ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

The Company was incorporated under the laws of the Province of British Columbia with the name "Braymart Development Corporation" on July 24, 1986. On July 31, 1987 the Company name was changed to "Spur Industries Corporation". On September 22, 1987, the Company name was changed to "Spur Ventures Inc." In December 1988, the Company conducted a public offering in Canada and became a reporting issuer under the British Columbia Securities Act. The Company was initially engaged in the prospecting and exploration of mineral and oil and gas properties in Canada. By early 1991, the exploration activities had ceased due to lack of capital. On July 31, 1991, the Vancouver Stock Exchange deemed the Company inactive and this status remained until February 16, 1996.

In June 1994, a reorganization program was initiated to reactivate the Company. The Company issued 900,000 units for proceeds of $135,000, with each unit comprising one common share and one warrant, exercisable into one additional share at $0.15. The proceeds from the initial offering and the exercise of all the warrants were used as working capital and to pay down debts.

In November 1995, the Company entered into a farm-in agreement whereby the Company would contribute 13.5% of the drilling and re-completion costs for a group of gas wells in the Fort St. John area of British Columbia and earn a net 5% interest in the gas wells. In December 1995 the Company closed a flow-through private placement for proceeds of $1,350,000, consisting of 4,500,000 units at $0.30 per unit. Each unit consisted of a flow-through share and a warrant exercisable at $0.35 in the first year or at a price of $0.45 in the second year. Under Canadian income tax legislation, corporations may issue "flow-through shares" whereby the corporation agrees to incur qualifying expenditures as defined under the Canadian Income Tax Act (general consisting of exploration and development expenses for mining or oil and gas projects), and renounce the related income tax deduction to investors. A fee of 311,616 shares was paid to brokerage firms for their assistance in completing the financing.

In August 1995, Mr. Y.B. Ian He was appointed President of the Company replacing Gerald Hallgren, with the mandate to identify a project of merit for the Company and its shareholders. In the subsequent one-year period, Mr. He and the Company's Board of Directors reviewed numerous business opportunities and projects, and decided to pursue the Yichang integrated phosphate mining and fertilizer manufacturing project.

On August 29, 1996, the Company entered into a joint venture agreement with Yichang Phosphorous Chemical Co., an industrial arm of the Yichang Prefecture Government, in the People's Republic of China ("China"). In the agreement, the Company obtained an exclusive right to the Yichang phosphate deposits in Yichang, China. The Chinese government has agreed to contribute the mineral deposit property into the joint venture and retain a 10% interest. The Company can earn a 90% interest in the joint venture by taking the property into production.

In August 1997, the Company closed a private placement of 2,290,000 units at a price of $0.85 per unit for proceeds of $1,946,500. Each unit consisted of one share and one two-year warrant attached, exercisable at $0.85 in the first year and $1.00 in the second year.

In March 1999, the Company received final project approval for the Yichang Phosphate Project from the Chinese Cabinet. In the same year, the Company retained a group of North American and Chinese engineering companies led by Florida based Jacobs Engineering Inc. to undertake feasibility study and environmental impact assessment study on the Yichang project.

In October 2000, a feasibility study on the Yichang phosphate project was completed. In December 2000, an environmental impact assessment study on the Yichang phosphate project was completed.

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In March 2001, China State Environmental Protection Bureau approved the environmental impact assessment study.

In early 2002, Spur commenced its application for a mining permit through its Chinese joint venture partner, Yichang Phosphorus Chemical Industry Company (‘YPCC"). The application involves two stages. Stage one is to file an application to delineate the area covering the mineral deposits and to designate the deposits for development by Spur and YPCC. The Chinese Ministry of Land and Mineral Resources gave its approval to this application at the end of 2002. In stage two, an independent valuation will be conducted on the mineral property to give it a deemed value as part of YPCC's contribution to the Yichang project. In April 2002, China State Planning and Development Commission approved the feasibility study.

In December 2002, Spur and YPCC signed a joint venture contract. The joint venture contract mandates both parties to set up a joint venture company, Yichang Maple Leaf Chemicals Ltd. ("YMC"), to develop the Yichang project. According to the contract,YMC was to be owned 90% by Spur and 10% by YPCC.

