BAFEX HOLDINGS LIMITED INTERIM GROUP FINANCIAL STATEMENTS 30 JUNE

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1 INTERIM GROUP FINANCIAL STATEMENTS Grant Thornton Neuhaus

2 INTERIM GROUP FINANCIAL STATEMENTS I N D E X Pages General information... 2 Directors approval of financial statements... 2 Review report to the members... 3 Directors report... 4 Balance sheet... 5 Income statement... 6 Statement of changes in equity... 7 Cash-flow statement... 8 Notes to the financial statements

3 GENERAL INFORMATION DIRECTORS C J MacKenzie R D Williams SECRETARY Apex Advisors Limited REGISTERED ADDRESS Barker Chambers P O Box 92 Road Town Tortola British Virgin Islands REGISTERED AGENT LWB Company Limited P O Box 92 Road Town Tortola British Virgin Islands DIRECTORS APPROVAL OF FINANCIAL STATEMENTS Management is responsible for the preparation, integrity and objectivity of the financial statements and other information contained in this interim report. In order to discharge this responsibility, the company and the group maintain internal, accounting and administrative control systems designed to provide reasonable assurance that assets are safeguarded and that transactions are executed and recorded in accordance with the company s and the group s policies and procedures. The interim financial statements, which appear on pages 4 to 14, were approved and signed by the directors on 2 August DIRECTOR DIRECTOR WINDHOEK

4 REVIEW REPORT To the members of BAFEX HOLDINGS LIMITED We have reviewed the accompanying group balance sheet of Bafex Holdings Limited at 30 June 2004, and the related statements of income and cash flows for the three month period then ended. These financial statements are the responsibility of the company s directors. Our responsibility is to issue a report on these financial statements, based on our review. Scope We conducted our review in accordance with the statement of Namibian Auditing Standards applicable to review engagements. This standard requires that we plan and perform the review to obtain moderate assurance that the financial statements are free of material misstatement. A review is limited primarily to enquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Review opinion Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial statements are not fairly presented, in all material respects, in accordance with International Financial Reporting Standards and Namibian generally accepted accounting practice. GRANT THORNTON NEUHAUS Registered Accountants and Auditors Chartered Accountants (Namibia) WINDHOEK 2 August 2004

5 DIRECTORS REPORT The directors herewith present their interim report, which forms part of the audited financial statements of the company and the group for the period ended 30 June GENERAL The company acts as investor in a subsidiary company, which operates in Namibia. The objectives of the subsidiary are to explore for, discover and mine mineral deposits, and develop mineral exploration properties, as well as any work connected with these objectives, including consulting. SHARE CAPITAL The authorised share capital of the company comprises par value shares of US$1 each of which 108 par value shares of US$1 were issued. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment amounting to $2 227 (March 2004 : $84 065) was acquired during the period under review. Otherwise, no further major changes occurred in the nature of the property, plant and equipment or in the policy regarding its use. STATE OF AFFAIRS AND RESULTS All matters material to the appreciation of the state of the company s and group s affairs and results are disclosed in the financial statements and do not require further comment or explanation. The results are attributable to the main activity of the company and the group. SUBSIDIARY The interest in the subsidiary company is as follows: Name of company Bafex Exploration (Pty) Ltd Nature of business Explore, discover and mine mineral deposits and develop mineral exploration properties Issue d Percentag e Interest of holding company capita held Share Indebtedness l 2004 s $ % $ The aggregate loss of the subsidiary company attributable to the group is $ (March 2004 : $ ) for the period under review. DIVIDENDS No dividends were declared or paid in respect of the period ended 30 June 2004 (March 2004 : $ Nil). DIRECTORATE AND SECRETARY The names of the directors in office at the date of this report appear on page 2 of this report together with the name, business and postal address of the secretary of the company.

6 EVENTS SUBSEQUENT TO THE ACCOUNTING PERIOD During the accounting period, a letter of intent was entered into with Helio Capital Corporation to acquire all of the issued and outstanding shares of the company. Subject to regulatory acceptance, the resulting company will be listed in the Mining Sector on the TSX Venture Exchange. Otherwise, the directors are not aware of any matter or circumstance arising since the end of the financial period, not otherwise dealt with in the interim financial statements and the interim group financial statements, which significantly affects the financial position of the company and the group or the results of their operations. WINDHOEK 2 August 2004

