Edgar Filing: BAY RESOURCES LTD

United States
Securities and Exchange Commission
Washington D.C. 20549

FORM 10-KSB

Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
(Mark one)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended June 30, 2005 or
--------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ________________ to _______________

Commission File Number 0-16097
--------

BAY RESOURCES LTD.
(Exact name of Registrant as specified in its charter)

Delaware 98-0079697
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organisation) Identification No.)

Level 8, 580 St Kilda Road Melbourne, Victoria, 3004, Australia
------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code 011 (613) 8532 2860
-------------------

Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of each exchange
on which registered
N/A N/A
--- ---

Securities registered pursuant to Section 12(g) of the Act:
Common stock, par value $.0001 per share
----------------------------------------
(Title of Class)

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 the past 90 days.

Yes X No _

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.|X|

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act)

Yes _ No X

State Issuer's Revenues for its most recent fiscal year.

None

The aggregate market value based on the average bid and asked price on the
over-the-counter market of the Registrant's common stock, ("Common Stock") held
by non-affiliates of the Company was US$5,324,902 as at June 30, 2005.

There were 16,711,630 outstanding shares of Common Stock as of September 22,
2005.

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable

Transitional Small Business Issuer Yes:___ No:_X_

TABLE OF CONTENTS PAGE

PART I
Item 1 Business 1
Item 2 Properties 35
Item 3 Legal Proceedings 35
Item 4 Submission of Matters to a Vote of Security Holders 35

PART II
Item 5 Market for Common Equity and Related Stockholder Matters 36
Item 6 Management's Discussion and Analysis of Financial Condition
or Plan of Operation 37
Item 7 Financial Statements 44
Item 8 Changes in and Disagreements with Accountants on
Accounting and Financial Statement Disclosure 44
Item 8A Controls and Procedures 44

PART III
Item 9 Directors and Executive Officers of the Registrant 46
Item 10 Executive Compensation 48
Item 11 Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters 51
Item 12 Certain Relationships and Related Transactions 54

Part IV
Item 13 Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 59
Item 14 Principal Accounting Fees and Services 59

Signatures 60
Exhibit Index 62

Appendix A - Glossary
Appendix B - List of Mining Interests

PART I

Item 1 Business

General

Our name is Bay Resources Ltd. and we sometimes refer to ourselves in this
annual report as "Bay Resources", the "Company" or as "we," "our," or "us." We
are an exploration stage mining company. Our objective is to exploit our
interest in the mineral claims in Nunavut, Canada which are in the Committee Bay
Greenstone Belt and in the Slave Craton. Our principal exploration target is for
gold and we are seeking to determine whether adequate gold reserves are present
on the property covered by our claims to develop an operating mine. We are in
the initial stages of our exploration program and have not yet identified any
ore reserves.

We hold the interest in the Slave Craton and our wholly owned subsidiary named
"Golden Bull Resources Corporation" (formerly 4075251 Canada Inc.) holds the
interests in the Committee Bay Greenstone Belt. Our wholly-owned subsidiary is
referred to in this annual report as `Golden Bull."

We sometimes refer to our claims collectively in this annual report as either
the "Committee Bay Properties" or the "Slave Properties". Our claims are
registered in the Mining Recorders Office in the Mining District of Nunavut and
give us the right to explore and mine minerals from the property covered by the
claims.

We were incorporated in the State of Delaware on February 1, 1973. We commenced
our mineral exploration activities in 2002. Prior thereto, we were engaged in a
number of other business activities that have been discontinued. Our executive
offices are at Level 8, 580 St. Kilda Road, Melbourne, Victoria 3004 Australia
and we have an office at 1 Yonge Street, Suite 1801, Toronto, Ontario M5E 1W7,
Canada. Our website location is www.bayresourcesltd.com and you can send an
email to us at peter@bayresourcesltd.com. Our wholly owned subsidiary, Golden
Bull, was incorporated on May 27, 2002 in the Province of Ontario, Canada and is
licensed to do business in the Northwest Territories and Nunavut Canada.

Currency

We use the Australian dollar as our reporting currency, since we are
headquartered in Australia and our administrative expenses are incurred in
Australian dollars. References to dollars are to Australian dollars (A$) unless
otherwise indicated as being Canadian dollars (CDN$) or United States dollars
(US$). As of September 20, 2005, the currency exchange rate was approximately
US$1.00 equals A$1.30504, and US$1.00 equals CDN $1.17020, as published by
Bloomberg at www.Bloomberg.com. For the convenience of the reader, the
Australian Dollar figures for the year ended June 30, 2005 have been translated
into United States Dollars ("US$) using the rate of exchange at June 30, 2005 of
A$1.00=US$0.7620.

History of the Company

Our predecessor corporation, Bayou Oil, was incorporated under the laws of
Minnesota in 1973 and since that time it had a number of activities that have
been ceased.

On February 13, 1998, we incorporated a 100% owned subsidiary, Bayou Australia
Pty Ltd, a corporation incorporated under the laws of Australia.

On June 29, 1999 we undertook a reverse stock split on a 1:20 basis and changed
our Articles of Incorporation to amend the par value of our shares from US$0.15
cents to US$0.0001 cents per share. On September 27, 1999 we changed our name
from Bayou International, Ltd to Baynet, Ltd.

In May 2000, we commenced work on the development of a B2B mining portal
however, this is no longer proceeding as it was considered uneconomic.

On July 13, 2000 we changed the name of our subsidiary, Bayou Australia Pty Ltd
to Baynex.com Pty Ltd. On August 21, 2000 we incorporated a new wholly owned
subsidiary, Baynet International Pty Ltd, a corporation incorporated under the
laws of Australia. In October 2000, it changed its name to Bay Resources (Asia)
Pty Ltd.

During fiscal 2001, we conducted a due diligence review of St. Andrew Goldfields
Ltd ("St. Andrew") with a view to taking a substantial investment in St. Andrew.
Following the conclusion of the review, we decided not to proceed with the
investment.

During the 2002 fiscal year we commenced our gold exploration business by:

(i) entering into an agreement to explore for gold on Tahera's extensive
property interests on the Slave Craton in northern Canada; and

(ii) making application via Gold Bull, for properties in the highly
prospective Committee Bay Greenstone Belt in Nunavut, Canada.

In October 2002 we entered into an agreement (via our wholly owned subsidiary
Bay Resources (Asia) Pty Ltd) with the Tibet Bureau of Geology and Minerals
Exploration Development, China to earn a minimum 51% interest in the Xigaze
copper belt running in a 200 kilometer east-west trend either side of Lhasa.
However, in February 2003 we decided to withdraw from these arrangements as a
result of further hurdles being placed before us by the Chinese authorities that
were not known at the time of entering into the agreement.

In April 2004, we raised US$1,670,000 (A$2,253,000) through a private placement,
issued 1,753,984 shares of common stock and 1,753,984 warrants to repay all of
our debt and commenced exploration on the Slave Craton and Committee Bay
properties.

It is the policy of our Board of Directors that we will not engage in any
activities which would subject us to registration and reporting requirements of
the Investment Company Act of 1940.

Description Of Business

We are an exploration stage mining company. Our objective is to exploit our
interest in the mineral claims in Nunavut, Canada. We hold interests in the
Slave Craton and through our wholly owned subsidiary, Golden Bull Resources, in
the Committee Bay Greenstone Belt in Nunavut. Our principal exploration target
is for gold and we are seeking to determine whether adequate gold reserves are
present on the property covered by our claims to develop an operating mine. We
are in the initial stages of our exploration programs and have not yet
identified any ore reserves.

Slave Craton Project

During 2002, we reached an agreement with the Canadian company, Tahera Diamond
Corporation, to explore for gold on Tahera's extensive properties on the Slave
Craton in Nunavut, Canada. At that time, Tahera's Slave land package includes
177 claims and 11 Inuit Land Concessions covering approximately 471,000 acres.
Tahera is a exploration company conducting diamond exploration in the northern
Slave Craton and plans to bring its Jericho diamond pipe into production in late
2005. Tahera has put together an extensive database of geologic and geophysical
information and does not wish to conduct exploration for gold and base metals.
Under the agreement, they will allow us to use the database to explore for gold.
We have agreed to pay them a two percent net smelter return royalty on any
production from gold and base metals we discover having used Tahera's extensive
database.

The Tahera data to which we have access, includes electromagnetic geophysical
surveys, overburden and bedrock mapping, overburden sampling and drilling data.
The overburden samples cover some 60,000 square kilometers of the northern Slave
Craton with some 17,000 samples being potentially available for gold and
base-metal analysis. The overburden samples have been taken on a reconnaissance
scale with line intervals at 2.5-5.0 kilometers with some detailed surveys at
50-100 meter sample spacings. The samples cover areas of known gold
mineralisation including in the vicinity of the Lupin and Ulu gold deposits.

We believe there are some exceptional gold targets on Tahera's ground;
principally in the High Lake Volcanic Belt, and in the Contwoyto Formation near
Lupin. In the High Lake Volcanic Belt, several high grade gold showings on the
ground include surface samples of 24 grams per tonne ("gpt gold"), 130 gpt gold,
176 gpt gold, and 220 gpt gold, and drillhole intersections to 25.5 gpt gold /
1.54 meters. The target is silicified shear-hosted gold, similar to the 565,000
ounce ULU gold deposit which borders the Tahera ground.

Tahera's Jericho and Contwoyto properties lie in close proximity to the Lupin
gold mine, which is a high grade, gold deposit of over three million ounces. We
believe that there is significant potential for gold mineralization, similar to
that found at Lupin, on Tahera's Jericho and Contwoyto properties. Previous work
has revealed surface gold values of 11 gpt, 15 gpt, 21 gpt, and 28 gpt gold in
Banded Iron Formation ("BIF"). The geology is very similar to the nearby Lupin
gold mine (2-3 kilometers to the west) where gold mineralization is in a "Z"
folded iron formation. The R43-R45 target on Tahera's ground is a 10 meters
wide, 1.3 kilometers long iron formation, that has an unsampled "Z" fold of the
same magnitude as Lupin.

We have included a list of the mining claims that are covered under our
agreement with Tahera in Appendix B to this report.

Committee Bay Greenstone Belt Project

In June 2002, we staked land in the highly prospective Committee Bay Greenstone
Belt.

The Committee Bay Greenstone Belt is located approximately 240 kilometers
northeast of Baker Lake in Nunavut, Canada and is believed to represent one of
the largest unexplored greenstone belts in North America, with potential to host
world-class gold deposits. The Baker Lake area is best known for the Meliadine
gold Project, currently in the pre-feasibility stage.

Originally 29 claims were staked totalling a land area of 71,694 acres in the
Committee Bay Greenstone Belt in central Nunavut, Canada. These claims were
recorded on October 16, 2002. From the original area we retained a total of
49,439.48 acres on 21 claims. To keep the claims in good standing, we needed to
spend a total of CDN$197,798 of assessment work by October 16, 2004. A total of
CDN$98,879 (CDN$2 per acre) is required in each subsequent year up to 2012 (at
which point a decision to bring the claims to lease must be made). We have
included a list of our mining claims in the Committee Bay Greenstone Belt in
Appendix B to this report.

The Canadian Government completed a Targeted Geoscience Initiative ("TGI")
between 2000-2003 in the Archean Committee Bay Greenstone Belt. Total government
funding for the Committee Bay Greenstone Belt TGI area was approximately CN$3.5
million. The stated objective of the TGI was to increase the level and
cost-effectiveness of private sector exploration for mineral resources.
Government work in the Committee Bay Greenstone Belt included 1:100,000 scale
geologic mapping, prospecting, surficial mapping, drift prospecting, and
airborne geophysics (400 meter flight line spacing). A joint government-industry
(GSC - DeBeers Exploration Canada Ltd.) partnership initiated in 2001, involves
heavy-mineral analysis of esker samples for diamond indicator minerals.

The stratigraphy of the Committee Bay Greenstone Belt includes Banded Iron
Formations (BIF) up to 50 meters thick, komatiite volcanic flows, basalts,
intermediate to felsic tuffs, and quartz-cobble conglomerates. Deformation is
recorded by major shear zones, second order faults, complex folding, and felsic
intrusions. Numerous gold showings are spread out over a 260 x 40 kilometer area
including the Inuk zone (12.8 gpt gold over 5 meters) in northeast Committee Bay
and the Three Bluffs zone (27.41 gpt gold over 9.44 meters) in the Hayes River
area.

Our Wrench claim group adjoins the Bluff claim block, where the mine grade/width
intersections of 27.41 gpt gold over 9.44 meters and 61.6 gpt gold over 4.84
meters were announced in September 2003 by Committee Bay Resources Ltd ("CBR"),
a company listed on the Toronto Venture Exchange with a large landholding in the
Committee Bay Greenstone Belt. The government airborne magnetic survey shows
that oxide iron formation (the host at the Three Bluffs discovery) strikes
northeast from their showing onto our Wrench claims. A number of gold
occurrences are known on this trend, including a 9.7 gpt gold sample taken in an
area of folded oxide iron formation, quartz veining and pyrite + pyrrhotite on
our Wrench claim.

The geology is highly prospective for BIF hosted gold (as in the 3 million ounce
Meadowbank and the 4.6 million ounce Meliadine gold deposits to the south). Our
claims protect several auriferous iron formations with surface values to 9.7 gpt
gold. In addition to the BIF hosted gold targets, this Belt has potential for
shear-hosted lode gold, Witswaterstrand style gold, komatiite hosted stratiform
nickel-copper (Kambalda analogy), and platinum group elements ("PGE's") in
layered igneous complexes (Laughland Lake Anorthosite Suite). Samples from
previous work in the Committee Bay area returned samples up to 245 gpt gold,
0.5% nickel, and 0.8% copper.

The region is best known for the Meliadine Gold Project, which is currently in
the pre-feasibility stage, as well as the Meadowbank Project of Cumberland
Resources, which is in post feasibility stage. These two projects host 7.5
million ounces of gold resources. The Committee Bay Greenstone Belt is also
situated in the same general area as the developing diamond play currently being
explored by De Beers, BHP-Billiton, and Stornoway Ventures Ltd. We have
accumulated a large landholding in the Belt.

CBR signed a letter of intent with Gold Fields Explorations Ltd, in June 2003,
to form a joint venture, whereby Gold Fields Exploration will take an equity
position in CBR and will spend US$10 million on exploration to earn a 65%
interest in that project.

Mining In Canada

The mining industry in Canada operates under both federal and provincial or
territorial legislation governing the exploration, development, production and
decommissioning of mines. Such legislation relates to the method of acquisition
and ownership of mining rights, labour, health and safety standards, royalties,
mining and income taxes, exports, reclamation and rehabilitation of mines, and
other matters. The mining industry in Canada is also subject to legislation at
both the federal and provincial or territorial levels concerning the protection
of the environment. Legislation imposes high standards on the mining industry to
reduce or eliminate the effects of waste generated by extraction and processing
operations and subsequently deposited on the ground or emitted into the air or
water. The design of mines and mills, and the conduct of extraction and
processing operations, are subject to the regulatory restrictions. The
exploration, construction, development and operation of a mine, mill or refinery
require compliance with environmental legislation and regulatory reviews, and
the obtaining of land use and other permits, water licenses and similar
authorizations from various governmental agencies. Legislation is in place for
lands under federal jurisdiction or located in certain provinces and territories
that provides for the preparation of costly environmental impact assessment
reports prior to the commencement of any mining operations. These reports
require a detailed technical and scientific assessment as well as a prediction
of the impact on the environment of proposed mine exploration and development.

Failure to comply with the requirements of environmental legislation may result
in regulatory or court orders being issued that could result in the cessation,
curtailment or modification of operations or that could require the installation
of additional facilities or equipment to protect the environment. Violators may
be required to compensate those suffering loss or damage by reason of mining
activities and the violators, including our officers and directors, may be fined
or, in some cases, imprisoned if convicted of an offence under such legislation.
Provincial and territorial mining legislation establishes requirements for the
decommissioning, reclamation and rehabilitation of mining properties that are
closed. Closure requirements relate to the protection and restoration of the
environment and the protection of public safety. Some former mining properties
must be managed for a long time following closure in order to fulfill regulatory
closure requirements. The cost of closure of existing and former mining
properties and, in particular, the cost of long-term management of open or
closed mining properties can be substantial.

Government Regulations

We are committed to complying and, to our knowledge, are in compliance with all
governmental and environmental regulations. Permits from a variety of regulatory
authorities are required for many aspects of mine operation and reclamation. Our
exploration work is subject to the Mining Land Use Regulations of the Indian and
Northern Affairs Canada Mining Act. This Act requires us to obtain permits prior
to performing significant exploration programs. We are currently conducting
exploration under a Land Use Permit, which is valid until June 20, 2006.

We cannot predict the extent to which future legislation and regulation could
cause additional expense, capital expenditures, restrictions, and delays in the
development of our Canadian properties, including those with respect to mining
claims. Our activities are not only subject to extensive federal, provincial and
local regulations controlling the mining of and exploration for mineral
properties, but also the possible effects of such activities upon the
environment. We will be obligated to take steps to ensure that such streams
draining the property do not become contaminated as a result of our activities
on the property. We are not aware of any environmental problems on the property
as of the date of this prospectus.

The mining industry in Nunavut, where our exploration properties are situated,
operates under Canadian federal and territorial legislation governing
prospecting, development, production, environmental protection, exports, income
taxes, labour standards, mine safety and other matters. We believe our Canadian
operations are operating in substantial compliance with applicable law.

Our exploration works is subject to environmental regulation primarily by the
Federal Department of Indian Affairs and Northern Development and the Nunavut
Water Board. The Department of Fisheries & Oceans (Canada) and the Department of
the Environment (Canada) have an enforcement role in the event of environmental
incidents, but presently have no direct regulatory role in relation to
exploration activity.

On April 1, 1999, the Nunavut Land Claims Agreement, dated May 28, 1993, between
the Inuit of Canada's eastern arctic region and Her Majesty the Queen in right
of Canada, came into force. Under this agreement, the Inuit were granted
ownership of approximately 360,000 square kilometers of land in an area referred
to as the Nunavut Settlement Area, including ownership of subsurface rights in
approximately 37,500 square kilometers of those lands. Third party interests in
lands in the Nunavut Settlement Area created prior to April 1, 1999 are
protected under the Nunavut Land Claims Agreement. Where a third party was
granted a mining lease under the Canada Mining Regulations in lands comprising
the Nunavut Settlement Area, that interest continues in accordance with the
terms and conditions on which it was granted, including any rights granted under
the legislation that give rise to the interest. However, where any successor
legislation has the effect of diminishing the rights afforded to the federal
government, it will not bind the Inuit without its consent. The Inuit are
entitled to receive whatever compensation is payable by the interest holder for
the use of exploitation of mineral rights. The federal government continues to
administer the third party interest on behalf of the Inuit, unless the third
party and the Inuit enter into an agreement under which the third party agrees
to the administration of their interest by the Inuit. In the event such an
agreement is reached, the applicable legislation will cease to apply to the
third party interest. Subsurface interests in such lands continue to be
administered in accordance with applicable legislation relating to those
interests and are not affected by the Nunavut Land Claims Agreement.

Third party interests in lands in the Nunavut Settlement Area created on or
after April 1, 1999 are granted, in the case of surface rights, by the
appropriate regional Inuit association and, in the case of subsurface rights, by
Nunavut Tungavik Incorporated. Which will hold subsurface title to Inuit owned
lands and will be additionally responsible, in consultation with the appropriate
regional Inuit associations, for the administration and management of those
subsurface rights.

Government Requirements For Maintenance Of Claims

Slave Craton

Fees and exploration expenditures associated with the maintenance of Tahera
Corporation's ground covered under the Slave Craton Agreement with Bay Resources
is the responsibility of Tahera.

Committee Bay Greenstone Belt

The Nunavut Government has granted our interest in the 21 mineral claims in the
Committee Bay Greenstone Belt described in this Report.

To keep the 21 claims in good standing, we were required to spend a total of
CDN$197,798 of qualifying assessment work by October 16, 2004. Assessment work
must be filed with the Mining Recorder within 30 days of the claim's anniversary
date or within 60 days of the lapsing notice date. We actually spent
CDN$1,566,962.

A total of CDN$98,879 (CDN$2 per acre) is required in each subsequent year up
to 2012 (at which point a decision to bring the claims to lease must be made).
However, the excess of CDN$1,369,164 spent can be used to offset the expenditure
requirement in following years. As a result we have already met our commitment
until 2012.

Description of Exploration Properties

Please note that the Glossary at the end of this Report contains definitions for
the geological and other specialized terms used in this section.

Property Location And Description

Slave Craton

Hood River Ground

The Hood River mineral claims and Inuit Owned Land Concessions are in the High
Lake Volcanic Belt located in the northwest section of the Slave Structural
Province in the Mackenzie District of Nunavut (Figure 1) on NTS Map Sheets:
76L/10, 14, and 15 and 76M/3. The land holdings here include 4 mining claims
(Hood 3, 4, 12, and 14) totalling 10,330 acres, and 5 contiguous IOL concessions
(CO 20-00-01, CO 20-00-03a, CO 20-00-03b, CO 20-00-04, and CO 20-01-01)
totalling 21,381.64 acres. Only the IOL concessions are within the greenstone
component of the High Lake Volcanic Belt and therefore of exploration interest
to us. The approximate center of the Inuit Concessions is about 45 kilometers
north of the Arctic Circle, and 530 kilometers NNE of Yellowknife at 66o 54' 37"
N, 110o 55' 12"W. The Inuit Concessions are held 50:50 by Benachee Resources
Inc. and Snowpipe Resources Ltd. (both wholly owned by Tahera). There are no
known encumbrances on the concessions. Tahera's land use permits are in effect
for 2005 and will cover proposed exploration work by us.

Contwoyto Lake Ground

The CO-08 IOL Concession underlain by the Contwoyto Formation on the east side
of Contwoyto Lake contains blocks (CO 08-00-01, CO 08-00-02, CO 08-00-03, CO
08-00-05, and CO 08-00-06). The original C0-08 Concession Agreement totaled
65,250.8 acres and is located in the Mackenzie District of Nunavut (Figure 1) on
NTS Map 76E/15. These concessions are all contiguous except for CO 08-00-01
which is approximately 1-2 kilometers west of the main block, separated by the
northeast arm of Contwoyto Lake. The approximate center of the C0-08 Concession
is about 100 kilometers south of the Arctic Circle, 100 kilometers
north-northwest of Lac de Gras, and 380 kilometers NNE of Yellowknife at 65o 49'
23" N, 111 o 13' 08"W. The C0-08 Concession Agreement is held 50:50 by Benachee
Resources Inc. and Snowpipe Resources Ltd. (both wholly owned by Tahera). The
IOL concessions are not surveyed and there are no known encumbrances on the
concessions. Tahera's land use permits for 2005 are in effect and will cover
proposed exploration work by us.

Committee Bay Greenstone Belt

Our Committee Bay Claims are located 245 to 365 kilometers northeast of the town
of Baker Lake (Qamani'tuaq), Nunavut, Canada, or 210 to 320 kilometers west to
southwest of the town of Repulse Bay (Ngoldjat). The community of Kagaaruk
(formerly Pelly Bay) is 190 to 305 kilometers northeast of the claim groups. The
centre of the claim area is approximately 66(degree) 37'N, 92(degree) 00'W.

Our land holdings in the Committee Bay Greenstone Belt include 21 claims in 10
claim blocks on NTS (National Topographic System) sheets 56 K, 56 J, and 56 O.
These claims total approximately 49,439.48 acres and all were recorded on
October 16, 2002. These claims have not been legally surveyed.

Access, Infrastructure, Local Resources

Slave Craton

Access to all the areas in the Slave Craton is by aircraft. In summer months,
float equipped aircraft can utilize local lakes of appropriate size including
Contwoyto Lake, Napatulik Lake, Penthouse Lake (unofficial name), and Carat
Lake. In addition airstrips are available for fixed wing aircraft equipped with
tundra tires at Kinross' Lupin mine site, Wolfden's Ulu gold deposit, and
Tahera's Carat Camp (Jericho). Helicopter support is needed to mobilize
personnel to and within the property areas. The winter road which links
Yellowknife to the Lupin mine site on Contwoyto Lake has historically been used
for economical transportation of supplies in winter months.

Tahera's properties are located in the treeless Arctic within the zone of
permafrost. Vegetation consists primarily of lichen and moss. The weather in the
property areas is typical of the continental barrenlands which experience cool
summers and extremely cold winters. Winter temperatures can reach -45 degrees
Celsius occasionally accompanied by high winds creating extreme wind chill
conditions and extensive drifting snow. Summer temperatures are generally in the
5 to 10 degree Celsius range but can reach the high 20's degrees Celsius.
Minimum and maximum temperatures recorded at the nearest permanent weather
stations are -53(0) C at the Lupin mines site, and +32(0) C at Coppermine. The
ground remains snow covered for more than 250 days a year. Snow accumulation
begins in September and remains into June. Average annual snowfall rarely
exceeds 1 meter, most of which falls during autumn and spring storms. Small
lakes are clear of ice usually by the third week in June (though ice on the
larger lakes can persist into the middle of July) and start freezing over again
in late September. Wind speeds have been recorded in excess of 100 kilometers
per hour.

The topography of the C0-08 Concession Agreement consists of low rolling hills
with areas of low-lying swampy muskeg near Contwoyto Lake at the south end of
the concessions. Local relief is low, rarely exceeding 150 meters. On the C0
20-01-01 Hood River Concession, there is about 115 meters of relief in the form
of deeply incised linears and steep cliffs. The basalt units form topographic
plateaus, elevated over the sediments and granitic rocks. Outcrop density here
is typically 50 - 60%, with the cover consisting of north-trending lakes, grassy
swamps, and boulder-strewn glacial drift.

The closest community with regularly scheduled air service is Kugluktuk
(formerly Coppermine) which is 145 kilometers northwest of the
Anuri/Rockinghorse concessions and 200 kilometers northwest of the Hood River
concessions. First Air has scheduled flights everyday from Yellowknife to
Kugluktuk. The main centre for transportation to the land holdings is through
Yellowknife, 530 kilometers southwest of the Hood River concessions, and 410
kilometers southwest of the Contwoyto concessions. Fixed wing and helicopter
charter services are available in Yellowknife, as are all supplies (groceries,
lumber, fuel, etc.) and expediting services. The only infrastructure that exists
to service the land holdings includes Tahera's Construction Camp (Jericho site),
the 20 person camp at Tahera's Rockinghorse property, the 12 person Tahera camp
northwest of the Hood River concession, and possibly the Wolfden camp on the ULU
claim. A limited network of approximately 3.5 kilometers of roads connects the
airstrip, camp, fuel farm, and Jericho mine site on the Jericho claim area
northwest of Contwoyto Lake.

Committee Bay Greenstone Belt

Access to the claims is by fixed wing aircraft equipped with tundra tires able
to land on short natural features such as eskers. Alternatively, float equipped
planes have the option of landing at some of the larger lakes (Laugh land Lake
for example) or on sections of the Hayes River. The closest community with
regularly scheduled air service is Baker Lake, about 350 kilometers to the
southwest. Canadian North and First Air flights arrive from Yellowknife and
Iqaluit. Calm Air flies from Winnipeg to Rankin Inlet (Kangiqliniq) and then on
to Baker Lake daily except Sundays. Kivalliq Air flies from Cambridge Bay
(Qaluktuuttiaq) to Baker Lake enroute to Rankin Inlet. Fuel and expediting
services are available in Baker Lake. There is no infrastructure in the claim
area.

The Committee Bay Greenstone Belt lies within the zone of permafrost. The mean
annual temperature of -20oC reflects its Arctic location (the Arctic Circle
transects the property area). The climate is typical of the Eastern Arctic with
average temperatures in the winter months of -30oC to -35oC, and +10oC to +12oC
in the summer. The ground remains snow covered for more than 250 days a year
(generally September to June). Rivers break up in June and lakes are ice bound
until mid July. In the summer and fall, the temperature differential between the
warm land and the cooler ocean can create fog blankets in low lying areas. Wind
speeds have been recorded in excess of 100 kilometers per hour.

The project area is on the northern section of the Wager Plateau, a shield area
that has been significantly modified by glacial processes. Elevations range from
122 meters above sea level in the southwest to 560 meters above sea level in the
northeast. The Hayes River and its tributaries flow northwest into Chantrey
Inlet. In the southwest, the Brown River flows into northwestern Hudson Bay. The
Arrowsmith River, to the north, flows into the Gulf of Boothia.

