(Mark One)

OR

For the fiscal year ended December 31, 200______________

OR

Commission file number _________________________________________________________

(Exact name of registrant as specified in its charter)

(Jurisdiction of incorporation or organization)

(Address of principal executive offices)

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

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

Title of class

____________________________

Common Shares without par value

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

Title of class

_____________________________

None

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.

10,693,577

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___No_X_

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

___Item 17 ___ 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 Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

___Yes ___ No

FORWARD LOOKING STATEMENTS pg 5

GLOSSARY OF TERMS AND DEFINITIONS pg 5

Item 1. Identity of Directors, Senior Management and Advisers pg 9

A: Directors and senior management pg 9

B: Advisers pg 9

C: Auditors pg.10

Item 2. Offer Statistics and Expected Timetable (Not applicable)

Item 3. Key Information

A: Selected financial data pg.10

B: Capitalization and indebtedness pg 12

C: Reasons for the offer and use of proceeds (Not applicable)

D: Risk factors pg 13

Item 4. Information on the Company

A: History and Development of DRC Resources pg 17

B: Business Overview pg 19

C: Organizational Structure pg 20

D. Property, Plant and Equipment pg 21

Item 5. Operating and Financial Review and Prospects

A: Operating results pg 47

B: Liquidity and capital resources pg 49

C: Research and development, patents and licenses, etc. (Not applicable)

D: Trend information (Not applicable)

Item 6. Directors, Senior Management and Employees

A: Directors and senior management pg 50

B: Compensation pg 52

C: Board practices pg 54

D: Employees pg 57

E: Share ownership pg 57

Item 7. Major Shareholders and Related Party Transactions

A: Major shareholders pg 60

B: Related party transactions pg 60

C: Interests of experts and counsel pg 61

Item 8. Financial Information pg

A: Consolidated Statements and Other Financial Information pg 61

B: Significant Changes pg 61

Item 9. The Offer and Listing Offer and listing details (Not applicable) pg 61

A: Plan of distribution (Not applicable)

B: Markets pg 62

C: Selling shareholders (Not applicable)

D: Dilution (Not applicable)

E: Expenses of the issue (Not applicable)

Item 10. Additional Information

A: Share capital pg 62

B: Memorandum and articles of association pg 64

C: Material contracts pg 66

D: Exchange controls pg 66

E: Taxation pg 66

F: Dividends and paying agents pg 67

G: Statement by experts pg 67

H: Documents on display pg 68

Item 11. Quantitative and Qualitative Disclosures about the Market (Not applicable)

Item 12. Description of Securities other than Equity Securities

A:.Debt securities (Not applicable)

B:.Warrants and rights pg 68

C:.Other securities (Not applicable)

D:.American Depositary Shares (Not applicable)

Item 13. Defaults, Dividend Arrearages and Delinquencies (Not applicable)

Item 14. Material Modifications to the Rights of

Item 15. Controls and Procedures (Not applicable)

Item 16. (Not applicable)

Item 17. Financial Statements pg 68

Item 18. Financial Statements pg 69

Item 19. Exhibits pg 69

Exhibit 1: Financial statements and consent of Auditor

Exhibit 2: Certificate of Incorporation

Exhibit 3: Memorandum and Articles

Exhibit 4: Opinion of counsel

Exhibit 5: Services agreement with President & CEO

Exhibit 6: Services agreement with Corporate Secretary

Exhibit 7: Option to purchase Afton Property

This registration statement of DRC Resources Corporation (herein referred to as "DRC Resources" or "the Company") contains forward-looking statements with reference to: (i) Indicated Mineral Resources, (ii) certain plans, strategies and objectives of DRC Resources' management, and (iii) expected costs of exploration and development programs. Such forward-looking statements are not guarantees of future performance, which may be affected by risk factors and other uncertainties, many of which are beyond the control of DRC Resources, which may cause actual results to differ materially from those expressed in the statements contained in this registration statement.

Historical financial information as to costs of exploration and administration may not be indicative of DRC Resources' future cost performance. All statements which are not statements of historical fact may be deemed to be forward-looking statements. The use of words such as "potential", "possible", "inferred", "estimated" or statements such as "may', "expect", "believe", "anticipate" and "intend" (and the negative or variations of, or comparable terminology) are intended to identify forward-looking statements.