In November, 2003, the Company entered into an agreement with YPCC to purchase a 72 percent interest in a new joint venture called Yichang Spur Chemicals Ltd. ("YSC"). In December, 2003, the Company received government approval for the YSC joint venture. On April 20, 2004, the Company's interest in YSC was finalized based on closing adjustments as at December 31, 2003 and final negotiations. The Company's interest has been agreed at 72.18%, an increase from the previously announced 65%. YSC was formerly called Xinyuan Chemicals Ltd., but has been renamed and converted into a Sino-foreign joint venture company to accommodate the Company's participation.

The YSC joint venture owns a fertilizer plant in Yichang. The fertilizer plant has been operating substantially below its rated capacity of 100,000 tonnes of annual NPK production since being commissioned in 2000 due to shortages of phosphoric acid, a key ingredient for NPK fertilizer production. To earn its 72.18% interest in YSC, the Company agreed to contribute US$2,500,000 for construction of a 60,000 tpa phosphoric acid plant (the "acid plant"), and agreed to undertake the expansion of the fertilizer plant to 300,000 tpa. The Company has advanced a first payment of US$1,250,000 ($1,658,534) in Q1 2004 and a second payment of US$1,250,000 has been made in Q2 2004 for the construction of the acid plant. The budget for construction of the acid plant is US$2,500,000, but the joint venture is considering increasing the size of certain of the equipment and infrastructure to accommodate future expansions, at an additional cost of approximately US$1 million. No decision has been made on any expansion of the fertilizer plant, other than construction of the acid plant, which will supply enough phosphoric acid for a 300,000 tpa fertilizer plant. Until the acid plant is commissioned, the YSC joint venture is not expected to be profitable. The Company also has agreed to pay interest on the existing debt of one of its partners for 5 years of approximately US$128,307 per year. However, the Company has no obligation to the repayment of debt of its partner.

As a result of the acquisition of an interest in the YSC joint venture, the terms of the original YMC joint venture were renegotiated since the new concept has the fertilizer plant being held and initially expanded under YSC. On April 20, 2004, the Company finalized the restructuring of the YMC joint venture, with the Company's interest in YMC adjusted to 78.72% with YPCC holding 21.28% . The original development plan for YMC called for Spur to earn a 90% interest in YMC by developing a 1 million tpa fertilizer plant integrated with the phosphate mine, originally estimated to cost approximately US$325 million.

The remaining principal assets of YMC are the phosphate deposits and the associated mine development. Due to the need to maintain the nature and scope of the YMC joint venture contract consistent with previous government approvals, the Company agreed that the development of the phosphate deposits and any expansion beyond 300,000 tonnes in annual capacity of the fertilizer plant, be undertaken under the YMC joint venture. Consequently, the estimated investment for the development of 700,000 tonnes of additional fertilizer plant capacity (the other 300,000 tonnes to be undertaken by YSC at the same site), plus the mine development and associated infrastructure has been reduced. The restructuring of the YMC joint venture was completed on April 20, 2004. Final government approval for the restructuring is expected shortly.

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On April 20, 2004, the Company acquired a 72.18% interest in YSC, and accordingly the financial statements of the Company for the quarter ending June 30, 2004 will include the assets and liabilities (including bank debt of approximately the equivalent of US$2,500,000) of YSC on a consolidated basis. An opening set of financial statements for YSC is being prepared and audited at the closing date to enable consolidation into the Spur accounts for the June quarter. The Company has not guaranteed the liabilities of YSC.

Under the new terms of the YMC joint venture, the Company is required to make a US$3,834,000 capital contribution into YMC within three months of receipt of Chinese government approval for the restructuring. This amount represents the estimated cost of commissioning a mining facility capable of producing sufficient phosphate rock to supply at least a 100,000 tpa NPK fertilizer facility. The Company has already advanced $700,000 of this amount for costs associated with the issue of the mining license, engineering and design work, of which $500,000 was advanced in Q1 2004 and $200,000 advanced during 2002.

