MANAGEMENT DISCUSSION

A. Description of Business

The Company is in the resource exploration and development business. The Company has leased and acquired mineral rights to the properties located near Port Hardy on Vancouver Island. These properties are industrial mineral properties containing cement feedstock and Kaolin as well as strong potential for development of base and precious metal deposits.

B. Discussion of Operations and Financial Condition

During the fiscal period ending December 31, 2002, the Company closed a private placement consisting of 3,000,000 common shares issued at $0.10 per share and 750,000 two year share purchase warrants to purchase 750,000 shares exercisable at $0.15 per share during the first year and $0.25 per share in the second year. A total of 15 placees were involved, including insiders. The shares issued are subject to a one year hold period expiring April 7, 2004. In addition to applicable hold periods, the Company's insiders agreed to escrow their shares such that 25% of their shares are released from escrow on issuance and 25% on the 6, 12 and 18 month anniversaries of the issuance of the shares.

During the fiscal period ending December 31, 2002, the Company signed agreements to settle debts of the Company in the amount of $1,474,536 by the issuance of 4,523,126 shares to various creditors.

During the fiscal period ending December 31, 2002, the Company closed agreements between the Company, Homegold Resources Ltd. ('Homegold'), Robert W. Howich and Johan Shearer. Pursuant to the agreements, the Company has leased the mineral rights to the Apple Bay property located near Port Hardy on Vancouver Island. This property is an industrial mineral property containing cement feedstock and Kaolin as well as strong potential for development of base and precious metal deposits. In consideration for the lease of mineral rights, the Company agreed to issue 1,500,000 shares (deemed price of $0.10) to Homegold and 1,500,000 shares (deemed price of $0.10) to Robert W. Howich. Electra will pay two royalties, which combined total $1.00 per ton of industrial product sold on one portion of the property and $1.00 per ton on another portion of the property. The Company also has agreed to spend $100,000 in exploration expenditures during the first year of the agreement. The Company will also pay a 3% net smelter return royalty for all base and precious metals produced from the property. The shares issued are subject to a one-year hold period expiring April 7, 2004. Johan Shearer owns Homegold. Mr. Shearer has been appointed as a director of the Company at a directors'meeting held on April 11, 2003.

During the year ended December 31, 2002, the Company took the necessary steps to have its wholly owned subsidiary, Raymo Processing Ltd., ('Raymo') stricken off the register of corporations of the Government of Newfoundland and Labrador, this resulted in a non-cash gain to the Company of $915,835. During the year Company incurred operating expenses of $219,547 of which $121,630 related to professional fees in conjunction with restructuring the company and $42,942 for technical consulting related to the Company's properties. The net income for the year ended December 31, 2002 was $805,847 or $0.13 per share, compared to $760,016 or $0.11 per share for the same period a year earlier. The net incomes for both years were primarily a result of non-cash gains from restructuring activities, debt forgiveness and discontinued operations.

C. Subsequent Events

On April 14, 2003 the Company announced that the TSX Venture Exchange approved the Company's restructuring and trading of the Company's shares commenced as of April 4, 2003. The restructuring included settlement of debt for shares, a private placement, a property acquisition, and appointment of a new director and president.

The Company issued 3,000,000 common shares at $0.10 per share pursuant to the Apple Bay Mineral property agreement. See Note 4 of the attached audited financial statements for the year ended December 31, 2002.

The Company issued 3,686,402 common shares at $0.10 or $1.00 per share for the settlement of $1,390,863 of indebtedness pursuant to the debt settlement agreement with creditors of the Company and Raymo. See Note10 of the attached audited financial statements for the year ended December 31, 2002. The Company issued 3,000,000 common shares at $0.10 per share for total proceeds of $300,000 pursuant to a Private Placement Agreement. See Note 10 of the attached audited financial statements for the year ended December 31, 2002. The Company agreed to purchase 100% of the interest in the Hankin Point and Coal Harbour claims all of which are situated in the Nanaimo Mining Division, British Columbia for a royalty equal to $0.60 fore each metric tonne of limestone produced or removed from the claims and 500,000 common shares at a price of $0.10 per share. This transaction is subject to regulatory approval.

The Company granted 1,300,000 stock options, subject to regulatory approval at a price of $0.10 cents per share. The options expire on April 11, 2005.

D. Liquidity and Solvency

As at December 31, 2002 the Company had cash of $256,191 and working capital of $160,530.

E. Directors and Officers

On April 14, 2003 the Company announced that it has appointed Johan Shearer as a director effective April 11, 2003. Mr. Shearer is an accomplished geologist and claims staker. He has been involved in mining exploration continuously since 1973. Mr. Shearer specializes in industrial minerals and has taken several quarries to production. He has also been a director of several public companies. Also effective April 11, 2003, Johan Shearer was appointed as president and Doug Stelling, having resigned his office as president, was appointed Chairman of the Board and Chief Executive Officer of the Company.

The directors and officers of the Company are as follows: (a) Doug Stelling, director and CEO, (b) Johan Shearer director & president (c) Marcia Stelling, director, (d) Caroline Stelling, director, and (e) Deborah Brand, secretary.

F. Investor Relations Agreements

The Company does not have any existing third party investor relations arrangements or contracts. DATED at West Vancouver, British Columbia, this 17th day of May, 2002.

BY ORDER OF THE BOARD Douglas B. Stelling, President
Tel: (604) 647-2227 Electra Gold Ltd. Fax: (604) 669-5375

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