==============================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-QSB



|[x]    | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period endedJune 30, 2005
|------ | -----------------------------------------------------------------------------------------------------------------------------
|       | OR                                                                                                                           
|[    ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT                                                              
|       | For the transition period from __________ to ___________                                                                     

Commission file number 333-41516

LUNA GOLD CORP.(Exact name of small business issuer as specified in its charter)



|Wyoming(State or other jurisdiction of incorporation or organization) |  | 98-0226032(I.R.S. Employer Identification No.)
|--------------------------------------------------------------------- |  | ----------------------------------------------

Suite 920, 475 West Georgia Street 
Vancouver, British Columbia 
Canada V6B 4M9(Address of principal executive offices)

(604) 689-7317(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes [X ]     No  [    ]

Shares outstanding as at August 10, 2005:  24,572,700

============================================================================================



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PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements.

The Company's financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

LUNA GOLD CORP.
INTERIM FINANCIAL STATEMENTS



|                               | Page                                                        
|------------------------------ | ------------------------------------------------------------
|                               |                                                             
|PART I - FINANCIAL INFORMATION |                                                             
|Item 1.                        | Consolidated Balance Sheets                                 
|                               | Consolidated Statements of Operations                       
|                               | Consolidated Statements of Stockholders' Equity (Deficiency)
|                               | Consolidated Statements of Cash Flows                       
|                               | Notes to Financial Statements                               
|Item 2.                        | Management's Discussion and Analysis or Plan of Operation   
|Item 3.                        | Controls and Procedures                                     
|                               |                                                             
|PART II - OTHER INFORMATION    |                                                             
|Item 2.                        | Changes in Securities and Use of Proceeds                   
|Item 6.                        | Exhibits                                                    













- 2 -

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Consolidated Financial Statements

LUNA GOLD CORP. 
(Expressed in United States dollars)
Three-month and six-month period ended June 30, 2005 and 2004
Period from January 20, 2003 (inception of new business)



















- 3 -

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LUNA GOLD CORP.Consolidated Balance Sheets

(Expressed in United States dollars)

Unaudited - Prepared by Management



|                                                                                                                                         |   | June 30, 2005
(unaudited) |  | December 31, 
2004
|---------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------- |  | ------------------
|Assets                                                                                                                                   |   |                           |  |                   
|                                                                                                                                         |   |                           |  |                   
|Current assets:                                                                                                                          |   |                           |  |                   
|Cash and cash equivalents                                                                                                                | $ | 224,925                   |  | 1,497,859         
|Short-term investments                                                                                                                   |   | 301,413                   |  | --                
|Accounts receivable                                                                                                                      |   | 9,401                     |  | 11,435            
|Related party receivables                                                                                                                |   | 83,054                    |  | --                
|Prepaid expenses                                                                                                                         |   | 10,000                    |  | 6,023             
|                                                                                                                                         |   |                           |  |                   
|Total current assets                                                                                                                     |   | 628,793                   |  | 1,515,317         
|                                                                                                                                         |   |                           |  |                   
|Equipment                                                                                                                                |   | 3,132                     |  | 4,788             
|                                                                                                                                         |   |                           |  |                   
|Investment in resource properties joint ventures (note 2(h))                                                                             |   | 579,708                   |  | 251,197           
|Total assets                                                                                                                             | $ | 1,211,633                 |  | 1,771,302         
|Liabilities and stockholders' deficiency                                                                                                 |   |                           |  |                   
|Current liabilities:                                                                                                                     |   |                           |  |                   
|Accounts payable and accrued liabilities                                                                                                 | $ | 55,982                    |  | 62,192            
|Note payable                                                                                                                             |   | --                        |  | 49,997            
|Payables to related parties (note 5)                                                                                                     |   | 58,704                    |  | 576,523           
|Total current liabilities                                                                                                                |   | 114,686                   |  | 688,712           
|                                                                                                                                         |   |                           |  |                   
|Subscriptions received in advance of share offering                                                                                      |   | --                        |  | 1,639,065         
|                                                                                                                                         |   |                           |  |                   
|Total liabilities                                                                                                                        |   | 114,686                   |  | 2,327,777         
|                                                                                                                                         |   |                           |  |                   
|Stockholders' equity (deficiency):                                                                                                       |   |                           |  |                   
|Common stock, no par value, unlimited authorized shares; issued 24,572,700
At June 30, 2005 and 17,004,865 at December 31, 2004 (note 4) |   | 7,899,276                 |  | 5,628,926         
|Additional paid-in capital                                                                                                               |   | 182,746                   |  | 182,746           
|Deficit before inception of new business                                                                                                 |   | (4,796,115)               |  | (4,796,115)       
|Deficit accumulated since inception of new business                                                                                      |   | (2,140,576)               |  | (1,542,432)       
|Accumulated other comprehensive income:
Cumulative translation adjustment                                                                |   | (48,384)                  |  | (29,600)          
|Total stockholder's deficiency                                                                                                           |   | 1,096,947                 |  | (556,475)         
|Total liabilities and stockholders' equity                                                                                               | $ | 1,211,633                 |  | 1,771,302         

The accompanying notes are an integral part of these financial statements

Approved on behalf of the Board:

|/s/  Tim Searcy
Tim Searcy, Director | /s/ Marcel de Groot
Marcel de Groot, Director
|------------------------------------ | ---------------------------------------------

F-1



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LUNA GOLD CORP.
Consolidated Statements of Operations(Expressed in United States dollars)
Unaudited - Prepared by Management