The following is a glossary of technical terms which are used in this registration statement to describe the DRC Resources' business.

The selected financial data appearing below for the fiscal years ending December 31, 2002, 2001, 2000, 1999 and 1998 are set forth in Canadian dollars and extracted from the audited Consolidated Financial Statements of DRC Resources that appear elsewhere herein. The selected financial data for the three month periods ended March 31, 2003 and 2002 are extracted from unaudited Interim Consolidated Financial Statements of DRC Resources that appear elsewhere herein.

DRC Resources' financial statements are prepared in accordance with generally accepted accounting principles (GAAP) that apply in Canada. The selected financial data appearing in the first table below is presented in accordance with Canadian GAAP. The second table sets out the selected financial data in accordance with US GAAP. The principle differences between Canadian GAAP and US GAAP that affect DRC Resources' income and shareholders' equity relate to those items described in Note 15 of the DRC Resources' December 31, 2002 financial statements appearing elsewhere herein.

The following selected financial data should be read in conjunction with, and is qualified in its entirety by reference to DRC Resources' audited Consolidated Financial Statements and from unaudited Interim Consolidated Financial Statements appearing elsewhere in this registration statement.

On June 18, 2003 a Canadian dollar (CAN $1.00) was exchangeable for US $0.7491 on the basis applied in the following table, which sets forth, for the periods and dates indicated, information concerning the rates of exchange of one Canadian dollar (CAN $1.00) into the US $ 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 ("Noon Buying Rate").

The following tables set out the capitalization of DRC Resources at March 31, 2003 in accordance with Canadian and US GAAP

Not applicable

This section describes some of the risks and uncertainties faced by DRC Resources'. The factors below should be considered in connection with any forward-looking statements in this registration statement. The risks described below are considered to be the significant or material ones, but they are not the only risks faced by DRC Resources. Some risks may not be known to DRC Resources and others that are not considered significant or material may turn out to be material. Investment in the common shares of DRC Resources must be considered speculative and risky, since any one or more of the risks could materially impact DRC Resources' business, its revenues, income, ability to raise required capital and the market price of its common shares.

Failure of bulk testing to achieve metal recovery levels indicated by limited testing of drill samples;

Estimates of reserves, mineral deposits and production costs adversely affected by such factors as environmental regulations and requirements, weather and other environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions;

The grade of ore ultimately mined may differ from that indicated by drilling results by reason of material changes in estimated reserves, grades, stripping ratios or recovery rates that affect the economic viability of any mining project;

Persistently lower prices of precious and base metals than those used to determine the feasibility of mining a mineral occurrence, since such prices have in the past been, and can be expected to continue to be, highly volatile over short periods due to factors such as international economic and political trends, expectations of inflation, currency exchange fluctuations (in particular the US dollar relative to the Canadian dollar, since selling terms are usually expressed in terms of the US dollar), interest rates, global or regional consumption patterns, speculative activities and increases in production due to improved mining and production methods; and

Adverse change in the supply of and demand for precious and base metals caused by various factors, including political events, economic conditions and production costs in major mineral producing regions.

DRC Resources' management is experienced in exploring for minerals, but not in developing or operating mines.

Market Risks If DRC Resources' stock trades in the OTC Bulletin Board or the Pink Sheets, but not on national exchanges, such as the New York Stock Exchange or NASDAQ, at a price below US$5.00 per share, it will be subject to the "penny stock" rules of the Securities and Exchange Commission. These rules require that, before a broker or dealer can sell a penny stock to persons other than established customers and accredited investors (generally those with assets in excess of $1 million or annual income exceeding $200,000), the firm must make a determination as to the suitability of the purchase of such securities for the customer and obtain the customer's written consent to the transaction prior to the purchase. Unless a penny stock transaction is exempt under the rules, the broker or dealer must furnish the customer a document describing the risks of investing in penny stocks. The broker or dealer must give the customer the current market quotation, if any, for the penny stock and disclose the compensation to the firm and registered representative. The firm must send monthly account statements showing the recent market price of penny stocks in the account. The penny stock rules will tend to restrict the ability of brokers and dealers to sell DRC Resources stock, which could have an adverse effect on liquidity and market price of DRC Resources' stock.

