**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB**





(Mark
      One)





[X]
            Quarterly
                Report under Section 13 or 15(d) of the Securities Exchange Act of
                1934For
                the quarterly period ended March 31, 2005[_]
            Transition
                Report under Section 13 or 15(d) of the Exchange ActFor
                the Transition Period from ________to __________Commission
              File Number:
              0-25523




**U.S.
      CANADIAN MINERALS, INC.**


(Exact
      Name of Registrant as Specified in its Charter)





**NEVADA**
            **33-0843633**(State
                of other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                Number)





**5380
                Valley View Ave. Suite F****Las
                Vegas, NV**
            **89118**(Address
                of principal executive offices)
            (Zip
                Code)





Registrant's
                Phone: (702) 433-8223
            Fax:
                (702) 873-8917





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act of 1934 during the past 12 months (or 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
      [ ]
      No [x]





As
      of
      March 31, 2005, the issuer had 69,066,720 shares of common stock issued
      and outstanding.





Transitional
      Small Business Disclosure Format check one: Yes [ ] No [X]





***Table
          of Contents***
















**TABLE
                OF CONTENTS**
            Page**PART
                I - FINANCIAL INFORMATION**Item
                1.
            Financial
                Statements
            3Item
                2.
            Plan
                of Operation
            4Item
                3.
            Controls
                and Procedures
            10**PART
                II - OTHER INFORMATION**Item
                1.
            Legal
                Proceedings
            10Item
                2.
            Unregistered
                Sales of Equity Securities and Use of
                Proceeds
            10Item
                3.
            Defaults
                Upon Senior Securities
            11Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            11Item
                5.
            Other
                Information
            11Item
                6.
            Exhibits
            11














2
 ***Table
          of Contents***





**ITEM
      1.   FINANCIALINFORMATION**








U.S.
      CANADIAN MINERALS, INC.


FINANCIAL
      STATEMENTS





MARCH
      31,
      2005

















U.S.
      CANADIAN MINERALS, INC.





TABLE
      OF
      CONTENTS





MARCH
      31,
      2005








PageBalance
                Sheets as of March 31, 2005 and 2004
            F-1Statements
                of Operations for the three months endedMarch
                31, 2005 and 2004
            F-2Statement
                of Stockholders’ Equity for 3 months endedMarch
                31, 2005 and 2004
            F-3Statements
                of Cash Flows for the three months endedMarch
                31, 2005 and 2004
            F-4Notes
                to Financial Statements
            F-5
                to F-19








3
 ***Table
          of Contents***


**U.S.
                  Canadian Minerals, Inc.****Balance
                  Sheets****as
                  of March 31, 2005 and 2004****(Unaudited)****Assets****2004****2005**
              
              **(Restated)**Current
                  AssetsCash
                  and Cash Equivalents
              
              $
              0
              
              $
              500,408Property
                  and Equipment, Net
              
              
              1,768,003
              
              
              2,137,965Other
                  AssetsNote
                  Receivable - Related Party
              
              
              178,864
              
              
              22,000Investments
              
              
              1,915,226
              
              
              1,000Shares
                  in Escrow
              
              
              44,630
              
              
              0Deposits
                  and Prepaids
              
              
              13,227
              
              
              0Total
                  Other Assets
              
              
              2,151,947
              
              
              23,000Total
                  Assets
              
              $
              3,919,950
              
              $
              2,661,373**Liabilities
                  and Stockholders' Equity**LiabilitiesCurrent
                  LiabilitiesAccounts
                  Payable
              
              $
              327,357
              
              $
              151,496Accrued
                  Expenses and Taxes
              
              
              76,020
              
              
              9,621Due
                  to Related Parties
              
              
              974,201
              
              
              223,126Due
                  to Unrelated Parties
              
              
              133,026
              
              
              0Unissued
                  Common Stock Obligation
              
              
              0
              
              
              (156,416
              )Net
                  Liabilities of Discontinued Operations
              
              
              975,317
              
              
              1,213,076Total
                  Current Liabilities
              
              
              2,485,921
              
              
              1,440,903Due
                  to Related Parties - Long-Term
              
              
              500,000
              
              
              0Total
                  Liabilities
              
              
              2,985,921
              
              
              1,440,903Stockholders'
                  EquityPreferred
                  Stock -Series A; $.001 par value; 1,000,000 shares
                  authorized522,750
                  shares issued and outstanding
              
              
              523
              
              
              258Common
                  stock $.001 par value, 200,000,000 shares authorized,
                  69,066,722shares
                  issued and outstanding
              
              
              69,067
              
              
              8,411Treasury
                  Stock
              
              
              1,000
              
              
              0Additional
                  Paid-In Capital
              
              
              21,781,362
              
              
              22,856,439Accumulated
                  Deficit
              
              
              (20,917,923
              )
              
              (21,644,638
              )Total
                  Stockholders' Equity
              
              
              934,029
              
              
              1,220,470Total
                  Liabilities and Stockholders' Equity
              
              $
              3,919,950
              
              $
              2,661,373See
                  Accompanying Notes to Financial Statements






F
          -
          1
 ***Table
          of Contents***


**U.S.
                  Canadian Minerals, Inc.****Statements
                  of Operations****For
                  the Three Months Ended March 31, 2005 and 2004****(Unaudited)****3
                  Months Ended March 31,****(Restated)****2005**
              
              **2004**Revenues
              
              $
              0
              
              $
              0General
                  and Administrative Costs
              
              
              664,652
              
              
              2,372,172Net
                  Loss from Operations
              
              
              (664,652
              )
              
              (2,372,172
              )Other
                  Income (Expense)
              
              
              (10,449
              )
              
              -89,315Net
                  Loss Before Income Taxes
              
              
              (675,101
              )
              
              (2,461,487
              )Provision
                  for Federal Corporate Income Taxes
              
              
              0
              
              
              0Net
                  Loss
              
              $
              (675,101
              )
              $
              (2,461,487
              )Basic
                  and Diluted Loss per Common Share:Net
              
              $
              (0.02
              )
              $
              (0.06
              )Weighted
                  Average Common Shares Outstanding
              
              
              32,532,920
              
              
              42,768,889See
                  Accompanying Notes to Financial Statements








F
          -
          2
 ***Table
          of Contents***


**U.S.
                  Canadian Minerals, Inc.****Statement
                  of Stockholders' Equity****For
                  the period from January 1, 2003 to March 31, 2005****(Unaudited)**Preferred
                  A
              
              Preferred
              
              Preferred
                  B
              
              Preferred
              
              Common
              
              Common
              
              Additional
              
              Other
              
              
              
              TotalSeries
              
              "A"Series
              
              Series
              
              "B"Series
              
              Stock
              
              Stock
              
              Paid
                  In
              
              Receivables
              
              Accumulated
              
              Shareholders'Shares
              
              Amount
              
              Shares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              or
                  Treasury
              
              Deficit
              
              EquityStockBalance
                  at January 1, 2003 (as adjusted to account for stock
                  splits)
              
              
              289,500
              
              $
              290
              
              
              140,000
              
              $
              140
              
              
              477,185
              
              $
              477
              
              $
              11,749,143
              
              
              ($2,750
              )
              
              ($12,818,458
              )
              
              ($1,071,158
              )Issuance
                  of Preferred A series stock for services at $7
              
              
              240,000
              
              
              240
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              559,760
              
              
              
              
              
              
              
              
              560,000Issuance
                    of common shares for cash, weighted average price of
                    $0.02 per share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              183,772
              
              
              184
              
              
              166,334
              
              
              
              
              
              
              
              
              166,518Issuance
                    of common stock in satisfaction of Companyliabilities, weighted
                    average prices of $0.02
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              15,600
              