|                                                                        |   | Three month period ended
June 30, |  | Six month period
ended June 30, |  | Period from
January 20/03 (inception of new business) to June 30, 2005
|----------------------------------------------------------------------- | - | --------------------------------- |  | ------------------------------- |  | ----------------------------------------------------------------------
|                                                                        |   | 2005                              |  | 2004                            |  | 2005                                                                  
|                                                                        |   |                                   |  |                                 |  |                                                                       
|Operating expenses:                                                     |   |                                   |  |                                 |  |                                                                       
|Business development                                                    | $ | 10,971                            |  | --                              |  | 22,135                                                                
|Consulting fees                                                         |   | 34,784                            |  | 92,851                          |  | 70,287                                                                
|Depreciation and amortization                                           |   | 760                               |  | 282                             |  | 1,542                                                                 
|Equity loss from  operation of 
resource properties joint
ventures      |   | 35,938                            |  | --                              |  | 216,961                                                               
|Exploration expense                                                     |   | 51,824                            |  | 15,542                          |  | 83,409                                                                
|Filing fees                                                             |   | 5,838                             |  | 4,994                           |  | 24,399                                                                
|General and administrative                                              |   | 10,831                            |  | 17,435                          |  | 21,750                                                                
|Investor relations                                                      |   | 1,079                             |  | 8,220                           |  | 2,106                                                                 
|Management fees to related
parties (note 5)                             |   | 5,944                             |  | 5,456                           |  | 12,059                                                                
|Marketing and promotion                                                 |   | 265                               |  | 1,814                           |  | 2,571                                                                 
|Organization expense                                                    |   | --                                |  | 1,074                           |  | --                                                                    
|Professional fees                                                       |   | 60,891                            |  | 45,498                          |  | 86,106                                                                
|Rent                                                                    |   | 2,603                             |  | 7,651                           |  | 6,190                                                                 
|Travel and conference                                                   |   | 19,832                            |  | 88,295                          |  | 36,351                                                                
|Wages and benefits                                                      |   | 29,437                            |  | --                              |  | 49,028                                                                
|Total expenses                                                          |   | 270,997                           |  | 289,112                         |  | 634,894                                                               
|                                                                        |   |                                   |  |                                 |  |                                                                       
|Loss from operations                                                    |   | (270,997)                         |  | (289,112)                       |  | (634,894)                                                             
|Foreign exchange gain (loss)                                            |   | 20,473                            |  | (2,893)                         |  | 36,942                                                                
|Interest income                                                         |   | 1,513                             |  | --                              |  | 1,513                                                                 
|Interest expense                                                        |   | --                                |  | --                              |  | (1,705)                                                               
|Net loss for the period                                                 | $ | (249,011)                         |  | (292,005)                       |  | (598,144)                                                             
|                                                                        |   |                                   |  |                                 |  |                                                                       
|Loss per common share, basic
and diluted                                | $ | (0.01)                            |  | (0.02)                          |  | (0.03)                                                                
|                                                                        |   |                                   |  |                                 |  |                                                                       
|Weighted average number of
common shares outstanding:
basic and diluted |   | 24,572,700                        |  | 12,555,829                      |  | 23,820,096                                                            

The accompanying notes are an integral part of these financial statements

F-2

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LUNA GOLD CORP.Consolidated Statements of Stockholders' Equity (Deficiency)(Expressed in United States dollars)

Unaudited - Prepared by Management



|                                                                                            | Common Shares | Additional
Paid-In Capital | Deficit accumulated
Prior to
Inception of New Business
|------------------------------------------------------------------------------------------- | ------------- | -------------------------- | ------------------------------------------------------
|                                                                                            | Shares        | Amount                    
|Balance, December 31, 2003                                                                  | 12,441,948    | $                          | 5,068,305                                             
|                                                                                            |               |                            |                                                       
|Issuance of common stock on exercise of warrants issued on August 8, 2003 private placement | 96,250        |                            | 24,063                                                
|Issuance of common stock on exercise of warrants on June 30, 2004                           | 4,416,667     |                            | 523,558                                               
|Issuance of common stock for exploration on
August 8, 2004                                  | 50,000        |                            | 13,000                                                
|Adjustment to cumulative translation account                                                | --            |                            | --                                                    
|Balance, December 31, 2004                                                                  | 17,004,865    | $                          | 5,628,926                                             
|Issuance of common stock on January 19, 2005 private placement (Note 4(d))                  | 7,567,835     |                            | 2,270,350                                             
|Balance, June 30, 2005                                                                      | 24,572,700    | $                          | 7,899,276                                             



|                                                                                            | Deficit Accumulated
Since Inception of New Business | Cumulative
Translation
Adjustment | Total
Stockholders'
Equity
(Deficiency) | Comprehensive
Income
(Loss)
|------------------------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------- | --------------------------------------- | ---------------------------
|Balance, December 31, 2003                                                                  | $                                                   | (466,688)                         | $                                       | (25,264)                   
|                                                                                            |                                                     |                                   |                                         |                            
|Loss for the period                                                                         |                                                     | (1,075,744)                       |                                         | --                         
|Issuance of common stock on exercise of warrants issued on August 8, 2003 private placement |                                                     | --                                |                                         | --                         
|Issuance of common stock on exercise of warrants on June 30, 2004                           |                                                     | --                                |                                         | --                         
|Issuance of common stock for exploration on 
August 8, 2004                                 |                                                     | --                                |                                         | --                         
|Adjustment to cumulative translation account                                                |                                                     | --                                |                                         | (4,336)                    
|Balance, December 31, 2004                                                                  | $                                                   | (1,542,432)                       | $                                       | (29,600)                   
|                                                                                            |                                                     |                                   |                                         |                            
|Loss for the period                                                                         |                                                     | (598,144)                         |                                         | --                         
|Issuance of common stock on January 19, 2005 private placement (Note 4(d))                  |                                                     | --                                |                                         | --                         
|Adjustment to cumulative translation account                                                |                                                     | --                                |                                         | (18,784)                   
|Balance, June 30, 2005                                                                      | $                                                   | (2,140,576)                       | $                                       | (48,384)                   

The accompanying notes are an integral part of these financial statements



F-3

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LUNA GOLD CORP.Consolidated Statements of Cash Flows(Expressed in United States dollars)

