposit:³5g/t;
Minimum Mineable Width: 0.8m;
Minimum Width of Internal Waste:³2m

With the above criteria the polygons were created and modified to meet the above criteria.

The polygon boundaries are created by the following: ( translation from Chinese text)

The delineation and inference of ore bodies is based on "Classification of Solid Mineral Resources and Ore Reserves" promulgated by the State Monitoring Bureau of Quality and Technology of China.

16.1.1

Delineation of ore body: Delineation of ore body strictly follow geological conditions and economic index. In principle, all samples with grade equal or greater than cutoff grade will be included in resource calculation. In cases that grade of individual exploration work and block is reduced to less than minimum economic grade, low-grade samples at margins will be excluded to meet the minimum economic grade.

All the samples of internal waste with length greater than the maximum allowable width have to be excluded in resource calculation.

Ore bodies are connected with direct lines between individual exploration works in the same structure and mineralization zone.

16.1.2

Inference of ore body: When ore body is intersected in one exploration work and is not intersected in the neighboring exploration work along strike, the ore body will be inferred to one second of the distance between the two exploration works. When there is no control of exploration works along strike or dip directions, the boundary of ore body will be inferred to one fourth of the distance of the space of the exploration works.

16.1.3

Resource Categories and Block Delineation

Categories of resource and delineation of blocks are based on the state standard "Classification of Solid Mineral Resources and Reserves" promulgated by the State Monitoring Bureau of Quality and Technology(GB/T11766-1999).

The two major ore veins 305-I and 314-I is simple in form and gold is evenly distributed in the ore zones. The width of the zone is stable.

For resource estimation of resource category 333** in the major ore veins, intersection in surface exploration works* is inferred to 50m outwards along strike and that in deep exploration works* is inferred to 100m along strike and 80m along dip direction.

Major considerations include:

Delineation of blocks is basically according to the 400m space of the exploration lines.

Occurrence of ore vein is similar in one block.

Ore vein is continuous without significant displacement of faults in one block.

The category of resource is the same in one block.

* Termexploration works: any drilling intercepts, trench sample, underground sampling.

**TermCategory 333: Chinese Government resource ranking description. Lowest resource category in the Chinese system.

The intercepts used to estimatethe grade and volume of zone 305 and 314 are listed below.

INTERCEPT COMPOSITE		True Width (m)		Horizontal Width ( m)	Grade g/t
BT513	2.98		3.9		5.94
BT515	8.21		10.73		8.21
BT549	5.58		7.07		3.74
CM352	1.05		1.49		3.17
CM352	4.221		5.97		4.21
PD311	4.6		6		2.98
TC313	3.17		5.04		4.33

TC351	1.17	1.45	1.78
TC371	1.32	1.42	3.14
TC507	3.6	5.1	4.76
TC509	9.44	11.61	4.23
TC555	7.63	10.22	4.67
TC559	11.98	13.07	5.75
ZK001	2.53	2.82	6.82
ZK001	1.26	1.41	1.32
ZK0115	0.71	0.82	8.3
ZK035	3.76	4.68	14.35
ZK041	1.1	1.23	1.08
ZK043	1.04	1.15	6.26
ZK059	0.82	1.01	1.24
ZK073	18.33	21.66	9.88
ZK073	1.66	1.96	1.66
ZK093	11.26	13.79	8.41
ZK111	2.08	2.43	4.06
ZK133	4.5	4.94	2.96
ZK133	0.86	0.94	0.86
ZK139	1.46	1.6	3.38
ZK170	6.03	6.44	4.72
ZK211	9.82	11.48	5.02
ZK251	1.32	1.53	3.84
ZK291	1.56	1.98	9.94

Intercepts used for Zone 314

INTERCEPT COMPOSITE	True Width(m)	Horizontal Width (m)		Grade g/t
BT505	7.48	8.7	3.61
BT515	8.27	10.81	6.67
CM01	4.52	4.95	5.37
CM03	19.83	22.9	6.17
CM05	14.75	18.01	8.72
CM331	21.8	22.8	6.65
PD311	4.26	4.89	3.26
TC331	3.23	3.98	4.37
TC351	1.22	1.5	2.06
TC503	13.6	15.9	7.04
TC559	4.72	8.96	3.35
ZK003	2.95	3.26	2.74
ZK0115	0.87	1.09	2.14
ZK035	7.75	10.62	3.1
ZK043	2.26	2.52	3.34
ZK059	2.33	3.05	4.78
ZK073	1.72	2.1	2.15
ZK091	6.14	8.42	3.64
ZK093	1.93	2.64	4.45
ZK139	0.98	1.26	4.2

ZK170	5.15	5.49	3.77
ZK211	7.45	8.72	4.6
ZK251	0.81	0.95	4.02
ZK291	2.1	2.57	2.17

The Chinese resource was calculated to the edge of the property line so there is no room on the property for strike extension and there is limited down dip extension (estimated about 250 metres available for down dip) of the resource at this time due to property boundary.

Mining, Exploration and Development Operations

Minco will participate in the detailed exploration and development of the Anba gold deposit through its interest in the Yangshan Gold Mining Co., Ltd.

For 2004

An early work program has been recommended including:

verifying all raw data including re-sampling core for data consistency;

twin several holes and sample using a diamond saw and compare to the original drill sampling;

obtain mineral exploration rights to the ground immediately adjacent to the current property boundary;

set up and operate an exploration program to Canadian standards;

commission a new resource estimate with new data;

negotiate for other properties along trend;

continue with environmental, metallurgical studies and research; and

initiate work towards a scoping study.

Yangshan Gold Belt - - West Extension - Guanniuwan, Hongyangou and Guojiagou Properties

Property Description and Location

The three areas, Hongyangou, Guanniuwan and Guojiagou, are all located in the Yangshan Gold Field, in the south Gansu Province of China, which is in the central part of the well known west Qinling Gold District.

The project consists of three widely separate exploration licenses issued to the NO.2 GEO-EXPLORATION INSTITUTE OF THE GANSU PROVINCIAL BUREAU OF GEOLOGICAL EXPLORATION (GBGE) by the Provincial Bureau of Land and Resources:

Guanniuwan (GNW): License Number 6200000330184, Area: 9.14km²

Hongyangou (HYG): License Number 6200000310260, Area: 26.58km².

Guojiagou (GJG): License Number 6200000320186, Area: 17.16km².

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Within the Qinling Mountains, three licences are located in rugged, deeply dissected, precipitous terrain. Elevations range from about 1100 metres upwards to over 2500 metres. The area contains a large population subsisting on agriculture, with intensely productive land in the valley bottoms and less valuable land worked in terraces up to the highest elevations. Land for major mining infrastructure would therefore be had at a premium. Wheat production takes up the largest areas, but all manner of cool-climate cereals, oil-seeds, vegetables, fruits, and spices are sown and various animals are husbanded. Small villages are scattered throughout and are found in the most unlikely

places. Most villages have electricity and some people have satellite television. Cellular telephone coverage is complete except in the most remote valleys.

Temperatures range from -13⁰ C to 0⁰ C in January to 16⁰ C to 28⁰ C in July with about 300 to 350 mm of precipitation annually.

Access to the GNW licence is via along a paved road along the Baishui, or "White Water" River about 20 km westerly up the river from the County Seat at Wenxian. Access to the edge of the HYG licence is along the same road about another 20 km upstream. Within the GNW concession access is by two dirt roads up from the river valley into the area where mining is being undertaken. There is no wheeled access to any part of the HYG licence which is precipitous and difficult. Helicopter transport is not an option.

The GJG licence is in a remote, mountainous part of Gansu Province. Access is by poor road south about three hours from the County Seat at Lixian and then by a precipitous road three hours south and west over a mountain range. Normal wheeled access would be impossible in the rain, or snow and the exploration season is from about April through October.

Hydro-electric power is generated between the GNW and HYG licence areas. Only small-capacity lines are available near to GJG.

History

The east Qinling area has been an historically important gold mining area in China with records of production dating back 3500 years. The metallogenic belt also contains historically important lead and zinc mines and is a source of antimony.

GBGE has been active in the area since 1967 when a 1:200,000 scale geological mapping program was instituted. From 1984 to 1986 a regional stream sediment survey was completed and this was followed up by more detailed geochemistry, mapping and trenching over many areas until 1989 when detailed work on specific projects was instituted.

Guanniuwan (GNW)

In 1995, a strong Au, As, Sb, and Hg anomaly was explored by detailed work including soil geochemistry, mapping, and trenching. Two zones, a "North Zone" and a "South Zone" were identified. This was followed up in 1996 by the driving of an adit on the North Zone and the mining and processing of 20,000 Tonnes of material by a cyanide heap-leach. This test recovered 800 grams of gold for a recovered grade of 0.04 g/t Au and no further work was done. It is the opinion of the Chinese geologists at GBGE that the test was not successful because the mineralization tested was likely taken from sulphide-rich zones below surface oxidation.

In the intervening years several hundred "illegal" miners in over one hundred small groups have entered the licence, have extensively mined the "South Zone", and have discovered and are mining an extension of the mineralization in a zone about two km to the west. Various other smaller mining locations can be seen scattered about the licence area. The miners are using cyanide leaching to process the oxidized ores being recovered from numerous adits and pits. Technical details of this work do not exist, but it is likely that much of this oxidized material have been moved and processed using hand carts and small tractors.

Hongyangou (HYG)

The exploration history at HYG ended with the delineation of a stream sediment anomaly in 1986. There are reports that two families are mining in two separate remote areas of the licence, but this has not been verified on the ground.

Guojiagou (GJG)

The GBGE completed a small amount of trenching on a stream sediment anomaly discovered in the 1980's, however it has been ten years since this work was done. In the meantime about ten groups of small miners have been processing tiny amounts of oxidized material from the geochemically anomalous area. The amount of material moved by these groups is insignificant, amounting to much less than one tonne per day in total.

Geological Setting

Regional Geology

The Qinling Mountains form the boundary between the North China and Tarim Cratons on the north and the Yangtze Craton and Tibetan Plateau on the south. The mountains consist of an east-west trending Upper Paleozoic-Mesozoic fold and thin-skinned thrust system formed by north-south compression. In the Yangshan region the thrust faults take the form of an unexplained arcuate system, possibly a later fold event, with a northeast-southwest axis. Devonian sedimentary formations consist of fine grained clastic sediments, calcareous sandstones, shales and various types of limestone. Younger Triassic assemblages consisting of sandstone, slate and limestones have been inserted into the Devonian section by complex, north verging thrust faulting. Younger Mesozoic calc-alkaline intrusions are common in an east-west trending belt generally in the northern part of the region. Precambrian intermediate to basic volcanics form the core of an anticlinorium which is exposed in the southern part of the area of interest.

Local Geology

The local geology within the three licence areas is described in the three sections below.

Guanniuwan (GNW)

In the vicinity of the GNW licence, north dipping reverse faults related to mineralization separate a Lower Devonian sequence of sandstone, slate and limestone from Middle Triassic sandstone, slate and limestone. In detail, however the situation is more complex with all units being overturned. The younger Triassic units are therefore thrust over the older Devonian sequence and these units and the reverse faults are cut by later north-south striking faults. There may be a component of dextral faulting in the shears noted in the North Zone trenching area. The limestone units in the area have been weakly marbleized and the thin-bedded units have suffered complex deformation especially marked near to the fault zones. Presence of unmapped crenulation cleavages in phyllites suggest that the structural history of the area is more complex than the mapping suggests. East-west trending feldspar porphyry, diorite porphyry, and granitic dykes are spatially related to faulting (and to mineralization). The West Zone is in an area of alluvium and was found by local prospectors after the geological team ceased work in the area in 1995.

Hongyangou (HYG)

The HYG area, about 20 km north from GNW is mapped as being in the same Middle Triassic sequences as the HYG.

Guojiagou (GJG)

At GJG similar Triassic limestone and fine clastic sediments have been altered to marble, hornfels and minor skarn by an elongate granodiorite intrusion. The intrusion has bowed the flanking sediments into an antiform over a three km distance and produced a series of north-south trending faults. Skarn observed in the area of most interest is in the form of a weak fine grained greenish rusty endoskarn, while the hornfels is fine grained tremolite hornfels with patchy fine grained biotite.

Exploration

The issuer has conducted no exploration on any of the licences being described. All of the work described here was done by government agencies from 1967 to 1996. The Chinese agencies explore systematically at scales from 1:200,000 geochemical surveys to 1:2,000 scale mapping to 1:500 trench sampling. Finally, the best areas are test

mined.

GEOCHEMISTRY

Regional geochemistry in the years 1982 to 1984 resulted eventually in the discovery of various deposits in the Yangshan area, including Anba.

The geochemical signature at GJG is somewhat different, with complimentary anomalies in Pb and Ag.

TRENCHING at GNW

In all cases the trenches excavated almost ten years ago have been either destroyed by the work of "illegal" miners or have caved in and become completely grown over. Six trenches were cut at the North Zone and 17 excavated at the South Zone. Below, is a summary of the historical trenching results by GBGE over 1.0 g/t Au.

ZONE	TRENCH NO.	LENGTH	AU G/T
South Zone	TC301	6.97	2.63
South Zone	TC301	2.05	1.08
South Zone	TC8	2.07	2.72
South Zone	II	4.96	2.22
South Zone	III	1.45	3.19
South Zone	TC16	3.22	9.62
South Zone	TC16	1.56	1.63
South Zone	TC22	8.90	1.00
South Zone	TC40	2.5	1.06
South Zone	TC9202	2.22	4.17
South Zone	TC8402	10.20	1.69
South Zone	TC8402	5.55	1.67
South Zone	TC7602	14.48	1.73
South Zone	B	7.02	3.62
South Zone	TC10002	4.95	2.84
South Zone	B	3.3	1.84
South Zone	TC11602	3.71	1.86
North Zone	TC201	1.95	1.52
North Zone	TC001	6.58	1.18
North Zone	TC001	8.46	3.20
North Zone	TC001	15.04	2.20
North Zone	TC701	9.2	2.14
North Zone	TC1501	6.70	1.39

Trench Results at GNW

The table above shows a fairly consistent zone in North Zone trenches TC001, TC701, and TC1501 which covers a strike length of approximately 150 metres.

BULK TEST

In 1996 a mining test of the North Zone by GBGE was carried out by driving an adit underneath the trenches outlined above. The Chinese state that 20,000 tonnes of material were extracted from the adit, placed on a leach pad, and cyanide leached. Only 800 grams of gold were recovered and the operation was not considered a success. It is most likely that the adit was driven in the sulfide zone and therefore a heap leach test would not work, or possibly the correct ore zone was not encountered because of some geological complication.

While there is some uncertainty in the exploration work which is brought about by the failure of the mining test to recover a significant amount of gold, the continuing activity by "illegal" miners unequivocally shows that gold in economically interesting amounts occurs in areas covered by the geochemical and trenching data.

Drilling

No exploration drilling has been undertaken on any of the subject licences.