              
              16
              
              
              12,984
              
              
              
              
              
              
              
              
              13,000Issuance
                    of common stock for related interest on notespayable, weighted
                    average price $0.06
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              80,922
              
              
              81
              
              
              216,824
              
              
              
              
              
              
              
              
              216,905Issuance
                    of common stock for services, weightedaverage price of
                  $0.07
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              424,369
              
              
              424
              
              
              1,102,942
              
              
              
              
              
              
              
              
              1,103,366Conversion
                  of preferred series "A" shares into common stock
              
              
              (192,000
              )
              
              (192
              )
              
              
              
              
              
              
              
              153,600
              
              
              154
              
              
              38
              
              
              
              
              
              
              
              
              (0
              )Bad
                  debt related to other receivable
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,750
              
              
              
              
              
              2,750Net
                  loss for the year ended December 31, 2003
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (2,198,026
              )
              
              (2,198,026
              )Balance
                  at January 1, 2004 (as adjusted to account for stock
                  splits)
              
              
              337,500
              
              $
              338
              
              
              140,000
              
              $
              140
              
              
              1,335,448
              
              $
              1,335
              
              $
              13,808,025
              
              $
              0
              
              
              ($15,016,484
              )
              
              ($1,206,646
              )Cancellation
                  of preferred shares
              
              
              
              
              
              
              
              
              (140,000
              )
              
              (140
              )
              
              
              
              
              
              
              
              140
              
              
              
              
              
              
              
              
              0Issuance
                  of preferred shares for services rendered - Rendal Williams
                  $1.51@
              
              
              114,000
              
              
              114
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              57,342
              
              
              
              
              
              
              
              
              57,456Issuance
                  of common shares to Mpower, Michael Kauffman, Pres. $1.51
                  @
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              300,000
              
              
              300
              
              
              150,700
              
              
              
              
              
              
              
              
              151,000Issuance
                  of common shares to Rendal Williams, CEO, $1.51 @
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              492,520
              
              
              493
              
              
              247,408
              
              
              
              
              
              
              
              
              247,901Issuance
                  of preferred shares to IB 2000 for repayment of debt of
                  $156,416
              
              
              30,000
              
              
              30
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (156,446
              )
              
              
              
              
              
              
              
              (156,416
              )**The
                  company approved a 125:1 reverse split of its common
                  shares**Issuance
                    of common shares for acquisition of mineral rights
                    inSaskatchewan, Canada from Nevada Minerals, Inc,
                  a related
                  party
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              15,000,000
              
              
              15,000
              
              
              112,000
              
              
              
              
              
              
              
              
              127,000Issuance
                  of common shares for conversion of preferred shares
              
              
              (138,000
              )
              
              (138
              )
              
              
              
              
              
              
              
              1,380,000
              
              
              1,380
              
              
              (1,242
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for rounding
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              39
              
              
              0Issuance
                  of common shares for conversion of preferred shares -IB
                  2000
              
              
              (30,000
              )
              
              (30
              )
              
              
              
              
              
              
              
              3,000,000
              
              
              3,000
              
              
              (2,970
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for rounding
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              36
              
              
              0
              
              
              0
              
              
              
              
              
              
              
              
              0Issuance
                  of common shares for services rendered
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              12,900
              
              
              13
              
              
              0
              
              
              
              
              
              
              
              
              13Issuance
                  of common shares for conversion of preferred shares
              
              
              (150
              )
              
              (0
              )
              
              
              
              
              
              
              
              15,000
              
              
              15
              
              
              (15
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for services rendered $1.51 @
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              15,000
              
              
              15
              
              
              7,535
              
              
              
              
              
              
              
              
              7,550Issuance
                  of common shares for acquisition of an asset - Juina Mining
                  Co.
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,212,420
              
              
              1,212
              
              
              149,788
              
              
              
              
              
              
              
              
              151,000Issuance
                  of common shares for services rendered - Stevenson Mgmt
                  $1.51@
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              30,000
              
              
              30
              
              
              15,070
              
              
              
              
              
              
              
              
              15,100Issuance
                  of common shares for services rendered - T. Mercer, Director
                  $1.51@
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              450,000
              
              
              450
              
              
              226,050
              
              
              
              
              
              
              
              
              226,500Issuance
                  of common shares - acquisition of interest in NV Magnetics,
                  Inc.
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              150,000
              
              
              150
              
              
              218,600
              
              
              
              
              
              
              
              
              218,750Issuance
                  of common shares - acquisition of interest in El Capitan
                  Metals
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,160,000
              
              
              2,160
              
              
              1,659,093
              
              
              
              
              
              
              
              
              1,661,253Issuance
                  of warrants to El Capitan to purchase stock at $5 per
                  share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              107,000
              
              
              1000
              
              
              
              
              
              108,000Issuance
                  of common shares for consulting services rendered $1.51 @
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              60,000
              
              
              60
              
              
              30,140
              
              
              
              
              
              
              
              
              30,200Issuance
                  of common shares - acquisition of interest in CMKXtreme
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              600,000
              
              
              600
              
              
              (600
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for cash -Casavant family member @$5
                  share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,800,000
              
              
              1,800
              
              
              2,998,200
              
              
              
              
              
              
              
              
              3,000,000Issuance
                  of common shares for acquisition of asset -CMKM Diamonds
                  Inc
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              22,500,000
              
              
              22,500
              
              
              (22,500
              )
              
              
              
              
              
              
              
              0Issuance
                    of preferred shares for acquisition of additional mineral rights
                    inSaskatchewan, Canada from Nevada Minerals, Inc,
                  a related
                  party
              
              
              300,000
              
              
              300
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (300
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for conversion of preferred shares
              
              
              (13,500
              )
              
              (14
              )
              
              
              
              
              
              
              
              1,350,000
              
              
              1,350
              
              
              (1,337
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for services rendered @1.40
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              60,000
              
              
              60
              
              
              27,940
              
              
              
              
              
              
              
              
              28,000Issuance
                    of common shares for acquisition of an asset - Langley ParkInvestment Trust, Mutual Fund, AMI London Exchange
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              5,142,000
              
              
              5,142
              
              
              744,271
              
              
              
              
              
              
              
              
              749,413Issuance
                  of common shares for services rendered @ 1.40 per share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              30,000
              
              
              30
              
              
              41,970
              
              
              
              
              
              
              
              
              42,000Issuance
                  of common shares for services rendered - A. Daryll Pryor
                  @1.40
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              300,000
              
              
              300
              
              
              419,700
              
              
              
              
              
              
              
              
              420,000Issuance
                  of common shares for cash -Casavant family member @$5
                  share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,800,000
              
              
              1,800
              
              
              2,998,200
              
              
              
              
              
              
              
              
              3,000,000Issuance
                  of common shares for cash -Casavant family member @$5
                  share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,800,000
              
              
              1,800
              
              
              2,998,200
              
              
              
              
              
              
              
              
              3,000,000Issuance
                  of common shares for cash -Casavant family member @$5
                  share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,800,000
              
              
              1,800
              
              
              2,998,200
              
              
              
              
              
              
              
              
              3,000,000Issuance
                  of common shares for cash -Casavant family member @$5
                  share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,800,000
              
              
              1,800
              
              
              2,998,200
              
              
              
              
              
              
              
              
              3,000,000Issuance
                  of common shares for rounding - CMKM Diamonds, Inc.
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              89,001
              
              
              89
              
              
              148,246
              
              
              
              
              
              
              
              
              148,335Issuance
                  of common shares for cash @ 2.05 per share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              257,100
              
              
              257
              
              
              175,428
              
              
              