Unaudited - Prepared by Management



|                                                                              |   | Three Month period ended
June 30, |  | Six Month period
ended June 30, | Period from Jan. 20, 2003 (inception of new business) to June 30,
|----------------------------------------------------------------------------- | - | --------------------------------- |  | ------------------------------- | -----------------------------------------------------------------
|                                                                              |   | 2005                              |  | 2004                            |                                                                  
|Cash flow from operating activities:                                          |   |                                   |  |                                 |                                                                  
|Net loss                                                                      | $ | (249,011)                         |  | (292,005)                       |                                                                  
|Items not affecting cash:                                                     |   |                                   |  |                                 |                                                                  
|Depreciation and amortization                                                 |   | 760                               |  | 282                             |                                                                  
|Issuance of shares for exploration                                            |   | --                                |  | --                              |                                                                  
|Equity in loss from operations                                                |   | 35,938                            |  | --                              |                                                                  
|                                                                              |   |                                   |  |                                 |                                                                  
|Changes in operating assets and liabilities:                                  |   |                                   |  |                                 |                                                                  
|Accounts receivable                                                           |   | (1,116)                           |  | 35                              |                                                                  
|Related party receivable                                                      |   | 66,946                            |  | --                              |                                                                  
|Prepaid expenses                                                              |   | (5,000)                           |  | (4,448)                         |                                                                  
|Accounts payable and accrued liabilities                                      |   | 209                               |  | 17,067                          |                                                                  
|Note payable                                                                  |   | --                                |  | --                              |                                                                  
|Net cash used in operating activities                                         |   | (151,274)                         |  | (279,069)                       |                                                                  
|Cash flow from investing activities:                                          |   |                                   |  |                                 |                                                                  
|Purchase of short-term investments                                            |   | (301,413)                         |  | --                              |                                                                  
|Purchase/ disposal of equipment                                               |   | --                                |  | (1,630)                         |                                                                  
|Investment in resource properties 
joint ventures                             |   | (19,149)                          |  | (152,305)                       |                                                                  
|Net cash used in investing activities                                         |   | (320,562)                         |  | (153,935)                       |                                                                  
|Cash flow from financing activities:                                          |   |                                   |  |                                 |                                                                  
|Payable to related parties                                                    |   | 13,380                            |  | (50,082)                        |                                                                  
|Proceeds from issuance of shares for cash                                     |   | --                                |  | --                              |                                                                  
|Proceeds from exercise of warrants                                            |   | --                                |  | 537,890                         |                                                                  
|Net cash provided by financing activities                                     | $ | 13,380                            |  | 487,808                         |                                                                  
|Increase (decrease) in cash and cash equivalents                              |   | (458,456)                         |  | 54,804                          |                                                                  
|Effect of exchange rate changes on foreign currency denominated cash balances |   | (4,310)                           |  | 2,524                           |                                                                  
|Cash and cash equivalents, beg. of period                                     |   | 687,691                           |  | 3,507                           |                                                                  
|Cash and cash equivalents, end of period                                      | $ | 224,925                           |  | 60,835                          |                                                                  
|Supplemental disclosure:                                                      |   |                                   |  |                                 |                                                                  
|Interest income (expense) net                                                 | $ | 1,513                             |  | --                              |                                                                  
|Income taxes                                                                  |   | --                                |  | --                              |                                                                  
|Issuance for common stock for debt                                            |   | --                                |  | --                              |                                                                  
|Subscriptions converted to common stock                                       |   | --                                |  | --                              |                                                                  

The accompanying notes are an integral part of these financial statements



F-4

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LUNA GOLD CORP.Consolidated Notes to Financial Statements(Expressed in United States dollars)

Unaudited - Prepared by Management

Three-month and six-month period ended June 30, 2005 and 2004
Period from January 20, 2003 (inception of new business) to June 30, 2005

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1. Nature of Operations:

The Company was incorporated on June 24, 1986 in British Columbia, Canada.  In July 1999, the Company redomiciled to Wyoming State, USA.  From July 1999 until January 2003, as described in the Company's consolidated financial statements filed with the 2004 annual report on Form 10-KSB, the Company's focus was on the streaming-media business.  These efforts ceased in January 2003 as the Company refocused its efforts from the streaming-media business and entered the mining exploration business (note 3).  As the Company has no producing properties, the Company is considered to be in the exploration stage and financial information from January 20, 2003, the inception of the mining business, has been presented in these financial statements. Additional debt or equity financing will be required from existing shareholders or third parties in order to provide working capital for operations in the future.  This debt or equity may not be available on reasonable terms or on any terms at all.

These financial statements have been prepared on a going concern basis in accordance with United States generally accepted accounting principles.  The going concern basis of presentation assumes the Company will continue to operate for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.  Certain conditions, described below, currently exists which raise substantial doubt upon the validity of this assumption.  These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
2. Significant Accounting Policies:

(a)     Basis of presentation:
The financial statements have been prepared in accordance with generally accepted accounting principles in the United States.  There are no material measurement differences to these financial statements to Canadian generally accepted accounting principles.  The interim financial statements do not include all information and footnote disclosures required under generally accepted accounting principles in the United States or Canada for a complete set of annual financial statements.  Results of operations for the periods ended June 30, 2005 are not necessarily indicative of what the results will be for the 2005 fiscal year.

In the opinion of management, these unaudited financial statements reflect all adjustments, consisting solely of normal recurring accruals, considered necessary for a fair presentation of the financial position as at June 30, 2005 and results of operations and cash flows for the six- months ended June 30, 2005 and 2004, and the period from January 20, 2003 (inception of new business) to June 30, 2005.

These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-KSB which includes the Company's financial statements for the year ended December 31, 2004.

F-5

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1. Significant Accounting Policies (Cont'd):

(b)     Principles of consolidation:
These consolidated financial statements include the accounts of the Company's wholly-owned subsidiaries Compania Minera Antero gold S.A. de C.V., Eureka Gold Inc., Luna Gold (China) Corp. and Luna Gold (Liaoning) Corp.  All significant inter-company transactions and balances have been eliminated.(c)     Use of estimates:
The preparation of financial statements in accordance with generally accepted accounting principles requires that management make estimates and reasonable assumptions which impact the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the balance sheets, and the reported amounts of revenues and expenses during the reporting periods.  Actual amounts may differ from these estimates.(d)     Foreign currency:
The Company uses the United States dollar as its reporting currency.

Canadian operations, which have the Canadian dollar as the functional currency, are translated to United States dollars as follows: assets and liabilities are translated at the exchange rate at the balance sheet date.  Revenues and expenses are translated at the average rate for the period.  Exchange gains and losses resulting from the translation are excluded from the determination of income and reported as the cumulative translation adjustment in stockholder's equity.

Other exchange gains and losses arising on the settlement of foreign currency denominated monetary items are included in the statement of operations.(e)     Loss per share:
Basic loss per share is calculated based on the weighted average number of common shares outstanding during the periods.  Excluded from the weighted average number of common shares are 213,839 common shares (June 30, 2004 - 213,839) held in escrow that are to be released based on financial performance criteria (note 4 (a)).