The total investment to be made by the Company in YMC is US$25,561,000 over 5 years, of which only the initial US$3,834,000 is a firm commitment. The balance of US$21,727,000 is to be invested over five years on a best efforts basis, as follows:

The US$25,561,000 represents the estimated minimum equity required to finance the total investment over the next five years to develop the phosphate mine and to expand the fertilizer plant from 300,000 tpa to 1 million tpa, estimated at US$93 million. The cost of mine development to supply a 1.2 million tpa mining rate is estimated at USD$29.8 million, including the value of YPCC's contribution of the deposit, working capital and contingencies over the 5 year development period. The estimated capital cost of expanding the fertilizer plant from 300,000 tpa capacity to 1million tpa is approximately US$49.8 million, plus working capital, contingencies and capitalized interest during construction over the next 5 years for a total of US$63.1 million. The balance above the equity to be contributed by the Company is anticipated to be financed though debt and cash flow.

If there is a conflict between the investment circumstances or market conditions and the investment schedule, the Company shall be entitled to make necessary adjustment to the investment schedule.

The key focus of activities in Q2 2004 include construction of the phosphoric acid plant at YSC which is scheduled to be commissioned in December 2004, detailed engineering studies for the expansion of the YSC fertilizer plant to 300,000 tpa, and the development of the phosphate mine and associated plant on a staged basis consistent with the planned fertilizer plant expansion. The Company is also engaging in an executive search to augment the management team in China at the YSC plant.

Yichang Integrated Phosphate Mining and Fertilizer Project

The Company's Yichang phosphate mining and fertilizer project in China is held through two separate joint ventures, YMC and YSC, with YMC holding the mining rights and assets, and YSC owning an existing fertilizer facility in Yichang. It is the Company's intention to merge the two joint ventures in the future, which will integrate phosphate rock mining with down stream chemical processing to produce high-analysis phosphate fertilizers for the China markets.

Regulatory Approvals . On December 19, 1996, the Yichang Prefecture Government approved the joint venture. On March 4, 1997, the Hubei Provincial Government completed its review and gave the project approval. Hubei Provincial Government and the Ministry of Chemical Industry filed an application to allocate Yichang phosphate mineral deposits for large-scale development and prohibit county level government and small-scale

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mining operations from encroaching on the deposit. On November 21, 1997, the Chinese Ministry of Chemical Industry completed its review and gave the project approval. On March 2, 1998, the primary environmental review of the project was completed and approved by the Hubei Provincial Bureau of Environment. On August 27, 1998, the State Planning Commission held its Ministers' meeting on the project and gave the project approval. In February 1999, the State Council (China's Cabinet) gave the project final approval. On February 13, 1999 the State Planning and Development Commission issued a final letter of approval for the Yichang Phosphate Project.

With the final project approval from the Federal Planning and Development Commission, the Company has the exclusive right to develop the Yichang phosphate project. There is no term attached to this exclusive right. The Company also has the legal right to work on a feasibility study of the Yichang project, to request and compile all the relevant technical and economic data and information, and to conduct site visit and field trips.

In November 2000, both feasibility study and environmental impact assessment study on the Yichang project were completed. Both reports were submitted to Chinese government for regulatory approval. In March 2001, the environmental impact assessment study obtained approval from China's State Environmental Protection Bureau. In April 2002, the China' State Planning and Development Commission gave its final approval to the feasibility study.

In early 2002, Spur commenced its application for mining permit through its Chinese joint venture partner, YPCC. The application involves two stages. Stage one is to file an application to delineate the area covering the mineral deposits and to designate the deposits for development by Spur and YPCC. The Chinese Ministry of Land and Mineral Resources gave its approval to this application in February 2003. In stage two, an independent valuation will be conducted on the mineral property to give it a deemed value as part of YPCC's contribution to the Yichang project.

In April 2004, the Supplementary Agreement respecting the restructuring of YMC was signed and application will be made for approval of the restructuring.

Technical Evaluations . The technical evaluation on the project consists principally of a feasibility study and environmental assessment impact study. These studies are essential in determine the viability of the project, in obtaining equity and debt financing, and in negotiating joint venture partnership.