              
              
              
              
              
              175,685Issuance
                  of common shares for conversion of preferred shares NV
                  Minerals
              
              
              (53,400
              )
              
              (53
              )
              
              
              
              
              
              
              
              5,340,000
              
              
              5,340
              
              
              (5,287
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for conversion of preferred
                  shares-Woodward
              
              
              (9,000
              )
              
              (9
              )
              
              
              
              
              
              
              
              900,000
              
              
              900
              
              
              (891
              )
              
              
              
              
              
              
              
              0Cancellation
                  of common shares
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (94,500
              )
              
              (95
              )
              
              95
              
              
              
              
              
              
              
              
              0Issuance
                  of shares - rounding to reconcile to transfer agent records
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              120
              
              
              0
              
              
              240
              
              
              
              
              
              
              
              
              240**1:3
                  forward stock split of its common and PF Series A
                  shares**Issuance
                  of shares for exercise of stock warrants exchanged @ $5.00
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              20,000
              
              
              20
              
              
              99,980
              
              
              
              
              
              
              
              
              100,000Cancellation
                  of common shares issued to NV Minerals, Inc.
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (4,806,000
              )
              
              (4,806
              )
              
              4,806
              
              
              
              
              
              
              
              
              0Issuance
                  of common shares for services rendered - Trigon Geoservices
                  Ltd.
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              179,091
              
              
              179
              
              
              417,103
              
              
              
              
              
              
              
              
              417,282Issuance
                  of common shares for services rendered - NV Minerals, Inc.
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              921,000
              
              
              921
              
              
              (921
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for rounding @1.97
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              399
              
              
              0
              
              
              798
              
              
              
              
              
              
              
              
              798Issuance
                  of common shares for cash @1.97
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              408
              
              
              0
              
              
              816
              
              
              
              
              
              
              
              
              816Issuance
                  of common shares for repayment of debt @ $1.97
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              3,300
              
              
              3
              
              
              6,498
              
              
              
              
              
              
              
              
              6,501Issuance
                    of common shares for conversion of preferred shares relating
                    toBarrington Foods, Inc. (see issuance of PF Series
                  A listed
                  above)
              
              
              (10,000
              )
              
              (10
              )
              
              
              
              
              
              
              
              1,000,000
              
              
              1,000
              
              
              (990
              )
              
              
              
              
              
              
              
              0Adjustment
                  to Paid in Capital to account for price-adjusted
                  investments
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (12,013,689
              )
              
              
              
              
              
              
              
              (12,013,689
              )Net
                  loss for the year ended December 31, 2004
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (5,226,338
              )
              
              (5,226,338
              )Balance
                  at December 31, 2004 (as adjusted to account for stock
                  splits)
              
              
              527,450
              
              $
              528
              
              
              0
              
              
              0
              
              
              68,405,282
              
              $
              68,406
              
              $
              21,660,518
              
              $
              1,000
              
              
              ($20,242,822
              )
              $
              1,487,630Issuance
                  of common shares for prior stock split LJDT
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              40,000
              
              
              40
              
              
              (40
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for conversion of preferred shares-Corp
                  One
              
              
              (200
              )
              
              (0
              )
              
              
              
              
              
              
              
              20,000
              
              
              20
              
              
              (20
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for conversion of preferred shares-Go
                  Bearcats
              
              
              (4,500
              )
              
              (4
              )
              
              
              
              
              
              
              
              450,000
              
              
              450
              
              
              (445
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for conversion of Barrington stock- Burns &
                  Wesley
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,440
              
              
              1
              
              
              (1
              )
              
              
              
              
              
              
              
              0Issuance
                  of common shares for services rendered - Cancio at $0.81 per
                  share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              50,000
              
              
              50
              
              
              40,450
              
              
              
              
              
              
              
              
              40,500Issuance
                  of common stock based compensation - Hansen & Roan @ $0.81 per
                  share
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              100,000
              
              
              100
              
              
              80,900
              
              
              
              
              
              
              
              
              81,000Net
                  loss for the three months ended March 31, 2005
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (675,101
              )
              
              (675,101
              )Balance
                  at March 31, 2005 (as adjusted to account for stock
                  splits)
              
              
              522,750
              
              $
              524
              
              $
              0
              
              $
              0
              
              
              69,066,722
              
              $
              69,067
              
              $
              21,781,362
              
              $
              1,000
              
              
              ($20,917,923
              )
              $
              934,029See
                  Accompanying Notes to Financial Statements






F
          -
          3
 ***Table
          of Contents***


**U.S.
                  Canadian Minerals, Inc.****Statements
                  of Cash Flows****For
                  the Three Months Ended March 31, 2005 and 2004****(Unaudited)****Three
                  Months Ended March 31,****2004****2005**
              
              **(Restated)****Cash
                  Flows from Operating Activities**Net
                  Income (Loss)
              
              $
              (675,101
              )
              $
              (2,461,487
              )Adjustments
                  to Reconcile Net Loss toNet
                  Cash Used by Operating Activities:Stock
                  Based Compensation
              
              
              81,000
              
              
              305,357Depreciation
              
              
              2,099
              
              
              1,572Stocks
                  and Warrants Issued for Services
              
              
              40,500
              
              
              6,591,757Changes
                  in Operating Assets and LiabilitiesIncrease
                  in Accounts Receivable
              
              
              0
              
              
              0Increase
                  in Deposits and Prepaids
              
              
              (8,000
              )
              
              0Increase
                  in Accounts Payable
              
              
              285,189
              
              
              0Increase
                  in Accrued Expenses and Taxes
              
              
              (50,508
              )
              
              (140,158
              )Accrued
                  Interest
              
              
              10,449
              
              
              (107,412
              )Total
                  Adjustments
              
              
              360,729
              
              
              6,651,116Net
                  Cash (Used in ) Continuing Operating Activities
              
              
              (314,372
              )
              
              4,189,629Net
                  Cash Flows from Discontinued Operations
              
              
              0
              
              
              1,213,076Net
                  Cash Provided by (Used in) Operating Activities
              
              
              (314,372
              )
              
              5,402,705**Cash
                  Flows from Investing Activities:**Additions
                  to Property and Equipment
              
              
              (591
              )
              
              0Additions
                  to Investment Assets
              
              
              (398,063
              )
              
              (2,133,250
              )Additions
                  to Shares in Escrow
              
              
              (44,630
              )
              
              0Valuation
                  of Mineral Rights
              
              
              0
              
              
              (4,166,667
              )Loans
                  to Related Parties
              
              
              (33,864
              )
              
              (23,000
              )Net
                  Cash (Used in) Investing Activities
              
              
              (477,148
              )
              
              (6,322,917
              )**Cash
                  Flows from Financing Activities:******Proceeds
                  from the****Issuance
                  of Common Shares
              
              
              (1
              )
              
              0****Proceeds
                  from the****Issuance
                  of Preferred Shares
              
              
              0
              
              
              24,905Net
                  Increase in Borrowings
              
              
              590,311
              
              
              (424,846
              )Common
                  and Preferred Stock Issued to Acquire Assets
              
              
              0
              
              
              2,133,250Unissued
                  Common Stock Obligation
              
              
              0
              
              
              (312,831
              )Net
                  Cash Provided by Continuing Financing Activities
              
              
              590,310
              
              
              1,420,478Net
                  Financing Cash Flow from Discontinued Operations
              
              
              0
              
              
              0Net
                  Cash Provided by (Used In) Financing Activities
              
              
              590,310
              
              
              1,420,478Net
                  Increase (Decrease) in Cash and Equivalents
              
              
              (201,210
              )
              
              500,266Cash
                  and Equivalents - January 1,
              
              
              201,210
              
              
              142Cash
                  and Equivalents - March 31,
              
              $
              0
              
              $
              500,408Supplemental
                  Cash Flow Information:Cash
                  Paid for Interest
              
              $
              0
              
              $
              0Cash
                  Paid for Income Taxes
              
              $
              0
              
              $
              0See
                  Accompanying Notes to Financial Statements








F
          -
          4
 ***Table
          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**








1.  NATURE
      OF
      OPERATIONS AND BASIS OF PRESENTATION





ORGANIZATION:
      U.S. Canadian Minerals, Inc. (hereinafter referred to as the "Company") was
      a
      development stage company in accordance with Statement of Financial Accounting
      Standards No. 7 until December 31, 2003, with its main focus on the manufacture
      and distribution of food products, and it was known as Barrington Foods
      International, Inc. (“BFI”). In January 2004, the Company changed its business
      focus to the mining industry and acquiring existing mining business operations
      and assets. On January 2, 2004, the Company changed its name to U.S. Canadian
      Minerals, Inc. and is no longer a development stage company.