Diluted loss per share is computed using the weighted average number of common and potentially dilutive common shares outstanding during the period.  Excluded from the calculation of diluted loss per share are 1,895,000 stock options (2004 - 1,860,000).(f)     Income taxes:
Income taxes are accounted for under the asset and liability method.  Current taxes are recognized for the estimated income taxes for the current period.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and the benefit of operating loss and tax credit carry forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  A valuation allowance is recorded for deferred tax assets when it is not more likely than not that such deferred tax assets will be realized.

F-6

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1. Significant Accounting Policies (Cont'd):

(g)     Mineral Property Interests:

The Company accounts for its mineral property interests whereby all acquisition and exploration costs are charged to expense as incurred and all property sales and option proceeds received are credited to income.  When the existence of a proven or probable mineral reserve on a property has been established, future acquisition, exploration and development costs will be capitalized for that property.  After commercial production on the property commences, the net capitalized costs will be charged to future operations using the unit of production method based on estimated recoverable reserves on the property.(h)     Joint Venture Agreements:
The Company holds a significant portion of its interests in resource properties through joint venture agreements.  The Company accounts for its joint venture operations using the equity method whereby the investment is initially recorded at cost and is adjusted to recognize the Company's share of losses and reduced by dividends and distributions received.  The joint venture accounting for its interests or activities related to mine property interests is consistent to that of the Company.  The assets underlying the Company's investment in joint ventures are primarily cash and are located in China.(i)     Stock-based compensation:
The Company applies the intrinsic value-based method of accounting prescribed by Accounting Principles Board ("APB") Opinion No. 25 "Accounting for Stock Issued to Employees", and related interpretations, in accounting for its fixed stock option plan.  As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeds the exercise price. Compensation expense for stock options is recognized over the vesting period.  Options granted to other than employees and directors are measured at their fair value as the services are performed and the options earned.  For the periods ended June 30, 2005 and 2004, no stock-based compensation has been recognized in expenses.

If the fair-value method had been used, an additional expense of nil (2004 - $148,723) would have been recognized for stock-based compensation for the six months ended June 30, 2005, and $208,408 the period from inception of new business on January 20, 2003 to June 30, 2005. Pro forma basic and diluted loss per share would have been nil (2004 - $0.12) and $0.13 respectively.
2. Mining Property Interests

(a)     Blue Mountain Project
The Company entered into an agreement dated March 18, 2003 with Nassau Ltd. ("Nassau") an unrelated private U.S. company, to acquire 100% of the interest held by Nassau in a mining property located in Nevada, U.S.A.

In order to acquire the interest, the Company has entered into an option agreement with Nassau, pursuant to which agreement Nassau granted the Company the option to acquire a 100% interest in certain mining claims known as the Blue Mountain project which is made up of 31 mining claims and is located in Humboldt County, Nevada approximately 20 miles west of Winnemucca, Nevada (the "Blue Mountain Project").

F-7

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1. Mining Property Interests (Cont'd):

In accordance with the terms of its agreement with Nassau, the Company has agreed that in order to acquire a 100% interest in the Blue Mountain Project, the Company will make the following payments and issue the following shares to Nassau:


(i)
50,000 shares were issued on August 8, 2003 when the TSX Venture Exchange (the "TSX") approved (the "Approval Date") the Blue Mountain Project as a "qualifying property" (as defined within the rules and policies of the TSX);(ii)
An additional 50,000 shares were issued on Aug 8, 2004;(iii)
Two years following the Approval Date a payment in the amount of $20,000;(iv)
Three years following the Approval Date a payment in the amount of $30,000(v)
Four years following the Approval Date a payment in the amount of $40,000;(vi)
Five years following the Approval Date a payment in the amount of $100,000; and(vii)
Six years following the Approval Date a payment in the amount of $1,300,000 (the "Final Payment").Upon the Company making the Final Payment to Nassau then the Company will own 100% of the Blue Mountain Project subject only to a 2% net smelter royalty on gold (the "Royalty") and the Company will have the right to buy down the Royalty to a 1% NSR by paying Nassau the sum of $1,500,000 at any time prior to completion of the first year of production.  All payments are in U.S. dollars.


Due Date

Cash Payment
Work CommitmentOn execution of Agreement
$
5,000 (PAID)
$
--By Yr. 1 Anniversary
$
15,000 (PAID)
$
10,000
CompletedBy Yr. 2 Anniversary
$
25,000
$
50,000By Yr. 3 Anniversary
$
50,000
$
100,000By Yr. 4 Anniversary
$
155,000
$
100,000By Yr. 5 Anniversary
$
250,000
$
250,000By Yr. 6 Anniversary
$
250,000
$
250,000By Yr. 7 Anniversary
$
250,000
$
240,000Each of Yrs. 8 to 15
$
50,000
$
50,000TOTAL
$
1,400,000
$
1,400,000

F-8

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1. Mining Property Interests (Cont'd):

(c)     Dongchuan Project
On June 2, 2004, the Company entered into a formal co-operative agreement with Yunnan Nonferrous Mining and Geology Ltd. ("YNMG") pursuant to which it established a Sino-Foreign co-operative joint venture company in the Yunnan Province, PRC.

The joint venture company is called the Xinan Mineral Resources Co. Ltd.  It is established for the purpose of jointly exploring and, if successful, mining any viable deposits discovered in the Dongchuan area of the Yunnan, Province, PRC.

The Company agreed to invest, at its option, a total of US$3.1 million over three years to earn a 70% interest in the co-operative company.  After the company has earned a 70% interest, the company may earn a further 20 % interest in the co-operative company by investing an additional US$6 million.

If the Company elects to terminate the co-operative agreement at any time, all unexpended amounts paid to the co-operative company will be returned to the Company and all rights to the property will be returned to YNMG.

The schedule of payments is as follows; beginning from October 12, 2004, the date the joint venture company was successfully incorporated:Due Date
InvestmentBy Yr. 1 Anniversary
$
600,000By Yr. 2 Anniversary

1,000,000By Yr. 3 Anniversary

1,500,000Total:
$
3,100,000As at June 30, 2005, the Company has invested $562,708 into the project.

(d)     Gongguo Project
On May 18, 2004 the Company entered into a formal co-operative agreement with Yunnan Nonferrous Mining and Geology Ltd. ("YNMG") to establish a Sino-Foreign co-operative joint venture company in Yunnan Province, PRC.