Sampling and Analysis

The Chinese exploration groups approach exploration and sampling in a systematic fashion utilizing geochemistry and then trenching and test mining. The trench sampling is done methodically, where possible on lines 100m apart or less, and is presented concisely on maps of the correct scale. The sample lengths, normally a metre, are controlled by the geology in the trenches and the individual samples would normally be in excess of two kg in weight. Since the trenches have subsequently been destroyed either by mining or by the elements, the true widths and various geological details of the trench sampling can not be confirmed.

The details of sample preparation, analyses and security employed by the GBGE in the years up to 1996, when work on the subject licences was halted, are not available. Normally the GBGE utilizes its own assay laboratory in Langzhou for the processing of exploration samples.

Mineral Resource and Mineral Reserve Estimates

No mineral resource or mineral reserve estimates have been published for the subject licences.

Mining, Exploration and Development Operations

The clearest verification of the gold values reported by the GBGE lies in the exploitation of the anomalous areas by "illegal" miners. The data has been generated with proper procedures and has been accurately transcribed and is being used suitably because field examinations show that the maps are accurate.

There is no evidence of metallurgical testing being carried out on material from the subject properties. Mineral processing by "illegal" miners is being done, on at least two of the licences (GNW and GJG), however the technical details of the various operations are not known.

Hongyangou (HYG)

Little is known about the HYG licence except that the GBGE has determined that a portion of the licence is geochemically anomalous and it occupies the same geological formations that host gold mineralization elsewhere in the district. Unverified local comments state that there are two families producing gold at two widely separated areas in the mountains of the licence. It is concluded that a basic geological mapping and geochemical sampling campaign is warranted as a preliminary evaluation of the licence.

Guojiagou (GJG)

Limestone and calcareous clastic sediments have been affected by an elongate, east-west trending granodiorite to quartz diorite intrusive body. The intrusion has bowed the sedimentary package upward into an antiform and has produced extensive marble and hornfels as thermal metamorphic products. A large gold-silver-lead-zinc stream sediment anomaly overlies the area of the intrusive contact zone and very small scale gold mining is taking place at various scattered locations within the same zone. Geological mapping and sampling at a scale much more detailed than that which was completed by the GBGE in 1995 is warranted to evaluate the licence.

Guanniuwan (GNW)

Some hundreds of "illegal" hand-miners producing gold from the superficial oxide zone at GNW demonstrates that gold is present in economically interesting amounts. It is considered probable that targets worthy of drilling follow-up are present in the vicinity of the active mines. The situation presents a rare opportunity to examine, map and sample underground while the workings are still accessible. Of the two active areas separated by a distance of about two km the westerly one is a relatively new discovery in alluvial-covered terrain and warrants immediate examination. The oxidized quartzite, limestone and fault gouge material being excavated from adits in this "West Zone" is similar in character to the rocks seen in the North Zone, and the two zones could be part of the same fault-related system.

As far as can be determined, since there has been no survey of the property boundary, the active mining probably extends off the licence to the west.

The active mine workings at the South Zone, which has been in exploited by "illegal" miners for several years, also need to be examined, mapped and sampled. The nearby North Zone, where a 20,000 tonne mining test was completed in 1996 requires re-evaluation to determine why the mining test failed to produce a significant amount of gold when the surface trench assays suggested that gold bearing rock should have been placed on the cyanide leach pad. The 1996 mining project executed by GBGE failed to provide a reliable test of the in situ gold grade either because the adit was driven below the level of oxidation, or the adit did not intersect the same gold-bearing structures that were indicated by trenching.

Geologically the gold is related to reverse faults which cut complex Triassic and Devonian limestone and clastic sedimentary formations. Narrow feldspar porphyritic or granitic dykes have intruded along similar structures and appear to be one of the important markers for the presence of gold in the general area. Noted alteration consists of silicification and some clays. Pyrite is oxidized to limonites in the superficial environment and it is this oxidation which allows the "illegal" miners to produce gold utilizing crude cyanide ponds and zinc strips.

For 2004

The Company plans to undertake a program of geological mapping and geochemical sampling of the subject properties as proposed by the independent consultant in the NI 43-101 report filed on SEDAR May 4, 2004. It is intended to follow this up with diamond drilling of selected targets identified during the 2004 summer field season.

Item 5. Operating and Financial Review and Prospects

This discussion and analysis of the operating results and the financial position of Minco for the three years ended December 31, 2003, 2002 and 2001, and should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto.

Operating results.

General

The Company is in the exploration stage and had no operating revenue during 2003, 2002 and 2001. Since the signing of its first co-operation agreement in China in 1995, Minco has been active in mineral exploration, property evaluation and acquisition in China and plans to build a portfolio of precious and base metals properties in China. To date, the Company has conducted exploration work on properties located in Sichuan, Xinjiang, Hebei, Inner Mongolia, and Gansu provinces of China, and investigated or evaluated about 300 Chinese mineral properties. The Company has rights to earn interests in three Sino-foreign co-operative joint ventures that have been established within the Chinese mining industry.

Results of Operations

Year ended December 31, 2003, compared to year ended December 31, 2002

During 2003, the Company's activities focused on a Phase-II drilling program for the Gobi Gold project and the acquisition of an advanced gold project. In 2002, the Company's activities focused on exploration of the Gobi Gold project in Inner Mongolia and the White Silver Mountain polymetallic project in Gansu Province, China.

For the year 2003, gross exploration costs totaled $352,394, of which $216,806 was spent on the Gobi Gold project and $36,994 was spent on White Silver Mountain compared to the year 2002 where gross exploration costs totaled $494,813, of which $451,434 was spent on the Gobi Gold project and $43,379 spent on White Silver Mountain. During the fourth quarter of 2001, the Company received an expense recovery of $162,015 from Teck Cominco Limited for equipment rental associated with the White Silver Mountain underground drilling completed to June 2001. There was no expense recovery from Teck Cominco Limited for equipment rental associated with the White Silver Mountain project in 2002.

During the year ended December 31, 2003, the Company made efforts to cut costs for administration and office overhead. Therefore, management fees, office and miscellaneous, rent salaries and benefits were significantly reduced. Salaries and benefits decreased to $138,582 from $178,348 for 2002. Rent cost decreased to $85,698 from $115,107 in 2002 as a result of partial office space subleasing. Total administrative expenses were $1,498,381 for 2003 compared to $820,556 for 2002. During fiscal year 2003, the Company undertook major efforts to enhance corporate visibility in security markets, and to broaden investors' bases both in the USA and abroad.

During 2003, management fees and salaries paid to its directors totaled $13,499 compared to $75,773 in 2002. During 2001, management fees and salaries paid to its directors totaled $77,757. In addition, the Company incurred exploration expenses of $68,992 for 2003 compared to $71,973 to its directors or corporations controlled by them in 2002, compared to paid expenses of $72,648 for the same period of year 2001.

At the same time, more resources were allocated to the evaluation of new properties and to the improvement of corporate visibility in the securities market. As a result, costs for project investigation increased by $392,477, and promotion increased by $33,450.

Net loss from operations for 2003 was $(1,769,195) or $(0.08) per shared compared to $(1,288,209) or ($0.07) per share in 2002. Net loss from operations for 2001 was $(715,412) or ($0.04) per share under Canadian GAAP and (915,264) or ($0.07) per share under US GAAP.

United States GAAP Reconciliation

Starting in 2002, the Company adapted all United States GAAP recommendations in accounts treatment and reconciliation procedures, as the Canadian GAAP were being called to fully reconcile with United States GAAP for financial reporting purposes. For the year ended December 31, 2001, the Company had a loss of $(915,264) or ($0.07) per share calculated under U.S. GAAP compared to a net loss of $(715,412) or ($0.04) per share calculated under Canadian GAAP. The difference in calculation of loss is primarily attributed to the release of escrow shares which is recorded as compensation of $199,852 under U.S. GAAP.

Year ended December 31, 2002, compared to year ended December 31, 2001

Total administrative expenses were $819,120 for fiscal year 2002 compared to $623,600 for fiscal year 2001. This $195,520 increase was the result of two major investor relation programs the Company undertook in year 2002, and the relocation of its head office.

Total administrative expenses were $623,600 for fiscal year 2001 compared to $740,884 for the year 2000. During fiscal year 2001, expenses decreased in almost all administrative categories including advertising by $9,078, consulting fees by $64,141, promotion and government relations by $24,438. These decreases were offset, in part, by the increase in legal fees by $44,248 related to the Company's Annual Report and registering its common shares with the SEC.

During 2002, mineral property expenditures were $494,813 of which $43,379 was spent on White Silver Mountain and $451,434 was spent on the Gobi Gold project, compared to 2001 mineral property expenditures of $330,850.

During 2001, mineral property expenditures were $330,850 of which $72,562 was spent on White Silver Mountain and $258,288 was spent on the Gobi Gold project.

Net loss from operations for 2002 was $(1,288,209) or ($0.07) per share compared to $(915,264) or ($0.07) per share for 2001 under US GAAP..

Net loss from operations for 2000 was $(1,070,773) or ($0.07) per share.

United States GAAP Reconciliation

For the year ended December 31, 2003, the Company had a loss of $(1,769,195) or $(0.08) per share calculated under U.S. GAAP and Canadian GAAP.

For the year ended December 31, 2002, the Company had a loss of $ (1,288,209) or $ (0.07) per share calculated under U.S. GAAP and Canadian GAAP.

For the year ended December 31, 2001, the Company had a loss of $ (915,264) or $ (0.07) per share calculated under U.S. GAAP compared to a net loss of $(715,412) or $(0.04) per share calculated under Canadian GAAP.

For the year ended December 31, 2000, the Company had a loss of $(1,070,773) or ($0.08) per share calculated under U.S. GAAP compared to a net loss of $(1,070,773) or ($0.07) per share calculated under Canadian GAAP.

Exchange Rates

Minco maintains its accounting records in functional currency: Canadian dollar. Minco translates foreign currency transactions into functional currency in the following manner: At the transaction date, each asset, liability, revenue and expense is translated into Canadian dollars at the exchange rate in effect on that date. At each period end, all monetary assets and liabilities are translated into the functional currency by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in the consolidated Statement of Operation.

Minco pays for its expenses related to its Chinese joint ventures in Canadian dollars which are then converted into Chinese dollars. Based on prior years' experience, Minco does not believe that foreign currency fluctuations have had a material impact on its financial condition. However, no assurance can be given that material foreign currency fluctuations will not occur in the future. The Company does not engage in foreign currency hedging transaction.

Inflation

Based on prior history for at least the two fiscal years, Minco does not believe that inflation will have a material adverse effect on its financial condition. However, no assurance can be given that Minco will not experience a substantial increase in inflation.

Liquidity and Capital Resources

Currently, none of the Company's projects are producing revenues. To provide working capital for its operations and project development, the Company plans to raise additional funds within twelve months. Traditionally, the Company has raised capital through the issuance of common shares. It is contemplated that it will continue to raise capital primarily through investors consisting of resource investment groups, senior mining companies, and public financing through the facilities of the Toronto Stock Exchange. No assurance, however, can be given that the Company's future capital requirements can be obtained. The Company's access to capital is always dependent upon future financial market conditions, especially those pertaining to venture capital situations such as mining exploration companies.

At December 31, 2003, the Company had working capital of $6,558,219. 643,000 options were exercised in 2003 and 50,000 warrants were exercised.

At December 31, 2002, the Company had working capital of $(227,515). No options or warrants were exercised during 2002.

At December 31, 2001, the Company had working capital of $489,123. No options or warrants were exercised during 2001. During the period of 1999 to 2000, capital additions totaled $111,100 through the exercise of warrants.

The Company anticipates that it will pay for its administrative and exploration costs for 2004 from its current working capital and from the completion of the private placement announced on June 9, 2003 and November 14, 2003. The Company plans to raise additional funds later in the year to assist with further development of its exploration projects and anticipated working capital expenditures during the next two to three years.

The particulars of all capital raising transactions since 1998 are detailed below. Proceeds of these financings have been used for exploration and for development expenditures (only when and if warranted) in connection with Minco's mineral projects located in China, for working capital and for acquisition of additional projects.

On July 10, 1998, Minco completed a private placement of 375,000 common shares to Teck Corporation at a price of $2.00 per share. Proceeds of this placement were expended entirely on the White Silver Mountain project. The placement also included warrants to purchase 125,000 common shares at a price of $2.00 per share for one year and a further 125,000 common shares at a price of $3.45 per share for two years.

Financing in 1999 included the exercise by Teck of 125,000 warrants to purchase shares at $1.60 as part of its exercise of its option to become a joint venture partner and operator of the White Silver Mountain project. Teck had the right but not the obligation to acquire an additional 125,000 shares at $3.45 until July 9, 2000, and did not acquire the additional common shares. Additionally, the Company undertook private placements of 250,000 common shares at $0.85 per share and 150,000 common shares at $1.00 per share.

During fiscal year 2000, Arbora Portfolio Management exercised warrants to acquire 110,000 common shares at $1.01 per share representing gross proceeds of $111,100.

In May 2002, the Company closed a non-brokered private placement consisting of 2,200,000 shares at a price of C$0.25 per share representing gross proceeds of $550,000.

On January 6, 2003, the Company announced that it proposed to complete another financing of up to C$550,000 by way of a 10% Redeemable Convertible Debenture due January 31, 2008. The Debenture would be convertible at any time at the option of the Debenture holders into common shares of Minco at a conversion price of C$0.40 per share. The Debenture allows the Company the option to pay interest on the Debenture in the form of cash or common shares. The maximim number of common shares issuable under the offering would be an aggregate of 1,250,000 after conversation, not including interest payments. On February 27, 2003, the Company announced an oversubscription to the Convertible Debenture by approximately 12% with all other terms of the Private Placement remaining unaltered. Proceeds of this financing are to be used for advancing exploration on the Company's Gobi Gold project, the newly acquired BYC gold project and general working capital. The financing closed on March 6, 2003 for a total of C$580,600. In November, 2003, pursuant to Section 3(b) of the Debenture, the Company notified the Debenture holders it was shortening the conversion period. The principal and interest amounts owing were converted into an aggregate of 1,461,750 common shares and paid out to all Debenture Holders in January 2004.

In 2003, an aggregate of 120,000 stock options were exercised by officers and directors of the Company for $31,000 and 643,000 stock options were exercised by consultants and employees for an aggregate of $273,650.

On June 9, 2003, the Company announced that it proposed to complete a financing of up to C$1,500,000.00 by way of a private placement at a price of Cdn$0.35 per unit. Each unit will consist of one common share and one half non-transferable share purchase warrant. Each whole warrant will entitle the warrant holder to

purchase one common share of the Company for a period of two years. Each whole warrant is exercisable on payment of Cdn$0.40 into one common share of the Company in the first year and Cdn$0.60 per common share if exercised in the second year. A finder's fee will be paid associated with this financing. Proceeds of this financing are to be used for advancing exploration on the Company's Gobi and BYC gold projects in China and for general working capital.