Legal Remedies Because DRC Resources is incorporated in British Columbia, Canada and all its assets and business operations are located outside the United States, as is the residence of all members of its management, the bringing of an action, the service of process, proof of a case and the enforcement of judgments will be more difficult.

The Company's legal and commercial name is: DRC Resources Corporation

DRC Resources was incorporated on January 31, 1980

DRC Resources exists as a limited liability corporation pursuant to Certificate of Incorporation issued by the Registrar of Companies and registration of its Memorandum and Articles under the Company Act (British Columbia), Canada.

DRC Resources' registered office for service in Canada and its principal place of business are located at Suite #601 595 Howe Street, Vancouver, British Columbia, V6C 2T5.

DRC Resources is a reporting issuer under the Securities Acts of the Provinces of British Columbia, Alberta and Ontario. Its Common Shares are listed under the symbol "DRC" on the Toronto Stock Exchange.

DRC Resources is in the business of acquiring and exploring natural resource properties. Exploration work on the properties has been limited to prospecting, sampling, research and drilling. To date, no property has been the subject of development work to bring it into production. A mineral property is abandoned if exploration results do not appear to warrant further expenditure on the property. Upon abandonment, DRC Resources writes off its investment in the property. Administrative expenditures are related primarily to maintaining corporate existence and meeting filing requirements, as there have been no mining operations. As properties are not acquired on a regular or periodic basis there can not be said to be observable trends in DRC Resources' business and year-to-year comparisons of accounting information may not be meaningful. As an exploration company, DRC Resources' success is generally measured by the extent and quality of mineralization (if any) discovered and this information is not contained in financial statements.

From incorporation in 1980 until 1997, DRC Resources was exclusively in the business of acquiring and exploring mineral resource properties in Canada.

For a period from 1997 until mid-1999, due to poor economic conditions in the mining industry, DRC Resources took steps to change the nature of its business, by diversifying and de-emphasizing mineral exploration. Several mineral properties were allowed to lapse and a joint venture was concluded to allow another company to acquire 50% of the Python claim group, DRC Resources' then major mineral property holding. e-Bid Online Inc. was incorporated under the Company Act (British Columbia) to reserve the corporate name as reflected in the domain (internet) address. DRC Resources secured shareholder approval for its plan to change its name and business to reflect its then e-commerce business direction. Consultants in that area of activity were engaged to assist in the transition. An e-commerce website was designed and developed during 1999 but commercialization was not achieved and the project was discontinued.

DRC Resources' President, John H. Kruzick, acted as nominee subscriber, holding in trust for the Company the one issued share of e-Bid Online Inc., which was incorporated on August 27, 1999 by registration of its Memorandum and Articles under the Company Act, British Columbia. e-Bid Online Inc. was never recorded in the financial statements as a subsidiary, but as a project expense subsequently written off.

While the Company pursued its change of direction to e-commerce, John H. Kruzick privately continued his long-time interest in mineral exploration with a colleague by, among other activities, acquiring an interest in the Afton Project by staking. When metal prices showed signs of recovery in September 1999, Mr. Kruzick persuaded his colleague to offer the Afton Project to DRC Resources. The directors decided to acquire the property and refocus the Company's activities on mineral property exploration, the current area of interest. Consistent with that decision, the Python mineral property option (covering ground in the same general area as the Afton Project) was terminated when the optionee decided not to proceed with required expenditures.

Since 1999 DRC Resources' principal capital expenditures have been on or in connection with the Afton Project, a copper-gold mineral exploration prospect located near Kamloops, British Columbia, Canada. There have been no significant divestitures.

In the three years ended December 31, 2002 the Company raised over $7.1 million, of which $3.2 million has been expended in exploration of the Afton Project property and $420,000, being the deemed value of shares issued to date as partial exercise of the option to purchase the Afton Project property.

The Afton Project exploration programs, which are the only significant expenditures in progress. All exploration has been funded by external financing through issue of securities of DRC Resources.