The joint venture company is called the Xinlong Mineral Resources Co. Ltd.  It is established for the purpose of jointly exploring and, if successful, mining any viable deposits discovered in the Gongguo area of the Yunnan, Province, PRC.

The Company has agreed to invest, at its option, a total of US$3.05 million over three years to earn an 80% interest in the co-operative company.  After the Company has earned its 80% interest, contributions to the co-operative company will be made pro rata, provided that YNMG's interest can be diluted to not less than 10% if it elects not to make cash contributions.

If the Company elects to terminate the co-operative agreement at any time, all unexpended amounts paid to the co-operative company will be returned to the Company and all rights to the property will be returned to YNMG.

F-9

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1. Mining Property Interests (Cont'd):

The schedule of payments, beginning from October 12, 2004, the date the joint venture company was successfully established, is as follows:


Due Date

InvestmentBy Yr. 1 Anniversary
$
540,000By Yr. 2 Anniversary

1,000,000By Yr. 3 Anniversary

1,510,000Total
$
3,050,000


As at June 30, 2005, the Company has invested $435,080 into the project.
2. Stockholders' Equity:


(a)     Escrowed stock:
At December 31, 2004, 213,839 (2003 - 213,839) common shares outstanding were held in escrow.

These shares are releasable from escrow on satisfaction of certain predetermined tests set out by the TSX Venture Exchange related to the generation of positive cash flow from operations. Stock not released from escrow within 10 years of the date of their issuance will be cancelled.  Pursuant to the escrow agreements, holders of the stock may exercise all voting rights attached thereto except on a resolution to cancel any of the stock, and have waived their rights to receive dividends or to participate in the assets and property of the Company on a winding-up or dissolution of the Company.  For accounting purposes these shares will be recorded at their fair value when the performance measures are satisfied with a charge in an equivalent amount to compensation expense.(b)     Stock options and stock-based compensation:
A summary of the status of the Company's stock options at June 30, 2005 and 2004 and changes during the periods ended on those dates is presented below:2005
2004Options
Weighted average
exercise price
Options
Weighted average
exercise priceOutstanding, beginning of period
1,860,000
$
0.28
810,000
$
0.25Granted
50,000

0.23
1,050,000

0.30Exercised
--

--
--

--Expired/cancelled
(15,000)

0.25
--

--Outstanding, end of period
1,895,000
$
0.28
1,860,000
$
0.28Options exercisable
1,586,668
$
0.27
810,000
$
0.25



F-10

- 13 -

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1. Stockholders' Equity (Cont'd):
The fair value of the options granted during the period ended June 30, 2005 is estimated to be $8,318 ($0.17 per option).  The fair value has been calculated using the Black-Scholes option pricing model and the following factors: volatility - 90%; risk-free interest rate - 5%; dividend yield - nil; term - five years.  As these options vest commencing July 8, 2005, no stock-based compensation expense attributable to them is required to be disclosed.(c)     Warrants:
As at June 30, 2005, 8,596,585 warrants were outstanding, of which, 1,028,750 expire on August 8, 2005 and the balance of 7,567,835 expire on January 18, 2007.  Each warrant is convertible into one common share and exercisable at $0.30 and $0.50 respectively.(d)     Private Placement:
On January 19, 2005, the Company closed a private placement of 7,567,835 units at a price of $0.30 per unit for a total of $2,270,350. Each unit consisting of one (1) common share and one (1) share purchase warrant, each warrant entitling the holder to purchase one (1) additional common share at a price of US$0.50 per share on or before January 18, 2007.
2. Related Party Transactions:

In addition to related party transactions disclosed elsewhere in these financial statements:

(a)     During the three and six month periods ended June 30, 2005, the Company paid or accrued, geological consulting fees to two directors as follows:


3 Months Ended June 30,
6 Months Ended June 30,2005
$33,464
$63,4642004
66,050
96,050The consulting fees are in the normal course of operations and are recorded at their exchange amount which is the price agreed to between the Company and the directors.

(b)     The Company is charged by Pathway Capital Ltd. (Pathway), a company with two common directors, CAD $2,500 per month in consideration for which Pathway provides the Company with advisory services relating to general corporate development, financial matters, raising additional capital, strategic planning and other matters relating to the financial affairs of the Company.

Total fees paid or accrued to Pathway during the three-months ended June 30, 2005 were as follows:


3 Months Ended June 30,
6 Months Ended June 30,2005
$5,944
$12,0592004
5,456
11,145



F-11

- 14 -

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1. Related Party Transactions (Cont'd):

In addition, Pathway charges the Company CAD $1,100 per month for rent and other administrative services on a cost recovery basis as follows:



3 Months Ended June 30,
6 Months Ended June 30,2005
$15,664
$30,0012004
NIL
NIL
2. Financial Instruments and Risk Management:



(a)     Fair values:
The carrying amounts of cash and cash equivalents, amounts receivable and accounts payable and accrued liabilities approximate their fair values due to their ability for prompt liquidation or short-term to maturity.  The fair value of payables, including note payables, to related parties is not readily determinable due to the lack of a ready market for such indebtedness.(b)     Foreign currency risk:
Foreign currency risk is the risk to the Company's earnings that arises from fluctuations in foreign currency exchange rates, and the degree of volatility of these rates.  The Company does not yet have any sales, and accordingly, foreign exchange risk arises solely from the cash balances held in and costs incurred in China.
3. Subsequent Event

On July 19, 2005 the Company elected to terminate the co-operative agreements on its Dongchuan and Gongguo projects.  All unexpended amounts paid to the co-operative companies will be returned to the Company and all rights to the property will be returned to Yunnan Nonferrous Mining and Geology Ltd.  Before the unexpended amounts are returned, the Company has agreed to pay a termination fee of approximately $48,000.  After giving effect to the termination, the Company will own 100% of the property interests.
4. Comparative Figures


The comparative figures for the three and six month periods ended June 30, 2004 have been reclassified from that previously presented to reflect adjustments, made in the third quarter of 2004, to recognize certain expenses regarding its joint venture interests.











- F-12

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ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward Looking Statements

This quarterly report contains certain forward-looking statements.  Much of the information included in this report includes or is based upon estimates, projections or other "forward looking statements".  Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, prediction, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below.  We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements."

The following discussion should be read in conjunction with our historical Financial Statements and contained herein.

Critical Accounting Policies

Our discussion and analysis of its financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an ongoing basis, management re-evaluates its estimates and judgments.