Item 6. Directors, Senior Management and Employees

Directors and senior management.

The following table sets forth all current directors and executive officers of Minco as of April 30, 2004, with each position and office held by them in Minco, their terms of office and the period of service as such. Each director's term of office expires at the next annual general meeting of shareholders to be held In June 2004. At such meeting, each current director is seeking re-election.

Name and Present Office Held

Director Since

Number of Shares Beneficially Owned, Directly or Indirectly, or Over Which Control Or Direction is Exercised

Principal Occupation and if Not at Present an Elected Director, Occupation During the Past Five (5) Years

Ken Cai

President, Chief Executive Officer and Director

February 1996

6,163,031⁽¹⁾

Geologist & Business Executive

William Meyer

Chairman and Director

July 13, 1999

��

641,441⁽²⁾

Professional Engineer

Robert M. Callander

Director

August 1996

232,250⁽³⁾

Vice President, Caldwell

Securities Ltd.

Hans Wick

Director

Robert Gayton

Director

Michael Legg

Officer

March 1997

September 2003

March 2004

290,000⁽⁴⁾

205,000⁽⁵⁾

150,000⁽⁶⁾

Financial Advisor

Chartered Accountant

Mine Financial Consultant

(1)

Includes 5,421,031 common shares held by Pacific Canada Resources, a private company, of which Dr. Ken Cai has more than a 10% interest. Also includes 742,000 common shares subject to options.

(2)

Includes 475,000 common shares subject to options.

(3)

Includes 200,000 common shares subject to options.

(4)

Includes 200,000 common shares subject to options.

(5)

Includes 200,000 common shares subject to options.

(6)

Includes 150,000 common shares subject to options.

Positions held by Minco's directors and officers other than with Minco:

Name

Positions Held

Ken Cai

Director, Chineseworldnet.com

Director, Dragon Pharmaceutical Inc.

Director, Aquasol Environtech Ltd.

President & Director, Kaisun Investment & Development

President & Director, Pacific Canada Resources Inc.

William Meyer

Director, Silver Standard Resources Inc.

Director, GGL Diamond Corp.

Director, Lysander Minerals Corporation

Director, Cantech Ventures Inc.

Director, Trans American Industries Inc.

Robert Callander

Director, Urbana Corporation

Director, Pacific Canada Resources Inc.

Director, Environwaste Technologies Inc.

Director, Member Savings Credit Union

Director, Intraconnect Inc.

Hans Wick

Financial Advisor

Robert Gayton

Director, Bema Gold Corporation

Director, Intrinsyc Software Inc.

Director, Nevsun Resources Ltd.

Director, Bravo Venture Group Inc.

Director, Canadian Zinc Corporation

Director, Quaterra Resources Inc.

Director, Radiant Resources Inc.

Michael Legg

Mine Finance Consultant

The business background and principal occupations of Minco's officers and directors for the preceding five years are as follows:

Ken Z. Cai. Dr. Cai has served as president, chief executive officer and a director of Minco since February 29, 1996. Dr. Cai devotes approximately 90% to 100% of his time to Minco's business. Dr. Cai holds a Ph.D. in mineral economics from Queens University in Kingston, Ontario, Canada. Dr. Cai, a Chinese national now living in Canada, has 15 years of experience in mineral exploration, project evaluation, corporate financing and company management. Dr. Cai has been responsible for negotiating the property agreements in China through his contacts in the Chinese mining communities. This has allowed Minco to access data on a large number of projects throughout China. Dr. Cai has served as a director of several publicly-traded and private Canadian and Chinese companies. In addition, Dr. Cai is a director of Dragon Pharmaceutical, Inc., a company whose shares of common stock are registered unde r the Securities Exchange Act of 1934.

William Meyer. Mr. Meyer has served as Chairman and director since 1999. Mr. Meyer devotes approximately 80% of his time to Minco's business. He was formerly Vice-President, Exploration for Teck Corporation and President of Teck Exploration Ltd. He graduated from the University of British Columbia with a B.Sc. in geology in 1962. After graduation, he was employed as an exploration geologist with Phelps Dodge Corporation of Canada and later as senior geologist with Gibraltar Mines Ltd. In 1967 he joined the consulting firm of Western Geological Services as a partner, and in 1975 formed his own consulting firm, W. Meyer and Associates. Mr. Meyer joined Teck Exploration Ltd. in 1979 as Exploration Manager for Western Canada and the United States. In 1991, he was appointed Vice-President, Exploration, for Teck Corporation responsible for the direction of exploration activities for Teck an d its associated companies worldwide. He is a director and officer of a number of public and privately owned Canadian companies.

Robert Callander. Mr. Callander has been a director since August 1996. He holds an MBA from York University, Toronto, Ontario, Canada, as well as a CFA from the Institute for Investment Management, Charlotte, Virginia. Mr. Callander has worked for Caldwell Securities Ltd. since 1992 and currently serves as a Vice-President with that firm. Prior to his engagement with Caldwell Securities Ltd., Mr. Callander served as a corporate finance analyst with Nesbitt Burns. He has worked in the investment industry for 25 years.

Hans J. Wick. Mr. Wick has been a director since March 1997. He is a resident of Zurich, Switzerland. For the past five years, Mr. Wick has been an independent portfolio manager.

Robert Gayton. Dr. Gayton has been consulting on accounting and finance issues for the last 30 years, first as an audit partner with Peat, Marwick Mitchell (now KPMG), Chartered Accountants and more recently as CFO/Director for numerous public and private companies.

Michael Legg. Mr. Legg has been a mine finance consultant and geologist for the past 35 years including Chief Geologist for Falconbridge Copper Ltd. and Chief Mine Geologist for Tara Mines Ltd. in Ireland. He was also involved with the Bank of Montreal's Mining Services Department performing appraisals for financing of mineral projects in Canada, USA and Australia.

Compensation

The aggregate direct or indirect remuneration paid to the directors and officers of Minco, as a group during the fiscal year ended December 31, 2003, for service to Minco in all capacities, was $113,400. Certain information about payments to Minco's executive officers is set out in the following table:

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

Annual Compensation

Long Term

Compensation

Name and Principal Position

Year

Salary

Bonus

Other

Shares Under Options

All Other Compensation ($)

Ken Cai

President, Chief Executive Officer and Director

2003

2002

2001

2000

Nil

$113,400⁽¹⁾

$106,700⁽¹⁾

$110,900⁽¹⁾

$110,300⁽¹⁾

742,000

704,500

371,000

Nil

(1)

Consulting fees paid and amounts paid as a travel allowance.

Board practices

The current directors of the board were elected to their position at the annual meeting of shareholders held on June 25, 2003 except for Dr. Gayton who was appointed September 15, 2003. Each director will continue to serve as such until the next meeting of the shareholders to be held in June 2004. The officers of the Company are elected by the board and serve at the board's pleasure. Directors are elected annually at the Annual General Meeting of shareholders, whereas officers' appointments are approved by the Board of Directors and terminate upon resignation or termination by the Board.

The Company has no contract with any of its officers or directors that provide for payments upon termination.

The Company has an Audit committee consisting of Messrs. Meyer, Gayton and Callander. The roles and responsibilities of the Audit committee have been specifically defined and include responsibility for overseeing management reporting on internal control. The Audit committee has direct communication channels with the external auditors.

Employees

The Company has 14 full-time employees, of which 7 are full time employees and 7 are hired on a part time or contractual basis. Most of the Company's employees are located in Vancouver, British Columbia with four_ employees located in China.

Share ownership

During the fiscal year ended December 31, 2003, no amounts were set aside or accrued by Minco or its subsidiaries during such year to provide pension, retirement or similar benefits for directors and officers of Minco, pursuant to any existing plan provided or contributed to by Minco or its subsidiaries.

During 2003, a total of 520,000 options were granted to directors, officers and employees of the Company and no options expired. As of December 31, 2003 stock options totaled 3,319,000. During 2002, a total of 230,000 options were granted to directors, officers and employees.

The following table sets forth, as of April, 2004, common stock held by Minco's officers and directors and all outstanding options and warrants to purchase common shares of Minco; there are no options to purchase shares of any other class of security:

Common Shares Owned by Officers and Directors

Name	Common Shares Held
Ken Cai, Director	5,421,031*
William Meyer, Director	166,441
Robert Callander, Director	32,250
Hans Wick, Director	90,000
Robert Gayton, Director	5,000
Mar Bergstrom, Officer	Nil
Amy Li, Officer	Nil
Michael Legg, Officer	Nil

Represents shares owned by Pacific Canada Resources Inc., a private company, in which Ken Cai beneficially owns more than 10%.

Outstanding Options

Name	From	Options	Exercise Price	To
Ken Cai	March 5, 1996	321,500	$0.55	March 5, 2006
Ken Cai	June 20, 1997	49,500	$0.55	June 20, 2007
Ken Cai	November 28, 2001	371,000	$0.20	November 27, 2006
Robert Callender	October 8, 1996	97,300	$0.55	October 8, 2006
Robert Callender	November 28, 2001	102,700	$0.20	November 27, 2006
Hans Wick	March 6, 1997	97,300	$0.55	March 6, 2007
Hans Wick	November 28, 2001	102,700	$0.20	November 27, 2006
William Meyer	July 16, 1999	150,000	$0.55	July 16, 2006
William Meyer	December 2, 1999	100,000	$0.55	December 2, 2006
William Meyer	November 28, 2001	225,000	$0.20	November 27, 2006
Robert Gayton	September 15, 2003	200,000	$0.83	September 14, 2008
Wayne Spilsbury	March 5, 1996	135,000	$0.55	March 5, 2006
Ruijin Jiang	January 2, 2001	100,000	$0.55	January 2, 2006
Ruijin Jiang	November 28, 2001	35,000	$0.20	November 27, 2006
Anna Liu	January 2, 2001	75,000	$0.55	January 2, 2006
Wilma Gao	January 2, 2001	7,000	$0.55	January 2, 2006
Wilma Gao	February 6, 2002	20,000	$0.25	February 5, 2005
Shiyou Liu	July 22, 2002	50,000	$0.55	July 21, 2005
Dean Danielson	March 26, 2003	100,000	$0.50	March 25, 2008
Jennifer Yu	March 26, 2003	40,000	$0.50	March 25, 2006
Elaine Einarson	March 26, 2003	40,000	$0.50	March 25, 2006
Lambert Pan	March 26, 2003	40,000	$0.50	March 25, 2006
Lambert Pan	March 30, 2004	20,000	$1.81	March 29, 2009
Mar Bergstrom	March 26, 2003	85,000	$0.50	March 25, 2006
Wade Dawe	June 1, 2003	150,000	$0.38	May 31, 2005
Amy Li	October 7, 2003	100,000	$0.80	October 6, 2008
Wade Dawe	November 14, 2003	200,000	$2.00	November 13, 2005
Michael Legg	March 30, 2004	150,000	$1.81	March 29, 2009
Lei Liu	March 30, 2004	75,000	$1.81	March 29, 2009
Cangou Liu	March 30, 2004	75,000	$1.81	March 29, 2009
Xiao D. Hao	March 30, 2004	75,000	$1.81	March 29, 2009
Xiao F. Hao	March 30, 2004	75,000	$1.81	March 29, 2009

3,464,000

Item 7. Major Shareholders and Related Party Transactions

Major shareholders

As of April 30, 2004, Minco believes that approximately 2,300,907 of the issued and outstanding common shares were held by 24 shareholders with addresses in the United States.

As far as known to Minco, and except as disclosed herein, Minco is not directly or indirectly owned or controlled by another corporation(s) or by any foreign government. As disclosed below, Pacific Canada Resources Inc., a private company controlled by a director and a former director of Minco, as at April 30, 2004, owned approximately 18.13% of the issued and outstanding shares of Minco's common stock.

The following table sets forth, as of April 30, 2004, information with respect to (i) any person who is known to Minco to be the owner of more than 10% of any class of Minco's outstanding voting securities and (ii) the total amount of any class of Minco's voting securities owned by the officers and directors as a group.

Title of Class	Identity of Holder	Amount Owned	Percent of Class

Common Shares	Pacific Canada Resources Inc.	5,421,031⁽¹⁾	18.13 %
Common Shares	Dr. Ken Cai	6,163,031⁽²⁾ PCR + Options	20.61%
Common Shares	All officers and directors as a group (eight persons)⁽³⁾	5,714,722	19.11 %

(1)

Dr. Ken Cai beneficially owns more than 10% of Pacific Canada Resources, Inc. See also note (3) below.

(2)

Dr. Ken Cai, a director and officer of Minco, beneficially owns more than 10% of Pacific Canada Resources Inc., a private company. Also includes options to purchase 742,000 common shares.

(3)

Includes Dr. Ken Cai's beneficial interest in shares owned by Pacific Canada Resources, Inc. and direct holdings of officers and directors (does not include options granted).

Performance Shares or Escrow Securities

As at April 30, 2004, there were a total of 2,991,322, common shares of Minco held at Computershare Trust Company of Canada, 510 Burrard Street, Vancouver, British Columbia, subject to escrow share restrictions under a Performance

Escrow Agreement dated August 17, 1995 (the "1995 Escrow Agreement") and an Escrow Agreement dated February 19, 1996 (the "1996 Escrow Agreement"). As of April 30, 2004, the escrow shares represent approximately 10.00% of the total issued and outstanding shares of Minco.

Table Of Escrow Shares

Pacific CanadaResources Inc.

Peter P.Tsaparas

Hans

Wick

FotiosKandianis

Petros S. E.Tsaparas

ColinMcAleenan

Total

Balance December 31, 1996

4,880,000

262,500

90,000

60,000

90,000

5,442,500

Released at $1.20 per share, June 1998

949,561

131,250

45,000

30,000

45,000

1,230,811

Released at $1.50 per share, August 1999

508,736

65,625

22,500

15,000

22,500

649,361

Released at $0.97 per share, March 2001

430,381

65,625

22,500

15,000

22,500

571,006

Balance May 31, 2001, March 31, 2003

And April 30, 2004

2,991,322

-0-

2,991,322

The escrow shares may be released upon the following conditions.

One escrow share for each $0.97 in the value of the interests in the mineral properties acquired by the Company from PCR pursuant to the PCR Agreement (the "PCR Properties"), based on a valuation report to be prepared by a qualified independent consultant, less any expenditures required to be made by the Company, pursuant to the PCR Agreement or otherwise, in order to earn its interests in the PCR Properties (provided that all required Chinese governmental approvals in order to perfect the interests to be acquired by the Company hereunder have been obtained for each of the PCR Properties that are the subject of the valuation report);

One escrow share for each $0.97 in the value of the interest in any new mineral properties acquired by the Company pursuant to the PCR Agreement or the TCIP Agreements ("New Projects"), such value to be determined on the same basis and subject to the same provisions as described in note 1 above.