While there have been friendly discussion with several majors in the industry, there have been no indication of public takeover offers in respect of DRC Resources' shares.

DRC Resources' sole business is resource property acquisition and exploration for minerals.

The Company is in the process of exploring its resource properties to determine whether they contain ore reserves that are economically recoverable.

DRC Resources has no producing mines. However, its principal resource property, the Afton Property, has significant Measured, Indicated and Inferred Mineral Resources of copper-gold mineralization.

The international metal markets for copper and gold have tended to be steady and showing an upward trend over the past three years. Performance of these markets has had the effect of creating interest in the Company and its Afton Property.

Mineral exploration tends to be a seasonal activity, though the location of the Company's principal property, the Afton Project, permits exploration work to be conducted year round. Mining operations would not be subject to seasonal variation.

Raw materials and chemicals, as well as equipment, used in the finishing of copper and other metal concentrates for market are in ready supply and available at relatively stable prices.

Copper is a commodity traded internationally on the London Metal Exchange and the New York Mercantile Exchange (COMEX).

If and when the Afton Property came into production, DRC Resources would produce copper concentrates, which are generally marketed under contract to smelters. Contract prices for concentrates are generally based on the London Metal Exchange cash settlement prices. In British Columbia, most mines have marketed their product to Japanese smelters, who have a long history of dealings in this province.

(HG, Comex)

Monthly Price Chart

(US $/pound)

DRC Resources does not yet have any contacts for the sale of any concentrates that may in future be produced from the Afton Property. However, under the prior operator of this property, concentrate production went to Japanese smelters, that found the product acceptable. The Company has made contact with a number of Japanese smelters and trading companies, who have expressed interest in the product, if and when available.

DRC Resources will not be dependent upon other persons' patents or proprietary processes in order to produce copper concentrates, since conventional, long-established processes and technology are freely available and well understood in the mine engineering and processing fields. However, DRC Resources is considering licensing some new copper recovery processes, provided they offer a cost advantage over conventional plant and systems.

The mineral exploration business is highly competitive. Many mining and exploration companies are much larger and have greater resources than DRC Resources to compete in the search for and acquisition of mineral properties.

DRC Resources will have to compete against large, international producers of copper concentrates in a market that tends to be very volatile.

Some advantage may accrue to DRC Resources from the fact that the concentrates that will result from processing the Afton Property material will tend to have a high copper content (30% to 40%) and be relatively free of penalty impurities. See "Metallurgical Testing" under "Afton Property" in section 4. D. below.

Mineral exploration in British Columbia, Canada, the geographical area in which the Company's activities are focused, is relatively free of government regulation, except in the area of environmental protection. As an experienced exploration company, DRC Resources has not encountered difficulties in complying with regulations regarding environmental protection.

Mining plans and operations are generally subject to staged permitting requirements that can be very costly and difficult to meet. The area on which the Afton Property is located is under a current mining permit obtained by the previous operator, thereby relieving DRC Resources of some significant trouble and expense in that regard if the exploration programs on the Afton Property are successful in identifying a commercial orebody.

The Afton Property is DRC Resources' principal mineral property. After acquiring an option of the property in 1999, the Company undertook several exploration programs, which culminated in the engagement in 2000 of mine engineering firm, Behre Dolbear and Company Ltd., to review the results of the Company's initial $800,000 diamond drilling program. A February 2001 Behre Dolbear and Company Ltd. scoping (pre-feasibility) study anticipated mine production at 4,500 tons per day, based on the then calculated 25 million ton Indicated Mineral Resource.

Following a further $2,000,000 of diamond drilling in 2001 and 2002, Behre Dolbear were engaged to update their 2001 scoping study, which was received on completion of Behre Dolbear's recommended 2003 infill program drilling program.

The following summary and introduction is a direct extract from a May, 2003 independent resource estimate, as contained in a study entitled "Mineral Resource Estimate for the Afton Copper/Gold Project, Kamloops, B.C." authored by Behre Dolbear Vice-President and Senior Associate, James A. Currie, P.Eng., a Qualified Person.