7 BALANCE SHEETS CANADIAN FUNDS COMPANY GROUP Notes 30/06/ /03/ /06/ /03/2004 ASSETS $ $ $ $ Non-current assets 937, , ,826 98,551 Property, plant and equipment ,826 98,551 Interest in subsidiary 3 902, , Investments 4 35,000-35,000 - Current assets 15,463 25,884 52, ,471 Receivables ,429 31,849 Cash and cash equivalents 15,463 25,884 39,392 75,622 Total assets 952, , , ,022 EQUITY AND LIABILITIES Capital and reserves 947, , , ,699 Issued capital 5 190, , , ,093 Reserves - - (32,821) (32,730) Accumulated profit/(loss) 757, ,522 17,056 21,336 Shareholders' interest 947, , , ,699 Current liabilities Payables 5,165 5,165 10,319 27,323 Total equity and liabilities 952, , , ,022

8 INCOME STATEMENTS CANADIAN FUNDS COMPANY GROUP 3 months 12 months 3 months 12 months ended ended ended ended 30/06/ /03/ /06/ /03/2004 $ $ $ $ INCOME 71, ,179 71, ,548 Income from Boulder Mining Corporation 71, ,179 71, ,179 - Project management fees 10,097 47,473 10,097 47,473 - Project consulting fees 18,847 68,706 18,847 68,706 - Common shares issue 35,000 22,000 35,000 22,000 - Other income 7,500 15,000 7,500 15,000 Interest received EXPENDITURE 26, ,538 (75,825) (47,382) Administration cost (35,756) (19,010) (71,696) (114,189) Audit fees - - 4,041 2,928 Consulting fees 28,156-28,156 - Depreciation - - 7,286 21,117 Foreign exchange loss Legal fees 3,000 3,507 3,000 4,502 Loss on sale of investment Office and sundry expenses 4,600 14,294 18,332 42,883 Rent paid - - 6,247 20,362 Salaries and wages - - 4,634 21,188 Resource property cost 62, ,548 (4,129) 66,807 EPL Tevrede (62,713) (429,849) (21,244) (226,205) - Expenses 18,343 42,965 59, ,609 - Recoveries from Boulder Mining Corporation (81,056) (472,814) (81,056) (472,814) EPL Vredelus - 6,385 4,945 46,797 EPL Otjitombo ,394 8,999 71,660 EPL Tevrede South ,473 8,595 EPL Honib ,840 8,537 EPL Leicester ,959 7,939 EPL Zebra ,687 7,738 EPL Otjimakuru - - 2,470 8,132 PROFIT/(LOSS) 97, ,717 (4,280) 106,166 Directors' loans waived - 32,549-32,549 PROFIT/(LOSS) for the period 97, ,266 (4,280) 138,715

9 STATEMENTS OF CHANGES IN EQUITY CANADIAN FUNDS Issued capital Share Share Accumulated Translation capital premium profit reserves T o t a l $ $ $ $ $ C O M P A N Y Balance at 1 April ,985 97, ,349 Shares repurchased (3) (9,997) - - (10,000) Repurchased shares sold 3 99, ,000 Profit for the year , ,266 Balance at 31 March , , ,615 Profit for the period - 97,897-97,897 Balance at 30 June , , ,512 Issued capital Share Share Accumulated Translation capital premium profit/(loss) reserves T o t a l $ $ $ $ $ G R O U P Balance at 1 April ,985 (117,379) (25,428) (42,714) Shares repurchased (3) (9,997) - - (10,000) Repurchased shares sold 3 99, ,000 Currency translation difference (7,302) (7,302) Profit for the year , ,715 Balance at 31 March ,985 21,336 (32,730) 178,699 Currency translation difference (91) (91) (Loss) for the period - - (4,280) - (4,280) Balance at 30 June ,985 17,056 (32,821) 174,328

10 CASH-FLOW STATEMENTS CANADIAN FUNDS COMPANY GROUP 3 months 12 months 3 months 12 months ended ended ended ended Note 30/06/ /03/ /06/ /03/2004 Cash flows from operating activities: $ $ $ $ Cash receipts from customers 117, , , ,362 Cash paid to suppliers and employees (19,603) (73,776) (116,604) (502,544) Cash generated from operations A 97, , ,818 Cash flows from investing activities: Investment to maintain or expand operations: Additions to property, plant and equipment - - (2,227) (84,065) Investment in subsidiary company (73,318) (585,588) - - Investment (made)/sold (35,000) 22,000 (35,000) 22,000 Net cash (outflow) from investing activities (108,318) (563,588) (37,227) (62,065) Cash flows from financing activities: Issued capital raised - 90,000-90,000 Non-interest-bearing borrowings raised - (91,025) - (129,315) Net cash (outflow) from financing activities - (1,025) - (39,315) Net movement in cash and cash equivalents (10,421) (34,396) (36,230) 438 Change in cash and cash equivalents Balance at beginning of the period 25,884 60,280 75,622 75,184 Net movement (10,421) (34,396) (36,230) 438 Balance at end of the period 15,463 25,884 39,392 75,622 The balance comprises: Cash on hand and at bank 15,463 25,884 39,392 75,622 NOTE TO THE CASH-FLOW STATEMENT A. RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS Profit/(Loss) for the period 97, ,266 (4,280) 138,715 Adjusted for: Depreciation - - 7,286 21,117 Translation differences - - (3,425) (16,473) Directors' loans waived - (32,549) - (32,549) Loss on sale of investment Operating profit/(loss) before working capital changes 97, ,217 (419) 111,310 Working capital changes: Increase/(decrease) in receivables ,420 (30,991) (Decrease)/increase in payables - - (17,004) 21,499 Cash generated from operations 97, , ,818