HISTORY:
      Barrington Foods International, Inc., formerly E-Bait, Inc, ("E-Bait") was
      incorporated in the State of California in February 1999. In August 2001, E-Bait
      consummated an acquisition and merger agreement (the "Agreement") to acquire
      all
      200,000 shares of outstanding capital stock of BFI, a Nevada corporation, in
      exchange for 1,772,015 shares of E-Bait's common stock and a note payable of
      $700,000 (the "Transaction"). Accordingly, the stockholders of BFI received
      an
      additional 1,552,015 shares of E-Bait's common stock and converted the existing
      200,000 shares of BFI's common stock into E-Bait common stock. Prior to the
      Transaction, E-Bait was a public company with nominal operations, assets, and
      no
      liabilities; and BFI was an operational privately held company. Net loss from
      development activities from December 8, 2000 (the date of Inception for BFI)
      through December 31, 2003 are reflected in the financial statements as
      discontinued operations and are not aggregated with the net loss from operations
      of U.S. Canadian Minerals, Inc.





CAPITAL
      CHANGES: In December 2003, the Company's Board of Directors adopted a resolution
      whereby it approved a 1-for-100 reverse stock split. Effective January 20,
      2004
      the Company’s Board of Directors adopted a resolution whereby it approved a
      1-for-125 reverse stock split. Accordingly, the accompanying financial
      statements have been retroactively restated to reflect the stock splits as
      if
      such stock splits occurred as of the Company's date of inception. Effective
      October 25, 2004 the Company’s Board of Directors adopted a resolution whereby
      it approved a 3-for-1 forward stock split of the Company’s common shares and
      Preferred Series A shares.





BUSINESS
      OPERATIONS: During the year ended March 31, 2005, the Company commenced the
      acquisition of interests in mineral rights and underlying mining operations
      through the issuance of shares for the acquisition of the shares of certain
      entities and entering into joint venture agreements. Since September 2005,
      the
      Company, through its investment in Durango Oro, S.A., has been actively involved
      in the extraction of ore and the processing and sale of gold and other minerals
      in the province of El Oro, Ecuador. Therefore, the Company is no longer
      considered to be in the development stage. The acquisitions of mineral rights
      have been accounted for as acquisitions of tangible property, in accordance
      with
      Emerging Issues Task Force (EITF) Issue No. 04-02 for reporting periods
      beginning after April 29, 2004. Other acquisitions have been accounted for
      as


F
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          5
 ***Table
          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








investments.
      Certain mineral rights and investments that were acquired during 2004 have
      been
      determined to have been valued at amounts higher than they should have been,
      and
      the corrected acquisition values are reflected in these financial statements.
      We
      have no subsidiaries although we have majority ownership of some of our
      investment assets, as we do not have control of the investment
      assets.





The
      financial statements reflect a restatement of the financial statement for
      calendar year end 2003. Such restatement reflects the treatment of all
      activities of Barrington Foods, Inc. as being associated with activities from
      discontinued operations at January 1, 2004.




2.  SIGNIFICANT
      ACCOUNTING POLICIES





This
      summary of significant accounting policies of the Company is presented to assist
      in understanding the company’s financial statements. The financial statements
      and notes are representations of the company’s management, who is responsible
      for their integrity and objectivity. These accounting policies conform to
      generally accepted accounting principles and have been consistently applied
      to
      the preparation of the financial statements. The Company will adopt accounting
      policies and procedures based upon the nature of future
      transactions.





a)
      Organization and Start Up costs





Costs
      of
      start up activities, including organization costs, are expensed as incurred.





b)
      Revenue Recognition





Revenue
      is recognized when a valid contract or purchase order has been executed or
      received, services have been performed or product has been delivered, the
      selling price is fixed or determinable, and collection is reasonably
      assured.





c)
      Foreign Currency Translation





The
      Company considers the U.S. dollar to be its functional currency as it is the
      currency of the primary economic environment in which the Company operates.
      Accordingly, monetary assets and liabilities denominated in foreign currencies
      are translated into U.S. dollars at the exchange rate in effect at the balance
      sheet date and non monetary assets and liabilities are translated at the
      exchange rates in effect at the time of acquisition or issue. Revenues and
      expenses are translated at rates approximating the exchange rates in effect
      at
      the time of the transactions. All exchange gains and losses are included in
      operations.


F
          -
          6
 ***Table
          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








d)
      Use of
      Estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the period. Actual results
      could differ from those estimates.





e)
      Loss
      Per Share





In
      accordance with SFAS No. 128 - “Earnings Per Share”, the basic loss per common
      share is computed by dividing net loss available to common stockholders by
      the
      weighted average number of common shares outstanding. Diluted loss per common
      share is computed similar to basic loss per common share except that the
      denominator is increased to include the number of additional common shares
      that
      would have been outstanding if the potential common shares had been issued
      and
      if the additional common shares were dilutional. At March 31, 2005 theCompany’s
      stock equivalents were anti-dilutional and therefore excluded in the net loss
      per share computation.





f)
      Income
      Taxes





The
      Company accounts for its income taxes in accordance with Statement of Financial
      Accounting Standards No. 109. Deferred tax assets and liabilities at the end
      of
      each period are determined using the tax rate expected to be in effect when
      the
      taxes are actually paid or recovered. Deferred tax assets are reduced by a
      valuation allowance when, based upon management’s estimates, it is more likely
      than not that a portion of the deferred tax assets will not be realized in
      a
      future period.





h)
      Financial Instruments





i.
      Fair
      values





The
      Company considers cash on hand, cash in banks, certificates of deposit, time
      deposits, and U.S. government and other short-term securities with maturities
      of
      three months or less when purchased as cash and cash equivalents. The carrying
      value of cash, accounts receivable, accounts payable and accrued liabilities
      and
      convertible debentures, promissory notes and loans payable approximate their
      fair value because of the short maturity of these financial instruments. The
      Company reviews its long-lived assets for impairment when events or changes
      in
      circumstances indicate that the book value of an asset may not be recoverable.
      The Company evaluates, at each balance sheet date, whether events and
      circumstances have occurred which indicate possible impairment. The Company
      uses
      various methods, including outside appraisals and estimates of future
      undiscounted net cash flows of the related asset or group of assets over the
      estimated remaining life, in measuring whether the assets are recoverable.