Encumbrance - Option to acquire Afton Property By Option to Purchase Agreement ("the Option") dated September 22, 1999 DRC Resources acquired the exclusive right for 90 days to purchase a 100% undivided working interest in the Afton 1 - 11, incl. mineral claims, Record Nos. 372023 - 372026 incl. and 372641 - 372647 incl. (the "Original Claims") as to 50% from Westridge Enterprises Ltd., a non-reporting British Columbia company wholly owned by John H. Kruzick, a director, the President and CEO of the Company, and as to 50% from Indo-Gold Development Ltd., a non-reporting British Columbia company owned by John Ball, a geologist. The Option provided for consideration to be a 10% Net Profit Royalty to and a property management agreement with the optionors, with exercise to be by carrying out exploration work and paying Common Shares of DRC Resources as follows:

While the mineral claims comprising the Afton Property have been transferred into the name of DRC Resources, title is subject to reverting to the optionors if the Option is not exercised according to its terms.

On June 27, 2002 DRC Resources acquired an option exercisable on or before December 1, 2010 to purchase the said optionors' 10% Net Profit Royalty for a cash consideration of $2 million and the Option was amended by removing the exclusive right of the optionors to act as the operators of the Afton Property.

Status of land tenure and terms for maintaining mineral rights DRC Resources did not acquire, and does not own, any surface rights to the area covered by the mineral claims comprising the Afton Project property. Certain surface areas of the Afton Property are owned by the former operator of the mine, by the British Columbia government and other private owners. The surfaxe area occupied by the present Afton mineral zone is on "crown land" (British Columbia government owned land). DRC Resources does not own the surface of lands that would provide the easiest access to the resource. However, if the owner of the lands denies DRC Resources access to explore, develop or commence production from the Afton Property, DRC Resources could use a less convenient and somewhat more costly access over Crown (government owned) lands. Alternatively, DRC Resources could make application to the gold commissioner to settle any dispute with the owner and, if necessary, to the Mediation and Arbitration Board as provided by the Mineral Tenure Act, British Columbia for an order as to the terms of entry, taking of right of way, use or occupation, and the security, rent and compensation to be paid to the owner therefor.

The Option requires DRC Resources to maintain the mineral claims in good standing, which under the Mineral Tenure Act, British Columbia requires certain minimum work to be carried out each year. Work done to date has caused all the mineral claims comprising this property to be in good standing until at least March 8, 2011. Sufficient work has been completed by DRC Resources to maintain the Option in good standing until November 10, 2004.

Environmental legislation to which the property is subject Use of the surface is governed by the Waste Management Act, S.B.C. 1982, c.41 as amended by Waste Management Act, 1993, S.B.C. 1993, c.25, under which an "owner" includes a person who is in possession or, has the right of control of, occupies or controls the use of the property. Liability is absolute, retroactive and joint and several and applies despite the fact that a contaminating substance was introduced to the environment in compliance with legislation and permits in effect at the time of introduction. The effect could be to render DRC Resources liable for a waste or contaminant deposited or permitted to escape by a previous owner, subject to a government appointed "manager" apportioning responsibility. The previous operator has carried out a successful reclamation program.

Material Plans for Property Exploration DRC Resources' current exploration program is designed to carry out infill drilling that will enable the Company's principal engineering consultants to confirm continuity of the mineral grade in the 1,000 metre (3,300 foot) mineral zone of the Afton Project. To date approximately $3.2 million has been spent in defining an Indicated Mineral Resource of 37.7 million tons grading 2.32% copper equivalent. The 2003 infill diamond drilling program, recommended by the Company's mine engineering consultants, Behre Dolbear & Company Ltd., began in March 2003 and completed at a cost of approximately $300,000 by May 31, 2003. The program is being paid for out of working capital. The infill drilling program results will be used to update the February 2001 Behre Dolbear and Company Ltd. scoping (pre-feasibility) study that anticipated mine production at 4,500 tons per day, based on the then calculated 25 million ton Indicated Mineral Resource. The Behre Dolbear & Company Ltd. update is expected to be completed by June 30, 2003 at an estimated cost of $200,000.