One escrow share for every $1.81 expended by the Company, PCR, Teck, Cominco, Temco or any other third party expending monies on exploration and development of the PCR Properties or of any New Projects, exclusive of general and administrative expenses, determined in accordance with the provisions applicable to natural resources issuers under Local Policy Statement #3-07 of the British Columbia Securities Commission; and

One escrow share for every $0.97 in cumulative cash flow from the operations of the Company on the PCR Properties and any New Projects and as determined in accordance with generally accepted accounting principles, provided that each PCR Property and each New Project will be considered separately without taking into account any negative cash flow that may exist in any other PCR Property or New Project.

Generally, requests for escrow release are made as a matter of course once per year accompanied by the audited financial statements for the previous year showing verifiable expenditures on mineral properties or cash flow from those properties. Upon review and approval of the statements, the Regulatory Authorities approve the release of the escrow shares in a quantity that matches the actual spending or cash flow divided by the "exploration spending per share" or "cash flow per share." If all the escrow shares are not released to PCR within ten years of issuance, all unreleased escrow shares shall be forfeited by PCR and canceled. The foregoing escrow shares are held subject to the direction and determination of the Regulatory Authorities.

Related party transaction

As a result of the PCR acquisition, Minco entered into a consulting agreement dated June 25, 1996, with Kaisun Investment, a private company controlled by Ken Cai, Minco's current President and Chief Executive Officer, under the terms of which such company receives $8,333 per month in exchange for Mr. Cai serving as president and chief executive officer and providing consulting, management and supervision services in connection with the development of overall corporate strategy. In addition, Kaisun Investment receives a travel allowance of $100 a day while Mr. Cai is in China. The consulting agreement has a three-year term and was renewed for an additional three years effective June 25, 1999.

During the years ended December 31, 2003, 2002 and 2001, the Company paid Kaisun Investment or Ken Cai, a total of $113,400, $106,700 and $110,900, respectively, for management services, property investigation, geological consulting and rent in China. Kaisun Investment is a company controlled by Dr. Ken Cai, president and director of the Company. The amounts paid to Kaisun Investment or Ken Cai include a management fee of $8,333 per month discussed in the preceding paragraph.

Minco believes that the consulting agreement with Kaisun Investment are on terms as favorable as could be obtained from an unaffiliated third party. Other than the previously disclosed agreements with Teck and Cominco, Minco has not entered into any other transactions with Teck or Cominco.

Item 8. Financial Information

Consolidated Statements and Other Financial Information

The following financial statements of Minco are attached to this Annual Report:

Auditors' Report.

Consolidated Balance Sheet at December 31, 2003 and 2002.

Consolidated Statement of Operations and Deficit for the years ended December 31, 2003 and 2002.

Consolidated Statement of Cash Flows for the years ended December 31, 2003 and 2002.

Notes to Consolidated Financial Statements

Dividend policy

The Company has never paid any dividends and does not intend to pay any dividends in the near future.

Item 9. The Offer and Listing

Since February 24, 1998, Minco's common shares have been listed on the Toronto Stock Exchange. Previously, Minco's common shares were dual listed on the CDNX (formerly the Vancouver Stock Exchange) and Toronto Stock Exchange. On January 29, 1999, voluntary delisted its common shares from the CDNX. The Board of Directors of Minco deemed a continued listing on a Canadian junior exchange, such as the CDNX to be an unnecessary requirement both from a financial and management perspective.

Minco's common shares are not currently trading on any U.S. stock exchange or in the over-the-counter market, and accordingly, there is currently no public market for the common shares of Minco in the United States. Minco intends to have its common shares quoted on the OTC Bulletin Board. However, no assurance can be given that Minco's common shares will qualify to be quoted on the OTC Bulletin Board, nor that a market will develop if Minco's common shares are quoted on the OTC Bulletin Board.

The following tables set forth the reported high and low prices for (a) the five most recent fiscal years; (b) each quarterly period for the past two fiscal years and for the first quarter of 2000; and (c) each month for the past six months.

Beginning in December 1998, Minco's common stock began trading on the Toronto Stock Exchange. Prior to that time, Minco's common shares were trading on the CDNX.

High and low price for the five most recent fiscal years.

Years Ended

High

Low

December 31, 2003

$2.70

$0.28

December 31, 2002

$0.75

$0.20

December 31, 2001

$0.49

$0.20

December 31, 2000

$1.88

$0.30

December 31, 1999

$2.50

$0.95

High and low prices for each quarterly period for the past two fiscal years ended December 31, 2003 and 2002.

Quarter Period

High

Low

Jan - - March 31, 2003

$0.59

$0.35

April 1 - - June 30, 2003

$0.51

$0.28

July 1 - - September 30, 2003

$0.94

$0.44

October 1 - - December 31, 2003

$2.70

$0.70

Jan - March 31, 2002

$0.49

$0.20

April 1 - June 30, 2002

$0.75

$0.27

July 1 - September 30, 2002

$0.70

$0.40

October 1 - December 31, 2002

$0.50

$0.25

High and low prices for each month for the past six months.

Month Ended

High

Low

April 2004

March 2004

February 2004

January 2004

December 2003

November 2003

$2.00

$1.90

$1.85

$2.28

$2.13

$2.70

$1.61

$1.45

$1.30

$1.60

$1.47

$0.97

Item 10. Additional Information

Share capital

Minco has 100,000,000 common shares authorized, without par value, of which 29,896,136 shares were issued and outstanding as of April 30, 2004.

Each of the common shares has equal dividend, liquidation and voting rights. Voters of the common shares are entitled to one vote per share on all matters that may be brought before them. Holders of the common shares are entitled to receive dividends when declared by the Board of Directors from funds legally available therefor.

The common shares are not redeemable, have no conversion rights and carry no pre-emptive or other rights to subscribe for additional shares. The outstanding common shares are fully paid and non-assessable.

Of Minco's common shares outstanding, 2,991,322 are held in escrow, subject to release or cancellation upon certain conditions. See Item 7 "Performance Shares or Escrow Securities."

The transfer agent and registrar for the common shares is Computershare Trust Company of Canada (formerly Montreal Trust Company of Canada), 510 Burrard Street, Vancouver, British Columbia, Canada V6B 5A1.

The following table sets forth a history of the share capital for the Company for the last three years, and through April 30, 2004.

Issuance

Common Share

Balance, December 31, 1997

15,370,123

Private placement of common shares to Teck Corporation

375,000

Balance, December 31, 1998

15,745,123

Private placement of common shares

250,000

Private placement of common shares

150,000

Exercise of warrants

125,000

Balance, December 31, 1999

16,270,123

Exercise of warrants

110,000

Balance, December 31, 2000

16,380,123

Balance, December 31, 2001

Balance, December 31, 2002

Private placement of common shares

16,380,123

2,200,000

18,580,123

Exercise of options

30,000

Balance, May 31, 2003

18,610,123

June 2003 exercise of options

30,000

July private placement of common shares

4,409,642

August, September, October November 2003

Exercise of options

553,000

November 2003 finders' fee

62,414

November 2003 - - issuance for fractional rounding

December 2003 private placement of common shares

3,748,848

December 2003 - - exercise of options

150,000

December 2003 - - exercise of warrants

50,000

Balance, December 31, 2003

27,614,029

January 2004 - - exercise of options

115,000

January 2004 - - exercise of warrants

293,500

January 2004 - - issuance for debenture debt

1,461,750

March 2004 - - exercise of warrants

172,857

April 2004 - - exercise of options

180,000

April 2004 - - exercise of warrants

59,000

Balance, April 30, 2004

29,896,136

B. Memorandum and articles of association

On July 8, 1996, Minco adopted a revised Articles of Minco Mining & Metals Corporation under the Province of British Columbia Company Act.

Common Shares

All issued and outstanding common shares are fully paid and non-assessable. Each holder of record of common shares is entitled to one vote for each common share so held on all matters requiring a vote of shareholders, including the election of directors. The holders of common shares will be entitled to dividends on a pro-rata basis, if and when as declared by the board of directors. There are no preferences, conversion rights, preemptive rights, subscription rights, or restrictions or transfers attached to the common shares. In the event of liquidation, dissolution, or winding up of the Company, the holders of common shares are entitled to participate in the assets of the Company available for distribution after satisfaction of the claims of creditors.

Powers and Duties of Directors

The directors shall manage or supervise the management of the affairs and business of Minco and shall have authority to exercise all such powers of Minco as are not, by the Company Act or by the Memorandum or the Article, required to be exercised by Minco in a general meeting.

Directors will serve as such until the next annual meeting. In general, a director who is, in any way, directly or indirectly interested in an existing or proposed contract or transaction with the Company whereby a duty or interest might be created to conflict with his duty or interest director, shall declare the nature and extent of his interest in such contract or transaction or the conflict or potential conflict with his duty and interest as a director. Such director shall not vote in respect of any such contract or transaction with the Company in which he is interested and if he shall do so, his vote shall note be counted, but he shall be counted in the quorum present at the meeting at which such vote is taken. However, notwithstanding the foregoing, directors shall have the right to vote on determining the remuneration of the directors.

The directors may from time to time on behalf of Minco; (a) borrow money in such manner and amount from such sources and upon such terms and conditions as they think fit; (b) issue bonds, debentures and other debt obligations; or (c) mortgage, charge or give other security on the whole or any part of the property and assets of Minco.

The majority of the directors of Minco must be persons ordinarily resident in Canada and one director of Minco must be ordinarily resident in British Columbia. There is no age limitation, or minimum share ownership, for Minco's directors.

Shareholders

An annual general meeting shall be held once in every calendar year at such time and place as may be determined by the directors. A quorum at an annual general meeting and special meeting shall be two shareholders or one or more proxy holder representing two shareholders, or one shareholder and a proxy holder representing another shareholder. There is no limitation imposed by the laws of Canada or by the charter or other constituent documents of Minco on the right of a non-resident to hold or vote the common shares, other than as provided in the Investment Canada Act, (the "Investment Act") discussed below under "Item 10. Additional Information, D. Exchange Controls."

In accordance with British Columbia law, directors shall be elected by an "ordinary resolution" which means (a) a resolution passed by the shareholders of Minco in general meeting by a simple majority of the votes cast in person or by proxy, or (b) a resolution that has been submitted to the shareholders of Minco who would have been entitled to vote on it in person or by proxy at a general meeting of Minco and that has been consented to in writing by such shareholders of Minco holding shares carrying not less than 3/4 of the votes entitled to be cast on it.

Under British Columbia law certain items such as an amendment to Minco's articles or entering into a merger, requires approval by a special resolution which shall mean (a) a resolution passed by a majority of not less than 3/4 of the votes

cast by the shareholders of Minco who, being entitled to do so, vote in person or by proxy at a general meeting of the company (b) a resolution consented to in writing by every shareholder of Minco who would have been entitled to vote in person or by proxy at a general meeting of Minco, and a resolution so consented to is deemed to be a special resolution passed at a general meeting of Minco.

Material Contracts

Assignment of Contracts and Share Purchase Agreement between Minco and PCR dated February 19, 1996, assigning all of PCR's direct and indirect exploration and development rights to properties located in China to Minco in exchange for 7,280,000 common shares of Minco and the assumption of PCR's liabilities to third parties.

Investment and Participation Agreement among PCR, Teck Corporation and Cominco dated February 19, 1996. Under the agreement, PCR granted Teck and Cominco a right to participate in direct and indirect interests in mineral properties acquired by PCR in consideration of an investment in PCR. Investment and Participation Agreement dated February 20, 1996, among Minco, Teck Corporation and Cominco Ltd. granting Teck Corporation and Cominco Ltd. an investment in Minco Mining & Metal and certain rights to properties that may be developed by Minco. The February 19, 1996 and February 20, 1996, are collectively referred to the "Teck-Cominco Agreements."

Pursuant to the terms of the Teck-Cominco Agreements, Teck and Cominco received "earn-in rights" as to the Non-Chinese Interest in any two mineral property rights acquired by Minco in China after the date of the Teck-Cominco Agreements until March 1, 2004. The Non-Chinese Interest with respect to a property represents the direct or indirect interest in a property that is available for a non-Chinese entity or a foreigner to acquire under Chinese Law. As of March 1, 2004, Teck-Cominco did not exercise their earn-0in rights and therefore the Teck-Cominco agreements have expired.

Performance Shares Escrow Agreement dated August 17, 1995, between Minco, Montreal Trust Company of Canada and certain shareholders of Minco describing the condition under which certain outstanding Minco common shares may be released. The escrow shares may be released upon the following conditions.

4. Consulting Agreement dated June 25, 1996, between Minco and Kaisun Group Canada, Inc. engaging Kaisun to act as president and chief executive officer and to provide Minco with such other consulting services as Minco

and Kaisun agree upon. The term of the consulting agreement is for a period commencing March 1, 1996, and ending June 25, 1999, for a fee of $500 per day to a maximum of $100,000 per year.

Cominco, Teck and Minco letter agreement regarding White Silver Mountain dated June 15, 1998. Under the letter agreement, Cominco has the right to elect to acquire an interest in the White Silver Mountain property up to 20%, provided that Cominco incurs expenditures on the White Silver Mountain property of 1.5 times the expenditures made by Teck and pays Minco $1,125,000 upon the closing of a project financing.

Sino-Foreign Joint Venture Agreement forming Gansu Keyin Mining Co. Ltd. to explore and develop the White Silver Mountain project. A fully licensed Sino-Foreign joint venture company, Gansu Keyin Mining Co. Ltd. ("Gansu Keyin") has been formed to hold the mineral interests. In order to earn up to an 80% interest in Gansu Keyin which owns the rights to the White Silver Mountain project, Minco must spend a minimum of US$4.8 million (40 million RMB) on the White Silver Mountain property over a six year period. If Minco fails to spend the minimum amount, Minco's interest in Gansu Keyin will be capped by a predetermined formula as set out in the Joint Venture Agreement.

Under the terms of the joint venture contract, Gansu Keyin's board of directors consists of seven directors of which Minco has the right to select four directors, including the chairman. Minco has selected Messrs. Ken Cai, William Meyer, Hans Wick and Fred Daley as its representatives. Baiyin has the right to select the remaining three directors.

Sino-Foreign Joint Venture Agreement forming Damo Mining Co. Ltd to explore and develop the Gobi Gold project. Inner Mongolia Damo Mining Co., Ltd. ("Damo Mining") was formed and operates pursuant to a Sino-Foreign Joint Venture contract between EILR and Minco. Under the terms of the joint venture contract, Damo Mining's board of directors consists of seven directors of which Minco has the right to select four directors, including the chairman. Minco has selected Messrs. Ken Cai, William Meyer, Robert Callander and Ruijin Jiang as its representatives. EILR has the right to select the remaining three directors.

Co-operation Agreement regarding the Development of the Changa Lijiagou Land Zinc Deposit dated November 17, 1997, between Minco and Baiyin Non-Ferrous Metals company, a corporation incorporated under the law of the People's Republic of China ("BNMC"). Under this agreement, Minco and BNMC will prepare and file an application with the Chinese governmental authorities to form a joint venture company to explore, and, if warranted, develop and exploit the lead and zinc deposits of Changba and Lijiagou and the joint area between them. If a joint venture company is approved and formed, Minco will contribute capital and advance equipment to develop a 3,500 tonne per day underground mine for a 75% interest in the joint venture and BNMC will contribute its mining right to the Changba and Lijiagou area for its 25% joint venture interest.