F
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 ***Table
          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








Significant
      Non-cash Operating, Investing and Financing Activities





In
      the
      three months ended March 31, 2005 we issued a total of 661,440 shares of common
      stock. We issued 40,000 shares to a shareholder who presented stock certificates
      of pre-split stock shares to reflect our stock split that occurred in 2004.
      We
      issued 470,000 shares of our common stock in conversion from preferred to
      common, representing 4,700 shares of preferred class A stock. We issued 1,440
      shares to convert old Barrington Foods stock into our common stock. We issued
      50,000 shares for services provided, we valued these services at $40,500. We
      also issued 100,000 shares to employees as bonus compensation, these shares
      were
      valued at $81,000.





ii
      Interest rate risk





The
      Company is not exposed to significant interest rate risk due to the short term
      maturity of its monetary current assets and liabilities.





iii
      Credit risk





The
      Company is exposed to credit risk with respect to its accounts receivable.
      The
      Company follows a program of credit evaluations of customers and limits the
      amount of credit extended when deemed necessary. The Company maintains
      provisions for potential credit losses and any such losses to date have been
      within management’s expectations.





i)
      Issued
      Shares





All
      share
      and per share amounts have been restated to reflect the 10-to-1 stock split
      in
      August 2001, 1-for-10 reverse stock split in December 2001, a 1-for-100 reverse
      stock split in December 2003, the 1-for-125 reverse stock split in January
      2004
      and the 3:1 forward stock split in October 2004.





j)
      Long-Lived Assets





The
      Company assesses the impairment of its intangible assets that have a defined
      life and other long-lived assets in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets” (“SFAS 144”). Pursuant to SFAS 144, the Company
      identifies and records impairment losses, as circumstances dictate, on
      long-lived assets used in operations when events and circumstances indicate
      that
      the assets might be impaired and the discounted cash flows estimated to be
      generated by those assets are less than the carrying amounts of those assets.
      In
      the event that assets are found to be carried at amounts which are in excess
      of
      estimated future cash flows or appraised values, the assets will be adjusted
      for
      impairment to a level commensurate with the estimated net recoverable amount.


F
          -
          8
 ***Table
          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








k)
      Property and Equipment





The
      Company has a nominal amount of computer equipment and office furniture at
      March
      31, 2005. The Company accounts for property and equipment at cost. Depreciation
      for financial reporting is provided over the estimated useful life of the assets
      by use of the straight line depreciation method, and accelerated methods are
      used for income tax reporting. Depreciation expense for the three months ended
      March 31, 2005 and 2004 totaled $2,099 and $1,572.





During
      2004, mineral rights were acquired. It has been determined that the original
      values we put on the assets acquired were incorrect and that these assets were,
      in most cases, worth less than what we had thought. The reduced values are
      reflected in these financial statements and, since we had issued shares of
      common stock in exchange for the mineral rights, we have adjusted additional
      paid-in capital to reflect the reduced values.





Property
      and equipment at March 31, 2005 and 2004 was as follows:





March
                31, 2005
            
            March
                31, 2004Equipment
            
            $
            16,112
            
            $
            13,023Office
                Furniture
            
            
            3,681
            
            
            0Land
                Improvements
            
            
            14,250
            
            
            0Mineral
                Rights
            
            
            1,747,251
            
            
            2,133,250Less:
                Accumulated Depreciation
            
            
            (13,291
            )
            
            (8,307
            )Net
                Property and Equipment
            
            $
            1,768,003
            
            $
            2,137,966





l)
      Recent
      Accounting Pronouncements





i.
      Effective for the reporting periods after December 15, 2005, Companies are
      required to account for the issuance of share-based payments in accordance
      with
      Statement of Financial Standard No. 123R. This Statement supersedes APB Opinion
      No. 25, Accounting for Stock Issued to Employees. SFAS 123R requires companies
      to value issuance of common stock, stock options and stock warrants at 'fair
      value' upon the completion of services rendered. For public companies, this
      fair
      value is arrived at by using an 'econometric model' to take into consideration
      variability of stock price, tax-free interest rate and time-value of money.
      The
      Company has not elected to retroactively apply such accounting principle to
      the
      2005 reporting period. The Company will conform with SFAS 123R in future
      reporting reports.





ii
      FIN
      46(R), Consolidation of Variable Interest Entities, applies at different dates
      to different types of enterprises and entities, and special provisions apply
      to
      enterprises that have fully or partially applied Interpretation 46 prior to
      issuance of Interpretation 46(R). Application of Interpretation 46 or
      Interpretation 46(R) is required in financial statements of public entities
      that
      have interests in variable interest entities or potential variable interest
      entities commonly referred to as special-purpose entities for


F
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 ***Table
          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








periods
      ending after December 15, 2003. Application by public entities (other than
      small
      business issuers) for all other types of entities is required in financial
      statements for periods ending after March 15, 2004. Application by small
      business issuers to entities other than special-purpose entities and by
      non-public entities is required at various dates in 2004 and 2005. There is
      no
      impact on the Company’s financial statements.





iii.
      In
      December 2004, the FASB issued SFAS Statement No. 153, “Exchanges of Non
      monetary Assets.” The statement is an amendment of APB Opinion No. 29 to
      eliminate the exception for non monetary exchanges of similar productive assets
      and replaces it with a general exception for exchanges of non monetary assets
      that do not have commercial substance. The adoption of this standard did not
      have a material impact on its financial statements.





iv.
      In
      March 2005, the FASB issued SFAS Interpretation (“FIN”) No. 47, “Accounting for
      Conditional Asset Retirement Obligations.” FIN 47 clarifies that the term
“Conditional Asset Retirement Obligation” as used in FASB Statement No. 143,
“Accounting for Asset Retirement Obligation,” refers to a legal obligation to
      perform an asset retirement activity in which the timing and/or method of
      settlement are conditional on a future event that may or may not be within
      the
      control of the entity. Accordingly, an entity is required to recognize a
      liability for the fair value of a Conditional Asset Retirement Obligation if
      the
      fair value of the liability can be reasonably estimated. FIN 47 is effective
      no
      later than the end of fiscal years ending after December 15, 2005. The adoption
      of FIN 47 does not have a material affect on the Company’s financial position,
      results of operations or cash flows.





v.
      In May
      2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections
      (“SFAS No. 154”), which replaced Accounting Principles Board Opinion No. 20,
      Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim
      Financial Statements. SFAS No. 154 changes the requirements for the accounting
      for and reporting of a change in accounting principles. It requires
      retrospective application to prior periods’ financial statements of changes in
      accounting principles, unless it is impracticable to determine either the
      period-specific effects or the cumulative effect of the change. This statement
      is effective for accounting changes and corrections of errors made in fiscal
      years beginning after December 15, 2005.  The impact on the Company’s
      operations will depend on future accounting pronouncements or changes in
      accounting principles.





vi.
      In
      July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for
      Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109” (“FIN
      48”), which clarifies the accounting and disclosure for uncertain tax positions,
      as defined. FIN 48 seeks to reduce the diversity in practice associated with
      certain aspects of the recognition and measurement related to accounting for
      income taxes. This interpretation is effective for fiscal years beginning after
      December 15, 2006. The Company is assessing FIN 48 and has not yet determined
      the impact that the adoption of FIN 48 will have on its consolidated results
      of
      operations or financial condition.


F
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          10
 ***Table
          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**





vii.
      In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring
      fair value, and expands disclosure requirements regarding fair value
      measurement. Where applicable, this statement simplifies and codifies fair
      value
      related guidance previously issued within United States of America generally
      accepted accounting principles. SFAS 157 is effective for financial statements
      issued for fiscal years beginning after November 15, 2007, and interim periods
      within those fiscal years. The Company will adopt this pronouncement effective
      January 1, 2008 and does not anticipate any material impact on its financial
      condition or results of operations due to the adoption of SFAS No.
      157.