Description of Access Physical access to the property off the main highway is by mine-site roads on private and crown lands. By Access Agreement dated April 7, 2000, subsequently extended from time to time, between DRC Resources and Afton Operating Corporation, the owner of the surface rights ("the lands"), DRC Resources was given the right to enter upon the lands of the former operator of the Afton Mine to conduct exploration. The Access Agreement requires DRC Resources to compensate the owner for damage to disruption or damage to any surface facilities, to reclaim areas disturbed by DRC Resources' operations, to post bond (which was done) against any failure to reclaim, to be responsible for any hazardous substances introduced to the lands and to insure (which has been done) and indemnify the owner against liabilities arising from any activities of DRC Resources in and about the lands. Less convenient access is available to DRC Resources over crown owned (government) land.

Technical Reports The Behre Dolbear and Company Ltd. Technical Report of May, 2003 includes references to and data from the following reports received by DRC Resources:

Geographic location and title status This property consists of two groups totaling 72 mineral claims located and recorded under the Mineral Tenure Act of British Columbia and 5 crown grants, all claims of each group are contiguous, though the two groups are not contiguous and both are situate in the Kamloops Mining Division within NTS map sheet 921-9W/10E of British Columbia, is situate 10 km (6 miles) southeast of the Afton Copper-Gold Property and 10 km (6 miles) south of Kamloops, British Columbia.

Acreage The 72 claims comprising this property cover an area of 4,500 acres.

Percentage ownership DRC Resources owns all (100%) interest in the property.

Status of land and claims tenure Subsequent to the acquisition of the Python claims group, several claims were allowed to lapse or were abandoned and relocated and additional claims staked so that DRC Resources now holds the 72 claims and 5 crown granted mineral claims above described, including 16 contiguous Ajax mineral claims covering the area between the two Ajax open-pits, staked by DRC Resources when the mineral rights previously held by Afton Mines Ltd. became available for staking in 1999.

DRC Resources did not acquire, and does not own, any surface rights to the area covered by the mineral claims and crown granted mineral claims comprising the Ajax-Python Property

Environmental legislation to which the property is subject Use of the surface is governed by the Waste Management Act, S.B.C. 1982, c.41 as amended by Waste Management Act, 1993, S.B.C. 1993, c.25, under which an "owner" includes a person who is in possession or, has the right of control of, occupies or controls the use of the property. Liability is absolute, retroactive and joint and several and applies despite the fact that a contaminating substance was introduced to the environment in compliance with legislation and permits in effect at the time of introduction. The effect could be to render DRC Resources liable for a waste or contaminant deposited or permitted to escape by a previous owner, subject to a government appointed ‘manager' apportioning responsibility. The previous operator has carried out a successful reclamation program in respect of the Ajax property group.

Material Plans for Property Exploration The Company does not plan a significant program on this property. Sufficient exploration work will be done to keep the property in good standing year to year. The annual cost of maintaining title is approximately $10,000 per year in assessment work, including statutory work requirements and filing fees.

Geographic location This property, consisting of 11 units under single unpatented claim Number P1229896, is located in Timmins Township on the north shore of Lipsett Lake approximately 48 km southeast of Timmins, Ontario.

Acreage This property covers 440 acres.

Percentage ownership The Company holds all (100%) direct interest in this claim.

Legal impediments DRC Resources is aware of no legal impediments or challenges to its title to this claim.

Environmental legislation to which the property is subject This property is subject to environmental legislation and regulations governing exploration and development in the Province of Ontario.

History of Exploration The property has no known history of exploration.

Exploration Carried out by the Company In May 1998 DRC Resources carried out prospecting, a geophysical survey and mapping, which was followed up by a 291 meter diamond drill program to test the meta-volcanic sequence for polymetallic massive sulphide mineralization that is characteristic of a similar geologic setting to the north of the property. No economic metal values were found in the disseminated sulphide mineralization intersected in the test holes.

Reserves The property contains no known orebody or mineral reserves.

Material Plans for Property Exploration DRC Resources has no immediate plans to carry out exploration of this property, though it intends holding the property.

]

The following discussion of DRC Resources' operations and financial condition describes financial data prepared using Canadian GAAP. The differences between US GAAP and Canadian GAAP are described in Note 15 to the accompanying audited financial statements.