Property History

Slave Craton

The following section deals with historic exploration on Tahera's land holdings.
Non diamond-related exploration activities are emphasized as these relate to
Bay's interest and exploration agreement with Tahera. Specifically, previous
exploration work on the Hood River/High Lake and Contwoyto Lake land holdings
are detailed as these are deemed to be most prospective for gold.

Hood River/ High Lake Belt

Borealis Exploration conducted a field program in 1970 in the "Penthouse" area
(now part of Tahera's Concession CO 20-00-01). The program consisted of mapping,
trenching, sampling and drilling. Trenching on the "Penthouse gossan" returned
values up to 1.37 gpt gold, 92.57 gpt silver, 6.48% copper, and 1.10% lead. An
X-ray sized drillhole drilled under the trench intersected 1.37 gpt gold, 15.09
gpt silver, and 0.18% lead over 0.9 meters. The PH 1-13 claims were staked over
this showing and these had lapsed by 1983.

The Blackridge area was first investigated between 1965 and 1970 by Borealis
Exploration. Borealis conducted an airborne electromagnetic ("EM")/magnetic
gamma ray spectrometer survey over their Permit 62 (NTS 76L/15). The actual
auriferous zone was discovered in 1974 by Long Lac Minerals during regional
prospecting in the Hood River area. This showing is now within Tahera's
Concession 20-00-04. A claim was staked here in 1975 and surface grab samples of
6.2 gpt gold and 8.4 gpt gold were reported. Noranda Exploration Ltd. is
reported to have done airborne geophysics with follow up ground work in 1981.
Aber Resources Ltd. was the next company to have filed assessment work for the
showing, having staked the Blackridge claim in 1983, along with a contiguous
claim BR1-2. A program of gridding, geophysical surveys (magnetics and very low
frequency "VLF"), and drilling (6 holes totalling 199 meters) was undertaken in
1985. The principal mineralized zone was traced for at least 700 meters
northeast in a 2.5-3.5 meter wide zone within gabbro at a gabbro/sediment
contact. The highest surface grades included a chip sample of 7.5 gpt gold/ 9
meters and the best intersection from drilling was 10.3 gpt gold / 1.07 meters.

Hy-Tech Resources Ltd. conducted an exploration program in 1988 on the HY 17-19
claims to the west of Aber's claims. These claims which belonged to Expeditor
Resource Group Ltd. were staked on January 13, 1988. The work by Hy Tech
included 113 rock samples and 60 soil samples. The best value was 610 parts per
billion ("ppb") gold (with 4.3% arsenic) at a volcanic -sediment contact in the
southeast corner of historic HY 17. BHP Minerals Ltd. evaluated the HY 17-19
claims in an agreement with the claim owners (Consolidated Envirowaste
Industries Inc.) in 1992. Nineteen rock samples and one soil sample was taken.
The best result was 2.87 gpt gold.

BHP Minerals Ltd. staked the CROWN and CROWN 2 claims in 1987 following the
discovery of auriferous mineralization during reconnaissance traversing. Samples
of silicified material with mineralization at a sediment/volcanic contact
returned values to 4 gpt gold. This "Main zone" was traced for 800 meters.
Further work on the Crown claims in 1988 and 1989 included 63 kilometers of
gridding, geological mapping, rock chip sampling (181 samples), limited soil
geochemical sampling (4 samples), 55 kilometers of ground magnetics-VLF surveys
and 77.5 meters of trenching.

Aber Resources staked the DEN 1 - 16, 19, 20 claims in 1987 to the west of BHP's
CROWN claims. Covello, Bryan, and Associates then staked the JEB 1-3 and FIDO
1-3 claims in 1988 to be included in this Aber claim group. Work by Covello,
Bryan, and Associates in 1988 included gridding, mapping, sampling and
geophysics. High values (up to 15.63 oz/t gold from grab samples) were returned
from these claims prompting BHP to enter into a joint venture with Aber on this
land package. From 1989 to 1991 BHP drilled 951.87 meters in eighteen drillholes
and took 253 core samples, 1,109 rock samples and 573 soil samples. Along the 55
kilometers of gridding they performed a number of geophysical surveys.

Following discovery of the ULU gold deposit in 1989, BHP mapped the core ULU
claims (including part of Tahera's current IOL Concession 20-01-01) at 1:5,000
scale and select areas were mapped at 1:1,000. Geochemical surveying included
humus and B horizon soil samples. A limited trenching program exposed
mineralisation in a 45 meter x 15 meter section in the northwest portion of the
main deposit (the "Flood" Zone). Geophysical surveys over the mineralised zones
included Total Field Magnetics, VLF-EM, VLF-Resistivity, Induced Polarisation,
Applied Potential, and Radiometrics.

The 1993 Nunavut Land Claims Agreement came into effect on April 1, 1999. Under
this agreement the Inuit were granted surface ownership of about 360,000 square
kilometers of land, of which they have the subsurface rights for approximately
37,500 square kilometers. Nunavut Tungavik Incorporation ("NTI") is the entity
through which these subsurface rights are administered. The areas that BHP
worked on in the Hood River (CROWN, DEN, FIDO and ULU) were ultimately
incorporated into NTI lands, with the exception of the original ULU claim which
was brought to lease by Echo Bay Mines Ltd.

In March, 2003, Strongbow Resources Inc. and Nunavut Tungavik Incorporated
announced an agreement whereby Strongbow could explore 604,723 hectares of Inuit
Owned Lands in 28 non-contiguous parcels within the West Kitikmeot region of
Nunavut. Their IOL parcel CO-27 covers all the south half of the High Lake
Greenstone Belt and borders Tahera's IOL concession on the east, south, and
west.

Contwoyto Formation

Following the discovery of the Lupin Mine on the western shore of Contwoyto Lake
in 1960, exploration for additional Lupin-style BIF hosted gold deposits
commenced throughout the Contwoyto Formation. This resulted in the discovery of
a number of showings including Fingers Lake, Butterfly, Raft, (143 gpt gold
surface grab), Pan (34 gpt gold surface grab, 11.31 gpt gold/3.11meters
trenching), Musk (8.4 gpt gold/10 meters surface grab), Mud (14.1 gpt gold/15.8
meters), Esker Lake, Brad (11.3 gpt gold/ 4.82 meters drilling) , Striker (9.39
gpt gold/3 meters surface, 47.3 gpt gold/3.4 meters drilling), Troy, and Donut
(24.41 gpt gold /3 meters surface grab). The bulk of this work was done in two
stages; (i) after the discovery of the "Main Showing" (later to become the Lupin
mine) in 1960 by Canadian Nickel Company; and (ii) after Echo Bay Mines Ltd.
optioned the Lupin showing in 1979 and started mining in 1982. Limited
exploration for BIF hosted gold targets continued to 1995, after which much of
the ground was staked over for diamond exploration.

Gold exploration specific to the Tahera-Bay agreement on the northeast side of
Contwoyto Lake started in 1962 with Canico (Canadian Nickel Company Limited).
Canico held Prospecting Permit 35 which covered NTS sheets 76E/10 and 76E/15.
From 1962 to 1964 they preformed mapping, prospecting, trenching, and airborne
and ground magnetometer surveys.

Echo Bay mapped and sampled their C1 - C4 claims on the northeast border of the
northeastern arm of Contwoyto Lake in 1983, retaining just the C2 claim in 1984.
During the course of taking 97 grab samples on the C2 claim in 1983, they
discovered the R43-R45 and R44-R47 showings which returned values up to 11.1 gpt
gold. Limited follow up surface sampling in 1984 did not yield anomalous
results. Echo Bay used a syngenetic gold model at this time, and this sampling
therefore would not have been properly focused on important structural
considerations (such as quartz veining in fold hinges) crucial to locating the
gold bearing rock.

Hecla Mining optioned a total of 33 claims over the northeastern arm of
Contwoyto Lake in 1985 from Contwoyto Goldfields. A helicopter-borne EM,
magnetics, and VLF-EM survey was conducted over these claims by Dighem Surveys
in 1985. This was followed in 1986-1989 with both ground and airborne
geophysics, surface mapping and sampling, geochemical soil and till surveys,
trenching and diamond drilling. The claims were transferred to Hecla in 1986. In
1986, Hecla investigated 74 of the 363 airborne anomalies. 327 rock samples were
taken and 57 silicate-facies iron formations were mapped. Drilling by Hecla on
the 5-5 grid (currently within Tahera's Contwoyto Concession CO 08-00-02)
included eight holes totalling 942 meters in 1987 and four holes totalling 352.9
meters in 1988.

Cominco performed sampling, geophysics, and drilling on their Coco 6 and 15
claims from 1988 to 1990. They discovered the Ox showing by surface sampling in
1988 and this was followed up by more sampling (9.65 gpt gold/ 3 meters chip)
and drilling. Gold bearing iron formations were intersected (see mineralization
section).

Hecla acquired and merged into Acadia Mineral Ventures Ltd. Acadia and Contwoyto
Goldfields optioned the main Contwoyto property to Kingswood Ventures Ltd in
1992. Their ground position covered all of the main gold showings known on
Tahera's Contwoyto Concessions. Drilling by Hecla in 1987 on the 5-5 land grid
included 8 holes totalling 942 meters. All eight holes intersected iron
formation with five of the eight holes intersecting sulphide-rich and/or
siliceous sulphidic iron formation. The best intercept was 2.31 gpt gold/ 7.85
meters (6.27 meters true width).

Four short drill holes on the 5-5 grid in 1988 tested a folded iron formation as
outlined by an IP survey. Diamond drillhole ("DDH") 88-4 tested 225 meters west
of the 2.31 gpt gold/ 7.85 meter intercept in DDH 87-6. DDH 88-4 intercepted
2.88 gpt gold/ 3.9 meters in a pyrite-rich siliceous iron formation. Excalibur
International Consultants were contracted to perform a review of previous work
on the property. Excalibur recommended a seven-hole drill program after
reviewing the database. Two of the seven drillholes were recommended for the 5-5
grid area which is on Tahera's current concession CO 08-00-02.

Tahera's predecessors started exploring the northern Slave Stuctural Province
for diamonds in 1993. (Tahera was the result of the amalgamation of Lytton
Minerals Ltd and New Indigo Resources Inc. in 1999.) 4.3 million hectares were
staked encompassing a significant portion of the northern Slave Craton. More
than 37,000 till samples and 11,000 square kilometers of airborne geophysics
were collected since exploration commenced in 1993. This work resulted in the
discovery of 20 kimberlite bodies on various Tahera properties. Additional
geophysical surveys in 1995-1997 included a helicopter-borne VLF EM and magnetic
survey over a 110 square kilometers in the Contwoyto Lake area. A total of 1,500
square kilometers was covered in a helicopter-borne survey over the Jericho and
Contwoyto Lake land holdings in 1998. Survey line spacings were at 50 meters
with a sensor height of 30 meters.

Committee Bay Greenstone Belt

The Committee Bay Greenstone Belt was the subject of two separate 3 year
(2000-2003) government TGI. These TGIs are a collaboration between the
Geological Survey of Canada, Canada-Nunavut Geoscience Office and university
partners. The stated objective of TGI was to increase the level and
cost-effectiveness of private sector exploration for mineral resources.
Government work in the Committee Bay Greenstone Belt included 1:100,000 scale
geologic mapping, prospecting, surficial mapping, drift prospecting, and
airborne geophysics. Airborne magnetic surveys (400 meter flight line spacing)
were carried out within three 1:250,000-scale NTS map sheet areas (56K,
56J/9-16, 56O/1-8, and 56P) and released as total field maps in 2002. Quaternary
research involved multimedia sampling for gold and base metals and this drift
prospecting/sampling was carried out between 2001 and 2003.

Following the release of Heywood's original geology map in 1961, several
exploration companies performed work in the Committee Bay Greenstone Belt. The
nickel copper potential of ultramafic rocks was the primary target of this first
exploration wave. King Resources staked 400 claims in the Committee Bay
Greenstone Belt (NTS 56I, 56J, 56K, 56O, 56P) in 1969/1970. They mapped the "A"
claims that year (site of our current "A" claim) and conducted trenching, and
geophysical surveys. This program outlined several electromagnetic conductors
coincident with surface mineralization. Values up to 0.18% nickel were returned
from trenching. King Resources also mapped, trenched, and conducted geophysical
surveys on the "E" claims (site of our current "E" claim) and identified several
similar conductors. The best trench value on the "E" claims was 0.51% nickel on
a 1.46 kilometer long conductor. King Resources also spent time on their "B"
claims evaluating a prospective rusty zone of rocks with disseminated and
locally massive of pyrite and pyrrhotite with trace chalcopyrite. King Resources
conducted geophysical surveys looking for nickel on the "B" claims in 1969. A
VLF conductor was outlined coincident with rusty zones in sedimentary rocks
adjacent to ultramafic rocks. The ground magnetic survey revealed a strong
anomaly at least one kilometer long. Mapping and trenching over the zone
produced a high of 0.19% nickel.

Aquitaine Company staked 347 claims in 56J and 56K in 1970. This claim package
included the HAR claims over the Laugh land Lake Anorthosite Suite or LLAS .
Aquitane preformed airborne and ground geophysical surveys over the LLAS in
1971. A weak airborne EM response was generated. A sulphide-bearing oxide facies
BIF, traceable for 2 kilometers along the northern border of the LLAS was
drilled with eight Winkie holes totalling 175 meters in 1971. Intervals of
pyrite + pyrrhotite +/- chalcopyrite were encountered in the BIF (including 2
meters of massive pyrrhotite). The highest value was 0.7% copper, and 0.2%
nickel. Gold was not analyzed. The anorthosite itself was apparently not
drilled.

Cominco undertook general nickel-copper reconnaissance in 1970 and 1974 and more
detailed work in 1975 and 1976. Geologic mapping, ground magnetic and EM surveys
were conducted over permit 349 (granted April 1, 1975) on 56J/13 in the Hayes
River area. Although prospective rock units with nickel and copper values were
found, no further follow up was recommended. Some rock geochemistry was done by
Cominco on their "OX" grid and other sulphide showings. The Ox grid is 1
kilometers north of King Resources "A" Claims.

In 1986, Wollex Exploration Ltd. of Calgary (division of Comaplex) took
reconnaissance rock samples within the current Pickle claims area. The highest
values were 908 ppb gold and 0.5% nickel from a 13 meter wide gossanous shear
zone in a folded ultramafic flow. No further work was done here by Wollex. Our
current three Pickle claims (PICK 1-3) are found southwest of the Central
Tonalite. This claim area was investigated as Prospecting Permits 1332 and 1333
which were granted to the Committee Bay Joint Venture (CBJV) on February 1,
1993. Reconnaissance sampling by CBJV returned values of 5.77 and 8.61 gpt gold
in sheared BIF with pyrite + arsenopyrite. Although the Pickle 1 claim was
staked in 1995, no follow-up work was filed. The IF is 70-100 meters thick and
traceable for 1.5 kilometers. The gold values are found in sulphidic sections
(arsenopyrite and pyrite) of the sheared oxide + silicate BIF over a distance of
1.35 kilometers.

In 1992, R.A Olson Consulting Ltd. ("ROACL") conducted reconnaissance in the
Committee Bay area on behalf of the Committee Bay joint venture (CBJV). Several
highly anomalous gold values were returned from the 392 rock samples taken, with
a high of 121 gpt gold (Williamson, 1993). ROACL preformed follow-up work in
1993, taking 348 samples, mapping, prospecting. Higher gold values corresponded
with BIF with quartz veining and/or silicified, and pyrite + pyrrhotite +/-
arsenopyrite. In 1995, 505 rock chip and grab samples were taken, and eight
drillholes totalling 811.41m completed (producing 596 samples core samples).
This work exclusively focused on the Bluff 1-7 claims (Hayes River area, 56J),
and the Inuk area further to the northeast. Part of the geological crew was from
Cyprus Canada, who had entered into the Committee Bay joint venture. In 1996,
the CBJV collected 447 rock samples, drilled 6 holes totalling 781 meters (at
Three Bluffs), and flew a 13,262 line kilometers detailed geophysical survey
(magnetics and VLF). This survey covered an area between the current KIM claims
over to the Bluff 1-7 claims. Approximately CDN$5.4 million was collectively
spent on the Committee Bay Greenstone Belt between 1992 and 2001 by Committee
Bay North Ltd., Echo Bay Mines Ltd., and Apex Geoscience. This exploration
focused on three areas: Laugh land Lake, Hayes River and Curtis River.

Numerous gold occurrences were discovered by the CBJV on the Laughland Lake
(56K) 1:250,000 sheet between 1992 and 2001. Initial reconnaissance sampling by
the CBJV in the now Bay Pickle Claim area returned values of 5.77 and 8.61 gpt
gold.

More than 677 rock samples were taken on two showings, "Four Hills" and "Cop"
further to the north. Gold values included highs of 28.02 and 48.07 gpt gold.
Additional work included airborne and ground geophysical surveying, gridding,
and detailed geologic mapping. Four claims (Cop 1-4) totalling 10,330 acres are
still held here by Apex Geoscience and Committee Bay North Ltd. CBR completed a
227 kilometer helicopter-borne Time Domain Electromagnetic geophysical survey
over the Four Hills and Cop showings in 2003.

Further to the south, the CBJV discovered the Ghost and West Plains showings.
Gold values to 13.37 gpt gold are found within complexly folded silicate IF. The
Ghost 1 claim was staked here by the CBJV in 1995. Reconnaissance sampling 10 to
15 kilometers further south by the CBJV in 1992-1994 (within their Prospecting
Permits 1333 and 1484) returned values of up to 6.95 gpt gold. The Plains 1
claim was staked in 1995. CBJV reports the gold assays were from high strain
zones in silicate iron formation with sulfides. CBR completed a 180 kilometers
helicopter-borne Time Domain Electromagnetic geophysical survey over the West
Plains claims in 2003.

Numerous gold occurrences were also discovered by the CBJV on the 56J 1:250,000
sheet between 1992 and 2001. These include the Coyote, Ridge, and Bluff group of
showings. Reconnaissance sampling in the Coyote area was first done by CBJV in
1995 (within their Permit 1981) and then again in 1996. Values to 246 gpt gold
were returned from intensely sheared gabbro with quartz veins, pyrite +
pyrrhotite + chalcopyrite + visible gold. CBR completed an 86 kilometer
helicopter-borne geophysical survey over their single Coyote claim in 2003.

The Ridge showing was discovered in 1995 on CBJV's Permit 1771. Gold values to
2.34 gpt gold were returned from silicified, intensely folded oxide + silicate
BIF. Quartz veins with up to 10% disseminated pyrrhotite + pyrite are found
within "Z-shaped" fold noses. The BIFs are traceable on surface for 500 meters,
and on the magnetics for several kilometers. Only limited follow-up work (11
samples) was done in 1996, and the prospecting permit was allowed to lapse. The
stratigraphy and structure is similar to the Meadowbank's North Portage deposit.
The showings were recently restaked by CBR with 13 claims (HYR 1-12, and HYR 15,
recorded August 30, 2002). CBR completed a 225 kilometer helicopter-borne Time
Domain Electromagnetic geophysical survey over these Ridge claims in 2003.
Recent sampling results to 27 gpt gold.

The Bluff 1 to 7 Claims in the Hayes River area (56 J) cover four main gold
showings. These 7 claims, totalling 18,077.5 acres, were staked in 1995. They
are now held by Committee Bay North Ltd and have an anniversary date of October
12, 2005. Exploration work included rock chip sampling, detailed ground
magnetics (5 meter x 20 meter stations), 1:500 scale mapping, and drilling of
lower amphibolite-grade, highly folded BIF (oxide, silicate, and sulphide
facies). Surface grab samples returned 26 rock samples greater than 10 gpt gold.
Some visible gold was discovered in chloritic and silicified oxide IF. The four
main showings are "Three Bluffs", "Antler", "Hayes", and "Ledge."

At Three Bluffs (on the Bluff 3 claim), the BIF is 10-55 meters wide, and was
originally traceable for at least 1.9 kilometers. The best chip samples were
6.81 gpt gold /21.00 meters, 11.61 gpt gold/4.80 meters, and 19.04 gpt gold/3.90
meters. The best results from 12 drillholes in 1994-1996 included 11.52 gpt
gold/1.89 meters, 8.58 gpt gold/2.55 meters, and 6.31gpt gold/4.15 meters.
Follow up drilling here in 2003 included 6 holes totalling 694 meters. This work
extended the known mineralization approximately 240 meters and returned
spectacular intercepts of 19.93 gpt gold/5 meters, 61.6 gpt gold/4.84 meters,
and 27.41 gpt gold/9.44 meters. The iron formation has now been traced for 6
kilometers along strike and mineralization in the form of sulphides and
silicification is reported to increase towards the northeast (towards our Wrench
claims). Chip samples taken in the central and eastern portions of the iron
formation included 11.6 gpt gold/4.8 meters and 19.04 gpt gold/3.9 meters.

Also in 2003, a helicopter-borne time domain electromagnetic survey was
undertaken totaling 214.1 line kilometers at 120/60 meter spacing.

Another gold occurrence on the BLUFF 3 claim is the Ledge showing. A 10 meters
wide oxide BIF has been traced for 1.2 kilometers. The best grab sample result
was 21.43 gpt gold from a pyrrhotite + pyrite bearing sections of the BIF. A
ground magnetic survey in 1996 showed continuation of the magnetic signature to
the northeast.

The Antler showing is on the BLUFF 2 claim. Sheared oxide BIF with
sulphide-rich, silicified quartz arenite, is traceable for approximately 420
meters. Mineralisation includes quartz veins and brecciated BIF with pyrrhotite
+ pyrite. A high of 120.82 gpt gold was returned from grab sampling. The best
result from the two holes drilled in 1994 was 6.72 gpt gold/0.75 meters.

The Hayes showing on BLUFF 1 claim contains a 4-5m wide sulphidic (pyrrhotite +
pyrite) BIF with narrow sheared and siliceous intervals traceable for 260
meters. Rock chip samples included 11.67 gpt gold/0.60 meters and 23.38 gpt
gold/0.30 meters.

The CBJV also discovered several gold showings in the Curtis River area (56 P).
These included the "Inuk", "Mist", and "Koffy" showings with gold assays to
1,894 gpt, 31 gpt and 334 gpt gold respectively, in BIF. Shearing,
silicification, quartz veining, and pyrite plus pyrrhotite are present. Some of
the current claims were previously covered by CBJV Permit 1772. An airborne
magnetic survey was completed over these showings in 1996. Ground geophysical
surveys (total field magnetic and VLF-EM) and 773.6 meters in six drillholes was
completed on the Inuk showing (56 P/7) in 1997. A high value of 12.81 gpt gold
over 4.99 meters was obtained from mineralized iron formation. 5 holes totalling
544 meters of drilling were completed at the Inuk showing in 2003. The best
intersection was 16 gpt gold / 12.6 meters. 12.4 line-kilometers of gridding and
3.0 line kilometers of ground geophysical surveying (total field magnetics and
VLF-EM) were performed in 1997 over the Mist-Koffy Grid. Rock samples returned
values to 12.04 gpt gold. Additional sampling in 2001 included an assay of 31.29
gpt gold. Surface channel sampling in 2003 yielded an assay of 334.15 gpt gold
over 0.8 meters. Three drillholes totaling 238.9m were completed at the Koffy
showing in 2003. The highest grade intersection was 3 gpt gold / 3.4 meters.
Also in 2003, a helicopter-borne time domain electromagnetic survey was
undertaken totaling 108 line kilometers.

CBR, a company with landholding in the Committee Bay area, signed a letter of
intent with an affiliate of Gold Fields Explorations Ltd in February 2003, to
form a joint venture, whereby Goldfields Exploration will earn a 65% equity
position in CBR upon spending US$10 million on exploration over 8 years.

Our five Wrench claims (WREN 1-5) were previously within Prospecting Permits
1477, 1481, and 1482 granted to the Committee Bay Joint Venture (CBJV) on
February 1, 1994. Reconnaissance sampling by the CBJV in 1993 returned a series
of gold anomalies (high of 3.68 gpt gold) over approximately three kilometers in
sheared oxide BIF in their northern part of their BLUFF claim block (BLUFF 7).
The government aeromagnetic survey shows a continuation of this auriferous iron
formation for at least three kilometers onto the Wrench claims. Government
sampling in 2001 on this trend returned a high of 9.7 gpt gold from sulphide
bearing (pyrite + pyrrhotite), quartz-veined intervals of oxide BIF. Additional
kilometer-scale segments of IF with anomalous gold are present further to the
east within the Wrench claim block.

After their 2004 drill program, CBR was able to produce an inferred mineral
resource for their Three Bluffs project.

This drilling defined gold mineralization for at least 1km along strike and to a
depth of 320m from surface. A near surface high grade inferred mineral resource
of 1.9 million tonnes grading 8.0 gpt gold for 487,000 ounces was defined by 49
drill holes. Using a lower cutoff grade this inferred mineral resource is
expanded to 5.1 million tonnes grading 4.0 gpt gold for 657,000 ounces.

The developing Eastern Arctic diamond plays currently being explored by De
Beers, BHP-Billiton, Northern Empire Minerals Ltd., and Stornoway Ventures Ltd.
are to the northeast and southeast of the Committee Bay Greenstone Belt.
Impressive diamond results were returned from the Melville Island kimberlites.
The Churchill diamond play north of Rankin Inlet intersected 11 kimberlites in
their first drill program in the spring/summer of 2003.

Geological Setting

Slave Craton

The Slave Structural Province encompasses an elliptical area 500 kilometers wide
by 750 kilometers long and is located between Great Slave Lake to the south and
Coronation Gulf to the north. Rocks within the Slave Structural Province are
assigned to three lithotectonic assemblages identified as: an early assemblage
of granitic rocks, gneisses and quartz arenites; Yellowknife Supergroup
sediments, volcanic rocks and synvolcanic intrusions; and a younger
sedimentary-plutonic assemblage of clastic sediments and granitic rocks. The
distribution of ultramafic rocks in the Slave is volumetrically insignificant
when compared to Archean cratons of a similar age (e.g. the Superior Province).
Another significant difference is the greater percentage of turbidite domains
within the Slave.

The earliest assemblage includes the ca. 4.03 Ga Acasta gneisses, 2.82 Ga - 3.15
Ga granitoid gneisses as well as a 2.85 Ga quartzite-banded iron formation group
generally found west of 111(Degree). The Yellowknife Supergroup is exposed as
twenty-six linear volcanic belts surrounded by granitic batholiths. These
volcanic belts are typically isoclinally folded and largely range in age from
2715-2671 Ma. The belts have been divided in the literature into mafic
volcanic-dominated (Yellowknife type) and felsic volcanic-dominated (Hackett
River type). Yellowknife-type volcanic belts are dominated by massive to
pillowed basalt flows with lesser amounts of felsic volcanic and volcaniclastic
rocks, clastic sedimentary rocks and occasionally synvolcanic conglomerate and
carbonate units. The Hackett River-type belts are defined by the abundance of
calc-alkaline felsic and intermediate volcanic rocks intercalated with
turbidite. A late (2.62 - 2.60 Ga) volcanic and sedimentary assemblage
consisting of felsic to intermediate volcanic rocks associated with conglomerate
and sandstone ("Timiskaming-type") has been identified overlying some of the
volcanic belts. A pan-Slave deformation event is recorded in all supracrustal
rocks by the presence of at least greenschist facies mineral assemblages. Higher
metamorphic grades, indicated by the presence of cordierite and andalusite, are
recognised in some belts.

Granitoid rocks that are coeval with, or postdate the supracrustal assemblages
comprise greater than 50% of the Slave Province. Synvolcanic granitoid rocks are
typically tonalites, diorites, and granodiorites, and these have been dated at
2.70 to 2.64 Ga. Late to post-deformational granitoids include megacrystic
biotite granodiorite and two-mica granites and range in age from 2605 to 2580
Ma.

At least five episodes of Proterozoic diabase dyke "swarms" (2400 Ma - 600 Ma)
have been recorded in the Slave Structural Province. These include the
northeasterly trending 2.23 Ga Malley dikes, the east-west Mackay suite of 2.21
Ga, the north trending 2.02 Ga Lac de Gras dikes (2.02 Ga) and the
north-northwest trending 1.27 Ga Mackenzie set. These dyke sets form local
positive relief where they intrude easily eroded lithologies such as the
metaturbidites and negative relief in areas where they are juxtaposed with
granites and gneisses.