3.  NOTES
      PAYABLE- CURRENT LIABILITIES TO RELATED PARTIES





As
      of
      March 31, 2005, notes payable to related parties are comprised of amounts due
      to
      various officers, directors and shareholders to which are unsecured,
      non-interest bearing, and due on demand, as follows:





PrincipalBalanceDue
                atMarch
                31,
            
            Interest2005
            Due
                Date
            RateLiabilities
                associated with discontinued operations of Barrington Foods at December
                31, 2003
            $348,927
            Past
                due
              and
                unpaid
            7%Rendal
                Williams, the Company’s former CEO
              Chairman
                & Director
            422,415
            Credit
                line;
              All
                Debt
              discharged
              in
                2006
            7%Nevada
                Minerals, Inc. whose sole officer and director is John E. Ed Dhonau,
                majority shareholder of the Company at March 31, 2005
            752,025
                (1)
            June
                30, 2005
            7%IB
                2000, a consultant to the Company and owned by John E. Ed
                Dhonau
            64,253
                (1)
            April
                12, 2005
            0%
                first year; 7% therafter


F
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          11
 ***Table
          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








PrincipalBalanceDue
                atMarch
                31,
            
            Interest2005
            Due
                Date
            RateMPower,
                owned byMichael
                A.Kauffman,
                former
              President
                of theCompany
                throughJanuary
                2, 2004
            33,169
            Demand
                Note
            7%StevensonManagement,
                aconsultant
                andresident
                agentof
                the Company
            25,000
            Demand
                Note
            7%Michael
                A. Kaufman
            693
            Past
                Due unpaid
            5
                to 10% now at post-judgment rate of 14%Paul
                Baker
            (2,680)Accrued
                interest on loans to related parties
            28,253Less:
                Notes Payable-
                Discontinued Operations
            (348,927)
            See
                Above
            See
                AboveTotal
                Notes Payable
            $1,323,128Total
                Notes Payable:-
                Continuing Operations
            $947,201(1)
                The balance due on these two notes as of December 31, 2005 is
                zero.










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          of Contents***


**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








4.  DUE
      TO
      RELATED PARTIES - LONG TERM




The
      Company acquired an interest in Juina on February 23, 2004 for $200,000. At
      March 31, 2005, the Company owed $500,000 to Juina Mining Corporation, in which
      the Company owns a majority interest. This represents an accrual for contingent
      liabilities pursuant to a funding agreement to assist with potential diamond
      mining operations in Brazil. Juina was unable to obtain the necessary mineral
      mining licenses from the government regulatory authorities. The operator, Mr.
      McFadden, filed suit against the Company for monetary damages, which was settled
      in full in 2006 with the transfer of all Juina shares owned by the Company.
      At
      the date of this report, the Company has no liability remaining to Juina. See
      Note 10.




5.  STOCKHOLDERS'
      EQUITY





COMMON
      STOCK - The Company is authorized to issue 200,000,000 shares of common stock,
      at par value $0.001. Effective January 20, 2004, the Board of Directors of
      the
      Company approved a reverse split of its common shares on the basis of 1:125.
      Effective October 25, 2004, the Board of Directors of the Company approved
      a
      forward split of its common shares on the basis of 3:1.





PREFERRED
      STOCK - SERIES A - The Company is authorized to issue 1,000,000 shares of
      preferred stock, Series A, at par value $0.001 with such terms as determined
      by
      the Board of Directors and the Corporation prior to their issuance. Each Series
      A Preferred Share may be converted into one hundred (100) common shares upon
      approval by the Board of Directors of the Corporation. Effective October 25,
      2004, the Board of Directors of the Company approved a forward split of the
      Preferred Stock Series A on the basis of 3:1.





On
      November 24, 2006, the Company issued 80,000 of Preferred Stock Series A shares
      to the Company’s management. See Note 10.





PREFERRED
      STOCK - SERIES B - The Company is authorized to issue 1,000,000 shares of Series
      B Preferred stock, at par value of $0.001 with other terms as may be determined
      prior to their issuance by the Board of Directors. Each Series B preferred
      share
      may be converted into two (2) common shares upon approval by the Board of
      Directors. As of March 31, 2005 and as of the date of this report, the Company
      has no issued and outstanding shares of this class.





PREFERRED
      STOCK - SERIES C - The Company is authorized to issue 1,000,000 shares of Series
      C preferred stock, at par value of $0.001 with other terms as may be determined
      by the Board of Directors prior to their issuance. As of March 31, 2005 and
      as
      of the date of this report, the Company has no issued and outstanding shares
      of
      this class.







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**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








6.  WRITE-DOWN
      OF PROPERTY ASSETS - MINERAL RIGHTS AND INVESTMENT ASSETS





During
      2004, the Company determined that the values of many of its properties were
      substantially or materially less than the value that was originally recorded.
      These include the claims in Smeaton, Fort a La Corne, Saskatchewan, Canada,
      investments in mineral rights in Saskatchewan purchase from CMKM Diamonds,
      Inc.,
      investments in Nevada Magnetics and 5616 hectares of mining property in
      Ecuador.





The
      Company recorded a reduction in the purchase price of 100% of the originally
      recorded cost of its investment assets of CMKM Diamonds, Inc. On July 12, 2005,
      the U.S. SEC issued an order revoking the registration of each class of
      securities of CMKM. Although the Company believes it may have a remaining claim
      to some of the assets of CMKM, if any, the Company has insufficient information
      in which to base a recording of any asset relative to this claim.





Due
      to
      the uncertainty of value, lack of liquidity, and the speculative nature of
      the
      venture, the Company’s investment in the Juina Mining Company was written down
      to its estimated fair market price of $151,000.





Due
      to
      the uncertainty of value, liquidity, and the speculative nature of the stock,
      at
      March 31, 2005 all free trading shares held by the Company of Langley Park
      PLC
      (“LPI”), are valued at $749,413. This reflects an impairment of $604,514
      recorded at December 31, 2004. LPI is a mutual fund made up of approximately
      one
      dozen small cap public companies and is traded on the AIM London exchange.
      On
      March 29, 2005, the Company sold 2,231,503 shares and the amount of proceeds
      received by the Company on April 1, 2005, net of sales commissions, was
      $581,228.





Due
      to
      the uncertainty of value, liquidity, and the speculative nature of the stock,
      all shares of Langley Park PLC held by the Company in escrow in the Company’s
      account (which was impounded until Fall, 2006) at Christows stock brokerage
      firm, London, England, should be valued at one pence per share (USD $0.018
      per
      share). At April 21, 2006 the Company owned 2,479,448 shares in escrow.
      Subsequently, in 2006, LPI called such shares at this amount, and the Company
      owns no shares of LPI trust.




7.  INCOME
      TAXES





No
      provision for income taxes has been recorded in the financial statements as
      the
      Company has incurred net operating losses from the date of inception through
      March 31, 2005.





For
      the
      period ended March 31, 2005 the Company has incurred net losses and, therefore,
      has no tax liability. The net deferred tax asset generated by the loss
      carry-forward has been fully reserved with a valuation allowance because of
      uncertainty regarding the realization of future taxable income. The cumulative


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**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








net
      operating loss carry-forward is approximately $6,957,000 at March 31, 2005
      and
      will expire in various amounts through the year 2025. The net operating loss
      carry forward for income tax purposes differs from the Company’s accumulated
      losses for financial reporting primarily due to timing differences caused by
      the
      issuance of stock-based compensation totaling approximately $13,245,000.
      Utilization of the net operating loss carryover for income tax purposes may
      be
      subject to certain limitations under Section 382 of the Internal Revenue
      Code.