Significant accounting policies applied in preparing DRC Resources' financial statements are set out in Note 2 to the accompanying audited financial statements.

Revenue did not include product sales Operations consisted wholly of exploration, primarily in the form of diamond drilling totaling 38,850 metres (127,450 feet) on the Afton Project carried out by DRC Resources since commencement of the periods reported on in this application. This drilling represents over 100% of the planned diamond drill program. To December 31, 2002 a total of $3,263,974 has been expended representing 69.45% of the costs budgeted for the total exploration program. The work completed in year 2000 established an Indicated Mineral Resource of 25 million tons grading an average 3% copper equivalent. Year 2001 exploration increased the Indicated Mineral Resource of the Afton Project by more than 50% to 37.7 million tons grading an average 2.32% copper equivalent. The Indicated Mineral Resource of 37.7 million tons does not take account of work completed in 2002, which is presently being evaluated by the Company's Qualified Person.

Some economies achieved by DRC Resources in the conduct of its exploration program were in part attributable to a persistent downturn in British Columbia's mineral exploration sector that resulted in diamond drilling units and other exploration facilities being available at favourable rates.

Drilling during and subsequent to the first quarter of 2002, encountered an intersection west of the mineral zone envelope boundary used in the 2000-2001 indicated mineral resource estimate of 37.7 million tons of 2.32% copper equivalent, indicating a possible widening of the mineralized zone.

For purposes of illustrating management explanation and discussion of the Company's financial condition and results of operations, please refer to the following table of selected financial information that appears in more detail in the financial statements that accompany this application.

Revenue over the years 2000, 2001 and 2002 consisted primarily of interest on working capital augmented by a small oil and gas royalty. The increase in year 2001 revenue was due to a full year's interest being earned and reported on working capital raised by the $5 million private placement in year 2000. The decrease in revenue for 2002 over 2001 is due in part to a reduction of working capital equal to expenditures in exploration and partly to progressively lower interest rates being earned on remaining working capital. Working capital is maintained in low risk term deposits. Foreign exchange gains of $20,133 and oil and gas royalties of $4,357 added to year 2000 interest earnings of $152,057 resulted in income of $176,527 for the year. Year 2001 foreign exchange gains of $20,231 and oil and gas revenues of $2,123 added to year 2001 interest earnings of $232,801 resulted in income of $290,539 for the year. A foreign exchange loss of $4,159 in year 2002 (due to a rise in value of the Canadian dollar) and oil and gas revenues of $1,743 resulted in income of $114,260 in year 2002.

An increase in loss (up $25,203) before income taxes for the year 2001 over the year 2000 was due primarily to increases in the write-off of mineral claim interests and a $39,405 increase in consulting and management fees. A $333,167 increase in loss before income taxes for the year 2002 over the year 2001 was due primarily to five factors: (1) a $116,125 drop in interest revenue due primarily to lower interest rates earned on working capital; (2) a $35,736 increase in consulting and management fees coupled with a $42,643 increase in professional fees due to increased activity on the Afton Project; (3) a $52,000 increase in financing and sponsorship costs related to a fund raising; (4) a $44,422 increase in regulatory fees in connection with the Company's listing on the Toronto Stock Exchange; and (5) a $66,621 increase in travel and promotion costs

Administrative costs increased from an average $11,150 per month in year 2000 to $15,262 per month in year 2001 to $39,547 per month in 2002 due primarily to increasing demands for professional services, regulatory and financing costs related to increasing exploration and analytical activity on DRC Resources' Afton Project and the search for financing and development partners for that project as its development prospect matured.

Property acquisition costs increased by $120,000 for the year 2002 over 2001 by the deemed value of 400,000 Common Shares issued at a deemed $0.30 per share in partial exercise of the option to acquire the Afton Project property. The Timmins Ontario Mineral Claims acquired for $31,500 in 1997 and on which $64,860 was expended on exploration, were written down in the year ended December 31, 2001.