Proterozoic metasedimentary cover rocks, having limited aerial extent in the
Slave Structural Province, are located near Rockinghorse Lake and northeast of
Contwoyto Lake, straddling the Burnside River, and extending to Bathurst Inlet.
These rocks comprise the Goulburn and Epworth groups and represent cratonic and
marginal geosynclinal environments and lie unconformably on Archean basement.

Committee Bay Greenstone Belt

The Prince Albert Group ("PAG") incorporates a series of Archean aged greenstone
belts that stretch approximately 600 kilometers northeast from the Aylmer Shear
Zone in the south to the eastern tip of Melville Peninsula in the north. The 300
kilometers long section southwest of Committee Bay is referred to here as the
Committee Bay Greenstone Belt. This diverse supracrustal assemblage includes
iron formation (oxide + silicate facies), semipelite, quartzite, komatiite,
basalt and intermediate to felsic tuffs. Synvolcanic intrusions include gabbro,
quartz diorite, tonalite, granite and granodiorite. An anorthosite complex
intrudes the sequence northeast of Laughland Lake. Based on stratigraphic and
age similarities, the PAG is interpreted to be correlative with the Woodburn
Lake Group, on the order of 100 kilometers to the southwest. The Mary River
Group, 230 kilometers northeast of the Melville Peninsula on Baffin Island, may
represent the northern continuation of the PAG. The 2.718 to 2.732 Ga age of the
Committee Bay Greenstone Belt places it in the Timmins (2.70 - 2.725 Ga) to Red
Lake (2.73 - 2.99 Ga) range.

Government mapping in conjunction with the regional aeromagnetic survey has
outlined three predominant crustal domains in the central Committee Bay
Greenstone Belt: (i) the central domain comprises northeast-striking,
tightly-folded, amphibolite-facies supracrustal belts, cored by younger plutons;
(ii) the northern domain comprises high-grade metasedimentary and plutonic rocks
separated from the central domain by shallowly-dipping, high-strain zones and;
(iii) the southeastern domain includes a large northeast-striking foliated,
K-feldspar-magnetite granodiorite batholith, intrusive into the central domain.

The approximate supracrustal stratigraphic sequence in Committee Bay from the
base up is basalt (~2.73 Ga), porphyritic felsic rocks, komatiite, and oxide
iron formation (~2.722 - 2732 Ga), psammite and quartzite (~2.718 - 2.722 Ga),
intermediate volcaniclastic rocks interlayered with psammite and komatiite
(~2706 - 2711 Ga) and wacke/semipelite with oxide iron formation (~<2.706 Ga -
<2.691 Ga). The lower volcanic dominated supracrustal sequence is intruded by a
2.718 Ga foliated biotite- and hornblende- tonalite called the Central Tonalite.
Other synvolcanic intrusions include plagioclase phyric quartz diorite and
biotite+titanite granodiorite.

The sedimentary sequences of the PAG include siliciclastics rocks, conglomerate,
quartz arenite and iron formation. The siliciclastics rocks are dominated by
interbedded fine grained, biotite psammite and semi pelite. Conglomeratic rocks
include polymictic matrix-supported conglomerates with angular to subrounded
clasts of quartzite, felsic volcanics, and mafic to ultramafic volcanics. Quartz
cobble conglomerates have also been noted. Quartz arenites form prominent ridges
and are well bedded. The deposition of oxide and silicate-facies iron formation
is recorded at two major stratigraphic horizons between 2.73 Ga and 2.71 Ga
interbedded with semipelitic rocks as well as quartz arenite and komatiite.
Garnet and grunerite are common in the silicate facies, and magnetite and chert
comprise the oxide facies. Minor sulphide facies iron formation has been noted.

The komatiite bodies are generally thick spinifex-textured, pillowed, and
cumulate dominated peridotitic flows. Rare amount of basalt and komatiitic
basalt are found associated with the main komatiite flows. The total aggregate
thickness of komatiite in the lower sequence is on the order of 300 meters
thick. The largest and best preserved exposures of komatiite are to the
northeast of the Central Tonalite, where the sequence is 5 to 10 kilometers wide
and up to 25 kilometers long. Basaltic rocks include thin chlorite schist units
interlayered with oxide and silicate iron formation. A large exposure of
pillowed and massive basaltic flows is exposed north and east of the Central
Tonalite. Felsic volcanic rocks appear to be confined to laminated lapilli,
crystal, and lithic tuff units found associated with komatiite and semipelite.

The supracrustal stratigraphy and associated synvolcanic plutons were intruded
by voluminous, 2610-2593 Ma granodiorite and tonalite plutons. The 2610 Ma
Walker Lake intrusive complex, a 300 kilometer long, northeast trending,
K-feldspar megacrystic, biotite-hornblende-magnetite granodiorite batholith is
found along the belt's southeastern margin. Biotite + titanite tonalite and
monzogranite are also contained within the Walker Lake intrusive complex. The
Laughland Anorthosite Suite is a layered mafic complex of gabbroic anorthosite
northeast of Laughland Lake. Mafic phases include gabbroic anorthosite,
pyroxenite, and layered gabbro-pyroxenite. Meter-scale igneous layering occurs
between anorthosite and coarse-grained plagioclase megacrystic gabbro
(gabbroic-anorthosite). Contacts are poorly exposed, though alteration of the
Prince Albert Group along the margins indicates that the LLAS is younger. In NTS
56 0 (northern Committee Bay) biotite- and K-feldspar-granodiorite intrudes the
upper sedimentary sequence at ~ 2.580 Ga.Younger plutonic intrusions include the
~ 1830 Ma equigranular biotite + magnetite +/- fluorite Hudson monzogranites,
also found along the belt's southeastern margin, especially in the Laughland to
Walker Lake region. Laterally continuous northeast trending quartz-feldspar
porphyry dykes, 0.5m to 10m wide, are traceable for hundreds of meters in the
Three Bluffs area. Age dates for these porphyry dykes are not currently
available.

Deposit Types

Slave Craton

Ulu Deposit

The Flood Zone on Wolfden Resources' ULU claim is approximately 1.2 kilometers
west of Tahera Concession CO 20-00-01's western boundary. It is the best example
of the target being explored for in the High Lake area. The Flood Zone was
estimated by Echo Bay in their 1998 Ulu feasibility study update to host a
geological resource of 1,368,953 tonnes grading 12.91 gpt gold (approximately
565,000 ounces of gold between surface and the 360 meter level) using a 5 gpt
cut-off grade and a 1.5 meter minimum mining width (Wolfden Resources Press
Release December 3, 2003).

At the Ulu gold deposit, the Flood Zone is a southeast trending,
shear-controlled vein system in basalt at the core of the Ulu anticline. Several
anatsomizing gold zones comprise the deposit which has been traced on surface
for 435 meters, and ranges in true width from 2.0 to 17.9 meters. BHP's drill
program on the Flood Zone from 1989 - 1992 outlined a series of mineralised
zones 320 meters along strike and down to a depth of 620 meters.

Lupin Gold Mine

The Lupin Mine, having produced 3,275,000 ounces of gold at an average grade of
9.5 gpt gold from 1982 to 2003, is the largest example of the target in the
Contwoyto area. The stratabound auriferous ores at Lupin are largely confined to
a single continuous horizon of amphibolitic (silicate-facies) iron formation
which has been traced in excess of 3 kilometers along strike and more than 1.2
kilometers downdip.

The ore grade mineralization is concentrated in a distinct "Z" fold with an
overall strike length of approximately 1.07 kilometers and a downdip projection
of 1.85 kilometers. This isoclinal "Z"fold plunges 75 - 80 degrees to the north
and is part of a larger anticlinorium. The highest gold values and sulphide
concentrations are within 1 meter of quartz vein-iron formation contacts.

Committee Bay Greenstone Belt

The Committee Bay Greenstone Belt is interpreted to correlate with the Woodburn
Lake Group, on the order of 100 kilometers southwest, which hosts the 3.0 M
ounce gold iron formation hosted Meadowbank deposit. The similar Committee Bay
geology is also highly prospective for BIF hosted gold. There are several such
showings already discovered in the Belt including "Three Bluffs" (inferred
resources of 5.1 million tonnes grading 4.0 gpt) and "Inuk" (12.81 gpt gold / 5
meters from drilling). Auriferous iron formations on our claims include those
found on the Wrench, Pickle, NN1, NN2, and Goose claims.

Mineralization

No known mineral reserves are known on our land. Our previous and proposed
programs are exploratory in nature.

Slave Craton

Hood River Property

High grade gold showings are found within a 9 by 7 kilometer block in the
Ulu-Crown-Blackridge area in the west-central portion of the High Lake belt. The
mineralisation style is best illustrated at the Ulu gold deposit where gold
occurs in brecciated basaltic wallrock clasts which are replaced by acicular
arsenopyrite + quartz + K-feldspar.

There is a close spatial association of the gold bearing zones on the original
ULU claims with the axial trace of the ULU anticline. Tahera's Concession
20-01-01 includes the previous ULU 2 claim which covers the northernmost two
kilometers of this important fold axis. Several gold bearing zones were
identified by BHP in this area. The exploration drilling outside of the main
deposit included drilling on the "Northern Fold Nose" ("NFN") zone, which is now
part of Tahera's land holdings. Values of 27.7 and 66.0 gpt gold were obtained
from surface grab samples of a 1 meter wide quartz vein containing arsenopyrite,
pyrite, pyrrhotite, chalcopyrite, and native copper. Highly anomalous silver and
bismuth were also returned from these samples. This quartz vein is variably
exposed over 40 meters at the volcanic-sediment contact on the east limb of the
fold. Two drill holes tested this vein. The first drillhole returned 25.63 gpt
gold/1.54 meters (estimated true width of 1.49 meters) at a vertical depth of 60
meters in 1990. The second hole was drilled underneath the first hole the
following year and intersected 54.94 gpt gold/0.95 meters (estimated true width
of 0.80 meters) at a vertical depth of 95 meters below surface. The vein remains
concordant to the contact which changes dip from -45 degrees west at the 60
meter level to 73 degrees west at the 95 meter level. This mineralization is
open at depth.

Further mineralized zones were discovered in the core of the NFN. A gold value
of 176 gpt gold was produced from narrow quartz-pyrite vein rubble taken from
within a northeast linear. Coarse acicular arsenopyrite was noted in narrow
shears within silicified basalt just south of the NFN. The best value in this 50
meters x 70 meters area was 11.7 gpt gold. This area is within Tahera's land
holdings (Concession CO 20-01-01).

BHP outlined five zones of gold mineralization on their Crown claims (now
largely within Tahera's Concessions). At the "Main Zone", several highly
anomalous gold values to 24 gpt were returned from along 800 meters of a
silicified basalt/biotite schist contact. In addition to the 24.35 gpt gold /
1.00 meter chip sample, values of 13.6 and 5.6 gpt gold were returned from grab
samples. Seven trenches were dug in the Main Zone area. Silicified zones up to 6
meters wide with arsenopyrite were noted. The best value returned was 14.4 gpt
gold / 0.8 meters. The "B" zone is parallel to, and 80 meters east of the Main
Zone. The structural setting (NE-trending basalt/sediment contact) and
mineralogy here is similar to the Main Zone. Gold values (including highs of
12.4 and 8.7 gpt gold) are found along 450 meters and the zone is reported open
to the north, gold values to 1.8 and 4.6 gpt gold were reported from grab
samples of silicified basalt and sediments with arsenopyrite in the "Western
Zone." Anomalous gold values were also reported in the folded stratigraphy of
the "Eastern" and "Fold" zone.

To the immediate northwest of BHP's historic Crown claims are the Penthouse
showings on the historic DEN 16 and 19, and Fido 3 and 6 claims. The original
sampling for Aber Resources Ltd. on the Penthouse grid returned values of 23.9
to 220.1 gpt gold. The highest sample taken by Aber here was from a silicified
north-trending shear zone which was discontinuously traceable for 200 meters on
the south part of their Longspur grid (South Penthouse). A northeast trending
shear, traceable for 250 meters on the north part of their Longspur grid (North
Penthouse) produced a value of 130.1 gpt gold from narrow (0.1 - 0.5 meter wide)
arsenopyrite bearing veins. Several zones of mineralization were identified by
BHP on the Penthouse grid. Sediment-hosted mineralization was found in narrow
intercalations (1.0 - 4.5 meters wide) within basalt along 750 meters of the
main western sediment-basalt contact on Den 16 and 19. BHP reports that gold
values for this style were "generally in the 2-10 gpt range with an isolated
value of 33.1 gpt that came from a massive arsenopyrite sample on the southern
Penthouse grid." The Spent showing is at the south edge of the South Penthouse
grid. Here a 1 meter wide black quartz vein with fine grained arsenopyrite was
traced on surface for 200 meters. The selvages of the vein were also silicified
up to 30 centimeters and beyond into the host basalt. The best grab samples were
9.6 and 32.0 gpt gold. There is no indication in the assessment reports that the
SPent Zone was drilled. Drilling by BHP on the South Penthouse area in 1989
included 235 meters of NQ core in 3 drillholes testing surface anomalies to 33
gpt gold. These holes intersected silicified sediment intercalations within
basalt. The highest assay value returned from drill core was 1.5 gpt gold.

Four "gopher" drill holes tested anomalous value on the North Penthouse area in
1989, gold values to 1.97 gpt gold were returned from silicified sediment
intercalations with 1-7% arsenopyrite. Feldspar porphyry was intersected in the
last 1989 drill hole and a value of 2.3 gpt gold was returned from an intensely
silicified interval at the lower contact of the porphyry. BHP mentions a 76.8
gpt gold sample from North Penthouse in their 1992 report. Five drillholes
tested recessive linears, anomalous surface results (to 15 gpt gold) and VLF
conductors in 1991. The best value was 7.8 gpt gold / 0.5 meters from
sulphide-rich (7% arsenopyrite and pyrite) selvages to quartz veins.

Polymetallic quartz veins became the focus of exploration for BHP in 1990.
Average gold values were reported to range from 2-9 gpt with highs up to 21.2
gpt. Highly elevated silver values up to 473 gpt were noted in the galena-rich
samples along with anomalous zinc, lead, cadmium, and antimony values. This
style of mineralization is very similar to the auriferous polymetallic quartz
vein at the Northern Fold Nose on the historic ULU 2 claim. The 21.2 gpt gold
sample was from a silicified shear at a basalt-gabbro contact and contained 10%
acicular arsenopyrite with strong actinolite alteration. Several other showings
of fine grained acicular arsenopyrite mineralization were discovered including
grab samples of 3.29 and 4.28 gpt gold on the North Penthouse grid and 9.6 and
20.4 gpt gold along an 80 meter strike on the Southern Penthouse grid.

Five drillholes totalling 171.5 meters tested anomalies on the small FIDO 3
claim in 1990. The majority of these holes intersected narrow zones of
silicification +/- brecciation with up to 5% arsenopyrite + pyrrhotite. The best
value returned from drill core was 1.92 gpt gold.

Massive sulphide mineralization is present as discontinuous pods up to 1.5
meters thick along the western basalt-sediment contact on the south Penthouse
grid. Values of up 4.8% zinc, 0.5% lead, 0.5% copper, 40 gpt silver and 0.5 gpt
gold were returned from surface sampling. No drilling was carried out on this
showing by BHP, though they noted that it had been trenched by previous workers.
This may be from Borealis Exploration's work in 1970 which returned trench
values of 1.37 gpt gold, 92.57 gpt silver, 6.48% copper, and 1.10% lead.

South of the historic Crown claims, across the southeastern edge of a granitic
intrusion is the North Mare/Blackridge showing last worked by Aber Resources
Ltd. The mineralization consists of an altered, and locally brecciated
gabbro-hosted silicified zone with up to 20% arsenopyrite and 10% pyrite +/-
pyrrhotite. The principal mineralized zone was traced on surface for at least
700 meters northeast in a 2.5 - 3.5 meter wide zone. The highest surface grades
included a chip sample of 7.5 gpt gold/ 9 meters and the best intersection from
drilling was 10.3 gpt gold / 1.07 meters.
Contwoyto Property

More than 100 iron formation-hosted gold occurrences occur in the Point Lake -
Contwoyto Lake meta-sediment sequence. The most notable gold-bearing iron
formation in the vicinity is the Lupin gold mine. Mineralization specific to the
Tahera held ground includes a number of significant iron formation hosted gold
showings including the R43-R45, the R44-R47, the 4-2 grid, the Ox, and the 5-5
grid showings.

The R43-R45 showing is hosted by a Z-shape folded silicate iron formation up to
10 meters wide and traceable for over 1.3 kilometers. A surface grab sample
returned 4.69 gpt gold, however the area is mainly unsampled. The geology,
mineralisation, alteration and structure are extremely similar to the Lupin gold
mine (located just 28 kilometers to the west) where gold mineralization is in a
"Z" folded iron formation with pyrrhotite and arsenopyrite. The R43-R45 "Z" fold
is of the same magnitude as Lupin. No drilling was reported here.

The R44-R47 showing is hosted by a banded garnet-silicate iron formation up to 5
meters wide and traceable on surface for 1.9 kilometers. The best gold values
returned from surface sampling have been 2.98 and 11.1 gpt gold. No drilling was
reported here.

Siliceous and sulphide-rich boulders of iron formation up to 2 meters in size
were traced on surface for 200 meters on Helca's 4-2 grid. The best gold assay
was 14.7 gpt gold. No follow-up drilling appears to have been done.

Cominco's Ox showing was discovered by surface sampling in 1988 on the lakeshore
along the northern boundary of the historic Coco 6 claim. This area is now part
of Tahera's IOL concession CO 08-00-05. The initial sampling of iron formation
produced values of 3.29 gpt gold/ 4.0 meters. Follow up chip sampling in 1990
returned a value of 9.65 gpt gold/ 3 meters from a pyrrhotite-rich boulder.
DDH-CC-89-4 was drilled underneath the showing and intersected two separate iron
formation horizons 8.2 meters apart. The upper iron formation assayed 2.12 gpt
gold/ 2.02 meters. The lower iron formation averaged 2.4 gpt gold/ 1.81 meters.

Several 080-0900 trending, 300 - 2700 meters long EM conductors were identified
on Hecla Grid 5-5. A total of six iron formations were identified here, four of
which were coincident with the EM conductors. Sulphide rich boulders of iron
formation at the southwest section of Grid 5-5 yielded values to 28 gpt gold.
The "Fox A" Canico showing is also within the Hecla 5-5 Grid area. Here the iron
formation is 33 meters wide and 220 meters long and returned values to 5.1 gpt
gold. Camico's "Grid 60" covered the shoreline on the west end of Hecla's Grid
5-5. A pyrite-bearing amphibolite iron formation sample on the shore of
Contwoyto Lake assayed 11.0 gpt gold. This amphibolite unit trends westward into
the lake.

Drilling by Hecla in 1987 on the 5-5 land grid included 8 holes totalling 942
meters. All eight holes intersected iron formation with five of the eight holes
intersecting sulphide-rich and/or siliceous sulphidic iron formation. The best
intercept was 2.31 gpt gold/ 7.85 meters (6.27 meters true width) from a section
of 15% pyrite +/- arsenopyrite and pyrrhotite in DDH 87-6. Drillhole 87-15 is
reported to have tested 30 meters below this intercept and only a narrow
interval of iron formation was encountered. Faulting was interpreted to explain
the change. DDH 87-8 was collared close to the baseline at L 9+00E and
intersected 25.57 gpt gold/0.30 meters in garnet-bearing siliceous iron
formation with <5% pyrrhotite. Several other intervals of iron formation, <1.0 -
5.5 meters wide were intersected in this hole. The surface samples values
targeted for each drillhole were not explicitly given, although a value of 20.81
gpt gold was noted from surface sampling of a sulphidic siliceous iron formation
35 meters south of the collar for DDH 87-17. An 11.73 gpt gold surface sampling
value within sulphidic iron formation was located approximately 75 meters east
of the collar for DDH 87-17 and may have been the target of DDH 88-3.

Four short drill holes on the 5-5 grid in 1988 tested a folded iron formation as
outlined by an IP survey. DDH 88-4 tested 225 meters west of the 2.31 gpt gold/
7.85m intercept in DDH 87-6. DDH 88-4 intercepted 2.88 gpt gold/ 3.9m in
pyrite-rich siliceous iron formation. DDH 88-3 tested an area 370 meters
southeast of the 28 gpt gold surface sample and intersected 5.9 meters of
siliceous and garnet-bearing iron formation with 1-2% pyrite. The bottom 1.7
meters of this unit contained 20% pyrite and assayed 4.2 gpt gold /1.7 meters.
The actual high grade surface showing (28 gpt gold in arsenopyrite and quartz-
rich iron formation boulders) was apparently not drilled. DDH 88-5 tested still
further to the southeast (several hundred meters away). Three iron formations
were intersected and the uppermost unit returned 2.07 gpt gold / 0.9 meters from
a pyritiferous upper contact. DDH 88-2 intersected six horizons of siliceous +/-
sulphidic iron formation ranging from 5.7 to 15.0 meters thick. The best value
was 3.2gpt gold/1.4 meters.

Committee Bay Greenstone Belt

The Committee Bay Greenstone Belt is prospective for a number of mineral deposit
types including BIF hosted gold, shear-hosted lode gold, komatiite hosted
stratiform nickel-copper (Kambalda analogy), and PGEs in layered igneous
complexes.

Examples of iron formation hosted gold include our Wrench claims where
government sampling in 2001 returned a high of 9.7 gpt gold from sulphide
bearing (pyrite + pyrrhotite), quartz-veined intervals of oxide BIF. This
section of iron formation is over 6.5 kilometers long. Additional
kilometer-scale segments of IF with anomalous gold (200 -390 ppb gold) are
present further to the east within the Wrench claim block.

Other iron formation hosted gold examples include mineralisation on our Pickle
claims. The IF here is 70-100 meters thick and traceable for 1.5 kilometers. The
gold values are found in sulphide rich sections (arsenopyrite and pyrite) of the
sheared oxide + silicate BIF over a distance of 1.35 kilometers. In addition
gold values in iron formation are also found on our NN1 and NN2 claims.

An example of shear-hosted gold in the belt is CBR's Coyote showing where values
to 246 gpt gold were returned from intensely sheared gabbro with quartz veins,
pyrite + pyrrhotite + chalcopyrite + visible gold. The hosting structure is a
splay off the east-west Walker Lake Shear Zone and is a classic setting for
shear-hosted gold. We have a claim on either side of the Coyote claim showing.
Another shear-hosted target is our Goose Claims where a value of 1.6 gpt gold
was reported in a folded sequence of sheared mafic and ultramafic volcanics.
Sulphides (pyrrhotite + arsenopyrite + pyrite) are found with oxide +/- silicate
BIF, and quartz veins. The stratigraphy and structure has parallels to the Red
Lake camp.

Komatiite hosted (Kabalda-style) nickel potential exists on our three EE claims
(EE 1-3). These claims cover nickel values from 0.2% to 0.5% spread over 930
meters of a contact between a thick ultramafic body and sediments. The highest
copper value was 0.2%. A second ultramafic/sediment contact on the western edge
of the western E claim also has anomalous nickel over a similar strike length.
The folded stratigraphy in the centre of the EE claim block is also prospective
for gold (samples to 200 ppb).

The Laughland Lake Anorthosite Suite ("LLAS") has good PGE potential. Rusty
zones defined by sulphide gossans of up to 100 meters wide and 500 meters long
have been reported in this area. Values to 185 ppb Pt, 41 ppb Pd, 1530 ppm
nickel, and 1.35% copper have originated from these zones.

Exploration

As a result of the level of the 2004 exploration program, no field work will be
undertaken in calendar 2005. Work will be limited to further assessment of the
2004 results and planning the 2006 season.

Slave Craton

The first phase of the planned exploration programs over the Hood River and
Contwoyto IOL claim groups was carried out in August 2004 and consisted of
exploration mapping, sampling and prospecting. This initial program was outlined
to follow up and assess geophysical and geological anomalies reported by
previous workers with a focus on targeting areas for phase two work.

As a result of the 2004 field season, several areas have emerged as having a
strong potential for gold based on geological, mineralogical and structural
criteria and as such require further examination. A program of detailed
structural mapping is recommended in order to understand the complex structural
environment. Further work should include detailed sampling and ground geophysics
over key anomalous areas with a follow up drill program. BHP Minerals Ltd
discovered the ULU deposit through a similar approach.

Hood River IOL Concessions

Bay Resources completed a total of $104,446 of qualifying assessment work on the
Hood River IOL Cocessions. This work was filed by Tahera. Four key areas warrant
further investigation.

Northern Fold Nose ( CO20-01-01)

This zone is located approximately 3 kilometers north of the ULU deposit and is
thought to be part of the major fold structure which hosts the ULU deposit.

Further mineralized zones were discovered in the core of the Northern Fold Nose
than previously described. Acicular arsenopyite was noted in narrow shears
within silicified basalt just south of the Northern Fold Nose. Chip sampling of
the exposed veins during the 2004 field season yielded several samples of
anomalous gold values. A relationship between arsenic and gold is observed. Gold
values obtained from this work ranged from 22.9 gpt to 495 ppb. Speculation is
that the asymmetry of the fold produced a pressure shadow on the east limb and
later hydrothermal fluids concentrated in this area.

Penthouse (CO20-00-01)

The Penthouse claims are covered by Tahera's concession CO20-00-01 and are
underlain by a geologically and structurally complex package of rocks. Mafic
volcanic and metasediments underlie the area.

The sediments are thought to form the conduit for mineralizing fluids. Gabbroic
sills occur within the the mafic volcanics and sediments and form marker
horizons outlining the structural complexity of the area.

A total of 65 samples were taken in the North Penthouse area with gold values
ranging from 0.98 gpt to 12.82 gpt in chip and grab samples. A total of 36 per
cent of samples taken from this area yielded anomalous assays.

A total of 53 samples were taken from the South Penthouse area with 15 per cent
returning anomalous values. These samples yielded the same arsenic-gold
relationship with values ranging from 1.95 gpt to a high of 30.32 gpt.

The Crown Trenches and East Crown (CO20-00-01)

The Crown `Main Zone' is located in the southern portion of Tahera's concession
CO20-00-01. It is comprised of a 800 meter contact zone of silicified basalt and
biotite schist contact. Gold mineralization is associated with silicification
+/-chloritization alteration assemblage with disseminated to massive, anhedral
to euhedral arsenopyrite +/- pyrrhotite +/- pyrite. Seven trenches were dug into
this contact.

The 2004 field work consisted largely of resampling of the trenches in this
area. A total of 60, 1.0 meter to 1.5 meter chip samples were taken from these
trenches. Results returned gold values from 5.78 gpt to 0.51 gpt with 32 per
cent of the samples returning anomalous results.

East of the trenches several anomalous zones were located with a new zone
extending off the claims and to the north for over 1 kilometer. This zone is
roughly parallel to the Crown trench area and may perhaps be part of a large
scale folded stratigraphy.

A total of 30 samples were taken on the East portion of the Crown area. The gold
values ranged from 2.75 gpt to 0.02 gpt.

Blackridge area (CO20-00-04-CO20-00-03A)

The main showing occurs along a gabbro-sediment contact. A linear mineralized
contact zone was traced over 750 meters.

Anomalous results were returned from siliceous metavolcanics and metasediments
with the highest values returned from trenches cut into gabrro
metavolcanic/metasediment contact. A total of 39 samples were taken from this
area with values ranging from 37.78 gpt gold, 21.58 gpt gold to lows in the
vicinity of 2.5 gpt gold. Elevated copper values were also noted and the
persistent relationship between arsenic and gold held in this sampling. A total
of 40 per cent of the samples taken returned anomalous values. Overall the 2004
results were an improvement over the historical results reported as 2.87 gpt
gold and 10.3 gpt gold over 1.07 meters.

Contwoyto IOL Concessions

Bay completed a total of CDN$109,057 of qualifying assessment work on the
Contwoyto IOL Cocessions. This work was filed by Tahera. Some key areas that
warrant further investigation include:

Norma Fault Area ( Co-08-00-01)

The geology consists of a package of sedimentary rocks belonging to the
Contwoyto Formation with minor Ichen Formation rocks located largely on the
northwest shore of the northeast arm of Contwoyto Lake. These rocks are appear
as well bedded turbiditic sequences with amphibolitized iron rich sediments

A moderate to well mineralized silicate facies iron formation zone was found on
the western edge of the claim block and traced over 800 meters. This zone
consisted of narrow bands +/- 50 cm to 1.0 meter wide mineralized silicate
facies iron formation containing very find grained pyrrhotite, pyrite and rare
chalcopyrite at the contact with a gabbroic sill.