On November 18, 2002, the Company signed an agreement with Inner Mongolian Bureau of Non-Ferrous Metals and Exploration, the license holder of the BYC P roject, to acquire a majority interest in the BYC gold project located in central Inner Mongolia, China. The Company can earn a 75% interest in the BYC Project by spending 12

million RMB (approximately C$2.4 million). On December 3, 2003, the joint venture company called the Inner Mongolia Huayu-Minco Mining Co., Ltd. was formed to hold the above noted mineral interest. In 2003, the Company entered into a letter agreement with New Cantech Ventures Inc. ("Cantech"). Pursuant to the agreement, Cantech acquired the right to earn a 51% interest in the BYC project by spending 12 million RMB (approximately Cdn$2.4 million) in exploration over a 3-year period. Cantech can earn another 9% by bringing the project to feasibility stage.

10.

In February, 2003, the Company signed a Co-operation Agreement with the Sichuan Bureau of Metallurgical Exploration which gave Minco the exclusive right until May 2003 to enter into a joint venture to explore and develop the Caodi gold project in Sichuan Province, China. Refer to section entitled "Description of Properties". The Company is currently not pursuing its interest in the Caodi Gold project.

11.

In November 2003, the Company announced it had executed several agreements with the Gansu Provincial Government and two other companies in the Gansu Province for the exploration and development of the Anba gold deposit in the Yangshan Gold Field. Minco, through its joint venture company, Gansu Keyin Mining Co. Ltd., will have the right to acquire a 40% equity interest in the Yangshan Gold Mining Co., Ltd., ("YGM") a joint venture company. YGM will acquire a 100% interest in the Anba gold deposit for US$6 million, consisting of a 40% initial payment (US$2.4 mil) and the balance of 60% (US$3.6 mil) will be paid over a five year period.

12.

In December 2003, the Company announced it had executed a Cooperation Agreement with No. 2 Exploration Institute of the Gansu Bureau of Geological Exploration ("GBGE") for the exploration and development of mineral resources on the Western Extension Properties, Gansu Province of China. Minco and GBGE will establish a new sino-foreign joint venture to explore for gold in three areas: the Guanniuwan, Hongyangou and Guojiagou. All of these areas are located in the Yangshan Gold Field. Minco will have the right to earn a 75% equity interest in the three areas through a joint venture. The total initial investment in the joint venture will be 8 million RMB (approx. US$960,000), 75% contributed by the Company and 25% contributed by GBGE (being the consideration for vending in the Exploration Permits they hold on the three areas). A joint venture contract was signed subsequently on March 1, 2004.

Exchange Controls

There is no law, 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 subject to withholding tax. See "Taxation."

There is no limitation imposed by the laws of Canada or by the charter or other constituent documents of Minco on the right of a non-resident to hold or vote the common shares, other than as provided in the Investment Act. The following discussion summarizes the principal features of the Investment Act for a non-resident who proposes to acquire the common shares.

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 (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. An investment in the common shares by a non-Canadian other than a "WTO Investor" (as that term is defined by 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 Minco was not controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of Minco and the value of the assets of Minco, as determined in accordance with the regulations promulgated under the Investment Act, was $5,000,000 or more, 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 Minco. An investment in the common shares by a WTO Investor, or by a non-Canadian when Minco was controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of Minco and the value of the assets of Minco, as determined in accordance with the regulations promulgated under the Investment Act was not less than a specified amount, which for 1996 was any amount in excess of $168 million. A non-Canadian would acquire control of Minco for the purposes of the Investment Act if the non-

Canadian acquired a majority of the common shares. The acquisition of one third or more, but less than a majority of the common shares would be presumed to be an acquisition of control of Minco unless it could be established that, on the acquisition, Minco was not controlled in fact by the acquirer through the ownership of the common shares.

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 Minco 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 Minco by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of Minco, through the ownership of the common shares, remained unchanged.

Chinese Currency

The Chinese currency is the Renminbi yuan ("RMB"). It is not freely convertible although the Chinese government has emphasized that full convertibility is the long-term goal. Full convertibility, probably after some transitional period, will be a condition precedent to membership in the World Trade Organization, for which China has applied. The People's Bank of China, China's central banking authority, publishes the Renminbi exchange rate against the U.S. dollar every day based on the trading price between the two currencies of the previous day on the Inter-Bank Foreign Exchange Market established in Shanghai in 1994. In addition, the People's Bank of China publishes the Renminbi exchange rates against other major foreign currencies. Designated banks participate on the Inter-Bank Foreign Exchange Market through a computer network connected with major cities in China.

Foreign exchange is administered by the State Administration Bureau of Exchange Control (SAEC), and its local branch offices, all of which are subject to the supervision of the People's Bank of China. The SAEC has established regulations relating to outward remittance by foreign investors of their share of net profits or dividends and final repatriation of their investments, in foreign currency. Subject to payment of applicable taxes, foreign investors may remit out of China, in foreign exchange, profits or dividends derived from a source within China. The Swap Centers were established to assist foreign investment enterprises to balance their foreign currency income and expenses by converting surplus local currency earnings into foreign exchange and vice versa without their having to wait for central allocation. The central foreign exchange adjustment center is in Beijing and other centers have been established in the coastal cities, Special Economic Zones and other major cities, municipalities and autonomous regions. Remittance by foreign investors of any other amounts (including, for instance, principal and interest on debt and proceeds of sale arising from a disposal by a foreign investor of any of its or his investments in China) out of China is subject to the approval of the SAEC.

The Company finances its Chinese operations by transferring Canadian dollars, which are then converted into Chinese dollars, or RMB. Based on prior history, the Company does not believe that the Canadian dollar and RMB conversion to be currency risk. No assurance, however, can be given that a currency risk will not occur in the future.

Taxation

Canadian Federal Income Tax Consequences

The following summarizes the principal Canadian federal income tax consequences applicable to the holding and disposition of common shares in the capital of Minco by a United States resident, and who holds common shares solely as capital property (a "U.S. Holder"). This summary is based on the current provisions of the Income Tax Act (Canada) (the "Tax Act"), the regulations thereunder, all amendments thereto publicly proposed by the government of Canada, the published administrative practices of Revenue Canada, Customs, Excise and Taxation, and on the current provisions of the Canada-United States Income Tax Convention, 1980, as amended (the "Treaty"). Except as otherwise expressly provided, this summary does not take into account any provincial, territorial or foreign (including without limitation, any U.S.) tax law or treaty. It has been assumed that all currently proposed amendments will be enacted substantially as proposed and that there is no other relevant change in any governing law or practice, although no assurance can be given in these respects.

Each U.S. Holder is advised to obtain tax and legal advice applicable to such U.S. Holder's particular circumstances.

Every U.S. Holder is liable to pay a Canadian withholding tax on every dividend that is or is deemed to be paid or credited to the U.S. Holder on the U.S. Holder's common shares. The statutory rate of withholding tax is 25% of the gross amount of the dividend paid. The Treaty reduces the statutory rate with respect to dividends paid to a U.S. Holder for the purposes of the Treaty. Where applicable, the general rate of withholding tax under the Treaty is 15% of the gross amount of the dividend, but if the U.S. Holder is a company that owns at least 10% of the voting stock of Minco and beneficially owns the dividend, the rate of withholding tax is 5% for dividends paid or credited after 1996 to such corporate U.S. Holder. Minco is required to withhold the applicable tax from the dividend payable to the U.S. Holder, and to remit the tax to the Receiver General of Canada for the account of the U. S. Holder.

Pursuant to the Tax Act, a U.S. Holder will not be subject to Canadian capital gains tax on any capital gain realized on an actual or deemed disposition of a common share, including a deemed disposition on death, provided that the U.S. Holder did not hold the common share as capital property used in carrying on a business in Canada, and that neither the U. S. Holder nor persons with whom the U.S. Holder did not deal at arms length (alone or together) owned or had the right or an option to acquire 25% or more of the issued shares of any class of Minco at any time in the five years immediately preceding the disposition.

United States Tax Consequences

Passive Foreign Investment Companies

The Treaty essentially calls for taxation of shareholders by the shareholder's country of residence. In those instances in which a tax may be assessed by the other country, a corresponding credit against the tax owed in the country of residence is generally available, subject to limitations.

Under'1296, of the Internal Revenue Code of the United States, a foreign investment corporation is treated as a passive foreign investment company (a "PFIC") if it earns 75% or more of its gross income from passive sources or if 50% or more of the value of its assets produce passive income. The Company believes that it is a passive foreign investment company ("PFIC") for United States federal income tax purposes with respect to a United States Investor.

Because the Company is a PFIC, unless a United States Investor who owns shares in the Company elects (a section 1295 election) to have the Company treated as a "qualified electing fund" (a "QEF") as described below, the following rules apply:

Distributions made by the Company during a taxable year to a United States Investor who owns shares in the Company that are an "excess distribution" (defined generally as the excess of the amount received with respect to the shares in any taxable year over 125% of the average received in the shorter of either the three previous years or such United States Investor's holding period before the taxable year) must be allocated ratably to each day of such shareholder's holding period. The amount allocated to the current taxable year and to years when the corporation was not a PFIC must be included as ordinary income in the shareholder's gross income for the year of distribution. The remainder is not included in gross income but the shareholder must pay a deferred tax on that portion. The deferred tax amount, in general, is the amount of tax that would have been owed if the allocated amount had been included in income in the earlier year, plus interest. The interest charge is at the rate applicable to deficiencies in income taxes.

The entire amount of any gain realized upon the sale or other disposition of the share will be treated as an excess distribution made in the year of sale or other disposition and as a consequence will be treated as ordinary income and, to the extent allocated to years prior to the year of sale or disposition, will be subject to the interest charge described above.

A shareholder that makes a section 1295 election will be currently taxable on his or her pro rata share of the Company's ordinary earnings and net capital gain (at ordinary income and capital gains rates, respectively) for each taxable year of the Company, regardless of whether or not distributions were received. The shareholder's basis in his or her shares will be increased to reflect taxed but undistributed income. Distributions of income that had

previously been taxed will result in a corresponding reduction of basis in the shares and will not be taxed against as a distribution to the shareholder.

A shareholder may make a section 1295 election with respect to a PFIC for any taxable year of the shareholder (shareholder's election year). A section 1295 election is effective for the shareholder's election year and all subsequent taxable years of the shareholder. (In temporary regulations, Treasury provides procedures for both retroactive and protective elections). Once a section 1295 election is made it remains in effect, although not applicable, during those years that the Company is not a PFIC. Therefore, if the Company requalifies as a PFIC, the section 1295 election previously made is still valid and the shareholder is required to satisfy the requirements of that election. Once a shareholder makes a section 1295 election, the shareholder may revoke the election only with the consent of the Secretary.

If the shareholder makes the section 1295 election for the first tax year of the Company as a PFIC that is included in the shareholder's holding period, the result will be that the PFIC will qualify as a "pedigreed QEF" with respect to the shareholder. If a QEF is an unpedigreed QEF with respect to the shareholder, the shareholder is subject to both the non-QEF and QEF treatment. Certain elections are available which enable shareholders to convert an unpedigreed QEF into a pedigreed QEF thereby avoiding such dual application.

A shareholder making the section 1295 election must make the election on or before the due date, as extended, for filing the shareholder's income tax return for the first taxable year to which the election will apply. A shareholder must make a section 1295 election by completing Form 8621; attaching said Form to its federal income tax return; and reflecting in the Form the information provided in the PFIC Annual Information Statement or if the shareholder calculated the financial information, a statement to that effect; and filing a copy of the Form with the Philadelphia Service Center. As provided in IRS Notice 88-125, the PFIC Annual Information Statement must include the shareholder's pro rata shares of the ordinary earnings and net capital gain of the PFIC for the PFIC's taxable year or information that will enable the shareholder to calculate its pro rata shares. In addition, the PFIC Annual Information Statement must contain information about distributions to shareholders and a statement that the PFIC will permit the shareholder to inspect and copy its permanent books of account, records, and other documents of the PFIC necessary to determine that the ordinary earnings and net capital gain of the PFIC have been calculated according to federal income tax accounting principles. Temporary regulations have recently clarified that a shareholder may obtain the books, records and other documents of the foreign corporation necessary for the shareholder to determine the correct earnings and profits and net capital gain of the PFIC according to federal income tax principles and calculate the shareholder's pro rata shares of the PFIC's ordinary earnings and net capital gain. In that case, the PFIC must include a statement in its PFIC Annual Information Statement that it has permitted the shareholder to examine the PFIC's books of account, records, and other documents necessary for the shareholder to calc ulate the amounts of ordinary earnings and net capital gain.

Because the Company's stock is "marketable" under section 1296(e), a U.S. Investor may elect to mark the stock to market each year. In general, a PFIC shareholder who elects under section 1296 to mark the marketable stock of a PFIC includes in income each year an amount equal to the excess, if any, on the fair market value of the PFIC stock as of the close of the taxable year over the shareholder's adjusted basis in such stock. A shareholder is also generally allowed a deduction for the excess, if any, of the adjusted basis of the PFIC stock over the fair market value as of the close of the taxable year. Deductions under this rule, however, are allowable only to the extent of any net mark to market gains with respect to the stock included by the shareholder for prior taxable years. While the interest charge regime under the PFIC rules generally does not apply to distributions from and dispositions of stock of a PFIC where the U.S. Investor has marked to market, coordination rules for limited application will apply in the case of a U.S. Investor that marks to market PFIC stock later than the beginning of the shareholder's holding period for the PFIC stock.

Special rules apply with respect to the calculation of the amount of the foreign tax credit with respect to excess distributions by a PFIC or inclusions under a QEF.

Each U.S. Holder should consult a tax advisor with respect to how the PFIC rules may affect such shareholder's tax situation. In particular, a U.S. Holder should determine whether such shareholder should elect to have Minco be treated as a Qualified Electing Fund.

Other Consequences

To the extent a shareholder is not subject to the tax regimes outlined above with respect to foreign corporations that are PFICs, the following discussion describes the United States federal income tax consequences arising from the holding and disposition of Minco's Common Shares.

U.S. Holders

As used herein, a "U.S. Holder" includes a holder of Common Shares who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof and any other person or entity whose ownership of Common Shares is effectively connected with the conduct of a trade or business in the United States. A U.S. Holder does not include persons subject to special provisions of federal income tax laws, such as tax exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals or foreign corporations whose ownership of common shares is not effectively connected with the conduct of a trade or business in the United States and shareholders who acquired their stock through the exercise of employee stock options or otherwise as compensation.