Deferred exploration costs in 2000 and 2001 were, respectively, $868,687 and $1,473,664. In year 2002 exploration costs were actually $193,692 lower than in 2001, but the Company's exploration grant recoveries were only $96,335 in 2002 compared to $412,375 in 2001. The indicated $211,056 reduction for year 2000 and the $376,207 reduction for each of the years 2001 and 2002 in deferred exploration costs due to ‘tax effect of flow through shares' does not represent a cost recovery; though it reduces cost for DRC Resources' tax purposes. Those amounts, which were qualifying exploration expenditures under Canadian income tax law, were renounced in favour of the subscribers to issues of flow-through shares of the Company.

Quarterly Information - Revenue for the quarter ended March 31, 2003 was $(4,613) compared to $33,438 for the corresponding quarters in 2002. The decrease is due primarily to a decrease in the value US dollar denominated term deposits as a result of the weakening of the US dollar and to lower rates of interest income on, and, due to the program work, a reduction in, working capital. General and administrative expenses were $99,241 for the first quarter of 2003 compared to $94,346 for the corresponding quarter in 2002 due to increased activity on the Afton Project. The result was a loss after taxes of $119,800 ($0.01 per share) for the first quarter of 2003 compared to a net loss after taxes of $48,180 ($0.01 per share) for the corresponding period in 2002. Because the president spent much of his time on the Afton Mine Property, his charges were apportioned between general and administrative and deferred exploration costs.

Exploration costs for the first quarter of 2003 were $84,300 compared to $58,717 in first quarter 2002. The work done in the first quarters of 2003 and 2002 were engineering studies and property evaluations for the planning of the upcoming respective diamond drill programs. The work in first quarter 2003 included data preparation for the pre-feasibility study commissioned in February, 2003.

Inflation did not affect DRC Resources' operating results, which actually benefited from lower costs due to a sectoral downturn.

Foreign currency fluctuations had a very limited negative effect on DRC Resources revenue. The impact of a rising Canadian dollar (or devaluing US dollar) could have significant effect on concentrate product sales in the future, since all such sales are conducted in US currency, while costs are incurred in Canadian dollars.

Working Capital at Year-end DRC Resources had working capital of $4,000,000, $5,800,000 and $5,100,000 and no debt at December 31^st in, respectively, the years 2002, 2001 and 2001. Equity financings of $4,904,120 in 2000 and $1,935,515 in 2002 were the principal sources of working capital.

Except for a brief period in 1999, the Company has been in the business of acquiring and exploring mineral properties. As such, it has had no operations revenue and has depended on sale of shares to provide capital to carry out its activities.

During 2002 interest income, a small oil and gas royalty and foreign exchange gains provided for approximately 23.57% of the Company's administrative costs. In 2001 and 2000 interest, royalty income and a foreign exchange gains provided for, respectively, approximately 87.82% and 94.55% of the Company's administrative costs.

In 2000 DRC Resources' working capital increased significantly due to funding provided by a $5 million Special Warrants Private Placement Offering, which put the Company in a position to make a commitment to a large exploration program on its Afton Project. In 2002 a $2.1 million private placement of flow-through shares was added to general working capital.

Interest revenue on its working capital combined with a favourable exploration cost experience on the Afton Project to leave DRC Resources with working capital adequate to meet its administrative costs and property maintenance programs through the year 2003. Other than relatively nominal property maintenance costs on projects other than the Afton Project, the Company does not have any commitments for material expenditures in either the near or long term. The Company is committed to completing the infill drilling program and updates of the technical report of J.J. MacDougall, P.Eng. and the Behre Dolbear and Company Ltd. scoping study at an aggregate estimated cost of $200,000. Results being achieved on the infill drilling on the Afton Project may cause that plan to change.

DRC Resources' working capital is sufficient to meet all its present requirements as an exploration company. However, to move to the development stage of its Afton Project, it may be necessary for DRC Resources to raise as much as 10% of the expected capital requirement of about $80 million, in order to attract an institutional lender or mine financing partner, such as a smelter, to the project. DRC Resources expects that such capital requirement would have to be met by equity financing through issue of securities of the Company.

Working Capital at Quarter-end At March 31, 2003 working capital was $3,831,788 compared to $4,134,172 at the end of the corresponding quarter in 2002.

C. Research and development, patents and licences, etc. (Not applicable)

D. Trend information (Not applicable)