The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business.  Certain conditions, discussed below, currently exists which raise substantial doubt upon the validity of this assumption.  The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

Our future operations are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable operations or income from our investments.  As of June 30, 2005, we have not generated revenues, and have experienced negative cash flow from operations.  We may look to secure additional funds through future debt or equity financings.  Such financings may not be available or may not be available on reasonable terms.

Our financial statements included in this quarterly report have been prepared without any adjustments that would be necessary if we become unable to continue as a going concern and are therefore required to realize upon our assets and discharge our liabilities in other than the normal course of operations.



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Overview

Our financial statements contained in this quarterly report have been prepared on a going concern basis, which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business.  We incurred net losses from operations for the period ended June 30, 2005, for the period ended June 30, 2004 and for the period from the inception of our mining business as of January 20, 2003 to June 30, 2005 of $249,011, $292,005 and $2,140,576, respectively.  We did not earn any revenues during the period ended June 30, 2005 and the year ended December 31, 2004.

The exploration projects the Company is currently engaged in are as follows:

Blue Mountain Project

The Company entered into an agreement dated March 18, 2003 with Nassau Ltd. ("Nassau") an unrelated private U.S. company, to acquire 100% of the interest held by Nassau in a mining property located in Nevada, U.S.A.

In order to acquire the interest, the Company has entered into an option agreement with Nassau, pursuant to which agreement Nassau granted the Company the option to acquire a 100% interest in certain mining claims known as the Blue Mountain project which is made up of 31 mining claims and is located in Humboldt County, Nevada approximately 20 miles west of Winnemucca, Nevada (the "Blue Mountain Project").

In accordance with the terms of its agreement with Nassau, the Company has agreed that in order to acquire a 100% interest in the Blue Mountain Project, the Company will make the following payments and issue the following shares to Nassau:



|(i)   | 50,000 shares were issued on August 8, 2003 when the TSX Venture Exchange (the "TSX") approved (the "Approval Date") the Blue Mountain Project as a "qualifying property" (as defined within the rules and policies of the TSX);
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii)  | An additional 50,000 shares were issued on Aug 8, 2004;                                                                                                                                                                         
|(iii) | Two years following the Approval Date a payment in the amount of $20,000;                                                                                                                                                       
|(iv)  | Three years following the Approval Date a payment in the amount of $30,000                                                                                                                                                      
|(v)   | Four years following the Approval Date a payment in the amount of $40,000;                                                                                                                                                      
|(vi)  | Five years following the Approval Date a payment in the amount of $100,000; and                                                                                                                                                 
|(vii) | Six years following the Approval Date a payment in the amount of $1,300,000 (the "Final Payment").                                                                                                                              

Upon the Company making the Final Payment to Nassau then the Company will own 100% of the Blue Mountain Project subject only to a 2% net smelter royalty on gold (the "Royalty") and the Company will have the right to buy down the Royalty to a 1% NSR by paying Nassau the sum of $1,500,000 at any time prior to completion of the first year of production.  All payments are in U.S. dollars.



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|Due Date                  | Cash Payment | Work Commitment
|------------------------- | ------------ | ---------------
|On execution of Agreement | $            | 5,000 (PAID)   
|By Yr. 1 Anniversary      | $            | 15,000 (PAID)  
|By Yr. 2 Anniversary      | $            | 25,000         
|By Yr. 3 Anniversary      | $            | 50,000         
|By Yr. 4 Anniversary      | $            | 155,000        
|By Yr. 5 Anniversary      | $            | 250,000        
|By Yr. 6 Anniversary      | $            | 250,000        
|By Yr. 7 Anniversary      | $            | 250,000        
|Each of Yrs. 8 to 15      | $            | 50,000         
|TOTAL                     | $            | 1,400,000      

Dongchuan Project

On June 2, 2004, we entered into a formal co-operative agreement with Yunnan Nonferrous Mining and Geology Ltd. ("YNMG") pursuant to which we together agreed to establish a Sino-Foreign co-operative joint venture company in the Yunnan Province, PRC. The joint venture company will be called the Xinan Mineral Resources Co. Ltd.  It will be established for the purpose of jointly exploring and, if successful, mining any viable deposits discovered in the Dongchuan area of the Yunnan, Province, PRC.



Pursuant to the terms of the co-operative agreement, we agreed to invest, at our option, a total of US$3.1 million over three years to earn a 70% interest in the co-operative company.  After we have earned a 70% interest, at our option, we may earn a further 20 % interest in the co-operative company by investing an additional US$6 million.

On July 19, 2005 the Company elected to terminate the co-operative agreement on its Dongchuan project.  All unexpended amounts paid to the co-operative company will be returned to the Company and all rights to the property will be returned to Yunnan Nonferrous Mining and Geology Ltd.  Before the unexpended amounts are returned, the Company has agreed to pay a termination fee of approximately $24,000.

Gongguo Project

On May 18, 2004 we entered into a formal co-operative agreement with Yunnan Nonferrous Mining and Geology Ltd. ("YNMG") pursuant to which we together agreed to establish a Sino-Foreign co-operative joint venture company in Yunnan Province, PRC.



- 18 -

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The joint venture company will be called the Xinlong Mineral Resources Co. Ltd.  It will be established for the purpose of jointly exploring and, if successful, mining any viable deposits discovered in the Gongguo area of the Yunnan, Province, PRC.

Pursuant to the terms of the co-operative agreement, we have agreed to invest, at our option, a total of US$3.05 million over three years to earn an 80% interest in the co-operative company.  After we have has earned its 80% interest, contributions to the co-operative company will be made pro rata, provided that YNMG's interest can be diluted to not less than 10% if it elects not to make cash contributions.

On July 19, 2005 the Company elected to terminate the co-operative agreement on its Gongguo project.  All unexpended amounts paid to the co-operative company will be returned to the Company and all rights to the property will be returned to Yunnan Nonferrous Mining and Geology Ltd.  Before the unexpended amounts are returned, the Company has agreed to pay a termination fee of approximately $24,000.

Our Proposed Exploration Program

We must conduct exploration to determine what amounts of minerals exist on our properties and if such minerals can be economically extracted and profitably processed.

Our exploration program is designed to efficiently explore and evaluate our properties.

We do not claim to have any mineral reserves whatsoever at this time on our properties.