Distribution of Common Shares

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to Minco's common shares are required to include in gross income for United States federal income tax purposes the gross amount of such distribution to the extent that Minco has current or accumulated earnings or 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 United States federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder's United States federal income tax by those who itemize deductions. (See more detailed discussions at "Foreign Tax Credit" below). To the extent that distributions exceed current or accumulated earnings and profits of Minco, 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 such shares. Preferential tax rates for the 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.

Dividends paid on Minco's common shares will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from Minco if such U.S. Holder owns shares representing at least 10% of the voting power and value of Minco.

Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distribution) Canadian income tax with respect to the ownership of Minco's common shares may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a tax 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 income 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 t axable 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. There are further limitations on the foreign tax credit for certain types of income, such as "passive income," "high withholding tax interest," "financial services income," "shipping income," and certain other classifications of income. The availability of foreign tax credit and the application of the limitations on the credit are fact specific and holders and prospective holders of common shares should consult their own tax advisors regarding their individual circumstances.

Disposition of Common Shares

A U.S. Holder will recognize gain and loss upon the sale of the common shares 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. The gain or loss will be capital gain or loss if the shares are a capital asset in the hands of the U.S. Holder, and will be a short-term or long-term capital gain or loss depending on each U.S. Holder's holding period. Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders who are individuals, 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 which are corporations (other than corp orations subject to Subchapter S of the Code), an unused capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

The foregoing discussion is based upon the sections of the Code, Treasury Regulations, published Internal Revenue Service rulings, published administrative positions of the Internal Revenue Service and court decisions that are currently applicable, any or all of which could be materially adversely changed, possibly on a retroactive basis, at any time. In addition, this discussion does not consider the potential effects, both adverse and beneficial, of recently proposed legislation which, if enacted could be applied, possibly on a retroactive basis, at any time. A holder or prospective holder of Minco's common shares should consult his or her own tax advisors about federal, state local and foreign tax consequences of purchasing, owning and disposing of the common shares of Minco.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk, primarily related to foreign exchange. The Company uses the Canadian dollar as its reporting currency and is therefore exposed to foreign exchange movements in China where the Company is conducting exploration activities.

The following table sets forth the percentage of Minco's administrative expense by currency for the years ended December 31, 2003 and 2002.

By Currency

2003

2002

Canadian Dollar

100%

92%

Renminbi yuan ("RMB")

Total

100%

Such administrative expense by currency may change from time to time. Further, Minco incurred exploration costs of $308,858 for 2003 compared to $494,813 and $168,835 for the years ended December 31, 2002 and 2001, respectively.

The Company has not entered into any material foreign exchange contracts to minimize or mitigate the effects of foreign exchange fluctuations on the Company's operations. The Company exchanges Canadian dollars to fund its Chinese operations. Based on prior years, the Company does not believe that it is subject to material foreign exchange fluctuations. However, no assurance can be given that this will not occur in the future.

The Company has no long-term debt, therefore, the Company does not believe that the interest rate market risk to be material.

Item 12. Description of Securities Other than Equity Securities

The Company announced in January, 2003 a financing of up to Cdn$500,000 by way of a Convertible Debenture (the "Debenture").

The Debenture coupon would pay interest at a rate of 10% per annum, payable semi-annually and would mature in five years from the date of issue. The Debenture would be convertible at any time at the option of the Debenture Holders at a conversion price of Cdn$0.40 per share. The maximum number of common shares that would be issued under the offering would be an aggregate of 1,250,000 after conversion. Any Debenture converted into Minco shares during the first calendar year would be subject to a one year hold period from the date of issue of the Debenture.

The Debenture calls for the redemption or conversion of the Debenture into common shares of the Company at any time should the common shares trade at an average closing price of 100% or greater than the conversion price of the Debenture for a period of 30 consecutive trading days. Any accrued interest will be paid to the investors up to the conversion date.

In February, 2003 the Company announced it had oversubscribed the Debenture financing by approximately 12%.

In March, 2003, the Company announced it had closed the Debenture financing and under the offering would issue an aggregate of 1,451,500 common shares, if converted.

In November, 2003, pursuant to Section 3(b) of the Debenture, the Company notified the Debenture holders it was shortening the conversion period. The principal and interest amounts owing were converted into an aggregate of 1,461,750 common shares and paid out to all Debenture Holders in January, 2004.

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

(a)

Evaluation of disclosure controls and procedures

Based on their evaluation as of a date within 90 days of the filing date of this Annual Report on Form 20-F for the year ended December 31, 2003, the Company's principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-14© and 15d-14© under the Securities Exchange Act of 1934 (the "Exchange Act")) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

(b)

Changes in internal controls

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 16. Audit Committee Financial Expert

Audit Committee Financial Expert

The Board only has one committee: The Audit Committee. The committee reviews the Company's annual consolidated financial statements and interim financial statements before the board approves them. The Audit Committee is composed of two outside and unrelated directors and one inside and related director, Robert Gayton, Robert Callander and William Meyer. Dr. Gayton, Chairman of the Audit Committee has been consulting on accounting and finance issues for the last 30 years, first as an audit partner with Peat, Marwick Mitchell (now KPMG), Chartered Accountants. Dr. Gayton serves as the Company's financial expert. Mr. Callander has over thirty years experience as an investment industry executive. Mr. Meyer has over thirty years experience as a geologist. In 1979, he joined Teck Exploration Ltd., the wholly-owned exploration subsidiary of Teck Corporation and in 1991 he was appointed President of Teck Exploration. & nbsp;Mr. Meyer joined Minco in July 1999. The roles and responsibilities of the Audit Committee have been specifically defined and include responsibility for overseeing management reporting on internal control.

The Audit Committee has direct communication channels with the external auditors and is responsible for recommending to the Board of Directors who the auditor should be and setting the auditor's remuneration. Due to its size, the Company has no formal internal audit process.

Safe Harbor

The safe harbor provided in Section 27A of theSecurities Act and Section 21E of theSecurities Exchange Act of 1934 applies to forward-looking information provided.

B. Code of Ethics

Introduction

Our Board of Directors has adopted a Code of Ethics to provide principles for the purpose of promoting:

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications;

compliance with applicable governmental laws, rules and regulations;

the prompt internal reporting of violations of our Code of Ethics; and

accountability for adherence to our Code of Ethics.

Our Code of Ethics applies to our Chief Executive Officer and other senior financial officers performing similar functions as these individuals are responsible for our financial management and satisfying our reporting requirements to securities commissions, stock exchanges and shareholders as well as reporting to our board of directors. In our Code of Ethics these individuals are referred to as "you".

Principles

You shall act with honesty and integrity in the performance of your duties, shall comply with all laws, rules and regulations of federal, provincial, state and local governments and other private and public regulatory agencies that affect the conduct of our business and our financial reporting.

You are responsible for full, fair, accurate, timely and understandable disclosure in the reports and

documents that we file with, or submit to, the Securities and Exchange Commission and in our other public communications. Accordingly, each of you is responsible for promptly bringing to the attention of the Chairman of the Board any material information of which you may become aware that affects our disclosure in our public filings.

You shall promptly bring to the attention of the Chairman of the Board any information you may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to us and the operation of our business or any violation of this Code of Ethics. In either event, any reporting is confidential and you are protected from retaliation.

You shall promptly bring to the attention of the Chairman of the Board any information you may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect our ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in our financial reporting, disclosures or internal controls.

You must avoid any personal activity or association that could appear to influence your judgment or affect our best interests. You shall promptly bring to the attention of the Chairman of the Board any information you may have concerning any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in our financial reporting, disclosures or internal controls.

Violations and Waivers

Our Chairman of the Board shall advise the Board of Directors in writing of all violations of this Cold of Ethics reported to him.

Our Board of Directors shall determine, with or without the advice of others, appropriate actions to be taken in the event you violate this Code of Ethics. These actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to this Code of Ethics and may include actions ranging from: (a) writing notices to the individual involved that the Board has determined that there has been a violation to (b) termination of the individual's employment. In determining what action is appropriate in a particular case, the Board of Directors will take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action and whether or not the individual in question had committed other violation in the past.

No waivers of any provision of this Code of Ethics may be made except by the Board of Directors. Only the Board of Directors may amend this Code of Ethics. Any waiver or amendment shall be reported as required by law or regulation.

Principal Accountant Fees and Services

During the past two fiscal years, the Company has paid its auditors, Ellis Foster, the following fees:

Dec. 31

2003 2002

Audit Fees

17,000

14,400

Audit Related Fees

6,705

All Other Fees

2,200

The above listed services were approved by the Company's audit committee.

Exemption from the Listing Standards for Audit Committee

The Company believes that the majority of the members of the audit committee were deemed "independent".

Purchase of Equity Security by the Issuer and Affiliate Purchaser

None

PART III

Item 17. Financial Statements

Attached hereto

Item 18. Financial Statements

Not Applicable

Item 19. Exhibits

Financial Statements

Document	Page
Consolidated Financial Statements as at December 31, 2003 and 2002 (in Canadian Dollars) including Auditors Report, Balance Sheet, Cash Flow and Notes	72

Exhibits

Exhibit Number	Description
12.1	Certification of President Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
12.2	Certification of Chairman of the Board Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing this Annual Report on Form 20-F and that it has duly caused the undersigned to sign this Annual Report on its behalf.

Minco Mining & Metals Corporation

Dated: May 20, 2004

/s/ Dr. Ken Z. Cai

EXHIBIT 12.1

CERTIFICATIONS

I, Ken Z. Cai, certify that:

I have reviewed this annual report on Form 20-F of Minco Mining & Metals Corporation;

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

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

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

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

b )

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

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

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

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

Date: May 20, 2004

___"Ken Z. Cai"___________________________

Ken Z. Cai, President

EXHIBIT 12.2

I, William Meyer, certify that:

I have reviewed this annual report on Form 20-F of Minco Mining & Metals Corporation;

b )

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

Date: May 20, 2004

__"William Meyer"________________________

William Meyer, Chairman of the Board

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Consolidated Financial Statements

(Expressed in Canadian dollars)

December 31, 2003 and 2002

Index

Auditors' Report

Consolidated Balance Sheets

Consolidated Statements of Operations and Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

ELLIS FOSTER

CHARTERED ACCOUNTANTS

1650 West 1^st Avenue

Vancouver, BC Canada V6J 1G1

Telephone: (604) 734-1112 Facsimile: (604) 714-5916

Website: www.ellisfoster.com

AUDITORS' REPORT

To the Shareholders of

MINCO MINING & METALS CORPORATION

We have audited the consolidated balance sheets of Minco Mining & Metals Corporation as at December 31, 2003 and 2002 and the consolidated statements of operations and deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the company as at December 31, 2003 and 2002 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

Canadian generally accepted accounting principles vary in certain significant respects from accounting principles generally accepted in the United States. Application of accounting principles generally accepted in the United States would have affected the company's financial position and its shareholders' equity as at December 31, 2003 and 2002 and its results of operations for each of the years in the three-year period ended December 31, 2003, to the extent summarized in Note 15 to the consolidated financial statements.

Vancouver, Canada

March 11, 2004

Chartered Accountants

E_F

A partnership of incorporated professionals An independently owned and operated member of Moore Stephens North America Inc., a member of Moore Stephens International Limited

- members in principal cities throughout the world

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Consolidated Balance Sheets
December 31, 2003 and 2002
(Expressed in Canadian Dollars)

			2003		2002


ASSETS

Current assets
Cash and cash equivalents		$	625,396	$	40,681
Temporary investments			5,918,413		61,918
Advances and sundry receivables			311,267		62,724
Prepaid expenses and deposits			60,813		38,606


			6,915,889		203,929

Mineral interests (Note 3)			100		100

Equipment (Note 4)			66,061		82,672


		$	6,982,050	$	286,701


LIABILITIES

Current liabilities
Accounts payable and accrued liabilities		$	357,670	$	431,444


SHAREHOLDERS' EQUITY (DEFICIENCY)

Share capital (Note 5)			19,201,871		10,836,933

Contributed surplus (Notes 5b and 6)			179,528		6,148

Deficit			(12,757,019)		(10,987,824)


			6,624,380		(144,743)


		$	6,982,050	$	286,701


Commitments (Note 11)




Approved by the Directors:	"Robert Gayton"		"William Meyer"

	Robert Gayton		William Meyer

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Consolidated Statements of Operations and Deficit
Years Ended December 31, 2003, 2002 and 2001
(Expressed in Canadian Dollars)

		2003		2002		2001


Exploration costs, net of recovery	$	308,858	$	494,813	$	168,835


Administrative expenses
Accounting and audit		31,232		24,800		62,070
Advertising		15,880		3,025		9,587
Amortization of equipment		23,301		20,922		25,877
Foreign exchange loss		48,148		1,436		(374)
Interest expense on convertible debenture		52,162		-		-
Legal		45,192		19,090		92,503
Listing, filing and transfer agents		73,620		25,857		16,082
Management fees, net of recovery		13,499		75,773		34,143
Office and miscellaneous		28,986		54,331		41,556
Project investigation		445,933		53,456		-
Promotion and government relations		231,936		198,486		164,671
Rent		85,698		115,107		79,055
Salaries and benefits		138,582		178,348		56,038
Stock based compensation		242,581		6,148		-
Telephone		5,963		15,011		7,354
Travel and transportation		15,668		28,766		35,038


		1,498,381		820,556		623,600


Operating loss		(1,807,239)		(1,315,369)		(792,435)

Interest and sundry income		38,044		27,160		77,023


Loss for the year		(1,769,195)		(1,288,209)		(715,412)

Deficit, beginning of year		(10,987,824)		(9,699,615)		(8,984,203)


Deficit, end of year	$	(12,757,019)	$	(10,987,824)	$	(9,699,615)


Loss per share - basic and diluted	$	(0.08)	$	(0.07)	$	(0.04)


Weighted average number of common
shares outstanding - basic and diluted		20,875,129		17,682,041		16,380,123

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Consolidated Statements of Cash Flows
Years Ended December 31, 2003, 2002 and 2001
(Expressed in Canadian Dollars)

		2003		2002		2001


Cash flows from (used in) operating activities
Loss for the year	$	(1,769,195)	$	(1,288,209)	$	(715,412)
Adjustment for items not involving cash:
- amortization of equipment		23,301		31,560		41,075
- loss on sale of temporary investments		-		700		(35,168)
- stock based compensation		242,581		6,148		-
- others		26,535		-		-
Change in non-cash working capital items:
- sundry receivable		(248,543)		11,132		4,220
- prepaid expenses and deposits		(22,207)		132,683		(114,688)
- accounts payable and accrued liabilities		(73,774)		29,836		72,735


		(1,821,302)		(1,076,150)		(747,238)


Cash flows from financing activities
Shares issued for cash		7,688,602		550,000		-
Proceeds from issuance of convertible debenture		580,600		-		-


		8,269,202		550,000		-


Cash flows from (used in) investing activities
Acquisition of equipment		(6,690)		(16,137)		(4,506)
Decrease (increase) in temporary investments		(5,856,495)		368,141		747,238


		(5,863,185)		352,004		742,732


Increase (decrease) in cash and
cash equivalents		584,715		(174,146)		(4,506)

Cash and cash equivalents,
beginning of year		40,681		214,827		219,333


Cash and cash equivalents, end of year	$	625,396	$	40,681	$	214,827


Supplemental disclosure of cash flows
information
Interest paid	$	25,627	$	-	$	-

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Nature of Operations

The Company was incorporated under the laws of British Columbia, Canada and is engaged in the acquisition, exploration and development of mineral resource properties in China.