In January 1999, the Company retained Jacobs Engineering Inc. ("Jacobs"), to undertake a feasibility study on the Yichang project. Jacobs Engineering Inc., a New York Stock Exchange listed company, is one of the world's largest engineering and construction services firms. Jacobs' phosphate engineering unit is located at Lakeland, Florida. Jacobs Engineering started the feasibility study on the Yichang phosphate project in collaboration with six international engineering firms. In the proposed study, the engineers and consultants examined in detail the project's geology, mining, beneficiation, slurry pipeline, chemical plants, infrastructure, environmental, and economic return. It provides capital and operating cost projections within a +/- 15% range of accuracy. The study was completed in October 2000, and concluded that the Yichang phosphate project is technically and economically feasible.

The feasibility study estimated the total initial capital cost for the project at US$371 million. The facilities are proposed to include a 2.2 million t/y mine operation, a beneficiation plan capable of producing 1.25 million t/y phosphate concentrate, a 126 km long pipeline to transport the phosphate concentrate, a chemical complex capable of producing 1 million t/y high-analysis DAP and NPK fertilizers, and a river jetty to ship in raw materials and to ship out finished products. Expenditures of sustaining (replacement) capital will begin in year 2 throughout the life of the project to maintain the operations at their rated capacities. Replacement capital is estimated to average about US$7.7 million/year. The cash production costs for DAP and NPK are estimated at US$93.6/tonne and US$85.0/tonne, respectively. The average cost for DAP in the US is US$146/tonne (The Fertiliser Institute, 1999 survey). The total cost of producing DAP for the Yichang project is estimated at US$132.0/tonne, allowing for general and administrative costs, value added tax, and depreciation. The IRR of

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the project is estimated at 32.9% assuming 35% equity and 65% debt at 10% interest rate. The feasibility study obtained approval from China's State Planning Commission in April 2002.

In May 2000, the environmental impact study on the Yichang project was started jointly by the Hubei Environmental Research Institute, Wuhuan Chemical Engineering Corp. and three other collaborating engineering firms, and was completed in November 2000. The study concluded that the potential gas emissions, fluid discharges, and solid disposals from these proposed facilities all satisfy the standards set by Chinese environmental regulations. In particular, the study noted that the Yichang project's proposed chemical complex was designed based on the highest environmental standards in North America. A public opinion poll and survey were also conducted in the affected area. Approximately 130 local residents in different social and economical strata were randomly surveyed. Approximately 93.8% of those surveyed are aware of the Yichang project and approximately 97.9% support the project. The environmental impact study report was submitted to China Environmental Protection Bureau for review and approval. The approval was subsequently obtained in March 2001.

In 2001, Spur commissioned Jacobs to conduct further studies to examine different alternatives for project implementation and product mix. The purpose of these efforts is to further optimize the project economics and to make project more compatible with corporate strategies of potential strategic partners. In one scenario, Jacobs proposed to execute the project in two stages. In stage one, a fertilizer plant will be built, which would use purchased phosphoric acid. The construction of mining and phosphoric acid facilities will be started in stage two a few years after stage one is completed.

In 2003, James S. Spalding, a consultant for Jacobs, completed a report entitled "Summary Report on Yichang Integrated Phosphate Mining and Fertilizer Project, Hubei Province, China. This report was intended to be a summary of the Feasibility Study prepared by Jacobs in 1999, and an update of data to standards set by Canadian Securities Administrators National Instrument 43-101. The Executive Summary of the report is set out below. The full text of the report may be found with the Company's filings at www.sedar.com .

The Yichang Phosphate District area, roughly centered at 111 O 20'E. and 31 O 20'N., is located approximately 100 km NNW of the city of Yichang, Hubei Province, People's Republic of China. Five individual deposits are dedicated to the Yichang project for Spur Ventures Inc. This group of five deposits is more-or-less contiguous and stretches about 11 km in the north-south direction and about 17 km in the east-west direction. These individual deposits cover an area of about 45 km 2.