11 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES The financial statements have been prepared in compliance with International Financial Reporting Statements and Namibian generally accepted accounting practice. The following are the principal accounting policies of the company and the group, which are consistent in all material respects with those applied in the previous year. The financial statements have been prepared on the historical cost basis, except if otherwise stated. 1.1 Basis of consolidation of financial results The consolidated financial statements reflect the financial results of the group. All financial results are consolidated with similar items on a line-by-line basis. Inter-company transactions, balances and unrealised gains and losses between group entities are eliminated on consolidation. To the extent that a loss on a transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, that loss is recognised in the income statement Subsidiaries The financial results of subsidiaries are consolidated into the group's results from the acquisition date until the disposal date. Minority interest at the acquisition date is determined as the minority shareholders' proportionate share of the fair value of the net assets of subsidiaries acquired. 1.2 Property, plant and equipment Property, plant and equipment is stated at historical cost less depreciation. Depreciation is calculated on the straight-line method to write off the cost of each asset over its estimated useful life as follows: Furniture and fittings Office equipment Motor vehicles Field equipment Computer equipment 6-7 years 6-7 years 5 years 4 years 3 years 1.3 Measurement currency and foreign currency translations Measurement currency The financial results of the entity are accounted for in its measurement currency. The consolidated financial statements are presented in Canadian Dollars, which is the measurement currency of the group Foreign entities Income and expenditure transactions of foreign entities are translated at the average rate of exchange for the year. All assets and liabilities, including fair value adjustments arising on acquisition, are translated at the rate of exchange ruling at the balance sheet date. Differences arising on translation are recognised in the changes in equity statement as a foreign currency translation reserve.

12 NOTES TO THE FINANCIAL STATEMENTS (Contd) 1. ACCOUNTING POLICIES (contd) Other foreign currency transactions Income and expenditure transactions are translated into the measurement currency of the individual entity at the rate of exchange ruling at the transaction date. 1.4 Intangible assets Intangible assets are recognised if it is probable that future economic benefits will flow to the entity from the assets and the costs of the assets can be reliably measured Exploration expenditure Mining exploration costs are recognised in the income statement until completion of a final feasibility study supporting proven and probable reserves. Expenditure incurred subsequent to proven and probable reserves being identified is capitalised. Expenditure on producing mines or development properties is capitalised only when excavation or drilling is incurred to extend reserves or further delineate existing proven and probable reserves. 1.5 Deferred tax Deferred tax is calculated on the comprehensive basis using the liability method, which requires provision for temporary differences between book and tax values of assets and liabilities. Tax losses are taken into account in determining the liability or asset. 1.6 Environmental expenditures The operations of the company may in the future be affected from time to time in varying degrees by changes in environmental regulations, including those for future removal and site restoration costs. Both the likelihood of new regulations and their overall effect upon the company are not predictable. The company's policy is to meet or, if possible, surpass standards set by relevant legislation, by application of technically proven and economically feasible measures. Estimated future removal and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated life of the operation, net of expected recoveries. 1.7 Fair value of financial instruments The company's financial instruments consist of investments, cash, VAT receivable, accounts payable and amounts due to parent company. Unless otherwise noted, it is management's opinion that the company is not exposed to significant interest, currency or credit risks arising from the financial instruments. The carrying value of these financial instruments approximates their fair value due to their short-term maturity or capacity of prompt liquidation.