The Company is in the process of exploring and evaluating its mineral properties and projects and has not yet determined whether these properties contain economically recoverable ore reserves. The ability of the Company to meet its commitments as they become payable, including the completion of acquisitions, exploration and development of mineral properties and projects, is dependent on the ability of the Company to obtain necessary financing. The underlying value of the mineral properties is entirely dependent on the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete development and upon future profitable production or sufficient proceeds from the disposition thereof.

Significant Accounting Policies

(a)

Consolidation

These consolidated financial statements include the accounts of the Company, its wholly-owned British Virgin Island subsidiary, Triple Eight Mineral Corporation ("Temco"), its 80% owned joint venture company, Gansu Keyin Mining Co. Ltd. ("Keyin"), and its 75% owned joint venture company, Inner Mongolia Damo Mining Co. Ltd. ("Damo"). Minority interests of 20% and 25%, respectively, are $nil as they represent only the profit sharing and working interests. As at December 31, 2003, the joint ventures are still in the exploration stage and have not generated any revenue; therefore, the accounts of Keyin and Damo are 100% consolidated.

All inter-company accounts and transactions have been eliminated.

(b)

Use of Estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from those estimates.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Significant Accounting Policies (continued)

(c)

Cash Equivalents

Cash equivalents usually consist of highly liquid investments which are readily convertible into cash with maturity of three months or less when purchased. As at December 31, 2003 and 2002, cash equivalents consist of cash only.

(d)

Temporary Investments

Temporary investments are stated at the lower of cost and market value. As at December 31, 2003, temporary investments consist of high-grade bonds and guaranteed investment certificates with a fair value approximately the carrying value.

(e)

Equipment

Amortization is provided as follows:

Motor vehicles	30% per annum, declining-balance basis
Mining equipment	30% per annum, declining-balance basis
Computer equipment	30% per annum, declining-balance basis
Office equipment and furniture	20% per annum, declining-balance basis
Leasehold improvements	5 year, straight-line basis

Amortization is provided at half the annual rate in the year of acquisition.

(f)

Loss Per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted loss per share amounts are calculated giving effect to the potential dilution that would occur if securities or other contracts to issue common shares were exercised or converted to common shares using the treasury stock method. The treasury stock method assumes that proceeds received from the exercise of stock options and warrants are used to repurchase common shares at the prevailing market rate. Shares held in escrow are excluded in the computation of loss per share until the conditions for their release are satisfied. As the Company incurred net losses in fiscal 2003 and 2002, the stock options and share purchase warrants as disclosed in Note 6 were not included in the computation of loss per share as its inclusion would be anti-dilutive.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Significant Accounting Policies (continued)

(g)

Translation of Foreign Currencies

The accounts of subsidiaries, all of which are considered to be integrated foreign operations, are translated into Canadian dollars using the temporal method. Under this method, monetary assets and liabilities are translated at the year end exchange rates. Non-monetary assets and liabilities are translated using historical rates of exchange. Revenues and expenses are translated at average rates for the year and exchange gains and losses on translation are included in income.

Transactions denominated in foreign currencies are translated into Canadian dollars at the exchange rates prevailing at transaction dates.

(h)

Mineral Interests

The Company follows the method of accounting for its mineral interests whereby all costs related to acquisition, exploration and development are expensed when incurred until such time as reserves are proven.

Although the Company has taken steps to verify the title to mineral properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects.

(i)

Stock Based Compensation

Effective January 1, 2002, the Company adopted the requirements of Section 3870 of the CICA Handbook with respect to stock-based compensation. Options granted to employees and directors are accounted for using the intrinsic value method where compensation expense is recognized for stock options granted at prices below the market price of the underlying common share at the date of the grant. Options granted to those other than employees and directors are accounted for using the fair value method where compensation expense is calculated using the Black-Scholes Option Pricing Model.

(j)

Long-lived Assets Impairment

Long-term assets are reviewed when changes in circumstances suggest their carrying value has become impaired. Management considers assets to be impaired if the carrying value exceeds the estimated undiscounted future projected cash flows to result from the use of the asset and its eventual disposition. If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Significant Accounting Policies (continued)

(k)

Income Taxes

The Company follows the liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, measured using substantially enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Mineral Interests

(a)

Gansu Projects: The joint venture company Gansu Keyin Mining Co. Ltd. ("Keyin") was formed pursuant to an agreement dated August 28, 1998 and amended August 28, 2003. The following projects are operated through Keyin:

(i)

White Silver Mountain - As per the amendment signed on August 28, 2003, the Company has spent approximately 20 million RMB and earned 61% total project interest. Both parties to the joint venture company may proceed in accordance with the original joint venture contract, which provided the Company has the right to earn an 80% interest by spending 40 million RMB (approximately C$6.3 million). There is no time limit for the contribution.

(ii)

Yangshan (Anba) - In 2003, the Company signed agreements with Gansu provincial government and two other companies in Gansu for the exploration and development of the Anba gold deposit in the Yanshan gold field. Pursuant to the terms of the agreements, Keyin has the right to acquire a 40% equity interest in Yangshan Gold Mining Co., Ltd. ("YGM"), a joint venture company to be established for the exploration and development of the Anba gold deposit. YGM will acquire a 100% interest in the Anba gold deposit for US$6 million, consisting of a 40% initial payment (US$2.4 million) and the balance of 60% (US$3.6 million) will be paid over 5 years. Keyin's share of the capital contribution is 40%, which is 24 million RMB (approximately C$3.8 million). As at December 31, 2003, about C$44,000 was incurred by the Company for expenditures on this project.

(iii)

West Extension of Yangshan - In 2003, the Company signed a co-operation agreement with No. 2 Exploration Institute of Gansu Bureau of Geological Exploration ("GBGE") for the exploration and development of mineral resources in south Gansu province of China. GBGE and Keyin will establish a new sino-foreign joint venture company to initially explore for gold in three areas, to which GBGE holds exploration permits. Keyin has rights to earn 75% equity interests in the three areas. To earn the interest, Keyin must expend 7.5 million RMB (approximately C$1.2 million) on this project over four years. A joint venture contract was signed subsequently on March 1, 2004.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Mineral Interests (continued)

(b)

Inner Mongolia Projects:

(i)

Gobi - - The property is located in Inner Mongolia Autonomous Region, China. Pursuant to a Co-operative Joint Venture Agreement, the Company can earn a 75% interest in the property by spending 18 million RMB (approximately C$2.8 million) over a four-year period. A joint venture company called Inner Mongolia Damo Mining Co. Ltd. was formed to hold the above noted mineral interests. In 2003, the board of the directors of Damo decided to reduce its registered capital from RMB 16.8 million RMB to 7 million RMB, with no effect to the earn-in process. As at December 31, 2003, the Company spent approximately 7 million RMB (approximately C$1.1 million) and earned 54% project interest.

(ii)

BYC - - In 2002, Minco reached an agreement with the Inner Mongolian Bureau of Non-ferrous Metals and Exploration to acquire majority interest in a joint venture company which holds the BYC gold project located in central Inner Mongolia. On December 3, 2003, the joint venture company called the Inner Mongolia Huayu-Minco Mining Co., Ltd. was formed to hold the above noted mineral interest. Minco can earn 75% interest in the joint venture company by spending 12 million RMB (approximately C$2.4 million) over four years. In 2003, the Company entered into a letter agreement with New Cantech Ventures Inc. ("Cantech"). Pursuant to the agreement, Cantech acquired the right to earn a 51% interest in the BYC project by spending 12 million RMB (approximately C$2.4 million) in exploration over 3-year period. Cantech can earn another 9% by bringing the project to feasibility stage. As at December 31, 2003, about C$55,000 was incurred by the Company for expenditures on this project.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Mineral Interests (continued)

The Company follows the practice of expensing all exploration costs until mineral reserves have been established. The costs incurred on the Company's mineral properties, which are all located in China, are as follows:

	Costs incurred to December 31 2002	2003 Exploration costs	Costs incurred to December 31 2003
Currently active properties:
- Gansu - White Silver Mountain	$1,349,354	$ 36,994	$ 1,386,348
- Gansu - Yangshan (Anba)	-	43,811	43,811
- Inner Mongolia - Gobi	1,158,745	216,806	1,375,551
- Inner Mongolia - BYC	-	54,783	54,783
	2,508,099	352,394	2,860,493
Inactive properties:
- Heavenly Mountains	436,519	-	436,519
- Emperor's Delight	100	-	100
- Crystal Valley	100	-	100
- Stone Lake	100	-	100
- Changba Lijiagou Lead-Zinc Deposit	100	-	100
- Chapuzi	100	-	100
	437,019	-	437,019

Total	2,945,118	352,394	3,297,512
Exploration cost recoveries	-	(43,536)	(43,536)
Expensed exploration costs	(2,945,018)	(308,858)	(3,253,876)
	$ 100	$ -	$ 100

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Equipment

	2003
		Accumulated	Net book
	Cost	Amortization	value

Computer equipment	$ 74,895	$ 61,777	$ 13,118
Office equipment and furniture	90,465	71,953	18,512
Motor vehicles	59,309	53,378	5,931
Mining equipment	191,873	167,416	24,457
Leasehold improvements	5,776	1,733	4,043

	2002
		Accumulated	Net book
	Cost	Amortization	value

Computer equipment	$ 71,635	$ 56,853	$ 14,782
Office equipment and furniture	87,035	67,754	19,281
Motor vehicles	59,309	50,836	8,473
Mining equipment	191,873	156,935	34,938
Leasehold improvements	5,776	578	5,198

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Share Capital

(a)

Authorized: 100,000,000 common shares without par value

(b)

Issued:

	Shares	Amount
Balance December 31, 2001	16,380,123	$10,286,933
Private placement at $0.25 per share	2,200,000	550,000
Balance, December 31, 2002
Stock options exercised ranging from $0.20 to $0.55 per share, including $69,201 contributed surplus attributed to stock-based compensation recognized	763,000	373,851
Private placement at $0.35 per share plus 186,344 shares and less $44,744 for finders' fees	4,472,058	1,455,257
Share purchase warrants exercised at $0.40 per share	50,000	20,000
Private placement at $1.70 per share less $464,348 in cash for share issuance costs	3,748,848	5,908,695
Shares allotted for the conversion of convertible debenture - see Note 5 (d)	-	607,135
Balance, December 31, 2003	27,614,029	$19,201,871

On July 30, 2003, the Company completed a non-brokered private placement of 4,285,714 units priced at $0.35 per unit with each unit consisting of one common share and one-half non-transferable share purchase warrant with each warrant entitling the holder to acquire a further common share at $0.40 until July 21, 2004 and at $0.60 until July 21, 2005. The Company applied the residual approach and allocated the total proceeds of $1,455,257 to the common shares and $nil to warrants. The securities were restricted from trading until November 21, 2003.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Share Capital (continued)

(b)

Issued: (continued)

On December 8, 2003, the Company completed a brokered private placement of 3,748,848 units priced at $1.70 per unit with each unit consisting of one common share and one-half non-transferable share purchase warrant with each warrant entitling the holder to acquire a further common share at $2.15 until December 8, 2005. In addition, the Company issued an underwriter's compensation warrant entitling the underwriter to purchase up to 262,419 common shares, exercisable at a price of $1.80 per share for a period of twelve months from closing. The Company applied the residual approach and allocated the total proceeds of $5,908,695 to the common shares and $nil to warrants. The securities are restricted from trading until April 8, 2004.

(c)

As at December 31, 2003, 2,991,322 (2002 - 2,991,322) of the shares issued are held in escrow, the release of which is subject to the direction of the regulatory authorities.

(d)

In 2003, the Company completed a $580,600 convertible debenture financing. The debenture accrued interest at a rate of 10% per year and matured in five years. The debenture was convertible into 1,451,500 common shares at $0.40 per share and the accrued interest was convertible into 10,250 common shares at $1.80 per share. The debenture and accrued interest were converted into common shares, which were allotted, before the year-end. Subsequent to the year-end, all of the allotted common shares have been issued.

(e)

Share purchase warrants outstanding as at December 31, 2003:

Number of Warrants	Exercise Price	Expiry Date

262,419	$1.80	December 8, 2004
2,092,857	$0.40	July 21, 2004
	$0.60	July 21, 2005
1,874,424	$2.15	December 8, 2005
4,229,700

See Note 5 (b).

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Stock Options

The Company granted 1,624,000 and 430,000 stock options to employees, directors and consultants of the Company in 2003 and 2002, respectively. Each option entitles its holder to acquire one common share of the Company between $0.38 to $2.00 per common share. These options are vested from February 6, 2002 to October 6, 2006 and expire between March 25, 2004 and October 6, 2008. In 2003, the Company recorded $242,581 (2002 - $6,148) stock based compensation and contributed surplus. The $242,581 includes stock options granted to consultants under the fair value method totalling to $234,111 and to employees and directors under the intrinsic value method where the fair market value of the options at the date of grant was higher than the exercise price totalling $8,470.