Grid 5-5 Area ( Co-08-00-02 )

Prospecting in the area of grid 5-5 on the southeast shore of the arm in the
vicinity revealed the area to be underlain by a package of amphibole rich
silicate facies iron formations, interbedded with a well banded turbiditic
sequence of biotite felpspar rich +/- cordiertite/ andalusite sediments. Grey to
clear quartz sweats and veining were observed conformable to bedding. These
sediments were typically magnetite poor however a strong magnetic effect was
experience in the center of the zone during mapping. This package has been
folded asymmetrically with soft sediment folding exhibited within the individual
beds. A fold closure to the south was observed in outcrop. Geophysical anomalies
indicate fold zones trending off shore into the lake proximal to the Grid 5-5
zone.

This area produced the best gold results in the Contwoyto concessions with
values ranging from 1.5 to 6.98 gpt gold from the iron formation.

Ox Area( Co-08-00-05 )

The north end of the claim block is underlain by a sulphide poor silicate facies
iron formation 100 meters wide and extending over 150 meters to the northeast.
To the north of the claim block interbeds of turbidites, biotite
schists/greywacke and coarse to fine grained heavily oxidized amphipobilite.
Mineralization is largely fine grained pyrite, pyrrhotite with minor
chalcopyrite and rare malachite, in trace to 5 percent abundance. The
mineralization is finely disseminated as well as locally concentrated along
planes of schistosity. Structurally the area consists of tightly folded units
with minor quartz veining crosscutting and conformable to bedding planes. The
sampling program on the Ox grid fold zone yielded consistent anomalous gold
values.

Committee Bay Greenstone Belt

A total of CDN$1.567 million was spent on our Committee Bay Greenstone Belt 2004
program. A large portion of the expense went to establishing a re-usable
base-camp into this fairly remote location. All field, office, and camp
supplies, as well as fuel, was flown in. As well all field activities were
helicopter supported.

Between June 2004 and early September 2004, a regional, grassroots-type
prospecting/mapping program was undertaken to explore all of our mineral claims
in the Committee Bay Greenstone Belt. Each of our 21 claims hold significant
promise of a mineral deposit. In some localities outcrop was not abundant or
observed however, many of the claim sites were selected to cover key anomalies
identified from the government regional airborne magnetic survey.

A total of 1,476 rock samples were removed and analysed from the 21 claims. In
addition, a small soil grid was established on the Wrench claims and 658 soil
samples were collected. Anomalous to ore grade gold was returned from sampling
on several of the claim areas. Of particular note were the results from the
Wrench claims which cover an area adjacent to the CBR's Three Bluffs deposit and
were found to hold identical structures and lithologies. Sampling along exposed
BIF produced high gold values of up to 100.45 gpt gold and anomalous values were
returned from a 1.5 kilometer strike length of the target horizon.

Our exploration program began in late May 2004 with a geophysical program on the
Wrench claims. This is covered in the "Geophysical Surveys" section.

Geophysical Surveys

Committee Bay Greenstone Belt- Wrench Claims

An eighty six line grid was established over the Wrench Claims by Aurora
Geosciences Ltd of Yellowknife, NT. Grid point control was accomplished using
GPS technology. Lines were turned off the base line on one hundred metre centres
and in total the grid was comprised of 176.46 line kilometres. Subsequently, two
geophysical surveys were undertaken. Total field magnetic surveying was carried
out with readings obtained at 6.25 metre stations. Horizontal loop
electromagnetic (H.L.E.M.) surveying was also undertaken. Readings for this
survey were spaced at twenty five metre intervals.

The Wrench claim group comprise five contiguous claims covering approximately
4,900 hectares. The claims are underlain by metasediments and over 10 kilometers
of strike length of a folded and faulted BIF. A government aeromagnetic survey
confirms that the signature of the Wrench iron formation is directly connected
with and along strike of CBR's Three Bluffs high grade iron formation (45.4
grams per tonne ("gpt") gold over 6.9 meters) discovered in 2003.

The geophysical program served a number of purposes. The magnetics accurately
trace the iron formation and delineate important structural information such as
faulting and folding. The HLEM component highlights where the conductive
pyrrhotite-rich sections of the iron formation are and, in conjunction with the
magnetics, may define trenching and drill targets.

The magnetic survey outlined a strong, six kilometre long northeast-trending
magnetic anomaly along the western half of the grid. In the southeastern portion
of the grid, two additional strong, parallel, magnetic anomalies were recorded.
The H.L.E.M. survey outlined 17 distinct conductive trends/anomalies, most of
which are coincident with, or flank very strong magnetic features.

Field verification of the magnetic anomalies indicates that the magnetic
anomalies are a result of the presence of BIF units that underlie the grid.

Further Exploration

Slave Craton

A program of detailed mapping and sampling along with selective ground
geophysical surveys has been recommended for the second phase of the exploration
on the Tahera claims.

After the 2004 program the IOL concession area at Contwoyto was dramatically
reduced down from 65,250.8 acres to 21,533.1 acres. All prospective ground was
retained. The area reduction was done in conjunction with Tahera and it served
to also greatly reduce the amount of exploration requirement for this area. A
program of approximately $63,300 would be required to maintain the ground into
2006.

A small portion of the Hood River IOL Concession area was reduced with all
prospective ground retained for further exploration. Currently Bay Resources has
no required 2005 spending commitments to maintain this ground however, the Hood
River area contains many of the most prospective gold targets which will be the
subject of future exploration.

Committee Bay Greenstone Belt

With the large assessment credit excess from the 2004 program, our claims are
secure for several years with no spending requirements, however due to the gold
potential and interest in the Committee Bay Greenstone Belt, further work is
planned.

Future exploration programs will involve further geophysical surveys, mapping,
prospecting, sampling, and drilling. Identifying and defining drill targets will
be the primary objective. Given the high grade results (61.6 gpt gold / 4.84m,
and 27.41 gpt gold / 9.44m) from CBR's recent drilling on the Three Bluff's
showing, on strike to the southeast, our Wrench showing (values to 100 gpt gold)
is a possible drill target. The thick sequence of sheared BIF with pyrite +
arsenopyrite on the Pickle claims also represents an excellent drill target.

Employees

We have a Vice President Exploration and Chief Operating Officer who are
full-time employees. We also use casual employees in our field exploration
program. The services of our Chief Executive Officer and Chief Financial Officer
as well as clerical employees are provided to us on a part-time basis pursuant
to a Service Agreement dated November 25, 1988 (the "Service Agreement") by and
between AXIS Consultants Pty Limited and ourselves. AXIS also provides office
facilities, equipment, administration and clerical services to the Company
pursuant to the Service Agreement. The Service Agreement may be terminated by
written notice from the parties thereto.

Further detail relating to additional terms of the Service Agreement is included
in "Item 2- Properties", "Item 13- Certain Relationships and Related
Transactions" and "Item 11- Executive Compensation".

Canadian Governmental and Environmental Regulation

The mining industry in the Nunavut Territory, where our exploration properties
are situated, operates under Canadian federal and territorial legislation
governing prospecting, development, production, environmental protection,
exports, income taxes, labor standards, mine safety and other matters. We
believe our Canadian operations are operating in substantial compliance with
applicable law.

Risk Factors

Risks of Our Business

We Lack an Operating History And Have Losses Which We Expect To Continue Into
the Future.

To date we have no source of revenue. We have no operating history as a mineral
exploration or mining company upon which an evaluation of our future success or
failure can be made. Our ability to achieve and maintain profitability and
positive cash flow is dependent upon:

- exploration and development of the property covered by our mineral
claims;

- our ability to locate economically viable mineral reserves in the
property covered by our mineral claims;

- our ability to raise the capital necessary to conduct exploration and
preserve our interest in the mineral claims, increase our interest in
the mineral claims and continue as an exploration and mining company;
and

- our ability to generate revenues and profitably operate a mine on the
property covered by our mineral claims.

We Have No Known Gold Or Other Mineral Reserves And We Cannot Assure You That We
Will Find Such Reserves. If We Develop A Gold Or Other Mineral Reserve, There Is
No Guarantee That Production Will Be Profitable.

We have not identified any gold or other commercial mineral reserves on the
properties covered by our mineral claims and we cannot guarantee we will ever
find any. Even if we find a gold or other commercial minerals reserve, there is
no assurance that we will be able to mine them. Even if we develop a mine, there
is no assurance that we will make a profit. If we do not find gold or other
commercial minerals you could loose part or all of your investment.

We Will Need Additional Financing To Determine If There Is Gold Or Other
Commercial Minerals And To Maintain The Mineral Claims.

Our success will depend on our ability to raise additional capital. We have met
our legal exploration commitments until 2012. However, at this time, we have not
found a gold deposit and further exploration is required. There is no assurance
whatsoever that funds will be available from any source or, if available, that
they can be obtained on terms acceptable to us to make these investments. If
funds are not available in the amounts required to maintain an interest, we will
be unable to proceed further on the Committee Bay properties and our operations
would be severely limited, and we would be unable to reach our objective. This
could cause the loss of all or part of your investment.

The Report Of Our Independent Registered Public Accounting Firm Contains An
Explanatory Paragraph Questioning Our Ability To Continue As A Going Concern.

The report of our independent registered public accounting firm on our
consolidated financial statements as of June 30, 2005 and for the years ended
June 30, 2005 and 2004 and for the period July 1, 2002 (inception of exploration
stage) through June 30, 2005 includes an explanatory paragraph questioning our
ability to continue as a going concern. This paragraph indicates that we have
not yet commenced revenue producing operations and have a retained deficit of
A$31,406,000 which conditions raise substantial doubt about our ability to
continue as a going concern. Our consolidated financial statements do not
include any adjustment that might result from the outcome of this uncertainty.

We Are A Small Operation And Do Not Have Significant Capital.

Because we will have limited working capital, we must limit our exploration. If
we are unable to raise the capital required to undertake adequate exploration,
we may not find gold or other commercial minerals even though our property may
contain gold or other commercial minerals. If we do not find gold or other
commercial minerals we may be forced to cease operations and you may lose your
entire investment.

We May Not Find Any Ore Reserves That Are Economical

If we are unable to raise the required capital or we do not find gold or other
commercial minerals on the properties or we cannot remove the gold or other
commercial minerals discovered economically, we may have to look for other
mineral rights on other properties in Canada or other parts of the world.
Alternatively, we may cease operations altogether and you may lose your entire
investment.

Weather Interruptions In Nunavet May Affect And Delay Our Proposed Exploration
Operations.

We can only work above ground at our mineral claims in Nunavet, Canada from late
May until early October of each year. Once we are able to work underground, we
plan to conduct our exploration year round, however, it is possible that snow or
rain could cause roads leading to our claims to be impassible. This could impair
our ability to meet our objectives and may increase our costs beyond our
ability, if any, to secure financing, which would adversely affect the value of
your investment and our ability to carry on business.

If Our Officers And Directors Stopped Working For Us, We Would Be Adversely
Impacted.

Our Vice President Exploration and Chief Operating Officer are employed on a
full time employment contract. Other than these officers, none of our other
officers or directors work for us on a full-time basis. There are no proposals
or definitive arrangements to compensate our officers and directors or to engage
them on a full-time basis. They each rely on other business activities to
support themselves. They each have a conflict of interest in that they are
officers and directors of other companies. You must rely on their skills and
experience in order for us to reach our objective. We have no employment
agreements or key man life insurance policy on any of them. The loss of some or
all of these officers and directors could adversely affect our ability to carry
on business and could cause you to loose part or all of your investment.

We Could Encounter Delays Due To Regulatory And Permitting Delays.

We could face delays in obtaining mining permits and environmental permits. Such
delays, could jeopardize financing, if any, in which case we would have to delay
or abandon work on the properties.

Gold Price Fluctuations.

If we are successful in developing a gold ore reserve, our ability to raise the
money to put it into production and operate it at a profit will be dependant on
the then existing market price of gold. Declines in the market prices of gold
may render reserves containing relatively low grades of ore uneconomic to
exploit, and we may be required to discontinue exploration, development or
mining on the properties, or write down our assets. If the price of gold is too
low we will not be able to raise the money or produce any revenue. We cannot
predict the future market price of gold. A sustained decline in the market price
of gold could cause a reduction in the value of your investment and you may lose
all or part of your investment. However, in September 2005, the gold price
reached an 18 year high.

There Are Uncertainties Inherent In The Estimation Of Gold Or Other Mineral
Reserves.

Based upon our preliminary study of the properties we believe that the potential
for discovering gold reserves exists, but we have not identified such gold
reserves and we are not able to estimate the probability of finding recoverable
gold ore. Such estimates cannot be calculated from the current available
information. Reserve estimates, including the economic recovery of gold ore,
will require us to make assumptions about recovery costs and gold market prices.
Reserve estimation is, by its nature, an imprecise and subjective process and
the accuracy of such estimates is a function of the quality of available data
and of engineering and geological interpretation, judgment and experience. The
economic feasibility of the properties will be based upon our estimates of the
size and grade of ore reserves, metallurgical recoveries, production rates,
capital and operating costs, and the future price of gold. If such estimates are
incorrect or vary substantially it could effect our ability to develop an
economical mine and would reduce the value of your investment.

If We Define An Economic Ore Reserve And Achieve Production, It Will Decline In
The Future. An Ore Reserve Is A Wasting Asset.

Our future ore reserve and production, if any, will decline as a result of the
exhaustion of reserves and possible closure of any mine that might be developed.
Eventually, at some unknown time in the future, all of the economically
extractable ore will be removed from the properties, and there will be no ore
remaining. This is called depletion of reserves. Ultimately, we must acquire or
operate other properties in order to continue as an on going business. Our
success in continuing to develop reserves, if any, will affect the value of your
investment.

There Are Significant Risks Associated With Mining Activities.

The mining business is generally subject to risks and hazards, including
quantity of production, quality of the ore, environmental hazards, industrial
accidents, the encountering of unusual or unexpected geological formations,
cave-ins, flooding, earthquakes and periodic interruptions due to inclement or
hazardous weather conditions. These occurrences could result in damage to, or
destruction of, our mineral properties or production facilities, personal injury
or death, environmental damage, reduced production and delays in mining, asset
write-downs, monetary losses and possible legal liability.

We could incur significant costs that could adversely affect our results of
operation. Insurance fully covering many environmental risks (including
potential liability for pollution or other hazards as a result of disposal of
waste products occurring from exploration and production) is not generally
available to us or to other companies in the industry. What liability insurance
we carry may not be adequate to cover any claim.

We Are Subject To Significant Environmental And Other Governmental Regulations
That Can Require Substantial Capital Expenditure, And Can Be Time-Consuming.

We are required to comply with various Canadian laws and regulations pertaining
to exploration, development and the discharge of materials into the environment
or otherwise relating to the protection of the environment, all of which can
increase the costs and time required to attain operations. We will have to
obtain exploration, development and environmental permits, licenses or approvals
that may be required for our operations. There can be no assurance that we will
be successful in obtaining, if required, a permit to commence exploration,
development and operation, or that such permit can be obtained in a timely
basis. If we are unsuccessful in obtaining the required permits it may adversely
affect our ability to carry on business and cause you to lose part or all of
your investment.

Mining Accidents Or Other Adverse Events At Our Property Could Reduce Our
Production Levels.

If and when we reach production it may fall below estimated levels as a result
of mining accidents, cave-ins or flooding on the properties. In addition,
production may be unexpectedly reduced if, during the course of mining,
unfavorable ground conditions or seismic activity are encountered, ore grades
are lower than expected, or the physical or metallurgical characteristics of the
ore are less amenable to mining or processing than expected. The happening of
these types of events would reduce our profitably or could cause us to cease
operations which would cause you to lose part or all of your investment.

The acquisition of gold mineral properties is subject to substantial
competition. If we must pursue alternative properties, companies with greater
financial resources, larger staffs, more experience, and more equipment for
exploration and development may be in a better position than us to compete for
properties. We may have to undertake greater risks than more established
companies in order to compete which could affect the value of your investment..

We are substantially dependent upon AXIS Consultants To Carry Out Our Activities

We are substantially dependent upon AXIS for our senior management, financial
and accounting, corporate legal and other corporate headquarters functions. For
example, each of our officers is employed by AXIS and, as such, is required by
AXIS to devote substantial amounts of time to the business and affairs of the
other shareholders of AXIS.

Pursuant to a services agreement, AXIS provides us with office facilities,
administrative personnel and services, management and geological staff and
services. No fixed fee is set in the agreement and we are required to reimburse
AXIS for any direct costs incurred by AXIS for us. In addition, we pay a
proportion of AXIS indirect costs based on a measure of our utilization of the
facilities and activities of AXIS plus a service fee of not more than 15% of the
direct and indirect costs. To date, AXIS has not charged us a service fee but
there can be no assurance that AXIS will not charge a fee in the future. This
service agreement may be terminated by us or AXIS on 60 days' notice. See
"Certain Relationships and Related Party Transactions."

Future Sales of Common Stock Could Depress The Price Of Our Common Stock

Future sales of substantial amounts of common stock pursuant to Rule 144 under
the Securities Act of 1933 or otherwise by certain stockholders could have a
material adverse impact on the market price for the common stock at the time.
There are presently 15,661,358 outstanding shares of our common stock held by
stockholders which are deemed "restricted securities" as defined by Rule 144
under the Securities Act. Under certain circumstances, there shares may be sold
without registration pursuant to the provisions of Rule 144. In general, under
rule 144, a person (or persons whose shares are aggregated) who has satisfied a
one-year holding period may, under certain circumstances, sell within any
three-month period a number of restricted securities which does not exceed the
greater of one (1%) percent of the shares outstanding or the average weekly
trading volume during the four calendar weeks preceding the notice of sale
required by Rule 144. In addition, Rule 144 permits, under certain
circumstances, the sale of restricted securities without any quantity
limitations by a person who is not an affiliate of ours and has satisfied a
two-year holding period. Any sales of shares by stockholders pursuant to Rule
144 may have a depressive effect on the price of our common stock.

Our Common Stock Is Traded Over the Counter, Which May Deprive Stockholders Of
The Full Value Of Their Shares

Our common stock is quoted via the Over The Counter Bulletin Board (OTCBB). As
such, our common stock may have fewer market makers, lower trading volumes and
larger spreads between bid and asked prices than securities listed on an
exchange such as the New York Stock Exchange or the NASDAQ. These factors may
result in higher price volatility and less market liquidity for the common
stock.

A Low Market Price May Severely Limit The Potential Market For Our Common Stock

Our common stock is currently trading at a price substantially below $5.00 per
share, subjecting trading in the stock to certain SEC rules requiring additional
disclosures by broker-dealers. These rules generally apply to any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions (a "penny stock"). Such rules require the delivery, prior to
any penny stock transaction, of a disclosure schedule explaining the penny stock
market and the risks associated therewith and impose various sales practice
requirements on broker-dealers who sell penny stocks to persons other than
established customers and institutional or wealthy investors. For these types of
transactions, the broker-dealer must make a special suitability determination
for the purchaser and have received the purchaser's written consent to the
transaction prior to the sale. The broker-dealer also must disclose the
commissions payable to the broker-dealer, current bid and offer quotations for
the penny stock and, if the broker-dealer is the sole market maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Such information must be provided to the customer orally or in
writing before or with the written confirmation of trade sent to the customer.
Monthly statements must be sent disclosing recent price information for the
penny stock held in the account and information on the limited market in penny
stock. The additional burdens imposed upon broker-dealers by such requirements
could discourage broker-dealers from effecting transactions in our common stock.

The Market Price Of Your Shares Will Be Volatile.

The stock market price of gold mining exploration companies like us has been
volatile. Securities markets may experience price and volume volatility. The
market price of our stock may experience wide fluctuations that could be
unrelated to our financial and operating results. Such volatility or
fluctuations could adversely affect your ability to sell your shares and the
value you might receive for those shares.

Item 2 Properties

The Company occupies certain executive and office facilities in Melbourne,
Victoria, Australia which are provided to it pursuant to the Service Agreement
with AXIS. See "Item 1- Business- Employees" and "Item 12- Certain Relationships
and Related Transactions". The Company believes that its administrative space is
adequate for its current needs.

In addition, we have an office in North America at Suite 1801, 1 Yonge Street,
Toronto ON Canada. The office receives mail, couriers and facsimiles on our
behalf and forwards any documents received to us. The lease is for six months
and can be renewed on a month to month basis. We pay a fee of CDN$30 per month.
This is a temporary arrangement whilst we determine whether to open a permanent
office.

Item 3 Legal Proceedings

There are no pending legal proceedings to which the Company is a party, or to
which any of its property is the subject, which the Company considers material.

Item 4 Submission of Matters to a Vote of Security Holders

Not Applicable

PART II

Item 5 Market for Common Equity and Related Stockholder Matters

Our Common Stock is traded in the over-the-counter market and quoted on the
OTC-Bulletin Board under the symbol "BYRE". The trading for the Common Stock has
been sporadic and the market for the Common Stock cannot be classified as an
established trading market.

The following table sets out the high and low bid information for the Common
Stock as reported by the National Quotation Service Bureau for each
period/quarter indicated in US$:

Calendar Period High Bid (1) Low Bid (1)
--------------- --------- --------

2003
First Quarter 3.50 1.01
Second Quarter 2.25 1.75
Third Quarter 2.50 1.50
Fourth Quarter 3.20 2.25

2004
First Quarter 10.01 2.40
Second Quarter 9.50 9.50
Third Quarter 9.50 8.00
Fourth Quarter 8.00 1.50

2005
First Quarter 2.50 1.01
Second Quarter 1.75 0.65

(1) The quotations set out herein reflect inter-dealer prices without retail
mark-up, mark-down or commission and may not necessarily reflect actual
transactions.

Shareholders

As of August 31, 2005 the Company had approximately 245 shareholders of record.

Dividend Policy

It is the present policy of the Board of Directors to retain earnings, when
incurred, for use in our business. We have not declared any cash dividends to
the holders of its Common Stock and does not intend to declare such dividends in
the foreseeable future

Transfer Agent

Our United States Transfer Agent and Registrar is The Bank of New York.

Proposed Dual Listing on Toronto Venture Exchange

We have lodged an application with TSX-V to dual list our shares of common stock
on TSX-V. Cannacord Capital Corporation, have agreed to act as sponsor for the
listing and may offer to act as agent on a commercially reasonably basis,
following a successful listing, to assist us in raising up to CDN$3 million in
flow through financing to assist us with funding our operations.

Item 6 Management's Discussion and Analysis of Financial Condition or
Plan of Operation

General

The following discussion and analysis of our financial condition and plan of
operation should be read in conjunction with the Financial Statements and
accompanying notes and the other financial information appearing elsewhere in
this report. This report contains numerous forward-looking statements relating
to our business. Such forward-looking statements are identified by the use of
words such a s believes, intends, expects, hopes, may, should, plan, projected,
contemplates, anticipates or similar words. Actual operating schedules, results
of operations, ore grades and mineral deposit estimates and other projections
and estimates could differ materially form those projected in the
forward-looking statements.

We are an exploration stage mining company. Our objective is to exploit out
interest in the mineral claims in Nunavut, Canada. Our principal exploration
target is for gold and we are seeking to determine whether adequate gold
reserves are present on the property covered by our claims to develop an
operating mine. We are in the initial stages of our exploration program and we
have not yet identified any ore reserves. We have not generated any revenues
from operations.

Selected Financial Data

Our selected consolidated financial data presented below for each of the years
in the two-year period ended June 30, 2005, and the balance sheet data at June
30, 2004 and 2005 have been derived from consolidated financial statements,
which have been audited by PKF, Certified Public Accountants, a Professional
Corporation. The selected financial data should be read in conjunction with our
consolidated financial statements for each of the years in the two-year period
ended June 30, 2005, and Notes thereto, which are included elsewhere in this
Annual Report.

Consolidated Statement of Operations Data
(in thousands, except per share data)

Year ended June 30

Conv.
Transl.
2004 2005 2005
A$ A$ US$

Revenues - - -
----------------------------------------------

Costs and expenses 1,722 2,603 1,984
----------------------------------------------

Loss from operations (1,722) (2,603) (1,84)

Other income (loss) (1) 3 2
----------------------------------------------

Profit (loss) before income
taxes (1,723) (2,600) (1,984)

Provision for income taxes - - -
----------------------------------------------

Net profit (loss) from (1,723) (2,600) (1,984)
Continuing Operations

Net loss from - - -
Discontinued Operations
----------------------------------------------

Net profit (loss) (1,723) (2,600) (1,984)
----------------------------------------------

A$ A$ US$

Net profit (loss) per share

On continuing operations (.18) (.16) (.12)

On discontinued - - -
----------------------------------------------
operations
(.18) (.16) (.12)
----------------------------------------------

Weighted average number
of shares outstanding (000's) 9,385 16,714 16,714
==============================================

Consolidated Balance Sheet Data

A$ A$ US$

Total assets 1,466 227 173
Total liabilities 599 1,577 1,201
----------------------------------------------

Stockholders' equity (deficit) 867 (1,350) (1,029)
----------------------------------------------

Foreign Currency Translation

The majority of our administrative operations are in Australia and, as a result,
our accounts are reported in Australian dollars. The income and expenses of its
foreign operations are translated into Australian dollars at the average
exchange rate prevailing during the period. Assets and liabilities of the
foreign operations are translated into Australian dollars at the period-end
exchange rate. The following table shows the period-end rates of exchange of the
Australian and Canadian dollar compared with the US dollar during the periods
indicated.

Year ended
June 30

2004 A$1.00 = US$0.6903
CDN$1.00 = US$0.7433
2005 A$1.00 = US$0.7620
CDN$1.00 = US$0.9279

The exchange rate between the A$ and US$ has moved by 10.4% between June 30,
2004 and 2005. Accordingly, a direct comparison of costs between fiscal 2004 and
2005 is not necessarily a true comparison.

Plan of Operation

We have A$2,000 in cash at June 30, 2005. We are investigating the possibility
of raising money in the USA and Canada for exploration and working capital
purposes.

During fiscal 2004 and 2005, we undertook a field exploration program on our
Committee Bay and Slave Properties at a cost of A$2,228,000. This was more than
the minimum required expenditure. As a result, we do not have a legal obligation
to undertake further exploration on our properties during their life. However
our properties are prospective for gold and other minerals. Subject to
financing, we plan to undertake further exploration in the 2006 summer season.
At this stage, we have not prepared a budget for the 2006 exploration program.
Our budget for general and administration for fiscal 2005 is A$0.8 million. We
are currently investigating capital raising opportunities which may be in the
form of either equity or debt, to provide funding for working capital purposes
and future exploration programs. There can be no assurance that such a capital
raising will be successful, or that even if an offer of financing is received by
the Company, it is on terms acceptable to the Company.

As set out in Item1 "Employees" we have a Vice President Exploration and a Chief
Operating Officer, use temporary employees in our field exploration program and
the services of our Chief Executive Officer and Chief Financial Officer as well
as certain clerical employees are provided by AXIS. At the current time, we have
no plans to change these arrangements or employ any further persons.