Our anticipated exploration costs for our respective properties, over the next twelve months are as follows:



|Blue Mountain Project | $ | 15,000
|--------------------- | - | ------
|Red Rock Project      |   | 50,000
|                      | $ | 65,000

Government Regulation

Mining operations and exploration activities are subject to various national, state, and local laws and regulations in the United States, which govern prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters.  We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in the United States.

Environmental Regulation

Our mining operations and exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment.  These laws are continually changing and, as a general matter, are becoming more restrictive.  Our policy is to conduct business in a way that safeguards public health and the environment.  We believe that our operations are conducted in material compliance with applicable laws and regulations.



- 19 -

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Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs.  Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain mining operations uneconomic.

Competition

We compete with other mining companies in connection with the acquisition of gold and other precious metals properties.  There is competition for the limited number of gold acquisition opportunities, some of which is with other companies having substantially greater financial resources than we do.  As a result, we may have difficulty acquiring attractive gold mining/exploration properties.

We believe no single company has sufficient market power to affect the price or supply of gold in the world market.

Results of Operations

We have included in this quarterly report, financial statements for the periods ended June 30, 2005 and 2004, and the period from January 20, 2003 (being the date of inception of our new business) to June 30, 2005.

Three-month period ended June 30, 2005

We incurred a net loss of $249,011 for the three-month period ended June 30, 2005, resulting in a loss per share of $0.01.  The loss was attributable to operating expenses of $270,997 offset by interest income of $1,513 and a foreign exchange gain of $20,473.

During the period we incurred exploration expenses of $87,762 which consists of a $35,938 loss related to our joint ventures in China and $51,824 in other exploration expenses related to our Nevada properties and fees paid to geologists.  We also incurred $10,971 in business development expenses, $34,784 in consulting fees, $760 in depreciation and amortization, $5,838 in filing fees, $10,831 in general and administrative expenses, $5,944 in management fees, $60,891 in professional fees, $2,603 in rent, $19,832 in travel expenses and $29,437 in wages and benefits.

In addition to exploration expenses incurred directly by our Chinese joint venture, we spent $51,824 on exploration compared to $15,542 in the previous year's quarter's period.  The majority of the exploration expenses relate to geologist fees and assay costs, previously paid through our joint ventures, as we conclude our projects in China.  Our equity loss from our joint ventures decreased as we did not make any further payments and our activity in China decreased.  Professional fees increased due to legal work involved in redomiciling the Company back to Canada from Wyoming.  Business development relates to expenses incurred analyzing property opportunities and establishing business contacts in China.  Business development increased over the prior period as we had just started to focus our efforts on our projects in China a year ago.  Consulting expense relates to contracted



- 20 -

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geologist fees, including a director of the company, to perform certain exploration activities.  Consulting fees decreased compared to the prior quarter as we retained the service of Kit Lee, who was responsible for sourcing and managing our projects in China.  We agreed to compensate Kit retro-active to November 2003 as this is when he began his efforts to acquire properties in China. Travel expenses decreased as several directors spent time traveling in China during the prior period's quarter and the Company agreed reimburse Kit for travel expenses in China retro-active to November 2003.  Wages and benefits also increased over the prior year's quarter as the company hired a new Chief Executive Officer who joined the company in late June 2004.  Management fees were constant as the monthly charge is approximately $2,000 per month.

Three-month period ended June 30, 2004

We incurred a net loss of $292,005 for the quarter ended June 30, 2004, resulting in a loss per share of $0.02.  The loss was attributable to operating expense of $289,112 and foreign exchange loss of $2,893.

During the quarter we incurred $282 in depreciation and amortization, $92,851 in consulting fees, $15,542 in exploration expense, $4,994 in filing fees, $17,435 in general and administrative expenses, $8,220 in investor relations, $5,456 in management fees, $45,498 in professional fees, $7,651 in rent, and $88,295 in travel and conference.

Expenses increased as we refocus our efforts to the China properties.  Consulting fees increased as we retained the service of director Kit Lee.  We agreed to compensate Kit retro-active to November 2003 as this is when he began his efforts to acquire properties in China.  Kit will be assisting us on property generation as well as exploration.  Exploration expense decreased as we focused our effort on acquiring the China properties.  The majority of the exploration expense relates to work performed on the Blue Mountain Property.  This work included mapping, sampling, data compilation and claims fees.  Exploration expense also includes costs related to area reconnaissance work.  The exploration expenses related to Blue Mountain was as follows: $10,674 in geologist fees, $1,264 in graphics supplies and analysis, and $4,199 in travel and transportation.  General and administrative expense increased due to increased activities associated with acquiring new properties in China.  Management fees were constant as the monthly charge is approximately $1,675 per month.  Professional fees increased as we incurred legal fees to draft the agreements in China and also to file an SB-2 registration statement with the SEC.  Travel fees increased as several directors spent time traveling in China during the quarter and we reimbursed Kit for travel expenses in China retro-active to November 2003 as this is when Kit first traveled to China to acquire properties.

Six-month period ended June 30, 2005

We incurred a net loss of $598,144 for the six-month period ended June 30, 2005, resulting in a loss per share of $0.03.  The loss was attributable to operating expenses of $634,894 and interest expense of $1,705 which was offset by a foreign exchange gain of $36,942 and interest income of $1,513.

During the period we incurred $22,135 in business development expenses, $1,542 in depreciation and amortization, $70,287 in consulting fees, $300,370 in exploration expense, $24,399 in filing fees, $21,750 in general and administrative expenses, $12,059 in management fees, $2,571 in marketing and promotion expenses, $86,106 in professional fees, $6,190 in rent, $36,351 in travel and conference and $49,028 in wages and benefits.