The
      cumulative tax effect at the expected rate of 34% of significant items
      comprising our net deferred tax amount is as follows:





As
                of March 31,2005Deferred
                tax asset attributable to:Net
                operating loss
            
            $
            7,112,000Valuation
                allowance
            
            
            (7,112,000
            )Net
                deferred tax asset
            
            $
            -0-








8.
      COMMITMENTS AND CONTINGENCIES





The
      Company was obligated under an office lease, which was terminated in mid-2006.
      This office was located at 4955 S. Durango, Suite 216, Las Vegas, NV 89113.
      For
      the years ended March 31, 2005 and 2004, rent expense was $20,706 and $0,
      respectively. At March 31, 2005 the Company had a rent deposit of $5,227. The
      terms of the lease are monthly payment of $5,176 through December 31,
      2006.





Future
      minimum lease payments required under such operating leases as of March 31,
      2005, are as follows:





2005
            
            $
            45,5842006
            
            
            62,112$
            107,696





In
      2006,
      the Company has relocated offices and has significantly reduced its office
      rent
      obligations. The Company is now on a month to month lease at a monthly rate
      of
      $1235





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**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








9.  RELATED
      PARTY TRANSACTIONS





On
      July
      18, 2004, the Company signed an Asset Purchase Agreement with CMKM Diamonds,
      Inc. The Company purchased 5% of all current and future mineral claim holdings
      and interests in exchange for 7.5 million shares of common stock of the Company.
      In addition, the Company executed an “Option to Purchase” agreement for $10 and
      acquired an option to purchase up to an additional 10.00% of such interests
      for
      $15,000,000. Such interest may be purchased in up to 10 increments of $1,500,000
      for each 1%. The Company exercised the majority of such options (i.e. 9% for
      $13,500,000) as described immediately below. The claims are located mostly
      in
      Saskatchewan, Canada, nearby the claims previously purchased from Nevada
      Minerals, Inc. Upon closer examination subsequent to the dates of acquisition,
      the Company determined that the assets acquired had no value and the asset
      book
      values were retroactively adjusted down to zero.





On
      July
      27, 2004 the Company received $3,000,000 proceeds from Wesley Casavant, a
      relative of Urban and Carolyn Casavant, for 600,000 common shares of the
      Company. On the same date, the Company issued a check for the amount of
      $3,000,000 to CMKM Diamonds, Inc., in which Urban and Carolyn Casavant are
      affiliates. This payment relates to the acquisition of an additional interest
      of
      2% per the Option to Purchase Agreement.





On
      September 7, 2004 the Company issued through a subscription agreement 600,000
      shares of common stock for $3,000,000 from Cindy Dwyer, a relative of Urban
      and
      Carolyn Casavant. On the same date, the Company issued a check for the amount
      of
      $2,500,000 to CMKM Diamonds, Inc. This payment relates to the acquisition of
      an
      additional interest of 1.66% per the Option to Purchase Agreement.




On
      September 21, 2004 the Company issued through a subscription agreement 1,200,000
      shares of its common stock for $6,000,000 from Urban and Carolyn Casavant,
      affiliates of CMKM Diamonds, Inc. On the same date, the Company issued a check
      for the amount of $5,000,000 to CMKM Diamonds, Inc. On September 22, 2004 the
      Company issued through a subscription agreement 600,000 shares of common stock
      at $5 per share for $3,000,000 from Corrine Ward. On the same date, the Company
      issued a check for the amount of $3,000,000 to CMKM Diamonds, Inc. These
      payments relate to the acquisition of an additional interest of 5.34% per the
      Option to Purchase Agreement.




10.  SUBSEQUENT
      EVENTS





In
      2005,
      the Company owned a majority interest in Durango Oro, S.A., Compania Minera
      with
      offices located at Circunvalacion Norte, #511, Machala El Oro, Ecuador. Such
      offices are shared with Santa Fe Mining Company, S.A., an Ecuador company in
      which we own 80%. Sante Fe owns the mineral processing plant and land known
      as
“Buza”. In 2005, the Company did not have managerial control of


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**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








Durango
      Oro. A mineral processing plant, known as Durango I, was operated by Durango
      Oro
      in Ecuador. In 2005, the Company acquired another mineral processing plant
      known
      as Durango II. The Durango I was operational at the time on-site auditing field
      work was completed in Ecuador in May, 2006. At March 31, 2005, these processing
      plants were wholly owned, but not controlled, by the Company, and are
      investments rather than subsidiaries.





On
      March
      29, 2005, the Company sold 2,231,503 shares of its investment in Langley Park
      PLC and the amount of proceeds received by the Company on April 1, 2005, net
      of
      sales commissions, was $581,228.





On
      April
      14, 2005, the Company acquired mineral rights to 5,616 hectares of land in
      Ecuador. As noted later, in August, 2006, the Company lost such mining claims
      due to non-payment of taxes.





In
      April
      2005, the Company entered into an agreement to sell its interest in the Yellow
      River Mining Company, S.A. The Company closed on its sale of its 80% interest
      in
      Yellow River Mining Company., S.A., an Ecuador corporation. Such property was
      previously owned by Juina Mining Corporation, in which the Company owned a
      majority interest. The cost basis of the Company’s interest in the Yellow River
      Mining Company, S.A. is $151,000. Nevada Minerals, a related party and
      controlling shareholder, paid the Company $800,000, which included the
      assumption of debt owed by the Company to the buyer. In addition, the Company
      (through the Durango Oro, S.A. company) retained the processing plant and land
      located at Durango I. At closing, Nevada Minerals Inc. paid various obligations
      of Yellow River Mining Company, including bank fees, unpaid salaries and bonuses
      to its Ecuadorian employees and managers, and financial obligations for
      processing plant equipment. The Company received no net proceeds from the sale
      of such property and the Company no longer has any financial interest in the
      Yellow River Mining Company, S.A. By September 2005, the Company began
      operations of the Durango I processing plant and incurred its own costs
      associated with such operations. At that time, the buyer of its extracted gold
      and tailings containing gold and other minerals was the Yellow River Mining
      Company, which continued to process the tailings in order to extract the
      remaining minerals. By 2006 the Durango I processing plant was selling its
      gold,
      tailings and other minerals to other individuals and companies.





On
      August
      30, 2005, the Company entered into a material agreement to acquire a royalty
      interest by issuing restricted stock to North Star Diamonds, Inc. for a joint
      drilling program.





On
      October 31, 2005, the Company accepted the resignation of Dr. Joseph de
      Beauchamp as President.





On
      November 17, 2005, the Company accepted the resignation of Marti Hansen as
      Chief
      Financial Officer. Ms. Hansen had joined the Company on or about February 7,
      2005. There were no disagreements with Marti Hansen on any matter of accounting
      principles or practices, and financial statement disclosure.


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**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








On
      January 26, 2006, the Company announced the appointment of Adam Jenn as
      President and Director and Frank J. Van der Bok Busboom as Chief Financial
      Officer. Subsequently the Company appointed Mr. Busboom as Secretary and
      Director.





On
      March
      23, 2006, the Company received a “Wells Notice” from the staff of the Securities
      and Exchange Commission (the “SEC”).  The Wells Notice notified the Company
      that the SEC staff was considering recommending that the SEC bring a civil
      enforcement proceeding against the Company for possible violation of the federal
      securities laws pertaining to fraudulent disclosures, failure to file reports
      in
      a timely manner and improper accounting practices. Under SEC procedures, the
      Company has the opportunity to respond to the SEC staff before the staff makes
      a
      formal recommendation regarding any action to be taken against the Company
      by
      the SEC. As of the date of this report, the Company reports that there has
      been
      no further enforcement action taken by the U.S. SEC as to such notice.