Results of Operations

Year ended June 30, 2005 versus Year ended June 30, 2004

Total costs and expenses have increased from A$1,722,000 for the year ended June
30, 2004 to A$2,597,000 (US$1,979,000) for the year ended June 30, 2005. The
increase was a net result of:

i) An increase in exploration expenditure written off from A$951,000 in fiscal
2004 to A$1,277,000 (US$973,000) in fiscal 2005. In fiscal 2005, we
completed our summer season field program on the Committee Bay and Slave
Properties. These properties are in Nunavet in an isolated area and
exploration can only be undertaken between June and August each year due to
ground conditions. Exploration is costly as we were required to hire and
construct a temporary camp which also had to be transported by charter
flight. All supplies and casual employees also needed to be transported to
the temporary camp by charter flights and/or helicopter. The properties are
located approximately 100 kilometers from the camp and employees are
transported by helicopter daily from camp to the exploration site. In
addition, our Vice President Exploration was employed for a full twelve
months compared to three months in fiscal 2004. In fiscal 2004 (April
2004), we appointed a Vice President Exploration in Canada and commenced
the exploration program on the Committee Bay Properties. During the 2003
fiscal year, the Company entered into an arrangement in Tibet in China (see
Item 1 Business - General and History of the Company). This arrangement was
subsequently cancelled however the Company incurred exploration expenditure
totalling A$109,000 in the form of salaries, consulting fees, travel and
accommodation and legal expenses. There was no comparable transaction in
the 2004 fiscal year.

ii) A decrease in interest expense from A$122,000 in fiscal 2004 to A$44,000
(US$34,000) in fiscal 2005. During fiscal 2005, we borrowed A$644,633
(US$491,210) from Wilzed, a company which our President and CEO is a
Director and shareholder. Wilzed charged us A$31,235 (US$23,801) in
interest. Wilzed charged interest at a rate between 9.10% and 9.35% during
fiscal 2005. AXIS provides management and geological services to us
pursuant to a Service Deed dated November 25, 1988. AXIS charged interst a
rate between 10.60% and 10.85% for fiscal 2005. In March 2004, we repaid
all in debt owing to Chevas Pty Ltd and AXIS. During the 2004 year, an
interest rate of 8.60% was charged on outstanding amounts by Chevas. Chevas
is a company associated with Mr. J.I. Gutnick, our President, which
provided funding for the Company's operations during the year. AXIS
provides management and geological services to the Company pursuant to a
Service Deed dated November 25, 1988. AXIS charged interest at a rate
between 10.10% and 10.60% for fiscal 2004.

iii) An increase in legal, accounting and professional costs from A$112,000 in
fiscal 2004 to A$189,000 (US$144,000) in fiscal 2005. During fiscal 2005,
we incurred legal expenses of A$58,874 (US$44,862) in relation to the
proposed listing on Toronto Venture Exchange and A$40,763 (US$31,061) in
relation to financing documents and general legal work; audit related fees
of A$56,369 (US$42,953) being A$52,061 (US$39,670) for the professional
services in relation to the financial statements in the quarterly Form
10-QSB's and annual Form 10-KSB and $4,308 (US$3,282) for professional
services in relation to the listing application on Toronto Venture
Exchange; and A$32,826 (US$23,668) in costs from our stock transfer agent
for management of the share register. During fiscal 2004, we incurred legal
expenses of A$31,500 which relates to the preparation of documentation for
a dual listing on Toronto Venture Exchange; A$23,000 being legal costs
involved in the preparation of a registration statement for the purpose of
registering shares of common stock and warrants issued to RAB in the
placement that occurred in April 2004; and general legal expenses to do
with the normal activities of the Company. We also changed independent
accountants during the fiscal 2003 year and as a result, incurred
additional costs of A$5,000 during fiscal 2004.

iv) An increase in administrative costs from A$537,000 in fiscal 2004 to
A$716,000 (US$546,000) in fiscal 2005. During fiscal 2005, the management
fee charged by AXIS to us was A$120,000 (US$91,440); AXIS charged us
A$224,065 (US$170,737) for Director's fees and salaries incurred on behalf
of the Company which relates to fees paid to independent Directors and the
cost of the President and Chief Executive Officer, Director, Secretary and
Chief Financial Officer and other staff of AXIS who provided services to
the Company. One independent Director charged the Company directly
amounting to A$20,000 (US$15,240). The Company paid A$68,000 in insurance
premiums and there was no comparable amount in fiscal 2004 as the insurance
policies were only taken out when the operations in Canada commenced at the
end of fiscal 2004. In November 2004, we appointed a Chief Operating
Officer and we paid his salary totalling A$82,823 (US$63,111). Prior to
that date, the current Chief Operating Officer had provided consulting
services and we had paid him A$51,132 (US$38,962). In addition, we have
paid A$35,732 (US$27,228) to Cannacord who have agreed to sponsor our
listing on Toronto Venture Exchange. During fiscal 2004, the management fee
charged by AXIS to the Company was A$100,000. In fiscal 2004, AXIS charged
the Company A$205,000 for Director's fees and salaries incurred on behalf
of the Company which related to fees paid to independent Directors and the
cost of the President and Chief Executive Officer, Director, Secretary and
Chief Financial Officer and other staff of AXIS who provided services to
the Company. One Independent Director charged the Company directly from
January 1, 2004 and this amounted to A$11,000. The Company incurred
A$56,000 in travel and accommodation costs in relation to travel by
Directors and officers on capital raising trips and trips in relation to
the proposed dual listing of the Company's securities on the Toronto
Venture Exchange; A$131,000 for consultants, a majority of which related to
the costs of the Vice President Investor Relations and Business
Development, who was a consultant during the year; and A$19,000 for
lodgement costs of filings with the SEC.

v) an increase in stock based compensation from A$nil for fiscal 2004 to
A$377,000 (US$287,000) for fiscal 2005. Following shareholder approval on
January 27, 2005 the Company issued 1,400,000 options (and up to a further
500,000 options) at an exercise price of US$1.00 per option pursuant to the
2004 Stock Option Plan. Of the total 1,400,000 options issued, 350,000 vest
immediately following shareholder approval, 50,000 vest on March 31, 2005,
333,331 vest on July 27, 2006, 333,334 vest on January 27, 2006 and the
balance vest on July 27, 2006. If the additional 500,000 options are
granted, they will vest 250,000 on October 31, 2005 and 250,000 on December
31, 2006. The exercise price of US$1.00 was derived from the issue price of
common stock from the placement of shares on March 31, 2004 and is
considered by the Company's Directors to be the fair value of the common
stock.

The Company has accounted for all options issued in 2005 based upon their
fair market value using the Black Scholes pricing model. There were no
options issued by the Company prior to 2005.

The Company has calculated the fair value of the options using the Black
Scholes valuation method using a share price of US$1.00, strike price of
US$1.00, maturity period of 5 years 7 1/2 months, risk free interest rate
of 5.15% and volatility of 20%. This equates to a value of US31.85 cents
per option. The total value of the options equates to A$575,100
(US$438,200) and has been reflected as Deferred Compensation Expense within
the Shareholders Equity Statement. The gross fair value is amortised into
operations over the vesting period. For fiscal 2005, the amortization
amounted to $377,210.

Accordingly, the loss from operations increased from A$1,723,000 for the year
ended June 30, 2004 to A$2,603,000 (US$1,984,000) for the year ended June 30,
2005.

The net loss amounted to A$2,600,000 (US$1,982,000) for the year ended June 30,
2005 compared to a net loss of A$1,723,000 for the year ended June 30, 2004. The
net loss per common equivalent share in 2005 was A$0.16 cents (US$0.12) compared
with a net loss with a common equivalent share of A$0.18 cents in the prior
year.

Liquidity and Capital Resources

For the fiscal year 2005, net cash used in operating activities was A$2,032,000
(US$1,549,000) primarily consisting of amounts spent on exploration of
A$1,277,000 (US$973,000), a decrease in prepayments and deposits of A$159,000
(US$121,000) for the exploration programme, an increase in accounts payable and
accrued expenses of A$110,000 (US$84,000) and repayment of short term
advance-affiliates of A$104,000 (US$79,000); net cash provided by financing
activities was A$922,000 (US$703,000) being proceeds from long-term loans from
affiliates of A$922,000 (US$703,000) and net cash used in investing activities
of A$6,000 (US$4,000) being purchase of plant and equipment.

As of June 30, 2005 we had short-term obligations of A$605,000 (US$460,000)
consisting mainly of accounts payable and accrued expenses.

We have A$2,000 in cash at June 30, 2005. We are investigating the possibility
of raising cash flow through money in Canada for exploration purposes. We have
lodged an application with TSX-V to dual list our shares of common stock on
TSX-V. Cannacord Capital Corporation, have agreed to act as sponsor for the
listing and may offer to act as agent on a commercially reasonably basis,
following a successful listing, to assist us in raising up to CDN$3 million in
flow through financing to assist us with funding our operations.

During fiscal 2004 and 2005, we undertook a field exploration program on our
Committee Bay and Slave Properties. This was more than the minimum required
expenditure. As a result, we do not have a legal obligation to undertake further
exploration on our properties during their life. However our properties are
prospective for gold and other minerals. Subject to financing, we plan to
undertake further exploration in the 2006 summer season. At this stage, we have
not prepared a budget for the 2006 exploration program. Our budget for general
and administration for fiscal 2006 is A$0.8 million. We are currently
investigating capital raising opportunities which may be in the form of either
equity or debt, to provide funding for working capital purposes and future
exploration programs. There can be no assurance that such a capital raising will
be successful, or that even if an offer of financing is received by the Company,
it is on terms acceptable to the Company.

We have been preparing a listing application for the dual listing of our shares
of common stock on Toronto Venture Exchange. The listing application was lodged
with TSX in June 2004 and we are currently in the process of responding to
questions raised by TSX. We believe that a dual listing of our shares of common
stock will provide liquidity in our shares. There can be no assurance that the
dual listing on TSX will eventuate or that such listing will create an increase
in the volume of trading of our shares of common stock.

Cautionary "Safe Harbour" Statement under the United States Private Securities
Litigation Reform Act of 1995.

Certain information contained in this Form 10-KSB are forward-looking statements
within the meaning of the Private Securities Litigation Act of 1995 ("the Act"),
which became law in December 1995. In order to obtain the benefits of the "safe
harbor" provisions of the Act for any such forward-looking statements, we wish
to caution investors and prospective investors about significant factors which,
among others, have in some cases affected our actual results and are in the
future likely to affect our actual results and cause them to differ materially
from those expressed in any such forward-looking statements. This Form 10-KSB
contains forward-looking statements relating to future financial results. Actual
results may differ as a result of factors over which we have no control,
including, without limitation, the risks of exploration and development stage
projects, political risks of development in foreign countries, risks associated
with environmental and other regulatory matters, mining risks and competitors,
the volatility of gold prices and movements in foreign exchange rates.

Impact of Australian Tax Law

Australian resident corporations are subject to Australian income tax on their
non-exempt worldwide assessable income (which includes capital gains), less
allowable deductions, at the rate of 30%. Foreign tax credits are allowed where
tax has been paid on foreign source income, provided the tax credit does not
exceed 30% of the foreign source income.

Under the U.S./Australia tax treaty, a U.S. resident corporation such as us is
subject to Australian income tax on net profits attributable to the carrying on
of a business in Australia through a "permanent establishment" in Australia. A
"permanent establishment" is a fixed place of business through which the
business of an enterprise is carried on. The treaty limits the Australian tax on
interest and royalties paid by an Australian business to a U.S. resident to 10%
of the gross interest or royalty income unless it relates to a permanent
establishment. Although we consider that we do not have a permanent
establishment in Australia, it may be deemed to have such an establishment due
to the location of its administrative offices in Melbourne. In addition we may
receive interest or dividends from time to time.

Impact of Australian Governmental, Economic, Monetary or Fiscal Policies

Although Australian taxpayers are subject to substantial regulation, we believe
that our operations are not materially impacted by such regulations nor is it
subject to any broader regulations or governmental policies than most Australian
taxpayers.

Impact of Recent Accounting Pronouncements

For a discussion of the impact of recent accounting pronouncements on the
Company's financial statements, see Note 2 to the Company's Consolidated
Financial Statements which are attached hereto

Quantitative and Qualitative Disclosures about Market Risk

Bay Resources is exposed to interest rate risk primarily through its loan
facilities. The Company utilizes these borrowings to meet its working capital
needs.

At June 30, 2005, the Company had outstanding borrowings of approximately
$972,000 under its Loan Facilities. In the event that interest rates associated
with these facilities were to increase 100 basis points, the impact on future
cash flows would be a decrease of approximately $9,720 annually.

Item 7. Financial Statements

See F Pages

Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

None

Item 8A Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Our principal executive officer and its principal financial officer,
evaluated the effectiveness of our disclosure controls and procedures as of
the end of the period covered by this report. Based on that evaluation,
such principal executive officer and principal financial officer concluded
that, our disclosure controls and procedures as of the end of the period
covered by this report have been designed and are functioning effectively
to provide reasonable assurance that the information required to be
disclosed by us in reports filed under the Securities Exchange Act of 1934
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. We believe that a controls system,
no matter how well designed and operated, can not provide absolute
assurance that the objectives of the controls system are met, and no
evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected.

In preparation for the annual report of management regarding our evaluation
of our internal controls that is required to be included in our annual
report for the year ended June 30, 2006 by Section 404 of the
Sarbanes-Oxley Act of 2002, we will need to assess the adequacy of our
internal control, remediate any weaknesses that may be identified, validate
that controls are functioning as documented and implement a continuous
reporting and improvement process for internal controls. We may discover
deficiencies that require us to improve our procedures, processes and
systems in order to ensure that our internal controls are adequate and
effective and that we are in compliance with the requirements of Section
404 of the Sarbanes-Oxley Act. If the deficiencies are not adequately
addressed, or if we are unable to complete all of our testing and any
remediation in time for compliance with the requirements of Section 404 of
the Sarbanes-Oxley Act and the SEC rules under it, we would be unable to
conclude that our internal controls over financial reporting are designed
and operating effectively, which could adversely affect our investor
confidence in our internal controls over financial reporting.

(b) Change in Internal Control over Financial Reporting. No change in our
internal control over financial reporting occurred during our most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect our internal control over financial reporting.

PART III

Item 9. Directors and Executive Officers of the Registrant

The following table sets out certain information in relation to each person who
held a position of Director and/or executive officer of the Company during the
year ended June 30, 2005.

Name Age Position(s) Held

Joseph Gutnick 53 Chairman of the Board
President, Chief Executive Officer and
Director.

David Tyrwhitt 67 Director.

Peter Lee 48 Director, Secretary, Chief Financial
Officer and Principal Accounting Officer.

Paul Ehrlich 47 Director

Joseph Gutnick
Mr Gutnick has been Chairman of the Board, President and Chief Executive Officer
since March, 1988. He has been a Director of numerous public listed companies in
Australia specialising in the mining sector since 1980 and is currently a
Director of Astro Diamond Mines N.L., Great Gold Mines N.L., and Quantum
Resources Limited and President and CEO of Legend International Holdings Inc, a
US corporation listed on the OTC market. Mr. Gutnick was previously Executive
Chairman of Tahera Corporation, a company that is listed on Toronto Stock
Exchange from May 2000 to October 2003 and has previously been a Director of the
World Gold Council. He is a Fellow of the Australasian Institute of Mining &
Metallurgy and the Australian Institute of Management and a Member of the
Australian Institute of Company Directors.

David Tyrwhitt
Dr Tyrwhitt was appointed a Director in November 1996. He is a geologist,
holding a Bachelor of Science and PhD degrees and has 40 years experience in
mineral exploration and management development and operation of gold mines in
Australia. Dr Tyrwhitt has been a Director of numerous public listed companies
in Australia in the mining industry and is currently a Director of Astro Diamond
Mines N.L., Great Gold Mines N.L., and Quantum Resources Limited listed on the
Australian Stock Exchange and Legend International Holdings Inc, a US
corporation listed on the OTC market.

Peter Lee
Mr Lee has been Chief Financial Officer and Principal Accounting Officer since
August 1989 and was appointed a Director in February 1996. Mr Lee is a Member of
the Institute of Chartered Accountants in Australia, a Fellow of Chartered
Secretaries Australia Ltd., a Member of the Australian Institute of Company
Directors and holds a Bachelor of Business (Accounting) from Royal Melbourne
Institute of Technology. He has over 20 years commercial experience and is
currently General Manager Corporate and Company Secretary of several listed
public companies in Australia and CFO and Secretary of Legend International
Holdings Inc, a US corporation listed on the OTC market.

Paul Ehrlich
Mr. Ehrlich is an attorney of 20 years experience in the fields of commercial
law and commercial litigation. From 1989 to 2001 Mr.Ehrlich was a partner in a
major national Australian law firm. He has expertise in a range of corporate
areas including mergers and acquisition (with an emphasis on public company
takeovers, litigation and trade sales), securities law, public raisings, IPO's,
government privatisation, corporate reconstructions and the negotiation and
drafting of complex contractual and commercial arrangements. Mr. Ehrlich
specialises in areas of complex corporate litigation and has conducted such
litigation on behalf of clients in the Supreme Courts of Victoria, New South
Wales, South Australia, Western Australia and in the Federal Court of Australia
and in the High Court of Australia. He also specialises in all areas of mining
resource law and project finance.

Mr Ehrlich resigned as a Director in September 2005 and ceased to be a member of
the Audit and Remuneration Committee's.

Mordechai Gutnick
On September 14, 2005, Mr Modechai Zev Gutnick was elected a non-executive
Director. Mr Mordechai Gutnick is a businessman and long-term investor in the
mining industry. He is also a Director of Astro Diamond Mines N.L. (May 2003 to
current), Great Gold Mines N.L. (May 2003 to current) and Quantum Resources
Limited (May 2003 to current). Mr M Z Gutnick has been appointed to the Audit
and Remuneration Committee's, effective September 14, 2005. Mr Mordechai Gutnick
is the son of Mr Joseph Gutnick.

Mr. J I Gutnick was formerly the Chairman of the Board, Dr. Tyrwhitt was
formerly an independent Director and Mr. Lee was formerly Company Secretary of
Centaur Mining & Exploration Ltd., an Australian corporation, which commenced an
insolvency proceeding in Australia in March 2001.

Board of Directors

Our Certificate of Incorporation provides that the number of Directors of the
Company shall be not less than six nor more than nine as shall be fixed in the
by-laws of the Company.

Directors need not be stockholders of the Company or residents of the State of
Delaware. Directors are elected for an annual term and generally hold office
until the next Directors have been duly elected and qualified. Directors may
receive compensation for their services as determined by the Board of Directors.
A vacancy on the Board may be filled by the remaining Directors even though less
than a quorum remains. A Director appointed to fill a vacancy remains a Director
until his successor is elected by the Stockholders at the next annual meeting of
Shareholder or until a special meeting is called to elect Directors.

The executive officers of the Company are appointed by the Board of Directors.
There are no family relationships between any Directors or executive officers of
the Company unless otherwise disclosed.

Audit Committee

Our Board of Directors has an Audit Committee comprised of Dr Tyrwhitt and Mr M
Z Gutnick, both of whom are independent Directors. Our Audit Committee does not
include a "financial expert" as defined in Item 401 (e) of Regulation S-B. The
Company only has two independent Directors and neither of these independent
Directors has a finance background.

Code of Ethics

We have adopted a Code of Conduct and Ethics and it applies to all Directors,
Officers and employees. A copy of the Code of Conduct and Ethics is posted on
our website and we will provide a copy to any person without charge. If you
require a copy, you can download it from our website or alternatively, contact
us by facsimile or email and we will send you a copy.

Section 16(a) Beneficial Ownership Reporting Compliance

Pursuant to Section 16(a) of the Securities Exchange Act of 1934, our Directors,
executive officers and beneficial owners of more than 10% of the outstanding
Common Stock are required to file reports with the Securities and Exchange
Commission concerning their ownership of and transactions in our Common Stock
and are also required to provide to us copies of such reports. Based solely on
such reports and related information furnished to us, we believe that in fiscal
2005 all such filing requirements were complied with in a timely manner by all
Directors and executive officers except (i) Mr Alford filed a Form 3 after the
due date; (ii) Mr Althaus filed a Form 3 and nine Form 4's after the due dates
for such forms and has not yet filed a Form 4 with respect to the grant of
options to him; (iii) Mr Lee has not yet filed a Form 4 with respect to the
grant of options to him; and (iv) Dr Tyrwhitt has not yet filed a Form 4 with
respect to the grant of options to him.

Item 10. Executive Compensation.

The following table sets forth the annual salary, bonuses and all other
compensation awards and pay outs on account of our Chief Executive Officer for
services rendered to us during the fiscal year ended June 30, 2005, 2004 and
2003. No other executive officer received more than US$100,000 per annum during
this period.

Summary Compensation Table

Long Term
Annual Compensation Compensation Awards
---------------------------------- -------------------------
Restricted Securities
Other Annual Stock Underlying
Year Salary Compensation Awards Options
---- ------ ------------ ------ -------

Name and Principal Position
Joseph Gutnick, Chairman
of the Board and CEO 2005 $91,667(1)(2) $18,935(3) -- 500,000(4)
2004 $76,000(1)(2) $16,484(3) -- --
2003 $-(1)(2) $28,553(3) -- --
Pini Althaus, Chief
Operating Officer 2005 US$110,000(5) -- -- 250,000(6)
Craig Alford, Vice
President Exploration 2005 CDN$120,000 3,722 -- 150,000(7)
--------------------------

1. The amounts listed were paid by us to AXIS, which provides the services of
Mr. J I Gutnick and Mr Lee as well as certain other officers and employees
to the Company.
2. Excludes options granted to Edensor of which Mr JI Gutnick is a Director
and Shareholder (see Item 13 - Certain Relationships and Related Party
Transactions)
3. Includes amounts paid by AXIS to an accumulation superannuation plan on
behalf of Joseph Gutnick.

4. Includes 166,667 options that are vested 166,667 options that will vest on
January 27, 2005 and 166,667 options that will vest on July 27, 2006.
5. Mr Althaus was a consultant for the period to October 2004 and at that time
was appointed as an employee. The salary disclosed includes the consulting
fees for the period July to October 2004 and the salary for the period
November 2004 to June 2005.
6. Includes 250,000 options that are vested. In addition, subject to
availability of options under the 2004 Stock Option Plan, Mr Althaus will
be issued a further 250,000 options which will vest on August 31, 2005 and
250,000 that will vest on December 31, 2006.
7. Includes 150,000 options that are vested.

For additional information about the Service Agreement and the Consulting
Agreement see "Item 1- Business- Employees" and "Item 12- Certain Relationships
and Related Transactions".

We have a policy that we will not enter into any transaction with an officer,
Director or affiliate of the Company or any member of their families unless the
transaction is approved by the Audit Committee and the Audit Committee
determines that the terms of the transaction are no less favourable to us than
the terms available from non-affiliated third parties or are otherwise deemed to
be fair to the Company at the time authorised.

Option Grants in Last Fiscal Year

Number of Percent of Total
Shares options Granted to Market
of Common Stock Employees in Price on
Underlying Fiscal Exercise Date of Expiration
Name Options Granted Year Price Grant Date
-------------- --------------- ------------------ -------- --------- -----------

Joseph Gutnick 500,000 35.7% US$1.00 US$1.01 10/15/2014
Pini Althaus* 250,000 17.9% US$1.00 US$1.01 10/15/2014
Craig Alford 150,000 10.7% US$1.00 US$1.01 10/15/2014

*Subject to availability of options under the 2004 Stock Option Plan, Mr Althaus
will be issued a further 250,000 options which will vest on August 31, 2005 and
250,000 options which will vest on December 31, 2006.

Aggregated Option Exercises in Fiscal 2005 and Fiscal 2005 Year-End Option
Values

The person listed in the following table did not exercise any options in 2005.

Number of Shares of Common
Stock Underlying Value of Unexercised
Unexercised In-The-Money
Options at June 30, 2005 Options at June 30, 2005(1)
Name Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------- ----------- ------------- ----------- -------------

Joseph Gutnick 166,667 333,333 US$208,334 US$416,666
Pini Althaus 250,000 -- US$312,500 --
Craig Alford 150,000 -- US$187,500 --
===================

(1) Based on U.S.$1.25 per share, the June 30, 2005 closing price reported on
the OTC Bulletin Board.

2004 Stock Option Plan

The 2004 Plan provides for the granting of options. The maximum number of shares
available for awards is 10% of the issued and outstanding shares of common stock
on issue at any time. If an option expires or is cancelled without having been
fully exercised or vested, the remaining shares will generally be available for
grants of other awards.

The 2004 Plan is administered by the Remuneration Committee of the Board
comprised solely of directors who are not employees or consultants to Bay
Resources or any of its affiliated entities.

Any employee, director, officer, consultant of or to Bay Resources or an
affiliated entity (including a company that becomes an affiliated entity after
the adoption of the 2004 Plan) is eligible to participate in the 2004 Plan if
the Committee, in its sole discretion, determines that such person has
contributed significantly or can be expected to contribute significantly to the
success of Bay Resources or an affiliated entity. During any one year period, no
participant is eligible to be granted options to purchase more than 5% shares of
our issued and outstanding common stock or if they provide investor relations
activities, or are a consultant to the Company, 2% of the issued and outstanding
shares of common stock in any 12 month period.

Options granted under the 2004 Plan are to purchase Bay Resources common stock.
The term of each option will be fixed by the Remuneration Committee, but no
option will be exercisable more than 10 years after the date of grant. The
option exercise price is fixed by the Remuneration Committee at the time the
option is granted. The exercise price must be paid in cash. Options granted to
participants vest and have a term of 10 years.

No award is transferable, or assignable by the participant except upon his or
her death.

The Board may amend the 2004 Plan, except that no amendment may adversely affect
the rights of a participant without the participant's consent or be made without
stockholder approval if such approval is necessary to qualify for or comply with
any applicable law, rule or regulation the Board deems necessary or desirable to
qualify for or comply with.

Subject to earlier termination by the Board, the 2004 Plan has an indefinite
term except that no ISO may be granted following the tenth anniversary of the
date the 2004 Plan is approved by stockholders.

Options to purchase the following shares of common stock have been issued (or
agreed to be issued) as follows:-

Name Quantity Exercise Price
J. I. Gutnick 500,000 US$1.00
P.J. Lee 250,000 US$1.00
D S Tyrwhitt 50,000 US$1.00
P L Ehrlich * 50,000 US$1.00
P. Althaus ** 750,000 US$1.00
C. Alford 150,000 US$1.00
E Flood 150,000 US$1.00

* as a result of Mr Ehrlich's resignation in September 2005, the options are
relinguished.

** tranche 1 of 250,000 options issued. Tranches 2 and 3 are subject to
availability of options under plan.

None of the proposed recipients have received any stock options or other equity
based forms of compensation from us for at least the last three years.

Other than the issue of these Options, there are no other current plans or
arrangements to grant any options under the 2004 Plan.

Compensation Pursuant to Plans.

The Company does not have any pension or profit sharing plans. The Company's
Vice President Exploration and temporary staff employed in the exploration
programme in Canada are subject to Canadian requirements for contributions to
pension plans. At June 30, 2005, the Company has an obligation to pay A$13,570.
Contributions to employee benefit or health plans during the year ended June 30,
2005 were A$7,196.

Compensation to Directors

It is our policy to reimburse Directors for reasonable travel and lodging
expenses incurred in attending Board of Directors meetings. Independent
Directors are paid Directors fees of A$20,000 per annum.

Securities authorized for issuance under equity compensation plans

The following table sets forth, as of June 30, 2005, information regarding
options under our 2004 stock option plan, our only active plan. The 2004 stock
option plan has been approved by our stockholders. Outstanding options under
this plan that are forfeited or cancelled will be available for future grants.
All of the options are for the purchase of our common stock.

Number of securities
remaining available
Number of for future issuances
securities to be under equity
issued upon Weighted average compensation plans
exercise of Exercise price (excluding
outstanding of outstanding securities reflected
options options in column (a)
Plan Category (a) (b) (c)
------------------- ------------------- ----------------- ---------------------

Equity compensation
plans approved by
security holders 1,400,000(1) US$1.00 271,163(2)

Equity compensation
plans not approved
by security holders - - -
------------------- ----------------- ---------------------

Total 1,400,000(1) US$1.00 271,163(2)
------------------- =================== =====================

(1) Does not include 500,000 options that have been granted subject to future
availability under our 2004 stock option plan.

(2) The maximum number of shares available for issuance under the 2004 stock
option plan is equal to 10% of the issued and outstanding shares of common
stock, at any time.

Principal Officers Contracts

Pini Althaus

On October 15, 2004, the Company appointed Mr. Pinchas (Pini) Althaus as Chief
Operating Officer.

Mr Althaus has 9 years business experience in insurance, sales, business
development and investor relations. More recently Mr Althaus was Director of
Business Development for Ambient Corporation (February 2000 to February 2003), a
company providing power line communications technology. In this role, Pini
initiated and maintained relationships with U.S. & International electrical
utilities and power companies, and managed and initiated relationships with
strategic and business development partners. He played a major role in Ambient
completing two successful rounds of funding, acted as liaison between Ambient
and its investors/financial community, managed public relations and corporate
communications duties, including press releases and media interviews, and
created and delivered presentations for Ambient. He joined Tahera Corporation, a
diamond exploration company, in February 2003 as Director of Investor Relations
& Business Development where he managed public relations and investor relations
activities, including press releases, conducting media interviews, responding to
shareholder inquiries and representing Tahera at conferences.