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Expenses increased over the prior year period due our projects in China which the Company was just starting in last year's prior period.  The majority of exploration expenses, not including our joint venture loss, relate to geologist fees and assay costs as we conclude our projects in China. These expenses were previously paid through our joint ventures.  Also included are exploration expenses relating to work performed on our Red Rock property.  This work included mapping, sampling, data compilation and claims fees.  Exploration expense also includes costs related to area reconnaissance work.  The exploration expenses related to Red Rock were as follows: $6,214 in geologist fees, $418 in analysis, $2,657 in supplies, travel and transportation and $18,277 in staking and claim fees.  Business development relates to expenses incurred reviewing property opportunities and establishing business contacts in China.  Business development increased over the prior period as we had just started to focus our efforts on our projects in China a year ago.  Consulting expense relates to contracted geologist fees, including a director of the company, to perform certain exploration activities.  Consulting fees decreased compared to the prior quarter as we retained the service of Kit Lee, who was responsible for sourcing and managing our projects in China.  We agreed to compensate Kit retro-active to November 2003 as this is when he began his efforts to acquire properties in China.  Professional and filing fees increased due to legal work involved in completing a private placement which closed on January 19, 2005.  Professional fees also increased due to legal work involved in redomiciling the Company back to Canada from Wyoming.   Travel expenses decreased as several directors spent time traveling in China during the prior period's quarter and the Company agreed reimburse Kit for travel expenses in China retro-active to November 2003.  Wages and benefits also increased over the prior year's quarter as the company hired a new Chief Executive Officer who joined the company in late June 2004.  Management fees were constant as the monthly charge is approximately $2,000 per month.

Six-month period ended June 30, 2004

We incurred a net loss of $417,871 for the six-month period ended June 30, 2004, resulting in a loss per share of $0.03.  The loss was attributable to operating expenses of $412,289, and foreign exchange loss of $5,582.

During the period we incurred $576 in depreciation and amortization, $106,973 in consulting fees, $90,757 in exploration expense, $7,648 in filing fees, $19,946 in general and administrative expenses, $8,220 in investor relations expenses, $11,145 in management fees, and $61,363 in professional fees, $14,478 in rent and $88,295 in travel and conference.

Expenses increased over the prior year period due to the increased activities as we enter the mining business.  Consulting fees increased as we contracted several geologists, including a director, to perform certain exploration activities.  We also retained the services of director Kit Lee.  We agreed to compensate Kit retro-active to November 2003 as this is when he began his efforts to acquire properties in China.  Kit will be focused on property generation as well as assisting in exploration.  The majority of the exploration expense related to work performed on our Blue Mountain Property.  This work included mapping, sampling, data compilation and claims fees.  Also included in exploration expense are staking fees on the NBM and LS Properties (see our 2003 10KSB for further information on the properties), which were acquired during the six-month period ended June 30, 2004.  Exploration



- 22 -

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expense also includes costs related to area reconnaissance work.  The exploration expenses related to Blue Mountain was as follows: $49,594 in geologist fees, $3,784 in graphics supplies and analysis, and $9,005 in travel and transportation.  We also spent $10,623 and $18,336 in staking fees on NBM and LS claims respectively.  Management fees were constant as the monthly charge is approximately $1,675 per month.  Professional fees increased as we incurred legal fees in preparing an SB-2 registration statement, as well as to draft the joint-venture agreements in China.  Travel fees increased as several directors spent time traveling during the quarter and we agreed to reimburse Kit for travel expenses in China retro-active to November 2003 as this is when Kit first traveled to China to acquire properties.

Period of inception of the mining business, January 20, 2003 to June 30, 2005

We incurred a net loss of $2,140,576 for the period of inception to June 30, 2005, resulting in a loss per share of $0.14.  The loss was attributable to operating expenses of $2,142,717 and interest expense of $1,705 which was offset by a foreign exchange gain of $2,333 and interest income of $1,513.

Balance Sheets

Total cash and cash equivalents as at June 30, 2005 and December 31, 2004, were respectively, $224,925 and $1,497,859.  Working capital as at June 30, 2005, and December 31, 2004, were respectively, $514,107 and $826,605.

The decrease in working capital between June 30, 2005 and December 31, 2004 was primarily attributable to operating expenses of $634,894, further investment into our Chinese joint venture companies of $675,000 and repayment of payables, including amounts to related parties.  This decrease was offset by the closing of the private placement in the amount of $2,270,350.  A total of $1,639,065 of the private placement had already been collected at December 31, 2004 and was recognized as subscriptions received in advance of share offering.  No revenue was generated during the period.

Total share capital as at June 30, 2005 and December 31, 2004, was respectively, $7,899,276 and $5,628,926.  Total shares outstanding as at June 30, 2005 and December 31, 2004, were respectively, 24,572,700 and 17,004,865.

Current Capital Resources and Liquidity

Our capital resources have been limited.  We currently do not, and will not, generate revenue from business operations in the foreseeable future, and to date have relied on the sale of equity and related party loans for cash required for our operations.  There can be no assurances that any outstanding share purchase warrants will be exercised.

On January 19, 2005, we closed a private placement of 7,567,835 units at a price of $0.30 per unit for total proceeds of $2,270,350.  There can be no assurances that we can obtain future additional financing on terms reasonably acceptable to us or at all.  The lack of capital may force us to curtail our operating activities and potential investment activities.



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During 2004, we entered into leasing agreements with respect to office and equipment leases expiring in January 2007.  Arrangement has been made for Pathway Capital Ltd., a related party to manage and assume payment of these leases.  The company will reimburse Pathway based on estimated usage of office space and other equipments on a cost recovery basis.  The balance of the 2005 lease obligation for the office space is estimated to be $8,583.





























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ITEM 3.     CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures:  Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

(b) Changes in Internal Control over Financial Reporting:  There were no changes in the Company's internal control over financial reporting identified in connection with the Company evaluation described above during the Company's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.







 :











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PART II - OTHER INFORMATION

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS.

On January 19, 2005, we completed our public offering and sold 7,567,835 shares of common stock and raised $2,270,350. There was no underwriter involved in our public offering. The proceeds from the offering were partially used during the quarter ended June 30, 2005 to cover exploration and working capital expenses.

The following amounts were paid from the proceeds of the offering:



|Exploration expenses |   | 794,598  
|-------------------- | - | ---------
|Working capital      |   | 273,090  
|Total                | $ | 1,067,688

In previous the previous quarter we also used the proceeds from the offering to pay loans to related parties, who financed the Company's exploration expenses during the period prior to the offering.   The proceeds remaining are available to cover future exploration and working capital expenses of the Company.

ITEM 6.     EXHIBITS



| | Exhibits | Item Description                                                                                                                                               
| | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1     | Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
| | 31.2     | Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
| | 32.1     | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).              
| | 32.2     | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).              









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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date this 12th day of August, 2005.



| | LUNA GOLD CORP.
| | ---------------
| |                
| | By:            
| |                
| |                
| | By:            
| |                





























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