I have compiled the consolidated balance sheet of New Guinea Gold Corporation as at June 30, 2004,
And the statement of operations and deficit and the statement of changes in cash flows for the six months then ended from information provided by management.

I have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of such information. Accordingly, readers are cautioned that these statements may not be appropriate for their purposes.


David Raftery


"David Raftery"

Chartered Accountant

Vancouver, British Columbia
August 28, 2004

NEW GUINEA GOLD CORPORATION

Supplementary cash flow information: Refer to note 8.

NEW GUINEA GOLD CORPORATION

1. NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS

The Company is incorporated in the Yukon Territory, Canada, and is an exploration stage company whose business activity is the exploration of mineral properties located in Papua New Guinea. The Company has not yet determined if any of these properties contain economic mineral reserves and, accordingly, the amounts shown for deferred exploration costs represent costs incurred to date, less write-downs, and do not necessarily reflect present or future values. The recovery of these amounts is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration of the properties, and upon the commencement of future profitable production or, alternatively, upon the Company=s ability to dispose of its interests on an advantageous basis

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These interim consolidate financial statements should be read in conjunction with the Company's audited consolidated financial statements dated December 31, 2003, both of which were prepared in accordance with the Canadian Generally Accepted Accounting Principles. The results for the six month period ended June 30, 2004 are stated utilizing the same accounting policies and methods of application as the most recent annual consolidated financial statements.

3. EQUIPMENT

4. SHARE CAPITAL

Authorized share capital consists of 100,000,000 common shares without par value.

4. SHARE CAPITAL (continued)

(1) Net of share issue costs of $385,993 of which $102,960 was paid in cash, $56,000 was paid in 140,000 units of the Company (each unit consisted of one share and one-half of one share purchase warrant, exercisable at a price of $0.40 for one year), and $30,000 was paid in 75,000 shares of the Company. The remaining $197,033 was representative of the fair value of 525,000 share purchase warrants exercisable at a price of $0.40 for 1 year. Refer to note 4(b).

(2) Net of share issue costs of $482,997, of which $85,237 was paid in cash, $48,400 was paid in 440,000 units of the Company (each unit consisted of one share and one-half of one share purchase warrant, exercisable at a price of $0.12 for one year), and $33,000 was paid in 330,000 shares of the Company. The remaining $316,360 was the fair value of 2,200,000 share purchase warrants exercisable at a price of $0.12 for 1 year. Refer to note 4(b).

(3) Refer to note 5.

(4) Refer to note 6.

(5) Share issue costs relating to 2003 private placement.

b) Stock options

c) Share purchase warrants outstanding at June 30, 2004:

5. MINERAL PROPERTIES

The Company's mineral properties are located in Papua New Guinea.

5. MINERAL PROPERTIES (continued)

The Company has a 100% interest in five and a 90% interest in two exploration projects in Papua New Guinea. The Company originally had a 25% interest in two properties and acquired the remaining interest with the acquisition of Macmin (PNG) Ltd. The Company is conducting operations on the Sinivit, Normanby, Sehulea and Simuku Projects and has optioned out the following:

• Crater Mountain - optioned by agreement dated January 6, 2004, to Celtic Minerals Ltd., a TSX Venture listed company, to acquire subject to regulatory consent, a 51% interest by expending $2,000,000 on exploration prior to March 1, 2006, and a further 25% interest can be acquired upon completion of a further $2,000,000 exploration program prior to March 1, 2009.

• Feni - optioned to Vangold Resources Ltd. ("Vangold"), a TSX Venture listed company, to acquire a 75% interest by performing $2,500,000 in exploration over three years, of which $500,000 must be spent by September 26, 2004, and to issue to the Company 200,000 shares upon receipt of regulatory consent to the agreement (issued) and a further 600,000 shares in stages prior to June 30, 2006. The Company must pay a finders fee of 10% of all share consideration received (20,000 Vangold shares paid).

• Mt. Nakru - optioned to Kanon Resources Ltd. ("Kanon"), whereby Kanon can acquire a 50% interest by spending $250,000 on exploration within two years and issue to the Company 5% of its issued share capital.

• Sehulea - The Company acquired a 30% interest to bring its interest to 100%, subject to a 2% gross royalty, by the issue of 250,000 shares valued at $30,000.

These projects are subject to a 1% NSR royalty payable, and the issue of 9% of the Company's issued share capital to Macmin Silver Ltd. at the time that any mine is developed on these properties and production is acheived in excess of 50,000 ounces of gold or equivalent in any year.


6. KANON REOURCES LTD.


7. MARKETABLE SECURITIES

The Company held marketable securities at June 30, 2004 with a fair market value of $187,200 and a book value of $147,600.

8. SUPPLEMENTARY CASH FLOW INFORMATION

During 2003, the Company:

• Issued 2,250,000 common shares valued at $214,200 for acquisition of a subsidiary.

During 2004, the Company:

• Issued 1,400,000 common shares valued at $7,475 for acquisition in a company to be operated as a joint venture
• Received shares valued at $93,600 as an option payment on a mineral property

9. SUBSEQUENT EVENTS

In addition to items mentioned elsewhere in these notes, the follow occurred subsequent to June 30, 2004:

• The Company issued 1,770,000 stock options exercisable at $0.41 for five years to employees and consultants.