In October 2003, Pini left Tahera and since that time, has provided consulting
services to Bay Resources and its subsidiary company covering investor relations
and public relations activities, including fund raising, press releases, media
interviews, and shareholder inquiries. In addition to this, he has coordinated
road-shows and delivered presentations on the Company's behalf. On October 15,
2004, he was appointed Chief Operating Officer of Bay Resources Ltd.

The employment agreement was effective May 1, 2004 and expires on December 31,
2006. Mr. Althaus shall be paid a salary of US$110,000 exclusive of bonus
benefits and other compensation. The Company has agreed to provide Mr. Althaus
with executive benefits comparable to those provided by the Company to other
executives of the Company generally and shall permit Mr. Althaus to participate
in any bonus place, share purchase plan, retirement plan or similar plan offered
by the Company to its executives generally in the manner and the extent
authorized by the Remuneration Committee of the Company. In addition, Mr.
Althaus will be able to participate in such extended health, medical, disability
insurance and other benefit plans established by the Company and made available
to other executives of the Company.

The Company has agreed to grant Mr. Althaus options to purchase 750,000 shares
of common stock of the Company at an exercise price of US$1.00 per option which
will vest as follows:-

o 250,000 shall vest immediately;

o a further 250,000 will vest at the mid term date of the contract; and

o the remaining 250,000 will vest on December 31, 2006.

The options will be issued subject to applicable securities laws, the
availability of options within the Company stock option plan and may be subject
to whole periods.

In the case of the change of control, all options then outstanding will
immediately vest for the purpose of such transaction.

The Company may terminate the employment of Mr. Althaus without notice or any
payment in law of notice for cause. The agreement may also be terminated by the
Company upon 30 days written notice to Mr. Althaus if Mr. Althaus becomes
permanently disabled and the agreement shall terminate without notice upon the
death of Mr. Althaus. If Mr. Althaus' employment is terminated during the term
for cause or by voluntarily termination by Mr. Althaus, Mr. Althaus shall not be
entitled to any severance payment other than pro rata entitlements up to the
date of termination.

Mr. Althaus may terminate his employment with the Company at any time upon the
occurrence of any one of the following:-

(i) A reduction of diminution in Mr. Althaus' authority, duties or
responsibilities (including without limitation, with respect to office
or title) hereunder,

(ii) Any reduction in the then applicable base salary or Mr. Althaus'
eligibility to participate in any executive benefits program,
retirement plan or executive incentive bonus programs,

(iii) Unless without his prior consent, his place of work is relocated to
more than 30 miles from New York,

(iv) Any other material failure on the part of the Company to comply with
any other provision of this agreement or any stock option agreement
executed by the parties as contemplated herein.

If Mr. Althaus' employment is terminated for other than cause, Mr. Althaus will
be entitled to receive the lesser of the total of three months salary at the
applicable base salary rate and the present value of the salary of Mr. Althaus
during the next 24 months.

If Mr. Althaus' employment is terminated as a result of permanent disability or
death, a payment will be made to Mr. Althaus or his estate of the balance of the
base salary that would otherwise have been paid to Mr. Althaus during the
remainder of the term of the agreement.

Craig Alford

In April 2004 the Company appointed Mr. Craig Alford as Vice President
Exploration. Mr. Alford has over 20 years of experience in the exploration
business including 5 years as Senior Geologist to District Manager for Teck
Cominco's exploration programs in Kyrgyzstan, Argentina and Chile. Most recently
Mr. Alford participated in various successful exploration programs within Canada
and the former Soviet Union, including as a Geologic Consultant for Placer Dome,
one of the world's largest gold mining companies. Mr. Alford has worked in
exploration for several major and junior mining companies including
Falconbridge, Golden Star Resources, Granges, and Homestake Minerals. In
addition, he has worked with the Geologic Survey of Canada.

Mr. Alford holds a Masters degree with Commendation in Geology from Lakehead
University. He has extensive exploration experience in many commodities,
including gold, silver, copper, lead, zinc, oil, and diamonds. Mr. Alford's
exploration experience is throughout Canada and several other countries
including Venezuela, Guyana, Chile, Argentina, Suriname, and Kyrgyzstan.

Mr. Alford is responsible for overseeing Bay Resources' gold exploration on the
Committee Bay Greenstone Belt and in the Slave Craton in Nunavut, Canada. He
will also be actively involved in continuing Bay Resources' strategy of
acquiring high potential, early-stage gold properties worldwide.

Mr Alford's contract is for one year until March 31, 2005 and since that time
has been operating on a month to month basis. Discussions are being held between
the parties with a view to renewing the contract. The contract sets out a salary
of CDN$120,000 per annum and the issue of 150,000 stock options pursuant to a
Stock Option Plan. If the Company terminates the contract without cause the
Company is required to pay Mr Alford a payment equivalent to two weeks salary.

Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.

The following table sets out, to the best of our knowledge, the numbers of
shares in us beneficially owned as at June 30, 2005 by:

(i) each of our present Executive Officers and Directors,

(ii) each person (including any "group" as that term is defined in Section
13(d)(3) of the Securities Exchange Act) who beneficially owns more than 5%
of our Common Stock, and

(iii) all of our present Directors and officers as a group.

Name Number of Shares Owned Percentage of
Shares (1)

Edensor Nominees Pty Ltd 5,394,590 32.3

Pini Althaus 250,000 (8) 1.5

Kerisridge Pty Ltd 3,507,968 19.0

Surfer Holdings Pty Ltd 1,500,000 8.9

Kalycorp Pty Ltd 2,000,000 12.0

Joseph Gutnick 12,954,208 (2)(3) 68.3
(4)(5)(6)(7)

Stera Gutnick 12,428,558 (4)(5)(6)(7) 67.3

David Tyrwhitt 50,000 (2)(8) 0.2

Peter Lee 250,000 (2)(8) 1.5

Paul Ehrlich 50,000 (8) 0.2

RAB Special Situations
(Master) Fund Limited 1,670,000 (9) 9.99
-----------------------------------------------

All officers and Directors
As a group 13,554,208 (4)(10) 69.3
-----------------------------------------------

Notes relating to Item 11:

(1) Based on 16,711,630 shares outstanding

(2) Does not include:

(i) 8,949 shares of Common Stock beneficially owned Great Gold Mines NL or

(ii) 1,918 shares of Common Stock beneficially owned by Quantum Resources
Limited or

(iii) 229,489 shares of Common Stock beneficially owned by AXIS,

of which companies Messrs Gutnick, Lee, and Dr. Tyrwhitt are officers
and/or Directors, as they disclaim beneficial ownership of those shares.

(3) Does not include 2,500 shares of Common Stock beneficially owned by us.

(4) Includes 5,394,590 shares of Common Stock owned by Edensor Nominees,
3,507,968 shares of Common Stock owned by Kerisridge (including 1,753,984
shares issuable upon exercise of warrants), 1,500,000 shares of Common
Stock owned by Surfer Holdings Pty Ltd, 2,000,000 shares of Common Stock
held by Kalycorp Pty Ltd and 26,000 shares of Common Stock owned by
Pearlway Investments Proprietary Limited, of which Mr Joseph Gutnick, Stera
M. Gutnick and members of their family are officers, Directors and
principal stockholders.

(5) Includes 500,000 shares issuable upon exercise of stock options of which
are vested and

(6) Joseph Gutnick is the beneficial owner of 25,650 shares of Common Stock.

(7) Joseph Gutnick and Stera Gutnick are husband and wife.

(8) Issuable upon exercise of stock options of which 33.3% are vested 33.3%
vest on January 27, 2006 and the remaining 33.4% will vest on July 27,
2006.

(9) RAB owns 1,670,000 shares of common stock and warrants exercisable to
acquire an additional 1,670,000 shares of common stock. Under the terms of
the warrants, in no event shall such securities be converted into common
shares if, after giving effect to such conversion, the holder would, in
aggregate, beneficially own common shares of the Company in excess of 9.99%
of the issued and outstanding common shares, within the meaning of Rule
13d-1 of the Securities Exchange Act of 1934, as amended.

(10) Includes 1.1 million shares that are issuable upon exercise of stock
options, of which 533,333 are vested, 283,333 vest on January 27, 2006 and
the remaining 283,333 will vest on July 27, 2006.

Item 12. Certain Relationships and Related Transactions

We are one of five affiliated companies of which four are Australian public
companies listed on Australian Stock Exchange. Each of the companies have some
common Directors, officers and shareholders. In addition, each of the companies
owns equity in and is substantially dependent upon AXIS for its senior
management and certain mining and exploration staff. The Company owns 9.09% of
the outstanding shares of AXIS. A number of arrangements and transactions have
been entered into from time to time between such companies. It has been the
intention of the affiliated companies and respective Boards of Directors that
each of such arrangements or transactions should accommodate the respective
interest of the relevant affiliated companies in a manner which is fair to all
parties and equitable to the shareholders of each. Currently, there are no
material arrangements or planned transactions between the Company and any of the
other affiliated companies other than AXIS.

AXIS is paid by each company for the costs incurred by it in carrying out the
administration function for each such company. Pursuant to the Service
Agreement, AXIS performs such functions as payroll, maintaining employee records
required by law and by usual accounting procedures, providing insurance, legal,
human resources, company secretarial, land management, certain exploration and
mining support, financial, accounting advice and services. AXIS procures items
of equipment necessary in the conduct of the business of the Company. AXIS also
provides for the Company various services, including but not limited to the
making available of office supplies, office facilities and any other services as
may be required from time to time by the Company as and when requested by the
Company.

We are required to reimburse AXIS for any direct costs incurred by AXIS for the
Company. In addition, we are required to pay a proportion of AXIS's overhead
cost based on AXIS's management estimate of our utilisation of the facilities
and activities of AXIS plus a service fee of not more than 15% of the direct and
overhead costs. AXIS has not charged the 15% service fee to us. Amounts invoiced
by AXIS are required to be paid by us. We are also not permitted to obtain from
sources other than AXIS, and we are not permitted to perform or provide
ourselves, the services contemplated by the Service Agreement, unless we first
requests AXIS to provide the service and AXIS fails to provide the service
within one month.

The Service Agreement may be terminated by AXIS or ourselves upon 60 days prior
notice. If the Service Agreement is terminated by AXIS, we would be required to
independently provide, or to seek an alternative source of providing, the
services currently provided by AXIS. There can be no assurance that we could
independently provide or find a third party to provide these services on a
cost-effective basis or that any transition from receiving services under the
Service Agreement will not have a material adverse effect on us. Our inability
to provide such services or to find a third party to provide such services may
have a material adverse effect on our operations.

In accordance with the Service Agreement AXIS provides the Company with the
services of our Chief Executive Officer, Chief Financial Officer and clerical
employees, as well as office facilities, equipment, administrative and clerical
services. We pay AXIS for the actual costs of such facilities plus a maximum
service fee of 15%.

The Company paid AXIS A$487,535 (being A$383,535 in respect to the current year
and A$104,000 being the amount owing at June 30, 2004) in respect of the Service
Agreement for the fiscal year ended June 30, 2005 and A$759,410 (being A$335,987
in respect to the current year and A$486,000 in respect to prior years) in
respect of the Service Agreement for the fiscal year ended June 30, 2004 and
A$201,688 for the fiscal year ended June 30, 2003. During 2005, AXIS loaned the
Company A$249,500.At June 30, 2003, 2004 and 2005, the Company owed AXIS
A$486,000, A$104,000 and A$296,764 respectively for services provided in
accordance with the Service Agreement. During fiscal 2003, 2004 and 2005, AXIS
Consultants charged interest of A$46,642, A$42,742 and A$13,879 respectively on
outstanding balances. AXIS charged interest at rates between 9.60% and 10.10%
for fiscal 2003 and 10.10% and 10.60% for fiscal 2004 and 10.60% and 10.85% for
fiscal 2005.

Chevas, a company associated with our President, Joseph Gutnick, has provided
loan funds to enable us to meet our liabilities and has paid certain expenses on
our behalf. At June 30, 2002 we had a liability to Chevas of A$783,743. During
the 2003 fiscal year, Chevas loaned a further A$369,155 and charged A$86,417 in
interest to us on the loan account. At June 30 2003, we owed Chevas A$1,239,315.
During the 2004 fiscal year, Chevas loaned a further A$187,122 and charged
A$82,776 in interest to us on the loan account. During fiscal 2004, we repaid
the loan in full. Chevas charged interest to us on outstanding balances of the
loan account at the ANZ Banking Group Limited reference rate for overdrafts over
A$100,000 plus 1%. In accordance with this formula, the actual interest rate
charged during the 2003 fiscal year was 8.60% and during the 2004 fiscal year
was 8.60% to 9.10%.

Edensor Gold Pty Ltd , a company associated with our President, Joseph Gutnick,
provided loan funds during fiscal 2004 to enable us to meet our liabilities.
During the 2004 fiscal year, Edensor Gold loaned A$69,000 and charged A$670 in
interest to us on the loan account. During fiscal 2004, we repaid the loan in
full. Edensor Gold charged interest to us on outstanding balances of the loan
account at the ANZ Banking Group Limited reference rate for overdrafts over
A$100,000 plus 1%. In accordance with this formula, the actual interest rate
charged during the 2004 fiscal year was 8.85% to 9.10%.

Wilzed Pty Ltd, a company associated with the President of the Company, Joseph
Gutnick, has provided loan funds to enable the Company to meet its liabilities.
During the 2005 fiscal year, Wilzed loaned A$644,633 and charged A$31,235 in
interest. We repaid $396. At June 30, 2005, the Company owed Wilzed A$675,472.
Wilzed charged interest during fiscal 2005 at rates between 9.10% and 9.35%.

On January 20, 2000, we issued 8,000,000 options over fully paid shares in our
capital at an issue price of US$0.01 per option and an exercise price of US$1.00
per option to Edensor. The options had a term of 5 years with a non-exercise
period of 2 years subject to a further board approval for Edensor, either
directly of indirectly, to exercise options in the case we required to raise
further working capital. On March 22, 2001, the Directors agreed to extend the
term of the options from 5 years to 10 years. Edensor advised us in June 2003
that it had sold 2,000,000 options to Delkern Investments Ltd. In March 2004, we
received notification from Edensor that it was exercising all of the options it
held utilising the cashless exercise feature of the terms and conditions of the
options. As a result of the exercise of the options, we issued 5,142,857 shares
to Edensor.

As described in the section headed "Canadian Exploration Properties" we entered
into an agreement to explore for gold on properties owed by Tahera. Mr Gutnick,
our President, was Executive Chairman of Tahera and his family company, Edensor
Nominees, who are our controlling stockholder, was a shareholder of Tahera.
During fiscal 2002, Tahera incurred certain exploration and administration costs
in Canada on our behalf amounting to A$36,365 and this amount was owing to
Tahera at June 30, 2002. During fiscal 2003, Tahera incurred further exploration
and administration costs in Canada on our behalf amounting to A$65,314. During
fiscal 2003, Mr. J.I. Gutnick and Chevas paid Tahera A$47,368 and A$53,350
respectively on our behalf. During fiscal 2002 and 2003, Tahera did not charge
us interest on amounts outstanding. At June 30, 2003, we owed Tahera A$1,361
(US$900) and Mr. J.I. Gutnick A$47,368 (US$31,594). During fiscal 2004 we paid
Mr J I Gutnick the amount in full and Tahera advised the Company in writing that
there was no monies owing to it by the Company.

Quantum Resources Limited incurred certain costs on our behalf amounting to
A$43,941 (US$29,308) in respect to our activities in Tibet China (See Item 1 -
Business - General) as a result of Quantum's contacts in China. This amount was
outstanding at June 30, 2003. During fiscal 2004, we repaid the principal in
full.

Kerisridge Pty Ltd, a company associated with our President, Mr J I Gutnick,
loaned us A$2,273,186 in March 2004 for the purpose of repaying our long term
debt. On March 31, 2004, Kerisridge agreed to convert all of the debt we owed to
it into common stock and warrants in us. We issued 1,753,984 shares of common
stock and 1,753,984 warrants exercisable at US$1.30 and at any time up to March
31, 2006 in full repayment of the amount owing to Kerisridge.

Transactions with Management.

We have a policy that we will not enter into any transaction with an Officer,
Director or affiliate of us or any member of their families unless the
transaction is approved by a majority of our disinterested non-employee
Directors and the disinterested majority determines that the terms of the
transaction are no less favourable to us than the terms available from
non-affiliated third parties or are otherwise deemed to be fair to us at the
time authorised.

PART IV

Item 13. Exhibits, Financial Statement Schedules and Reports on
Form 8-K

(a) Consolidated Financial Statements and Notes thereto.

(I) The Consolidated Financial Statements and Notes thereto listed on
the Index at page 58 of this Annual Report on Form 10-KSB are
filed as a part of this Annual Report.

(b) Exhibits

The Exhibits to this Annual Report on Form 10-KSB are listed in the
Exhibit Index at page 19 of this Annual Report.

Not Applicable

Item 14. Principal Accounting Fees and Services

The following table shows the audit fees we were billed by PKF for fiscal 2005
and 2004.

2005 2004
---- ----

Audit fees $52,061 $41,121
Audit related fees* 4,308 -
Tax fees - -
--------------- ---------------
Total $56,369 $41,121
=============== ===============

* services relating to listing on Toronto Venture Exchange A$4,308 (2004: A$nil)

Audit fees were for the audit of our annual financial statements, review of
financial statements included in our 10-QSB/10-Q quarterly reports, and services
that are normally provided by independent auditors in connection with our other
filings with the SEC. This category also includes advice on accounting matters
that arose during, or as a result of, the audit or review of our interim
financial statements.

As part of its duties, our Audit Committee pre-approves audit and non-audit
services performed by our independent auditors in order to assure that the
provision of such services does not impair the auditors' independence. Our Audit
Committee does not delegate to management its responsibilities to pre-approve
services performed by our independent auditors.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorised.

BAY RESOURCES LTD.

(Registrant)

By: /s/ Peter J Lee
--------------------------
Peter J Lee
Director, Secretary,
Chief Financial Officer
and Principal Financial
and Accounting Officer

Dated: September 27, 2005

FORM 10-KSB Signature Page

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons in the capacities and on the
dates indicated.

Signature Title Date

/s/ Joseph Gutnick
1. ------------------- Chairman of the Board,
Joseph Gutnick President and Chief Executive
Officer (Principal Executive
Officer), and Director. September 27, 2005

/s/ David Tyrwhitt
2. ------------------- Director. September 27, 2005
David Tyrwhitt

/s/ Peter Lee
3. ------------------- Director, Secretary,
Peter Lee Chief Financial Officer and
Principal Financial and
Accounting Officer. September 27, 2005

/s/ Mordechai Gutnick
4. --------------------- Director September 27, 2005
Mordechai Gutnick

EXHIBIT INDEX

Incorporated by Exhibit
Reference to: No Exhibit

(1) Exhibit 3.1 3.1 Certificates of Incorporation of the Registrant
(1) Exhibit 3.2 3.2 By-laws of the Registrant
(2) Exhibit A 3.3 Amendment to Certificate of Incorporation dated July 17, 1999
(3) 3.4 Amendment to Certificate of Incorporation dated October 17,
2000
3.5 Amendment to Certificate of Incorporation dated April 6, 2005
(4) 99.3 4.1 Warrant to purchase 1,670,000 shares of common stock
(4) 99.4 4.2 Warrant to purchase 1,783,984 shares of common stock
(5) Exhibit 10.5 10.4 Service Agreement dated November 25, 1988, by and between
the Registrant and AWI Administration Services Pty Limited
(6) Exhibit 10.6 10.5 Agreement with Tahera Corporation
(4) Exhibit 10.6 Subscription Agreement with RAB Special Solutions LP
(7) 10.7 Employment Agreement between the Registrant and C. Alford
10.8 Employment Agreement between the Registrant and P Althaus.
(7) 10.9 Sponsorship Agreement with Canaccord Capital
* 21 List of Subsidiaries as at June 30, 2005.
* 31.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 by Peter
James Lee.
* 31.2 Certification pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by
Joseph Isaac Gutnick.
* 32.1 Certification pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
Joseph Issac Gutnick.
* 32.2 Certification pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
Peter James Lee

*Filed herewith

Financial Statements for the years ended June 30, 2004 and 2005. Bay
Resources, Ltd Audited Consolidated Financial Statements for the Company
and its Subsidiaries for the year ended June 30, 2004 and Audited
Consolidated Financial Statements for the Company for the year ended June
30, 2005.

(1) Registrant's Registration Statement on Form S-1 (File No. 33-14784).

(2) Registrant's Definitive Information Statement dated August 11, 1999.

(3) Registrant's Definitive Information Statement dated October 17, 2000.

(4) Registrant's Form 8-K filed on April 8, 2004.

(5) Registrant's Annual report on Form 10-K for the fiscal year ended June 27,
1989.

(6) Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31,
2002.

(7) Registrant's Annual Report on Form 10-KSB for the year ended June 30, 2004.

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)

Consolidated Financial Statements

June 30, 2005 and 2004

(with Report of Independent Registered Public Accounting Firm)

F-16

CONTENTS

Page

Report of Independent Registered Public Accounting Firm F-2
Consolidated Balance Sheet F-3
Consolidated Statements of Operations F-4
Consolidated Statements of Stockholders' Equity (Deficit) F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7 - F-16

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
Bay Resources Ltd.

We have audited the accompanying consolidated balance sheet of Bay Resources
Ltd. and Subsidiaries (An Exploration Stage Company) as of June 30, 2005, and
the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the years ended June 30, 2005 and 2004 and the
cumulative period from July 1, 2002 (inception of exploration activities)
through June 30, 2005. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Bay Resources, Ltd.
and Subsidiaries at June 30, 2005, and the results of its operations and its
cash flows for the years ended June 30, 2005 and 2004 and the cumulative period
from July 1, 2002 (inception of exploration activities) through June 30, 2005 in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As described in note 1, at June
30, 2005 the Company had not yet commenced revenue producing operations and had
a retained deficit of A$31,406,000 (US$23,931,000). These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty. Management's plans in regard to
these matters are also discussed in note 1.

New York, NY PKF
September 6, 2005 Certified Public Accountants
A Professional Corporation

F-2

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Balance Sheet
June 30, 2005

Convenience
A$000's Translation
2005 US$000's
2005
-------------------------------

ASSETS

Current Assets:
Cash 2 2
Receivables 126 96
Prepayments and Deposits 82 62
-------------------------------
Total Current Assets 210 160
-------------------------------

Non Current Assets:
Property and Equipment, net 17 13
-------------------------------
Total Non Current Assets 17 13
-------------------------------

Total Assets 227 173
===============================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable and Accrued Expenses 605 460
-------------------------------
Total Current Liabilities 605 460
-------------------------------

Non Current Liabilities
Long-Term Advance - Affiliate 972 741
-------------------------------
Total Non Current Liabilities 972 741
-------------------------------

Total Liabilities 1,577 1,201
-------------------------------

Stockholders' Equity (Deficit):
Common stock: $.0001 par value
50,000,000 shares authorised,
16,714,130 shares issued 2 2
Less Treasury Stock, at Cost, 2,500 shares (20) (15)
Additional Paid-in-Capital 30,275 23,068
Deferred Compensation (198) (151)
Other Comprehensive loss (3) (2)
Retained Deficit during exploration stage (5,004) (3,813)
Retained Deficit prior to exploration (26,402) (20,118)
-------------------------------
Total Stockholders' Equity (deficit) (1,350) (1,029)
-------------------------------

Total Liabilities and Stockholders' Equity 227 172
===============================

See Notes to Financial Statements

F-3

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Operations
For the years ended June 30, 2004 and 2005
and for the cumulative period July 1, 2002
(inception of exploration activities) to June 30, 2005

Convenience July 1, 2002
Translation to June 30,
A$000's A$000's US$000's 2005
2004 2005 2005 A$000's
---------------------------------------------------------

Revenues $- $- $- $-
---------------------------------------------------------

Cost and expenses

Stock Based Compensation - 377 287 377
Exploration Expenditure 951 1,277 973 2,426
Interest Expense net - related entity 122 44 34 299
Legal, Accounting and Professional 112 189 144 363
Administrative 537 716 546 1,541
---------------------------------------------------------
1,722 2,603 1,984 5,007
---------------------------------------------------------
(Loss) from Operations (1,722) (2,603) (1,984) (5,007)
Foreign Currency Exchange Gain (Loss) (1) 3 2 (3)
---------------------------------------------------------
(Loss) before Income Tax (1,723) (2,600) (1,982) (5,004)
Provision for Income Tax - - - -
---------------------------------------------------------
Net (Loss) $(1,723) (2,600) (1,982) (5,004)
=========================================================

Basic net (Loss) per Common Equivalent
Shares $(.18) $(.16) $(.12) $(.38)
=========================================================

Weighted Number of Common Equivalent
Shares Outstanding (000's) 9,385 16,714 16,714 12,932
=========================================================

See Notes to Financial Statements

F-4

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
June 30, 2004 and 2005
and for the cumulative period July 1, 2002
(inception of exploration activities) to June 30, 2005

Shares Common Treasury Additional Retained Retained Deferred Other Total
Stock Stock, at Paid-in Earnings Earnings Compen- Compre-
Amount Cost Capital (Deficit) (Deficit) sation hensive
(during the (prior to Loss
Exploration Exploration
stage) stage)
------------------------------------------------------------------------------------------------------

000's A$000's A$000's A$000's A$000's A$000's A$000's A$000's A$000's

Balance June 30,
2002 6,347 $1 $(20) $25,175 - $(26,402) - - $(1,246)
Net loss - - - - (681) - - - (681)
------------------------------------------------------------------------------------------------------

Balance June 30,
2003 6,347 $1 $(20) $25,175 $(681) $(26,402) - - $(1,927)

Issuance of
1,753,984 shares
and warrants in
lieu of debt
repayment 1,754 - - 2,273 - - - - 2,273
Sale of 1,670,000
shares and warrants 1,670 - - 2,253 - - - - 2,253
Issuance of
6,943,057 shares on
cashless exercise
of options 6,943 1 - (1) - - - - -
Net unrealised loss
on foreign exchange - - - - - - - (9) (9)
Net (loss) - - - - $(1,723) - - - (1,723)
------------------------------------------------------------------------------------------------------
Balance June 30,
2004 16,714 $2 $(20) $29,700 $(2,404) $(26,402) - (9) $867

Issuance of
1,400,000 options
under 2004 stock
option plan - - - 575 - - (575) - -

Amortisation of
1,400,000 options
under 2004 stock
option plan - - - - - - 377 - 377

Net unrealised gain
on foreign exchange - - - - - - 6 6

Net/(loss) - - - - (2,600) (2,600)
------------------------------------------------------------------------------------------------------

Balance June 30,
2005 16,714 $2 $(20) 30,275 $(5,004) (26,402) (198) (3) (1,350)
------------------------------------------------------------------------------------------------------

See Notes to Financial Statements

F-5

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
For the Years Ended June 30, 2004 and 2005
and for the cumulative period July 1, 2002
(inception of exploration activities) to June 30, 2005

Convenience July 1, 2002
Translation to June 30,
A$000's A$000's US$000's 2005
2004 2005 2005 A$000's
--------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $(1,723) $(2,600) $(1,981) $(5,004)
Adjustments to reconcile net (loss) to net
cash (used) in operating activities
Foreign Exchange (9) 6 4 (3)
Depreciation of plant and equipment 1 9 7 10
Stock based compensation - 377 287 377
Accrued interest added to principal 1 50 38 184
Net Change In :
Receivables (84) (39) (30) (126)
Staking Deposit - - - 23
Prepayments and Deposits (241) 159 121 (82)
Accounts Payable and Accrued Expenses 338 110 84 156
Short-Term Advance - Affiliates 103 (104) (79) (36)
--------------------------------------------------------

Net Cash used in Operating Activities (1,614) (2,032) (1,549) (4,501)
--------------------------------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of Plant and Equipment (21) (6) (4) (27)
--------------------------------------------------------
Net Cash used in Investing Activities (21) (6) (4) (27)
--------------------------------------------------------

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Net borrowing (repayments) from Affiliates (1,774) 922 703 3
Sale of Shares of Common Stock 2,253 - - 2,253
Proceeds from loan payable 2,273 - - 2,273
--------------------------------------------------------

Net Cash Provided by Financing Activities 2,752 922 703 4,530
--------------------------------------------------------
Net Increase (Decrease) in Cash 1,117 (1,116) (850) 1
Cash at Beginning of Year 1 1,118 852 1
--------------------------------------------------------
Cash at End of Year 1,118 2 2 2
========================================================

Supplemental Disclosures
Interest Paid $122 - - 255

NON CASH FINANCING ACTIVITY
Debt repaid through issuance of shares $2,273 - - 2,273
Stock Options recorded as Deferred
Compensation - $575 $438 $575

See Notes to Financial Statements

F-6

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(1) ORGANIZATION AND BUSINESS

Bay Resources, Ltd. ("Bay Resources" or the "Company") is incorporated in
the State of Delaware. The principal shareholder of Bay Resources is
Edensor Nominees Proprietary Limited ("Edensor"), an Australian
corporation. Edensor owned 32.3% of Bay Resources as of June 30, 2005.
During fiscal 1998, Bay Resources incorporated a subsidiary, Baynex.com Pty
Ltd (formerly Bayou Australia Pty Ltd), under the laws of Australia.
Baynex.com has not traded since incorporation. On August 21, 2000 the
Company incorporated a new wholly owned subsidiary, Bay International Pty
Ltd, (now known as Bay Resources (Asia) Pty Ltd), a corporation
incorporated under the laws of Australia. In June 2002, the Company
incorporated a new wholly owned subsidiary, Golden Bull Resources
Corporation ("Golden Bull") (formerly 4075251 Canada Inc), a corporation
incorporated under the laws of Canada. Golden Bull is the vehicle that will
be used by the Company to undertake exploration activities for gold in
Canada.