13 NOTES TO THE FINANCIAL STATEMENTS (Contd) CANADIAN FUNDS 2. PROPERTY, PLANT AND EQUIPMENT GROUP Motor Office Furniture Field Computer vehicles equipment and fittings equipment equipment T o t a l $ $ $ $ $ $ Carrying amount at 1 April ,470 3,407 5,465 4,896 23,313 98,551 At cost 76,227 4,611 6,832 6,446 32, ,001 Accumulated depreciation (14,757) (1,204) (1,367) (1,550) (9,572) (28,450) Additions ,227 2,227 Depreciation (3,712) (168) (250) (392) (2,764) (7,286) Translation difference 2, ,334 Carrying amount at 30 June ,803 3,355 5,403 4,659 23,606 96,826 At cost 79,061 4,783 7,086 6,685 36, ,094 Accumulated depreciation (19,258) (1,428) (1,683) (2,026) (12,873) (37,268) Carrying amount at 1 April ,178 3,305 2,870 2,255 7,825 26,432 At cost 11,622 3,769 3,356 2,551 9,304 30,602 Accumulated depreciation (1,444) (464) (486) (296) (1,479) (4,170) Additions 57, ,805 3,276 19,911 84,065 Depreciation (11,999) (623) (751) (1,113) (6,631) (21,117) Translation difference 5, ,208 9,171 Carrying amount at 31 March ,470 3,407 5,465 4,896 23,313 98,551 At cost 76,227 4,611 6,832 6,446 32, ,001 Accumulated depreciation (14,757) (1,204) (1,367) (1,550) (9,572) (28,450)

14 NOTES TO THE FINANCIAL STATEMENTS (Contd) CANADIAN FUNDS COMPANY GROUP 30/06/ /03/ /06/ /03/ INTEREST IN SUBSIDIARY $ $ $ $ Investment in and amounts owing to subsidiary, Bafex Exploration (Pty) Ltd: Investment in shares Loans 902, , , , The recovery of the company's investment in the subsidiary and the attainment of profitable operations is dependent upon the discovery and development of economic ore reserves and the ability to arrange sufficient financing to bring the ore reserves into production. As the ultimate outcome of these matters cannot presently be determined, because they are contingent on future events, the company has subordinated its claim against the subsidiary in favour of other creditors until such time that the assets, fairly valued, exceed the liabilities. 4. INVESTMENTS Listed at fair value Available for sale Balance at beginning of the period - 22,500-22, Boulder Mining Corporation shares received free of consideration 35,000 22,000 35,000 22,000 Shares sold during the period - (44,500) - (44,500) Balance at end of the period 35,000-35,000 - The shares are granted to the company in terms of an option agreement as disclosed in note 10 to the financial statements.

15 NOTES TO THE FINANCIAL STATEMENTS (Contd) CANADIAN FUNDS COMPANY GROUP 30/06/ /03/ /06/ /03/ ORDINARY SHARE CAPITAL $ $ $ $ Authorised Par value shares of US$1 each 50,000 50,000 50,000 50,000 Issued 108 Par value shares of US$1 each Share premium 189, , , ,985 The unissued shares are placed under the control off the directors until the next annual general meeting. 190, , , , DIRECTORS EMOLUMENTS For other services 47,003 60,200 54,923 85, COMMITMENTS Lease commitments Payable within 12 months ,038 18, TAXATION No provision for current taxation has been made as no such liability is anticipated. 9. EXCLUSIVE PROSPECTING LICENCES The subsidiary company is the holder of eight exclusive prospecting licences issued in respect of precious metals, base and rare metal and industrial minerals over certain portions of land situated in Namibia. The subsidiary owns a 100% interest in all of its eight properties except the Tevrede property (EPL 2909), which is subject to an earn-in agreement with Boulder Mining Corporation as disclosed in note 10 to the financial statements. The exclusive prospecting licences give the subsidiary the sole and exclusive right to conduct prospecting on the properties for a three-year term, renewable for a further two periods each of two years duration. The expiry dates of the licences range between 26 April 2004 and 8 July The exclusive prospecting licence 2909 expired on 26 April 2004 and the renewal application is pending with the Ministry of Mines and Energy. The directors are of the opinion that the criteria for renewal were met and have no reason to believe that the licence will not be renewed.

16 NOTES TO THE FINANCIAL STATEMENTS (Contd) CANADIAN FUNDS 10. OPTION AGREEMENT The company and its subsidiary granted an exclusive right and option on the exclusive prospecting licence, EPL 2909, to Boulder Mining Corporation to acquire, subject to the terms and conditions of an option agreement, and subject to the approval of the Ministry of Mines and Energy of the Republic of Namibia for the transfer of the licence, a 100% interest in the company's and subsidiary's right, title and interest in and to the licence, subject to a 3% NSR royalty to the subsidiary. The option has to be exercised on or before 3 June In terms of the option agreement, the Optionee will make an initial payment of $ to the Optionor and incur exploration expenditures of $3 million on the property by 3 June The Optionee will further issue common shares to the Optionor in four tranches by 3 June Further free-trading common shares up to a maximum of shares shall be issued if no commercial production has taken place on the property before 3 June 2011, on a schedule of shares per year starting 3 June The optionee has the right, at any time, prior to the commencement of commercial production to purchase one-third of the 3% NSR royalty for US$1 million.