Details of options granted are as follows:

	Number of options	Weighted Average Exercise Price
Options outstanding at December 31, 2001	2,637,000	$ 0.37
Granted	430,000	$ 0.52
Expired	(15,000)	$ 0.55
Options outstanding at December 31, 2002	3,052,000	$ 0.39
Granted	1,624,000	$ 0.73
Exercised	(763,000)	$ 0.40
Cancelled / Expired	(594,000)	$ 0.55
Options outstanding at December 31, 2003	3,319,000	$ 0.53

A summary of weighted average fair value of stock options granted during the year- end December 31, 2003 is as follows:

	Weighted Average Exercise Price	Weighted Average Fair Value
Exercise price exceeds market price at grant date:	$ 0.53	$ 0.24
Exercise price equals market price at grant date:	$ 0.58	$ 0.33
Exercise price less than market price at grant date:	$ 2.00	$ 1.81

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Stock Options (continued)

A summary of stock options outstanding and exercisable is as follows:

	Options Outstanding			Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (yr)	Weighted Average Exercise Price	Number Exercisable	Weighted Average Exercise Price
$0.10 - $0.50	1,301,400	2.71	$ 0.22	1,131,400	$ 0.17
$0.51 - $1.00	1,817,600	2.85	$ 0.59	1,479,265	$ 0.47
$1.01 - $2.00	200,000	1.87	$ 2.00	-	$ -
	3,319,000	2.74	$ 0.53	2,610,665	$ 0.42

Under CICA Handbook, Section 3870, the Company is required to calculate and present the pro-forma effect of all awards granted. For disclosure purposes, the fair value of each option granted to employees and directors has been estimated as of the date of grant using the Black-Scholes Option Pricing Model with the following assumptions:

	2003	2002
Risk-free interest rate	5.14%	5.5%
Dividend yield	0%	0%
Volatility	67% - 111%	84% - 111%
Approximate expected lives	3 years	5 years

Option-pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates and therefore, in management's opinion, existing models do not necessarily provide reliable measure of the fair value of the Company's stock options.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Stock Options (continued)

Based on the computed option values and the number of the options issued, had the Company recognized compensation expense for employees and directors using the Black-Scholes Option Pricing Model, the following would have been its effect on the Company's net loss:

	2003	2002
Net (loss) for the year:
- as reported	$ (1,769,195)	$ (1,288,209)
- pro-forma	$ (2,033,406)	$ (1,362,126)
Basic and diluted (loss) per share:
- as reported	$ (0.08)	$ (0.07)
- pro-forma	$ (0.10)	$ (0.08)

Income Taxes

(a)

A reconciliation of the statutory tax rate to the effective rate for the Company is as follows:

	2003	2002

Statutory income tax rate	(38%)	(40%)
Tax losses not benefited	38%	40%
Effective tax rate	-	-

(b)

As at December 31, 2003, the Company has non-capital losses of approximately $8,400,000, unused cumulative Canadian and foreign exploration and development expenses of $3,075,000, and undepreciated capital costs of approximately $400,000 carried forward for tax purposes and available to reduce taxable income of future years. The non-capital losses will expire between 2004 and 2010 if not utilized. The exploration and development expenses and undepreciated capital costs can be carried forward indefinitely.

Future income tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is unlikely.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

Related Party Transactions

(a)

The Company incurred the following expenses to its directors or corporations controlled by its directors:

	2003	2002

Exploration costs	$ 68,992	$ 71,973
Management fees	18,239	75,773
Promotion	7,363	-
Property investigation	25,423	-

(b)

Accounts payable of $31,030 (2002 - $39,841) is due to a director of the Company.

(c)

Sundry receivable of $234,436 (2002 - $2,373) is due from two corporations related by a common director.

Geographical Information

The Company's business is considered as operating in one segment and the geographical division of the total assets of the Company are as follows:

	2003	2002

Canada	$ 6,918,159	$ 251,201
China	63,891	35,500

10.

Non-Cash Transactions

(a)

In 2003, the Company issued 186,342 common shares as finder's fee pursuant to a private placement.

(b)

See Note 5 (d).

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

11.

Commitments

(a)

The Company has commitments in respect of office leases requiring minimum payments of $682,158, as follows:

2004	$ 201,345
2005	203,409
2006	207,537
2007	69,867

The Company has entered into sub-lease agreements for a portion of its leased premises and anticipates recovering approximately $140,000 per annum.

(b)

The Teck-Cominco Agreements

The Company has entered into agreements with Teck Cominco Ltd. "Teck Cominco"), of Vancouver, B.C., Canada on February 19, 1996 and February 20, 1996, respectively (collectively the "Teck-Cominco Agreements").

Pursuant to the terms of the Teck-Cominco Agreements, Teck Cominco received "earn-in rights" as to the Non-Chinese Interest in any two mineral property rights acquired by the Company in China after the date of the Teck-Cominco Agreements until March 1, 2004 (expired). Teck Cominco has, however, ongoing right of first offer on the disposition of Minco's interests for an additional period of three years.

12.

Financial Instruments

The carrying value of cash and cash equivalents, temporary investments, sundry receivable, accounts payable and accrued liabilities and convertible debenture approximates the fair value due to the short-term nature of these financial instruments. The fair value of temporary investments is equivalent to the market value. The Company operates in China and some of its material exploration expenditures are payable in either U.S. dollars and the Chinese currency RMB and is, therefore, subject to foreign currency risk arising from changes in exchange rates among Canadian dollars, U.S. dollars and RMB. The Company is not exposed to significant interest risk. The Company places its temporary investments with government and bank debt securities and is subject to minimal credit risk. The Company also considers itself not subject to high concentration of credit risk to its debtors and does not require collateral to support these financial instruments.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

13.

Comparative Figures

Certain 2002 comparative figures have been reclassified to conform with the financial statement presentation adopted for 2003.

14.

Subsequent Events

(a)

The Company issued 581,357 common shares between $0.20 and $0.40 per share for total proceeds of $209,543 pursuant to the exercise of stock options and warrants.

(b)

See Note 3(a)(iii).

(c)

See Note 5(d).

15.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles

(a)

The Consolidated Statement of Shareholders' Equity, prepared in accordance with the U.S. GAAP as required, is now presented as an additional schedule.

(b)

Reconciliation of Consolidated Balance Sheet items:

	2003	2002
Mineral interests (Canadian GAAP)	$ 100	$ 100
Nominal carrying value written off	(100)	(100)
Mineral interests (US GAAP)	$ -	$ -
Securities available for sale (Canadian GAAP)	$ 5,918,413	$ 61,918
Unrealized gains (losses)	(864)	-
Securities available for sale (US GAAP)	$ 5,917,549	$
Total assets (US GAAP)	$ 6,981,086	286,601
Total liabilities (US GAAP)	$ 357,670	$ 431,444

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

15.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)

(c)

Reconciliation of Consolidated Statement of Operations Items:

	2003	2002	2001
Loss for the year (Canadian GAAP)	$(1,769,195)	$(1,288,209)	$ (715,412)
Release of escrow shares as compensation	-	-	(199,852)
Loss for the year (US GAAP)	$(1,769,195)	$(1,288,209)	$ (915,264)
Loss per share - basic and diluted (US GAAP)	$ (0.10)	$ (0.09)	$ (0.07)
Weighted average number of common shares outstanding - basic and diluted (US GAAP)	17,883,807	14,690,719	13,388,801

(d)

Marketable Securities

All of the Company's temporary investments are classified as available-for-sale securities under US GAAP. Available-for-sale securities are recorded at market value. Unrealized holding gains and losses on available-for-sale securities are excluded from income and charged to accumulated other comprehensive income as a separate component of shareholders' equity until realized. A summary of available-for-sale securities by major security type is as follows:

	Cost	Gross unrealized holding gains (losses)	Market value
2003:
Bank of Montreal Mortgage Corporation Term Investment	$ 5,697,400	$ 3,618	$ 5,701,018
Nova Scotia Power Inc. Medium Term Note	51,166	(1,066)	50,100
Ford Credit Canada Medium Term Note	36,370	(298)	36,072
General Motors Acceptance Medium Term Note	101,321	(2,978)	98,343
GMAC of CDA Ltd. Medium Term Note	32,156	(140)	32,016
Total	$ 5,918,413	$ (864)	$ 5,917,549
2002:
Canadian Treasury Bills	$ 61,918	$ -	$61,918

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

15.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)

(e)

Escrow Shares

562,500 escrow shares may be released, upon application, on the basis of 15% of the original number of escrow shares for every $100,000 expended on exploration and development of a resource property provided that no more than 50% of the original number of escrow shares may be released in any twelve-month period. In addition, where administrative expenses exceed 33% of total expenditures during the period of application, then the release factor of 15% will be reduced to 7.5% and the percentage of the original number of escrow shares available for release in any twelve-month period will be reduced to 25%. 281,250 shares, 140,625 shares and 140,625 shares were released in 1998, 1999 and 2001 respectively.

Pursuant to another escrow share agreement, 4,880,000 escrow shares may be released, upon application, on the basis of one escrow share for every $1.81 expended on exploration and development of a resource property, including expenditures on mining equipment, but excluding expenditures on Chapuzi and Savoyardinskii properties. 949,561 shares, 508,736 shares and 430,381 shares were released in 1998, 1999 and 2001 respectively. As at December 31, 2003, there were 2,991,322 (2002: 2,991,322) such escrow shares outstanding.

U.S. GAAP requires that the fair value of the shares at the time they are released from escrow should be recognized and charged to income. The Company recorded $199,852 in 2001 relating to the release of 571,006 escrow shares.

As escrow shares are contingently cancellable, they are excluded from the calculation of the weighted average number of shares for purposes of loss per share under U.S. GAAP.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

15.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)

(f)

Stock Based Compensation

In 2002, The Company adopted the CICA Recommendation "Stock-based compensation and other stock-based payments" to account for stock based compensation. The adoption of the Recommendation has harmonized the U.S. and Canadian GAAP in this aspect in 2002 and onward.

In 2001, the Company adopted the Accounting Principles Board ("APB") No. 25 "Accounting for Stock Issued to Employees" and related interpretations in accounting for stock options under the U.S. GAAP. Under APB 25, no compensation is recognized in connection with options granted to employees except if options are granted at a strike price below fair value of the underlying stock. The Company did not have any stock based compensation after applying APB 25 in 2001.

A summary of the stock options movement in 2001 is as follows:

	Number of shares	Weighted average exercise price

Outstanding, December 31, 2000		$1.42
Re-priced	1,000,600	0.55
Granted	1,686,400	0.27
Cancelled	(1,050,600)	1.38
Outstanding, December 31, 2001	2,637,000	0.37

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

15.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)

(f)

Stock Based Compensation (continued)

The Company is required under the U.S. GAAP to disclose pro-forma information regarding its "Loss for the year" and "Loss per Share" as if it has accounted for its stock based compensation using the fair value method as required under SFAS 123.

The weighted-average fair value of the stock options granted and modified in 2001 is estimated by applying the Black-Scholes Option-pricing Model with the following weighted-average assumptions.

Number of options

Dividend

yields

Expected volatility

Risk-free interest

rate

Expected

lives in

years

Weighted

average

fair value

of options

2,687,000

83%

4.9%

5.2

$ 0.25

Had the Company adopted the fair value method to account for its stock based compensation, the Company's loss for the year, basic and diluted loss per share would have been increased on a pro-forma basis as indicated below:

	2003	2002	2001
Loss for the year:
- as reported	$ (1,769,195)	$ (1,288,209)	$ (915,264)
- pro-forma	$ (2,088,220)	$ (1,465,985)	$ (1,400,134)
Basic and diluted loss per share:
- as reported	$ (0.10)	$ (0.09)	$ (0.07)
- pro-forma	$ (0.12)	$ (0.10)	$ (0.10)

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

15.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)

(g)

New Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities - An Interpretation of Accounting Research Bulletin (ARB) No. 51. This interpretation clarifies how to identify variable interest entities and how the Company should assess its interests in a variable interest entity to decide whether to consolidate the entity. FIN 46 applies to variable interest entities created after January 31, 2003, in which the Company obtains an interest after that date. Also, FIN 46 applies in the first fiscal quarter or interim period beginning after June 15, 2003, to variable interest entities in which the Company holds a variable interest that it acquired before February 1, 2003. The adoption of FIN 46 has no impact on the Company's consolidated financial statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities". This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". This Statement is effective for contracts entered into or modified after June 30, 2003. The Company does not expect the implementation of SFAS No. 149 to have a material impact on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity". This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). This Statement is effective for financial instruments entered into or modified after May 30, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The Company does not expect the implementation of SFAS No. 150 to have a material impact on our consolidated financial statements.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

15.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)

(g)

New Accounting Pronouncements (continued)

In December 2003, the FASB issued SFAS No. 132(R), a revision to SFAS No. 132, "Employers' Disclosure about Pensions and Other Postretirement Benefits. SFAS No. 132(R) requires additional disclosures about the assets, obligations, cash flows and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. SFAS No. 132(R) is effective for financial statements with fiscal years ending after December 15, 2003, with the exception of disclosure requirements related to foreign plans and estimated future benefit payments which are effective for fiscal years ending after June 15, 2004. The adoption of SFAS No. 132(R) does not impact our consolidated financial position or results of operations.

In a December 11, 2003 speech at the American Institute of Certified Public Accountants, the Securities and Exchange Commission ("SEC") expressed that rate-lock commitments represent written put options and, therefore, be valued as a liability. The SEC expressed that they expect registrants to disclose the effect on the financial statement of recognizing the rate-lock commitments as written put options, for quarters commencing after March 15, 2004. Additionally, the SEC recently issued Staff Accounting Bulletin (SAB) No. 105. SAB No. 105 clarifies the SEC's position that the inclusion of cash flows from servicing or ancillary income in the determination of the fair value of interest rate lock commitments is not appropriate. The Company has not yet determined the impact on the consolidated financial statements of SAB No. 105, which must be implemented for loan commitments entered into on or after April 1, 2004. The Company is currently analyzing the impact of the SEC's position and will, if required, account for its loan origination commitments as prescribed.

MINCO MINING & METALS CORPORATION

(An exploration stage enterprise)

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(Expressed in Canadian Dollars)

MINCO MINING & METALS CORPORATION
(An exploration stage enterprise)

Consolidated Statements of Shareholders' Equity
Years Ended December 31, 2003 and 2002
(Expressed in Canadian Dollars)
								Accumulated			Total
									other		Share-		Total
				Additional					compre-		holders'		Compre-
	Common shares				paid-in		(Deficit)		hensive		equity		hensive
	Shares	Amount			capital	accumulated		(loss)			(deficiency)		(loss)

Balance, December 31, 2001	16,380,123		-		14,610,766		(14,023,548)		3,210		590,428	$	(929,484)
Shares issued for cash on May 29, 2002
for private placements at $0.25 per share	2,200,000		-		550,000		-		-		550,000		-
Stock based compensation	-		-		6,148		-		-		6,148		-
Other comprehensive income
- unrealized gain (loss) on available-for-sale securities	-		-		-		-		(3,210)		(3,210)		(3,210)
Comprehensive income - net (loss) for the year	-		-		-		(1,288,209)		-		(1,288,209)		(1,288,209)

Balance, December 31, 2002	18,580,123		-		15,166,914		(15,311,757)		-		(144,843)	$	(1,291,419)
Shares issued for cash in fiscal year 2003 for exercise
of options, ranging from $0.20 to $0.55 per share	763,000		-		304,650		-		-		304,650		-
Shares issued for cash on July 30, 2003
for private placements at $0.35 per share	4,472,058				1,455,257						1,455,257
Shares issued for cash on December 9, 2003
for private placements at $1.70 per share	3,748,848				5,908,695						5,908,695
Shares issued for cash on December 12, 2003 for
exercise of warrants at $0.40 per share	50,000				20,000						20,000
1,461,750 shares allotted for the conversion of
convertible debenture					607,135						607,135
Stock based compensation	-		-		242,581		-		-		242,581		-
Other comprehensive income
- unrealized gain (loss) on available-for-sale securities	-		-		-		-		(864)		(864)		(864)
Comprehensive income - net (loss) for the year	-		-		-		(1,769,195)		-		(1,769,195)		(1,769,195)

Balance, December 31, 2003	27,614,029		-	$	23,705,232	$	(17,080,952)	$	(864)	$	6,623,416	$	(1,770,059)

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Minco Capital (MGHCF) Inactive 20-F2003 FY Annual report (foreign)

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