During the 2002 fiscal year, Bay Resources expanded its gold exploration
business by entering into an agreement to explore for gold on extensive
property interests in northern Canada held by Tahera Corporation; and
making application via a new 100% owned subsidiary, Golden Bull Resources
Corporation, for properties in the highly prospective Committee Bay
Greenstone Belt in Nunavut, Canada.

Bay Resources originally applied for 29 claims totaling 71,694 acres in the
Committee Bay Greenstone Belt in central Nunavut, Canada. These claims were
recorded on October 16, 2002. From the original area, Bay Resources
retained a total of 49,439.48 acres on 21 claims. To keep the claims in
good standing, Bay Resources needed to spend a total of CN$197,798 of
assessment work was required to be completed by the anniversary date of
October 16, 2004. A total of CDN$98,879 is required in each subsequent year
up to 2012 (at which point a decision to bring the claims to lease must be
made). Bay Resources spent more than the minimum requirement and the excess
spent can be used to offset the expenditure requirements in following
years. As a result, Bay Resources has already met its commitment until
2012.

The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United
States of America, which contemplates continuation of Bay Resources as a
going concern. However, Bay Resources is an exploration stage company which
has not yet commenced revenue producing operations and has sustained
recurring losses since inception.

In addition, Bay Resources has historically relied on loans and advances
from corporations affiliated with the President of Bay Resources and fund
raising through the sale of equity instruments. Based on discussions with
these affiliate companies Bay Resources believes this source of funding
will continue to be available.

The Company's ability to continue operations through fiscal 2006 is
dependent upon future funding from affiliated entities, capital raisings,
or its ability to commence revenue producing operations and positive cash
flows.

F-7

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(1) ORGANIZATION AND BUSINESS (continued)

The Company raised A$2,253,000 in April 2004 through the issuance of shares
under a Private Placement and has used their funding to commence
exploration activity in Canada.

(2) RECENT ACCOUNTING PRONOUNCEMENTS

In December 2002, the Financial Accounting Standards Board ("FASB")
approved Statement of Financial Accounting Standards No. 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure. SFAS No. 148
amends Statement of Financial Accounting standards No. 123, "Accounting for
Stock-Based compensation" (SFAS No. 123) to provide alternative methods of
transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS No. 148
amends the disclosure requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect
of the method used on reported results. SFAS No. 148 was effective for the
Company fiscal year ended June 30, 2003.

In May 2003, the FASB issued SFAS No. 150 "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No.
150 establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity.
It requires that an issuer classify a financial instrument that is within
its scope as a liability (or an asset is some circumstances). The
requirements of SFAS No. 150 apply to issuer's classification and
measurement of freestanding instruments, including those that comprise more
than one option or forward contract. SFAS No. 150 does not apply to
features that are embedded in a financial instrument that is not a
derivative in its entirety. SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June
15, 2003, except for mandatory redeemable financial instruments of
non-public entities. It is to be implemented by reporting the cumulative
effect of a change in an accounting principle for financial instruments
created before the issuance date of SFAS No. 150 and still existing at the
beginning of the interim period of adoption. The adoption of this new
standard had no effect on the Company's financial position.

In December 2004, the FASB issued Statement of Financial Accounting
Standards No. 153 (SFAS 153), "Exchanges of Nonmonetary Assets." SFAS 153
amends the guidance in APB No. 29, "Accounting for Nonmonetary Assets." APB
No.29 was based on the principle that exchanges of nonmonetary assets
should be measured on the fair value of the assets exchanged. SFAS 153
amends APB No. 29 to eliminate the exception for nonmonetary exchanges of
similar productive assets and replaces it with a general exception for
exchanges of nonmonetary assets that do not have commercial substance if
the future cash flows of the entity are expected to change significantly as
a result of the exchange. SFAS 151 is effective for financial statements
issued for fiscal years beginning after June 15, 2005.

F-8

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(2) RECENT ACCOUNTING PRONOUNCEMENTS (continued)

The adoption of SFAS 153 is not expected to have a material effect on the
Company's financial position or results of operations.

In December 2004, the FASB revised Statement of Financial Accounting
Standards No. 123 (SFAS 123(R)), "Accounting for Stock-Based Compensation."
The SFAS 123(R) revision established standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods
or services and focuses primarily on accounting for transactions in which
an entity obtains employee services in share-based payment transactions. It
does not change the accounting guidance for share-based payment
transactions with parties other than employees. For public entities that do
not file as small business issuers, the revisions to SFAS 123 are effective
as of the beginning of the first interim or annual reporting period that
begins after June 15, 2005. For public entities that file as small business
issuers, the revisions to SFAS 123(R) are effective as of the beginning of
the first interim or annual reporting period that begins after December 15,
2005. For non-public entities, the revisions to SFAS 123 are effective as
of the beginning of the first annual reporting period that begins after
December 15, 2005. The adoption this statement will not have an effect on
the Company's financial position or results of operations as the Company
already applies the provisions of FASB No.123 and accounts for stock
options under the fair value method

In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47,
"Accounting for Conditional Asset Retirement Obligations." FIN No. 47
clarifies the meaning of the term CONDITIONAL ASSET RETIREMENT OBLIGATION
as used in SFAS 143, "Accounting for Asset Retirement Obligations" and
clarifies when an entity would have sufficient information to reasonably
estimate the fair value of an asset retirement obligation. This
interpretation is effective no later than the end of fiscal years ending
after December 15, 2005 (December 31, 2005 for calendar-year companies).
Retrospective application of interim financial information is permitted but
is not required. The adoption of this statement is not expected to have a
material effect on the Company's consolidated financial position, results
of operations or cash flows.

In May 2005, the FASB issued SFAS no. 154, "Accounting Changes and Error
Corrections ("SFAS No. 154") which replaces APB Opinion No. 20, "Accounting
Changes" and SFAS No. 3, "Reporting Accounting Changes in Interim Financial
Statements-An Amendment of ABP Opinion No. 28. SFAS No. 154 provides
guidance on the accounting for and reporting of accounting changes and
error corrections. Specially, this statement requires "retrospective
application" of the direct effect for a voluntary change in accounting
principle to prior periods' financial statements, if it is practical to do
so. SFAS No. 154 also strictly defines the term "restatement" to mean the
correction of an error revising previously issued financial statements.
SFAS No. 154 is effective for accounting changes and corrections of errors
made in fiscal years beginning after December 15, 2005 and is required to
be adopted by the Company in the first quarter of fiscal year 2007.
Although we will continue to evaluate the application of SFAS No. 154,
management does not currently believe adoption will have a material impact
on our results of operations, financial position or cash flows.

F-9

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(3) ACCOUNTING POLICIES

The following is a summary of the significant accounting policies followed
in connection with the preparation of the consolidated financial
statements.

(a) Consolidation

The consolidated financial statements include the accounts of Bay
Resources and the 100% interest it holds in Baynex.com Pty Ltd, Bay
Resources (Asia) Pty Ltd and Golden Bull Resources Corporation. All
significant intercompany transactions and balances have been
eliminated in consolidation.

(b) Foreign Currency Translation

The majority of Bay Resources' administrative operations are in
Australia and as a result the reporting currency of its consolidated
accounts are maintained in Australian dollars. The functional currency
of the Company Canadian subsidiary is the Canadian dollar. The income
and expenses of operations are translated into Australian dollars at
the average exchange rate prevailing during the period. Assets and
liabilities of the Canadian subsidiary are translated into Australian
dollars at the period-end exchange rate. The resulting translation
adjustments are accumulated in a separate component of Stockholders
Equity. Foreign currency translation adjustments have not been
material for all periods presented.

The Company's cash, receivables, payables and short term borrowings
represent financial instruments whose carrying amounts reasonably
approximate their fair value.

(d) Comprehensive Income (Loss)

The Company follows Financial Accounting Standards No. 130 (SFAS 130)
"Reporting Comprehensive Income". SFAS 130 requires a company to
report comprehensive income (loss) and its components in a full set of
financial statements. Comprehensive income (loss) is the change in
equity during a period from transactions and other events and
circumstances from non-owner sources, such as unrealized gains
(losses) on foreign currency translation adjustments. Changes in
unrealized foreign currency translation gains or (losses) during
fiscal 2005 and 2004 amounted to A$6,000 and (A$9,000), respectively.
Accordingly, comprehensive loss for the years ended June 30, 2005 and
2004 amounted to A$2,594,000 and A$1,732,000, respectively.

F-10

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(3) ACCOUNTING POLICIES (continued)

(e) Property and Equipment

Property and equipment is stated at cost. Depreciation is
computed over a period covering the estimated useful life of the
applicable property and equipment. Accumulated depreciation and
depreciation expense as of and for the year ended June 30, 2005
amounted to A$2,654 (2004 A$1,052) and A$1,602 (2004 $1,052)
respectively.

(f) Cash Equivalents

Bay Resources considers all highly liquid investments with an
original maturity of three months or less at the time of purchase
to be cash equivalents. For the periods presented there were no
cash equivalents.

(g) Income Tax

Income taxes are provided on financial statement income. For the
periods presented there was no taxable income. There are no
deferred income taxes resulting from temporary differences in
reporting certain income and expense items for income tax and
financial accounting purposes. Bay Resources at this time is not
aware of any net operating losses which are expected to be
realised.

(h) Loss per share

Basic (loss) per share is computed based on the weighted average
number of common shares outstanding during the period. Dilutive
loss per share has not been presented as the effects of common
stock equivalents are anti-dilutive.

(i) Exploration Expenditure

Exploration expenditure consisting of prospecting and exploration
costs are written off into operations as incurred.

(j) Accounting for Stock Options

For the issuances of stock options, the Company follows the fair
value provisions of Financial Accounting Standards No. 123
"Accounting for Stock Based Compensation". SFAS 123 requires the
company to measure the cost of employee services received in
exchange for an award of equity instruments based on grant date
fair value. The cost will be recognised over the period during
which an employee is required to provide service in exchange for
the award - usually the vesting period. In the case where there
is no required service period, the fair value of the equity
instruments is expensed immediately.

F-11

BAY RESOURCES, LTD. AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(3) ACCOUNTING POLICIES (continued)

(k) Pension Plans

The Company does not have any pension or profit sharing plans. The
Company's Vice President Exploration and temporary staff employed in
the exploration programme in Canada are subject to Canadian
requirements for contributions to pension plans. At June 30, 2005, the
Company has an obligation to pay A$13,570. Contributions to employee
benefit or health plans during the year ended June 30, 2005 were
A$7,196.

(l) Convenience Translation to US$

The consolidated financial statements as of and for the year ended
June 30, 2005 have been translated into United States dollars using
the rate of exchange of the United States dollar at June 30, 2005
(A$1.00=US$0.7620). The translation was made solely for the
convenience of readers in the United States.

(m) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Significant estimates required to be made by management include the
fair value of options and other equity instruments issued.

(n) Comparative Figures

Where necessary, comparative figures have been restated to be
consistent with current year presentation.

(4) INVESTMENT SECURITIES The Company has several small historical cost based
investments that it has provided a full valuation for diminution and
carry's at a $nil value (2004 $nil).

A$000's
2005
----

(5) LONG-TERM ADVANCE - AFFILIATE
Loan from AXIS Consultants, a corporation affiliated with the 297
President of Bay Resources. Interest accrued at 10.60% to 10.85%
being the National Australia Bank rate plus 1.5% for overdrafts over
$100,000.

Loan from Wilzed Pty Ltd, a corporation affiliated with the President 675
of Bay Resources. Interest accrued at 9.10% to 9.35% being the rate.

--------------------
972
====================

F-12

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(6) AFFILIATE TRANSACTIONS

Bay Resources advances to and receives advances from various affiliates.
All advances between consolidated affiliates are eliminated on
consolidation.

Included in short term advances and accounts payable and accrued
liabilities at June 30, 2004 was A$104,000 due to AXIS, an affiliated
management company. This entity is affiliated through common management and
ownership. The Company paid AXIS A$487,535 (being A$383,535 in respect to
the current year and A$104,000 being the amount owing at June 30, 2004) in
respect of the Service Agreement for the fiscal year ended June 30, 2005
and A$759,410 (being A$335,987 in respect to the current year and A$486,000
in respect to prior years) in respect of the Service Agreement for the
fiscal year ended June 30, 2004 During 2005, AXIS loaned the Company
A$249,500.At June 30, 2004 and 2005, the Company owed AXIS A$104,000 and
A$296,764 respectively for services provided in accordance with the Service
Agreement. During fiscal 2004 and 2005, AXIS Consultants charged interest
of A$42,742 and A$13,879 respectively on outstanding balances. AXIS charged
interest at rates between 10.10% and 10.60% for fiscal 2004 and 10.60% and
10.85% for fiscal 2005.

Chevas Pty Ltd, a company associated with the President of the Company,
Joseph Gutnick, has provided loan funds to enable the Company to meet its
liabilities and has paid certain expenses on behalf of the Company. At June
30 2002, the Company owed Chevas A$783,743. During the 2003 fiscal year,
Chevas loaned a further A$369,155 and charged A$86,417 in interest to the
Company on the loan account. At June 30, 2003, the Company owed Chevas
A$1,239,315. During the 2004 fiscal year, Chevas loaned a further A$187,122
and charged A$82,776 in interest to the Company on the loan account. During
the 2004 fiscal year the Company repaid the loan in full amounting to
A$1,509,214. Interest rates charged in fiscal 2004 ranged between 8.6% to
9.10%.

Edensor Gold Pty Ltd, a company associated with the President of the
Company, Joseph Gutnick, provided loan funds during fiscal 2004 to enable
the Company to meet its liabilities. During the 2004 fiscal year, Edensor
Gold loaned A$69,000 and charged A$670 in interest. During fiscal 2004, we
repaid the loan in full. Edensor Gold charged interest on outstanding
balances of the loan account at the ANZ Banking Group Limited reference
rate for overdrafts over A$100,000 plus 1%. In accordance with this
formula, the actual interest rate charged during the 2004 fiscal year was
8.85% to 9.10%.

Wilzed Pty Ltd, a company associated with the President of the Company,
Joseph Gutnick, has provided loan funds to enable the Company to meet its
liabilities. During the 2005 fiscal year, Wilzed loaned A$644,633 and
charged A$31,235 in interest. We repaid $396. At June 30, 2005, the Company
owed Wilzed A$675,472. Wilzed charged interest during fiscal 2005 at rates
between 9.10% and 9.35%.

F-13

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(6) AFFILIATE TRANSACTIONS (continued)

At June 30, 2002, the Company owed Tahera A$36,365. During fiscal 2003,
Tahera incurred certain exploration and administration costs in Canada on
behalf of the Company amounting to A$65,314 and Mr. J.I. Gutnick and Chevas
paid Tahera A$47,368 and A$53,350 respectively on behalf of the Company.
During fiscal 2003 and 2004, Tahera did not charge the Company interest on
amounts outstanding. At June 30, 2003, the Company owed Tahera A$1,361 and
Mr. J.I. Gutnick A$47,368. During fiscal 2004, Mr J I Gutnick was paid in
full and Tahera advised the Company in writing that there was no monies
owing to it by the Company.

Quantum Resources Limited incurred certain costs on behalf of the Company
amounting to A$43,941 during fiscal 2003 in respect to the Company's
activities in Tibet China as a result of Quantum's contacts in China. This
amount remained outstanding and was included in accounts payable and
accrued expenses at June 30, 2003. During fiscal 2004, this amount was
repaid in full.

Kerisridge Pty Ltd, a company associated with the President of the Company,
Mr J I Gutnick, loaned us A$2,273,186 in March 2004 for the purpose of
repaying our long term debt. On March 31, 2004, Kerisridge agreed to
convert all of the debt owed to them into common stock and warrants of the
Company. The Company issued 1,753,984 shares of common stock and 1,753,984
warrants exercisable at US$1.30 and at any time up to March 31, 2006 in
full repayment of the $2,273,186 owing to Kerisridge.

On February 19, 2004 Edensor Nominees Pty Ltd ("Edensor") advised the
Company that it was exercising the 6,000,000 options for common stock of
the Company it held utilizing the cashless exercise feature of the terms
and conditions of the issue of the options. The Company issued 5,142,857
shares of common stock to Edensor on March 3, 2004 as a result of the
exercise of the options. (See note 9)

Interest expense incurred on loans and advances due to affiliated entities
approximated A$45,000 and A$122,000 in fiscal 2005 and 2004, respectively.

(7) CONTINGENT LIABILITY

The Company has received an invoice from a corporation that conducted the
pegging of the claims in Canada on behalf of the Company. A number of
claims that were pegged were not ultimately issued to the Company due to a
number of errors by the pegging Company. The Company had advised the
pegging company that it does not believe any further payments are due to
the pegging company as a result of the economic loss incurred by Bay
Resources. The Company believes that if it is unsuccessful in defending any
claim that is brought against it, the maximum potential liability is
C$59,000. No accrued liability has been recorded in the accompanying
financial statement pending the ultimate disposition of this matter.

F-14

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(8) INCOME TAXES

Bay Resources files its income tax returns on an accrual basis. Bay
Resources should have carry forward losses of approximately US$19.4 million
as of June 30, 2005 which will expire in the years 2006 through 2024. Bay
Resources will need to file tax returns for those years having losses on
which returns have not been filed to establish the tax benefits of the net
operating loss carry forwards. Due to the uncertainty of the availability
and future utilization of those operating loss carryforwards, management
has provided a full valuation against the related tax benefit. The
valuation allowance increased from US$6.8 million at June 30, 2004 to
US$7.5 million at June 30, 2005.

(9) STOCKHOLDERS EQUITY

In February and March 2004, holders of options to acquire 8,000,000 shares
of the common stock informed the Company of their intentions to exercise
the cashless exercise feature of their option agreement. As a result the
Company issued 6,943,057 shares of its common stock.

In March 2004, the Company raised US$1,670,000 (A$2,253,000) through a
private placement by issuing 1,670,000 shares of common stock and warrants
to purchase 1,670,000 shares of common stock at US$1.30 per share. The
warrants expire in two years from the date of issuance.

In March 2004, the Company received a loan from an affiliated entity in the
amount of A$2,273,000 (US$1,754,000) which was used to repay other
outstanding amounts due to affiliated entities. This loan was later
satisfied through the issuance of 1,753,984 shares of common stock and
warrants to purchase 1,753,984 shares of common stock at $1.30 per share.
The warrants expire in two years from the date of issuance.

At June 30, 2005 the Company has outstanding stock options as detailed in
footnote 11. At June 30, 2005 the Company had warrants outstanding to
purchase 3,423,984 shares of common stock at US$1.30 per share. All of the
warrants expire in 2006.

(10) ISSUE OF OPTIONS UNDER STOCK OPTION PLAN

In October 2004, the Board of Directors and Remuneration Committee of the
Company adopted a Stock Option Plan and agreed to issue 1,400,000 options
and up to a further 500,000 options to acquire shares of common stock in
the Company, at an exercise price of US$1.00 per option, subject to
shareholder approval which was subsequently received on January 27, 2005.
Of the total 1,400,000 options issued, 350,000 vest immediately following
shareholder approval, 50,000 vest on March 31, 2005, 333,331 vest on July
27, 2005, 333,334 vest on January 27, 2006 and the balance of 333,335 vest
on July 27, 2006. If the additional 500,000 options are granted, they will
vest 250,000 on October 31, 2005 and 250,000 on December 31, 2006. The
exercise price of US$1.00 was derived from the issue price of common stock
from the placement of shares on March 31, 2004 and is considered by the
Company's Directors to be the fair value of the common stock. The options
expire on October 15, 2014.

F-15

BAY RESOURCES LTD AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
June 30, 2005 and 2004

(10) ISSUE OF OPTIONS UNDER STOCK OPTION PLAN (continued)

The Company has accounted for all options issued in 2005 based upon their
fair market value using the Black Scholes pricing model. There were no
options issued by the Company in 2004.

The Company has calculated the fair value of the 1,400,000 options using
the Black Scholes valuation method using a share price of US$1.00, strike
price of US$1.00, maturity period of 5 years 7 1/2 months, risk free
interest rate of 5.15% and volatility of 20%. This equates to a value of
US31.85 cents per option. The total value of the options equates to
A$575,100 (US$438,200) and has been reflected as Deferred Compensation
Expense within the Shareholders Equity Statement. The gross fair value is
amortised into operations over the vesting period. For fiscal 2005, the
amortization amounted to A$377,210 (US$287,434). Subsequent to June 30,
2005, and as a result of the resignation of one of the Company's Directors,
50,000 options were relinquished.

A summary of the options outstanding and exercisable at June 30, 2005 are
as follows:

Outstanding Exercisable
Number of options 1,400,000 733,333
Exercise price US$1.00 US$1.00
Expiration date October 15, 2014 October 15, 2014

F-16

Appendix A

GLOSSARY

In this Form 10-KSB, we use certain capitalized and abbreviated terms, as well
as technical terms, which are defined below.

ACTINOLITE A bright to gray-green member of the amphibole
minteral family. In addition to silica, it
contains calcium, magnesium, and iron.

AG Chemical symbol for silver.

AIR PHOTO
ANALYSIS Use of aerial photography to determine or estimate
geological features.

ALKALI FELDSPAR Those feldspar minerals composed of
mixtures of potassium feldspar (KalSi3O8) and
sodium feldspar (NaAlSi3O8) with little or no
calcium feldspar (CaAl2Si2O8).

ALTERATION ZONE An area where bedrock has undergone
mineralogical changes as a result of the action of
hydrothermal fluids.

AMPHIBOLE A family of silicate minerals forming prism or
needlelike crystals. Amphibole minerals generally
contain iron, magnesium, calcium and aluminum in
varying amounts, along with water.

AMPHIBOLITE A rock made up mostly amphibole and plagioclase
feldspar.

ANDESITE Fine-grained, generally dark colored, igneous
volcanic rock with more silica than basalt.
Commonly with visible crystals of plagioclase
feldspar.

ANOMALY Pertaining to the data set resulting from
geochemical or geophysical surveys; a deviation
from uniformity or regularity.

ANTICLINE An upward-curving (convex) fold in rock that
resembles an arch. The central part contains the
oldest section of rock.

AQUA REGIA A very corrosive, fuming yellow liquid made
by mixing nitric and hydrochloric acids, usually
in the proportion of one part by volume of pure
nitric acid with three parts by volume of pure
hydrochloric acid.

ARCHEAN The time interval between 3800-2500 million years
ago. The Archean is one of the Precambrian time
intervals.

ARSENOPYRITE A tin-white or silver-white to steel-grey mineral
(FeAsS).

A Chemical symbol for arsenic.

ASSAY To analyze the proportions of metals in a specimen
of rock or other geological material. Results of a
test of the proportions of metals in a specimen of
rock or other geological material.

AU Chemical symbol for gold.

A-1

B HORIZON A general term for the near surface part
of the soil profile which is commonly enriched in
iron and other metals, often resulting in a
brownish colour.

BACKGROUND As pertains to geochemical data; the variation in
natural abundance of a particular metal or other
constituent within a specific geological setting.

BEDDING The arrangement of a sedimentary or metamorphic
rock in beds or layers of varying thickness and
character.

BEDDING PLANE
FAULT A fault, the fault surface of which is parallel to
the bedding plane of the host rocks.

BEDROCK A general term for the rock, usually solid, that
underlies soil or other unconsolidated superficial
material.

BIOTITE A dark brown to dark green or black mica mineral.

BRECCIA A rock that is composed of larger than sand size
angular fragments that are cemented together by a
finer grained matrix; in this sense the
fragmentation is usually a result of movement on
nearby or adjoining fault or fracture zones.

CHALCOPYRITE Copper iron sulfide mineral (CuFeS2). Color is
brassy yellow.

CHANNEL SAMPLE A sample composed of pieces of vein or
mineral deposit that have been cut out of a small
trench or channel, usually about one inch deep and
4 inches wide.

CHIP SAMPLE A sample of a vein or other mineralized
structure that is collected by way of small pieces
of rock taken at regular and frequent intervals on
a transect across the structure; intended to be a
relatively accurate representation of the tenor of
mineralization.

CHLORITE A group of platy, micaceous, usually greenish
iron-magnesium alumino-silicates that occur in
metamorphic rocks and as alteration products of
ferromagnesium minerals in volcanic and igneous
rocks.

CLAIM POST In Yukon Territory, a 4 inch square, four
foot long wooden post that establishes the legal
location of a mineral claim. Two posts, an Initial
Post and a Final Post are required.

CLAIM TAG In Yukon Territory, a set of small metal tags
are issued by the government, each pair with a
unique grant number assigned for the claim after
the location is recorded. The tags are legally
required to be permanently affixed to the Initial
and Final claim posts at the first reasonable
opportunity after issue of the tags.

CM Centimeters

COLLAR The start or beginning of a drill hole or the
mouth of an underground working entrance.

CRATON The relatively stable nucleus of a continent.
Cratons are made up of a shield-like core of
Precambrian Rock and a buried extension of the
shield.

A-2

CU Chemical symbol for copper.

DIKE A sheet-like or tabular-shaped igneous intrusion
that cuts across the sedimentary laering,
metamorphic foliation, or other texture of a
pre-existing rock.

DYKE A tabular igneous intrusion that cuts across the
bedding or foliation of the country rock.

FAULT A fracture or fracture zone in rock along which
there has been displacement of the two sides
relative to each other and parallel to the
fracture plane.

FE Chemical symbol for iron.

FOLIATED A general term for a planar arrangement of
mineralogical, textural or structural features in
a rock.

FOLIATION Aligned layers of minerals characteristic of some
metamorphic rocks.

FRACTURE A general term for any break in a rock, whether or
not it causes displacement.

GABBRO A dark, coarse-grained intrusive igeneous rock.
Gabbro is made of calcium-rich plagioclase, with
amphibole and/or pyroxene, and is chemically
equivalent to basalt.

GEOCHEMICAL SAMPLING The collection of soil, silt, vegetation
or rock samples for analysis as a guide to the
presence of areas of anomalous mineral of metal
content in bedrock.

GEOLOGICAL MAPPING In mineral exploration, the collection of
geological data such as the description and
orientation of various types of bedrock.

GEOPHYSICAL SURVEY In mineral exploration, the collection of
seismic, gravitational, electrical, radiometric,
density or magnetic data to aid in the evaluation
of the mineral potential of a particular area.

GLACIAL TILL Dominantly unsorted and unstratified and
generally unconsolidated material deposited
directly by and underneath a glacier without
subsequent reworking by water, and consisting of a
heterogeneous mixture of clay, silt, sand, gravel,
and boulders ranging widely in size and shape.

GRAB SAMPLE A specimen of mineralized bedrock or float, usually
about fist-sized, that may be collected as a
representation of the mineralized zone as a whole.
Because of bias, either unintended or otherwise,
and because of the generally high natural
variability typical of gold-silver vein
mineralization, grades of grab samples should not
be considered as a reliable estimation of a
mineralized zone as a whole but they nonetheless
serve to establish the presence of mineralization
with grades of economic interest.