The phosphate ore is of sedimentary origin and contained in the Doushantuo Formation of Upper Sinian age (Upper Precambrian). The Doushantuo Formation is characterized as the oldest phosphatic sedimentary sequence in southern China deposited about 650 to 700 million years ago. In the five deposits under study, phosphate bed Ph1 3 is of primary economic importance. The floor material below this relatively flat laying phosphate bed is shale and the roof material is a competent dolomite. The phosphate bed is divided into three distinctly different layers, the combination of which determines the characteristics of the total ore section at any given location. The bottom layer is described as the "lower lean layer" and is composed of banded phosphorite and black potassic shale. The next layer is the high-grade section described as the "middle rich layer." It is composed of alternating bands of coarse and fine phosphorite. The upper-most layer is called the "upper lean layer" and is composed of alternating bands of phosphorite and dolomite. The thickness of each layer ranges from 0 to as much as 4 meters. There are locations where only a single layer is present (generally lower or upper lean) and other locations where only two layers are present.

The two primary deposits, Dianziping and Shukongping, with 121 and 46 drill sample sites respectively, have been adequately explored and contain a total of 75 million tonnes of proven and probable ore reserves at 24% P ₂ O ₅ . These in-situ tonnages were established with an ore grade cut-off of 12% P ₂ O ₅ and an ore thickness cut-off of 1.5 metres. The two primary deposits have sufficient reserves to justify the 20-year project life. Reserves were defined by data from 121 sample sites at Dianziping and 46 sample sites at Shukongping.

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The remaining three deposits are currently viewed as subsidiary deposits. They will serve as replacement "orebodies" for the primary orebodies which are currently scheduled for depletion approximately 20 years after initial large-scale operations are begun. The current level of exploration and development on the three properties can best be described as preliminary. Much work remains to be completed to fully characterize each of the deposits in preparation for exploitation design. The total measured and indicated resources of the three subsidiary deposits are 396.1 million tonnes with 20.8% P ₂ O ₅ .

Spur Ventures Inc. commissioned Jacobs Engineering Inc. (Jacobs) to conduct a feasibility study on the Yichang Phosphate Project. The feasibility study was completed in November 2000. In April 2002, Jacobs prepared a supplemental report that examined implementing the project in two phases with product mix alternatives, based on updated prices of raw materials and products.

The feasibility study proposed the development of the Yichang Phosphate Project with integrated mining and fertilizer production to convert Chinese phosphate resources into high analysis fertilizers. Rich phosphate ore will be extracted and upgraded at the mine site. The resultant concentrate will be transported 126 km by slurry pipeline to a chemical complex near the Yangtze River, where the phosphate is converted to diammonium phosphate (DAP) and complex fertilizer (NPK). The fertilizer products will be distributed to Chinese agricultural areas via the Yangtze River and the existing railroad system. Over the last six years, China has imported about 5 Mt/a of DAP, and the demand for NPK has increased.

The feasibility study was based on room-and pillar mining and heavy media separation as the method of producing a phosphate rock concentrate. The resultant concentrate would be ground into fine particles and pumped as high solids slurry to the Maojiagang chemical complex, about 23 km SE of Yichang City. In the chemical complex, the phosphate concentrate would be reacted with sulfuric acid to produce phosphoric acid and a phosphogypsum waste. Part of the phosphoric acid would be reacted with ammonia to produce 480,000 t/a DAP. The remaining phosphoric acid would be reacted with ammonia and potash to produce 528,000 t/a NPK. These high analysis granular fertilizers would be conveyed to the nearby storage and bagging facility adjacent to the jetty on the Yangtze River. Bulk and bagged fertilizer shipments would be dispatched via low cost water freight to various distribution centers and customers in China.

The feasibility study and the supplemental study demonstrated that the Yichang phosphate project is technically and economically feasible. Spur Ventures Inc. (Spur), a Canadian natural resource company headquartered in Vancouver, British Columbia, has the requisite Chinese government approvals at the local, provincial, and national levels, to take the lead role in developing the Yichang Phosphate Project. Spur Ventures Inc. will earn a 90% interest in the project by bringing the project into production. Spur's Chinese joint venture partner, the Yichang Phosphorous Chemicals Co. Ltd., a state-owned company, will earn a 10% interest in the Yichang Phosphate Project by contributing the mineral properties, land, and its early investment into the Yichang project. The mining permit application was started in the third quarter of 2002. A preliminary approval was obtained in the first quarter of 2003.

The following shows the structure of the Company's material subsidiaries.

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Project history and status

Exploration programs (1973-1987)

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