GRANITE A coarse grained intrusive igneous rock with at
least 65% silica. Quartz, plagioclase feldspar and
potassium feldspar make up most of the rock and
give it a fairly light color. Granite has more
potassium feldspar than plagioclase feldspar.

A-3

GRANODIORITE A coarse grained igneous plutonic rock intermediate
in composition between quartz diorite and quartz
monzonite; containing quartz, plagioclase, and
potassium feldspar, with biotite and hornblende as
the dominant mafic components.

GRAPHITIC Containing graphite.

GREENSTONE A metamorphic rock derived from basalt or
chemically equivalent rock such as gabbro.
Greenstones contain sodium-rich plagioclase
feldspar, chlorite, and epidote, as well as
quartz.

GPT Abbreviation for gram per tonne; equivalent to one
part per million (ppm).

HAND TRENCHING A method of exposing bedrock by hand excavation.

HYDROTHERMAL Of or pertaining to hot water, to the action of
hot water, or to the products of this action, such
as a mineral deposit precipitated from a hot
aqueous solution, with or without demonstrable
association with igneous processes.

IGNEOUS Said of a rock or mineral that solidified from
molten or partly molten material; also applied to
processes leading to, or resulting from the
formation of such rocks.

ICP-AES Abbreviation for Inductively Coupled Plasma
Emission Spectroscopy - Atomic Emission
Spectroscopy; an analytical technique in which a
sample solution is introduced into an argon plasma
at very high temperature where individual elements
emit light at specific wavelengths. The light is
collected by the spectrometer and the wavelength is
analyzed to yield individual elemental
concentrations by comparison against standard
solutions with calibrated elemental concentrations.

INTRUSION Emplacement of magma (molten rock) into
pre-existing rock. Dikes, sills and batholiths are
intrusions.

IP A type of geophysical survey method called Induced
Polarisation.

IRON FORMATION A chemical sedimentary rock containing
at least 15% iron and commonly containing chert.
The iron may be present as oxide, silicate,
carbonate, or sulfide.

KOMATIITE An igneous suite of basaltic and ultramafic lavas.

LITHOLOGY The character of a rock described in terms of its
structure, colour, mineral composition, grain size
and arrangement of its component parts.

MAFIC Pertaining to or composed dominantly of the
ferromagnesian rock forming silicates; said of
some igneous rocks and their constituent minerals.

A-4

MAGNETITE Iron oxide mineral (Fe3O4). Usually tiny black,
metallic crystals. Magnetite will attract a magnet.

MASSIVE Said of a stratified rock that occurs in very thick,
homogenous beds.

METADIORITE A general term for a metamorphosed diorite; also
greenstone.

METAGABBRO A general term for a metamorphosed gabbro; also
greenstone.

METALLIC A mineral chiefly composed of, or containing, one
or more metals as a primary constituent.

METALLURGICAL TEST A general term for a number of mechanical or
chemical processes that are employed to test the
amenability of separating metals from their ores.

METAMORPHOSED Rock or mineral that has undergone mineralogical
and/or structural change in response to elevated
pressures, temperatures or changes in chemical
conditions.

MINERALIZATION The process or processes by which a mineral or
minerals are introduced into a rock, resulting in
an enriched deposit; or the result of these
processes.

MINERALIZED Rock that has undergone the process of
mineralization.

NET SMELTER

RETURN ROYALTY A general term for a residual benefit that
is a percentage of the value for which a smelter
will reimburse the provider of ore to the smelter,
after deduction for various smelting fees and
penalties and, often after cost of transportation
has been deducted.

ORE The naturally occurring material from which a
mineral or minerals of economic value can be
extracted profitably or to satisfy social or
political objectives.

ORE SHOOT an elongate pipelike, ribbonlike, or
chimneylike mass of ore within a deposit (usually
a vein), representing the more valuable part of
the deposit.

ORTHOCLASE A member of the feldspar group of minerals (KAlSi3O8).

OUTCROP The part of a rock formation that appears at the
surface of the ground.

OXIDATION The conversion of sulphide mineral (especially
metallic mineral) species to oxide, sulphate or
hydoxide minerals, typically by the processes of
near surface weathering.

OXIDE MINERAL A mineral formed by the union of an element with
oxygen.

OVERBURDEN Loose soil, sand, gravel, broken rock,
etc. that lies above the bedrock.

OZ/TON Abbreviation for troy ounce per ton.

A-5

PATHFINDER In geochemical exploration, a relatively mobile
element or gas that occurs in association with an
element or commodity being sought, but can be more
easily found because it forms a broader halo or
because it can be detected more readily by
analytical methods.

PERMAFROST A permanently frozen layer of soil or subsoil, or
even bedrock, which occurs to variable depths
below the Earth's surface in arctic or subarctic
regions.

PETROLOGY See igneous petrology.

PLAGIOCLASE A member of the feldspar group of minerals
((Na,Ca)Al(Si,Al)2O6).

PLUTON A body of medium to coarse grained igneous rock
that formed beneath the Earth's surface by
crystallization of a magma.

PLUTONIC SUITE A group of igneous bodies that are linked by
virtue of similarities in age, petrology, etc.

PLUTONISM A general term for the phenomena associated
with the formation of plutons.

POTASSIUM
FELDSPAR See orthoclase.

PPB Abbreviation for part per billion.

PPM Abbreviation for part per million.

PRECAMBRIAN A period of geologic time earlier than 544 million
years before present.

PROSPECTING Pertaining to the search for outcrops or surface
exposures of mineral deposits, primarily by
nonmechanical methods.

PROXIMAL MINERALIZATION Refers to the relative distance of
mineralization from a pluton thought to be related
to or responsible for the deposit. Proximal
deposits form near to the mineralizing pluton.

PYRITE Iron sulfide mineral (FeS). Forms silvery to
brassy metallic cubes or masses.

QUARTZ A glassy silicate and common rock forming mineral
(SiO2).

QUARTZ DIORITE A group of plutonic rocks having the
composition of diorite but with appreciable quartz
and feldspar, i.e. between 5 and 20%.

QUARTZ GABBRO A group of plutonic rocks having the
composition of gabbro but with appreciable quartz.

QUARTZ MONZONITE A medium to coarse grained plutonic rock
containing major plagioclase, orthoclase and
quartz with minor biotite and hornblende.

QUARTZITE A metamorphosed sandstone or rock composed of
quartz grains so completely cemented with
secondary silica that the rock breaks across or
through the grains rather than around them.

A-6

REPLACEMENT Pertaining to a type of mineral deposit that forms
by partial or complete replacement of bedrock
constituents by new minerals, generally by the
action of hydrothermal fluids.

RESERVE An estimate within specified accuracy limits of
the valuable metal or mineral content of known
deposit that may be produced under current
economic conditions and with present technology.

RESOURCE Pertaining to the quantity or bulk of mineralized
material without reference to the economic
viability of its extraction (see reserve).

SEDIMENT Fragmental material that originates from
weathering of rocks and that is transported by
air, water, ice or other natural agents, and that
forms in layers on the Earth's surface at ordinary
temperatures in a loose, unconsolidated form; e.g.
silt, sand, gravel, etc.

SEDIMENTARY
ROCK A rock resulting from the consolidation of loose
sediment.

SELECTED SAMPLE A specimen of a mineralized zone that is
not intended to be representative of the deposit
as a whole.

SCHIST A strongly foliated rock, formed by dynamic
metamorphism, that can be split into thin flakes
or slabs due to well developed parallelism of more
than 50% of the minerals.

SHEARED A descriptive term for rock that is deformed as a
result of stresses that cause or tend to cause
parts of a body to slide relative to each other
along their plane of contact.

SILICA A generic term for silicon dioxide (SiO2), the
most common form of which is quartz.

SILL A concordant sheet of igneous rock lying parallel,
or nearly so, to bedding or other planar fabric in
the country rock.

SOIL SAMPLING (see geochemical sampling).

SPLIT A portion of a rock or soil sample that is
separated from the bulk of the original before the
analytical process so as to provide material for
re-analysis as a check of the accuracy of the
original procedure should it be required.

STAIN as in scorodite stain; a thin film of a mineral
deposited as part of the weathering process.

STOCK An igneous intrusion with less than 40 sq. mi. (100
sq. km.) in surface exposure, usually but not
always discordant with respect to country rock.

STOCKWORK An intersecting three-dimensional network of veins
or veinlets.

SPHALERITE A varicoloured sulphide mineral (ZnS), the most
important source of zinc.

STRATA Beds or layers of rock.

A-7

STRIKE The course or bearing of the outcrop of an
inclined bed, vein or fault plane on a level
surface; the direction of a horizontal line
perpendicular to the dip.

STRINGER A mineral veinlet or veinlets that occur in a
discontinuous subparallel pattern in the host
rock.

STRUCTURAL MAPPING Geological mapping that focusses in
collection of data pertaining to the orientation
of beds, faults and fractures as well as other
structures that modify the distribution of bedrock
and mineralized zones.

SULPHIDE MINERAL A mineral compound characterized by the
linkage of sulphur with a metal or semimetal.

SURFICIAL
GEOLOGY The study or geological mapping of surficial,
unconsolidated materials.

TALUS Rock fragments of any size or shape (usually
coarse and angular), derived from a steep rocky
slope chiefly by gravitational falling, rolling or
sliding.

THRESHOLD The level, whether determined statistically or
arbitrarily, at which a separation is made between
anomalous and background geochemical values for a
particular data set.

THRUST FAULT A fault with a dip of 45 degrees or less
over much of its extent, on which the hanging wall
appears to have moved upward relative to the
footwall.

TRACE Pertaining to assay values; as used in this
report, this term refers to gold grades of less
than 0.01 oz/ton (0.3 gpt).

TRANSVERSE FAULT A fault that strikes obliquely or
perpendicular to the general structural trend of
the region.

TRANSVERSE VEIN A vein that strikes obliquely or
perpendicular to the general structural trend of
the region.

TRUEWIDTH The width of a vein or other structure measured
orthogonal to its

strike and dip.

ULTRAMAFIC Igneous rocks made mostly of the mafic minerals
hypersthene, augite, and/or olivine.

UPPER
PROTEROZOIC The period of geologic time between about 1000 and
544 million years before present.

VEIN An epigenetic mineral filling of a fault or other
fracture in a host rock, in tabular or sheetlike
form, often as a precipitate from a hydrothermal
fluid.

VEINLET A small vein.

VITREOUS As pertains to minerals, a glassy luster.

A-8

VLF-EM An abbreviation for the Very Low
Frequency-Electromagnetic geophysical survey
technique.

WALL ROCK The rock adjacent to, enclosing, or including
a vein, layer or dissemination of ore minerals.

WEIGHTED AVERAGE Value calculated from a number of samples,
each of which has been "weighted" by a factor of
the individual sample width.

WORKING A general term for any type of excavation carried
out during the course of mining or mining
exploration.

ZN The chemical symbol for zinc.

A-9

Appendix B
Slave Craton Mining Claims
--------------------------

The following is a list of the mining claims that are covered under our
agreement with Tahera:

Next
Tag# Claim NTS Acres Registered Anniversary Type of Property
Jericho Mining
Claims

ML3793 DJB 19 076-L-04 344.0 09-Jun-99 09-Jun-04 Lease
ML3794 JD 94 076-L-04 2524.0 09-Jun-99 09-Jun-04 Lease
ML3795 JD 313 076-L-04 2515.0 09-Jun-99 09-Jun-04 Lease
ML3796 OD 44 076-L-04 422.0 09-Jun-99 09-Jun-04 Lease
ML3797 OD 45 076-L-04 325.0 09-Jun-99 09-Jun-04 Lease
ML3798 OD 61 076-L-04 508.0 09-Jun-99 09-Jun-04 Lease
----------------
6,638.0
----------------
Jericho Group
F31092 JD 92 076-L-04 2,272.60 26-Jan-93 26-Jan-04 Lease Applied For
F31093 JD 93 076-L-04 2,569.60 26-Jan-93 26-Jan-04 Lease Applied For
F31095 JD 95 076-L-04 2,363.10 26-Jan-93 26-Jan-04 Lease Applied For
F31096 JD 96 076-L-04 2,582.50 26-Jan-93 26-Jan-04 Lease Applied For
F31310 JD 310 076-L-03 632.70 26-Jan-93 26-Jan-04 Lease Applied For
F31311 JD 311 076-L-03 890.90 26-Jan-93 26-Jan-04 Lease Applied For
F31312 JD 312 076-L-03 1,144.00 26-Jan-93 26-Jan-04 Lease Applied For
F31314 JD 314 076-L-03 2,118.10 26-Jan-93 26-Jan-04 Lease Applied For
F31315 JD 315 076-L-03 2,117.60 26-Jan-93 26-Jan-04 Lease Applied For
----------------
16,691.10
----------------

F35015 OD 25 076-E-13 2,255.50 18-Jun-93 18-Jun-04 Lease Applied For
F35016 OD 26 076-E-13 2,255.50 18-Jun-93 18-Jun-04 Lease Applied For
F35017 OD 27 076-E-13 2,165.40 18-Jun-93 18-Jun-04 Lease Applied For
F35018 OD 28 076-E-13 375.10 18-Jun-93 18-Jun-04 Lease Applied For
F35019 OD 29 076-E-13 444.20 18-Jun-93 18-Jun-04 Lease Applied For
F35020 OD 30 076-E-13 2,509.60 18-Jun-93 18-Jun-04 Lease Applied For
F35021 OD 31 076-E-13 2,548.70 18-Jun-93 18-Jun-04 Lease Applied For
F35022 OD 32 076-E-13 2,582.50 18-Jun-93 18-Jun-04 Lease Applied For
F35031 OD 41 076-E-13 2,435.90 18-Jun-93 18-Jun-04 Lease Applied For
F35032 OD 42 076-E-13 2,435.90 18-Jun-93 18-Jun-04 Lease Applied For
F35033 OD 43 076-E-13 2,420.80 18-Jun-93 18-Jun-04 Lease Applied For
F35036 OD 46 076-E-13 2,066.00 18-Jun-93 18-Jun-04 Lease Applied For
F35037 OD 47 076-E-13 2,029.90 18-Jun-93 18-Jun-04 Lease Applied For
F35038 OD 48 076-E-13 2,029.90 18-Jun-93 18-Jun-04 Lease Applied For
F35048 OD 58 076-E-14 2,582.50 18-Jun-93 18-Jun-04 Lease Applied For
F35049 OD 59 076-E-14 2,582.50 18-Jun-93 18-Jun-04 Lease Applied For
F35050 OD 60 076-E-14 2,582.50 18-Jun-93 18-Jun-04 Lease Applied For
F35052 OD 62 076-E-14 508.60 18-Jun-93 18-Jun-04 Lease Applied For
F35053 OD 63 076-E-14 2,582.50 18-Jun-93 18-Jun-04 Lease Applied For
F35055 OD 65 076-E-14 2,582.50 18-Jun-93 18-Jun-04 Lease Applied For
F35065 OD 75 076-E-14 2,582.50 18-Jun-93 18-Jun-04 Lease Applied For
-----------------
44,558.50
-----------------

-----------------
F45947 DJB 17 076-L-03 160.10 06-Jul-94 06-Jul-04 Lease Applied For
-----------------

Jericho Exploration
Next
Tag# Claim NTS Acres Registered Anniversary Type of Property

F45635 INU 3 076-E-11 77.50 08-Jun-94 08-Jun-04 Mineral Claim
F44915 INU 5 076-E-11 217.00 08-Jun-94 08-Jun-04 Mineral Claim
F44916 INU 6 076-E-11 77.50 08-Jun-94 08-Jun-04 Mineral Claim
-----------------
372.00
-----------------

F48871 PT 3 076-M-02 2,066.0 16-Dec-94 16-Dec-04 Mineral Claim
F48872 PT 4 076-M-02 1,833.5 16-Dec-94 16-Dec-04 Mineral Claim
-----------------
3,899.5
-----------------

-----------------
F65378 KIM 1 076-L-04 67.40 04-Sep-98 04-Sep-04 Mineral Claim
-----------------

F76144 TA 1 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76145 TA 2 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76146 TA 3 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76147 TA 4 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76148 TA 5 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76149 TA 6 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76150 TA 7 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76151 TA 8 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76152 TA 9 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76153 TA 10 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76154 TA 11 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76155 TA 12 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76156 TA 13 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76157 TA 14 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76158 TA 15 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76159 TA 16 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76160 TA 17 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76161 TA 18 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76162 TA 19 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76163 TA 20 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76164 TA 21 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76165 TA 22 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76166 TA 23 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76167 TA 24 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76168 TA 25 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76169 TA 26 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
F76170 TA 27 86-I-01 2582.5 06-Jun-02 06-Jun-04 Mineral Claim
-----------------
69,727.5
-----------------

-11-

Contwoyto Inuit Owned Lands
Next
Tag# Claim NTS Acres Registered Anniversary Type of Property

CO-08-00-01 076-E-15 20,968.62 01-Jan-95 31-Dec-04 Mineral Claim
CO-08-00-02 076-E-15 19,518.16 01-Jan-95 31-Dec-04 Mineral Claim
CO-08-00-03 076-E-15 12,181.86 01-Jan-95 31-Dec-04 Mineral Claim
CO-08-00-05 076-E-15 4,971.58 31-Dec-99 31-Dec-04 Mineral Claim
CO-08-00-06 076-E-15 7,610.58 31-Dec-00 31-Dec-04 Mineral Claim
-----------------
65,250.80
-----------------

HOOD RIVER CLAIMS - February 2004
F64824 Hood 3 76-L-10 2582.5 24-Jun-98 24-Jun-06 Mineral Claim
F64825 Hood 4 76-L-10 2582.5 24-Jun-98 24-Jun-06 Mineral Claim
F64828 Hood 12 76-L-13 2582.5 24-Jun-98 24-Jun-08 Mineral Claim
F64829 Hood 14 76-L-13 2582.5 24-Jun-98 24-Jun-08 Mineral Claim
------------------
10,330.00
------------------

------------------
F48875 PT 7 76-L-15 263.37 16-Dec-94 16-Dec-03 Mineral Claim
------------------

CO 20 - 00 - 01 76-L-15 6653.08 01-Jan-97 01-Jan-05 IOL - Mineral Claim
CO 20 - 00 - 03 (a) 76-L-14 3008.90 01-Jan-97 01-Jan-05 IOL - Mineral Claim
CO 20 - 00 - 03 (b) 76-L-15 2164.74 01-Jan-97 01-Jan-05 IOL - Mineral Claim
CO 20 - 00 - 04 76-L-15 2901.85 01-Jan-97 01-Jan-05 IOL - Mineral Claim
CO 20 - 01 - 01 76-L-15 6653.08 01-Jan-97 01-Jan-05 IOL - Mineral Claim
------------------
21,381.64
------------------

ICE CLAIMS
F22432 ICE032 76-E-06 2582.5 01-Apr-92 01-Apr-04 Lease Applied For
F22433 ICE033 76-E-06 2582.5 01-Apr-92 01-Apr-04 Lease Applied For
F22464 ICE064 76-E-06 2582.5 01-Apr-92 01-Apr-04 Lease Applied For
F22534 ICE334 76-E-06 2582.5 01-Apr-92 01-Apr-04 Lease Applied For
F22535 ICE335 76-E-06 2582.5 01-Apr-92 01-Apr-04 Lease Applied For
F22537 ICE337 76-E-06 2582.5 01-Apr-92 01-Apr-04 Lease Applied For
ML3464 ICE336 76-E-06 2665.0 14-Feb-96 14-Feb-04 Lease
------------------
18,160.0
------------------

DOLLY VARDEN CLAIMS
------------------
F23152 DIA 52 76-E-01 2,582.50 28-Apr-04 28-Apr-04 Lease Applied For
------------------

Rockinghorse Claims - February 2004
F60840 WC 156 86-I-02 413.2 11-Dec-96 11-Dec-04 Mineral Claim
F60841 WC 157 86-I-02 1601.15 11-Dec-96 11-Dec-03 Mineral Claim
F60844 WC 160 86-I-02 826.4 11-Dec-96 11-Dec-06 Mineral Claim
F60846 WC 162 86-I-02 154.95 11-Dec-96 11-Dec-03 Mineral Claim
F60847 WC 163 86-I-02 464.85 11-Dec-96 11-Dec-06 Mineral Claim
------------------
3,460.55
------------------

-12-

Rockinghorse Claims - February 2004 continued

Next
Tag# Claim NTS Acres Registered Anniversary Type of Property
------------------
F50064 SKY 1 86-I-02 2,582.50 20-Aug-99 20-Aug-09 Mineral Claim
------------------

F58889 PUD 4 86-I-14 2582.5 14-Jun-99 14-Jun-05 Mineral Claim
F58890 PUD 5 86-I-14 2582.5 14-Jun-99 14-Jun-05 Mineral Claim
F56909 PUD 24 86-I-14 2582.5 14-Jun-99 14-Jun-05 Mineral Claim
F66955 PUD 36 86-I-14 2582.5 14-Jun-99 14-Jun-06 Mineral Claim
F67117 PUD 39 86-I-14 2582.5 14-Jun-99 14-Jun-04 Mineral Claim
F67118 PUD 40 86-I-14 2582.5 14-Jun-99 14-Jun-04 Mineral Claim
------------------
15,495.0
------------------

------------------
F58677 DD 24 86-I-13 2,582.50 11-Apr-96 11-Apr-04 Mineral Claim
------------------

F62383 KE 5 86-I-10 447.63 14-May-97 14-May-05 Mineral Claim
F62941 KE 6 86-I-10 416.63 14-May-97 14-May-05 Mineral Claim
F63306 KE 22 86-I-7 378.77 14-May-97 14-May-05 Mineral Claim
------------------
1,243.03
------------------

F85901 KEN 1 86-I-09 2582.5 20-Apr-99 12-Mar-09 Mineral Claim
F66045 KEN 5 86-I-09 2100.35 20-Apr-99 12-Mar-09 Mineral Claim
------------------
4,682.85
------------------

F74768 NAP 1 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74769 NAP 2 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74770 NAP 3 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74771 NAP 4 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74772 NAP 5 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74773 NAP 6 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74774 NAP 7 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74775 NAP 8 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74776 NAP 9 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74777 NAP 10 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74778 NAP 11 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74779 NAP 12 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74780 NAP 13 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F74781 NAP 14 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75430 NAP 15 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75431 NAP 16 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75432 NAP 17 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75433 NAP 18 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75434 NAP 19 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75435 NAP 20 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75436 NAP 21 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75437 NAP 22 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75438 NAP 23 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75439 NAP 24 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75440 NAP 25 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
Rockinghorse Claims - February 2004 continued

-13-

Next
Tag# Claim NTS Acres Registered Anniversary Type of Property

F75441 NAP 26 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75442 NAP 27 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75443 NAP 28 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75444 NAP 29 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75445 NAP 30 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75446 NAP 31 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75447 NAP 32 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75448 NAP 33 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75449 NAP 34 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75450 NAP 35 86-I-10 831.67 11-Jun-02 11-Jun-04 Mineral Claim
F75451 NAP 36 86-I-10 1514.99 11-Jun-02 11-Jun-04 Mineral Claim
F75452 NAP 37 86-I-10 1477.12 11-Jun-02 11-Jun-04 Mineral Claim
F75453 NAP 38 86-I-10 509.58 11-Jun-02 11-Jun-04 Mineral Claim
F75454 NAP 39 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75455 NAP 40 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75456 NAP 41 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75457 NAP 42 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75458 NAP 43 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75459 NAP 44 86-I-10 263.74 11-Jun-02 11-Jun-04 Mineral Claim
F75461 NAP 46 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75462 NAP 47 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75463 NAP 48 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75464 NAP 49 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75465 NAP 50 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75466 NAP 51 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75467 NAP 52 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75468 NAP 53 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75469 NAP 54 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75470 NAP 55 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75471 NAP 56 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75472 NAP 57 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75473 NAP 58 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75474 NAP 59 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
F75475 NAP 60 86-I-10 2582.5 11-Jun-02 11-Jun-04 Mineral Claim
------------------
144,052.10
------------------

F74338 TL 8 86-I-11 2029.57 24-Jun-93 13-Mar-04 Mineral Claim
F74352 TL 22 86-I-11 2582.5 24-Jun-93 13-Mar-04 Mineral Claim
F74353 TL 23 86-I-11 1019.73 24-Jun-93 13-Mar-04 Mineral Claim
F74354 TL 24 86-I-11 378.53 24-Jun-93 13-Mar-04 Mineral Claim
F74355 TL 25 86-I-11 2582.5 24-Jun-93 13-Mar-04 Mineral Claim
F74356 TL 26 86-I-11 2582.5 24-Jun-93 13-Mar-04 Mineral Claim
F74366 TL 36 86-I-11 64.72 24-Jun-93 13-Mar-04 Mineral Claim
F74367 TL 37 86-I-11 255.23 24-Jun-93 13-Mar-04 Mineral Claim
F74368 TL 38 86-I-11 469.09 24-Jun-93 13-Mar-04 Mineral Claim
F74369 TL 39 86-I-11 471.17 24-Jun-93 13-Mar-04 Mineral Claim
------------------
12,435.54
------------------

-14-

Next
Tag# Claim NTS Acres Registered Anniversary Type of Property
------------------
CO44 -00-01 86-I-11 414.0 01-Jan-97 01-Jan-05 IOL - Mineral Claim
------------------

F38623 OK 123 86-I-11 2582.5 18-Jun-93 18-Jun-03 Applied for Lease
F38627 OK 127 86-I-11 2582.5 18-Jun-93 18-Jun-03 Applied for Lease
F38628 OK 128 86-I-11 2582.5 18-Jun-93 18-Jun-03 KCEI Lease
F38629 OK 129 86-I-11 2582.5 18-Jun-93 18-Jun-03 Applied for Lease
F38648 OK 148 86-I-11 2169.3 18-Jun-93 18-Jun-03 Applied for Lease
F38649 OK 149 86-I-11 2169.3 18-Jun-93 18-Jun-03 Applied for Lease
F38652 OK 152 86-I-11 2582.5 18-Jun-93 18-Jun-03 Applied for Lease
F38653 OK 153 86-I-11 2582.5 18-Jun-93 18-Jun-03 Applied for Lease
F38654 OK 154 86-I-11 2582.5 18-Jun-93 18-Jun-03 Applied for Lease
F38665 OK 165 86-I-11 2582.5 18-Jun-93 18-Jun-03 Applied for Lease
------------------
24,998.60
------------------

Total 471,765.71

-15-

Committee Bay Greenstone Belt Claims

The following is a list of our claims in the Committee Bay Greenstone Belt:

Claim name Claim No. NTS Sheet Recording Date Anniversary Date

Pick 1 F54799 56K/03 16-Oct-02 16-Oct-10
Pick 2 F54798 56K/03 16-Oct-02 16-Oct-10
Pick 3 F54760 56K/03 16-Oct-02 16-Oct-10
EE 1 F54757 56K/06 16-Oct-02 16-Oct-10
EE 2 F54756 56K/06 16-Oct-02 16-Oct-10
EE 3 F54758 56K/06 16-Oct-02 16-Oct-10
K 1 F60304 56K/11 16-Oct-02 16-Oct-10
K 2 F60305 56K/11 16-Oct-02 16-Oct-10
CAY 1 F60252 56K/09 16-Oct-02 16-Oct-10
CAY 3 F60254 56K/09 16-Oct-02 16-Oct-10
AA 1 F60249 56J/13 16-Oct-02 16-Oct-10
AA 2 F60250 56J/13 16-Oct-02 16-Oct-10
NN 1 F60307 56K/16 16-Oct-02 16-Oct-10
NN 2 F60251 56O/04 16-Oct-02 16-Oct-10
WREN 1 F60231 56J/11 16-Oct-02 16-Oct-12*
WREN 2 F60232 56J/14 16-Oct-02 16-Oct-12*
WREN 3 F60233 56J/14 16-Oct-02 16-Oct-12*
WREN 4 F60234 56J/14 16-Oct-02 16-Oct-12*
WREN 5 F60235 56J/14 16-Oct-02 16-Oct-12*
WEST F60212 56K/03 16-Oct-02 16-Oct-10
HOST F54800 56K/03 16-Oct-02 16-Oct-10

o as confirmed by the mining recorder

(one small additional claim GB-1 will be ours after Bruce Goad receives his pay)

-16-