On
      March
      30, 2006, the Company filed a Form 8-K with the U.S. SEC related to the
      unreliability of certain previous SEC filings as described in that current
      report. These reports are Forms 10-QSB for the periods ending March 31, 2004,
      June 30, 2004, and September 30, 2004. As of this date, the Company has not
      yet
      filed amended periodic reports described in the Form 8-K.





At
      April
      21, 2006, the Company owned 2,479,448 Langley Park PLC (“LPI”) shares in escrow.
      Subsequently, in 2006, LPI trust called such shares at this amount. The Company
      no longer owns any shares of LPI trust.





On
      May 4,
      2006, the Company accepted the resignation of Rendal Williams as CEO, Director
      and Chairman of the Board. There were no disagreements with Rendal Williams
      on
      any matter of accounting principles or practices, and financial statement
      disclosure.





In
      August
      of 2006, 5614 hectares of Ecuadorian mining claims was lost due to the Company’s
      failure to pay taxes owed on the property.





On
      November 2, 2006, the company settled pending lawsuits from McFadden and Issod
      by agreeing to the transfer of 471,000 shares of Juina owned by U.S. Canadian
      Minerals. The Company effectuated the terms of the settlement agreement on
      February 27, 2007. The stock transfer to McFadden and Issod is complete. The
      Company does not dispute regarding the terms of the settlement agreements.





On
      November 24, 2006, the Company issued 80,000 of Preferred Stock Series A shares
      to pay for services rendered. Of this amount 40,000 shares was paid to Maria
      Regina Caeli Management Corp., a Nevada Corporation owned by Mr. Busboom, our
      Chief Financial Officer, Secretary and Director. In addition, 40,000 shares
      were
      issued to First Star Strategies, Inc, owned by Mr. Jenn, our President and
      Director.


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**U.S.
      CANADIAN MINERALS, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2005**


**(CONTINUED)**








On
      November 27, 2006 the Company issued 1,000,000 shares of common stock to First
      Star Strategies in accordance with the terms of the consulting agreement for
      Presidential services, dated January 2, 2006 as a signing bonus.





On
      December 8, 2006 the Company issued 1,000,000 shares of common stock to Maria
      Regina Caeli Management Corp. in accordance with the terms of the consulting
      agreement for Chief Financial Officer services, dated January 23, 2006 as a
      signing bonus.





On
      January 26, 2007 the Company issued 16,666 Preferred "A" shares to First Star
      Strategies for partial payment for compensation owing.





On
      January 26, 2007 the Company issued 9,333 Preferred "A" shares to Maria Regina
      Caeli Management Corp for partial payment for compensation owing.





On
      January 26, 2007 the Company issued 339,167 common shares to Joriel Systems
      Ltd.
      for services rendered in 2006.





On
      February 5, 2007 the Company cancelled a total of 39,626,500 common shares
      held
      by two stockholders who upon consultation agreed that such a cancellation would
      be in the best interest of the Company.





On
      February 5, 2007, Adam Jenn was named as CEO of the Company. Mr. Jenn already
      held title of President and Director of the Company.





On
      February 15, 2007 the Company issued 1,000,000 common shares to First Star
      Strategies, Inc. and 1,000,000 shares to Maria Regina Caeli Management Corp
      in
      accordance with the terms of the consultation agreements the Company has with
      these companies.





On
      February 27, 2007 the Company effectuated the transfer of all 471,000 shares
      of
      Juina Mining Corp owed by the Company, thus settling the McFadden and Issod
      lawsuits.





In
      2006,
      the Company relocated its offices from its former office on Durango Blvd.,
      Las
      Vegas, Nevada. The company has significantly reduced its monthly office expense.
      The Company forfeited its deposit of approximately $5,000 to the Durango Blvd.
      landlord at the time the lease was terminated. The Company also forfeited to
      its
      former landlord its office furniture and small equipment.





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**ITEM
      2.MANAGEMENT'S PLAN OF OPERATION**





FORWARD-LOOKING
      STATEMENTS





This
      Form
      10-QSB includes "forward-looking statements" within the meaning of Section
      27A
      of the Securities Act of 1933, as amended, and Section 21E of the Securities
      Exchange Act of 1934, as amended. All statements, other than statements of
      historical facts, included or incorporated by reference in this Form 10-QSB
      which address activities, events or developments which the Company expects
      or
      anticipates will or may occur in the future, including such things as future
      capital expenditures (including the amount and nature thereof); finding suitable
      merger or acquisition candidates; expansion and growth of the Company's business
      and operations; and other such matters are forward-looking statements. These
      statements are based on certain assumptions and analyses made by the Company
      in
      light of its experience and its perception of historical trends, current
      conditions and expected future developments, as well as other factors it
      believes are appropriate under the circumstances. However, whether actual
      results or developments will conform with the Company's expectations and
      predictions is subject to a number of risks and uncertainties, including general
      economic, market and business conditions; the business opportunities (or lack
      thereof) that may be presented to and pursued by the Company; changes in laws
      or
      regulation; and other factors, most of which are beyond the control of the
      Company.





These
      forward-looking statements can be identified by the use of predictive,
      future-tense or forward-looking terminology, such as "believes," "anticipates,"
      "expects," "estimates," "plans," "may," "will," or similar terms. These
      statements appear in a number of places in this Filing and include statements
      regarding the intent, belief or current expectations of the Company, and its
      directors or its officers with respect to, among other things: (i) trends
      affecting the Company's financial condition or results of operations for its
      limited history; (ii) the Company's business and growth strategies; and, (iii)
      the Company's financing plans. Investors are cautioned that any such
      forward-looking statements are not guarantees of future performance and involve
      significant risks and uncertainties, and that actual results may differ
      materially from those projected in the forward-looking statements as a result
      of
      various factors. Such factors that could adversely affect actual results and
      performance include, but are not limited to, the Company's limited operating
      history, potential fluctuations in quarterly operating results and expenses,
      government regulation, technological change and competition.





Consequently,
      all of the forward-looking statements made in this Form 10-QSB are qualified
      by
      these cautionary statements and there can be no assurance that the actual
      results or developments anticipated by the Company will be realized or, even
      if
      substantially realized, that they will have the expected consequence to or
      effects on the Company or its business or operations. The Company assumes no
      obligations to update any such forward-looking statements.





GENERAL
      DESCRIPTION OF BUSINESS





U.S.
      Canadian Minerals is headquartered in Las Vegas, Nevada. On its own and through
      Joint Ventures, the Company is looking to expand and develop mining properties
      throughout North and South America. The Company has the following projects,
      which are in varying stages of development.





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 ***Table
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Fort
      a La
      Corne





On
      January 20, 2004, the Company acquired from Nevada Minerals, Inc. a 20% interest
      in the mineral rights to 500,000 acres in Saskatchewan Canada near Fort a La
      Corne (the "fort a La Corne Property"). The Company issued 5,000,000 shares
      of
      its common stock to Nevada Minerals as consideration for such rights.
      Subsequently on July 18, 2004, Nevada Minerals conveyed an additional 20%
      interest in the mineral rights to the Fort a La Corne Property to the Company
      for 100,000 shares of Series A Preferred Stock, giving the Company an aggregate
      40% of the mineral rights to the Fort a La Corne property. The mineral rights
      include the right to explore and exploit all minerals discovered in the Fort
      a
      La Corne property.





Lincoln
      County





The
      company acquired from Nevada Minerals, Inc. for nominal consideration, an option
      to purchase a mining operation and associated property located in Rachel,
      Lincoln county, Nevada, (the "Rachel Property") for an exercise price of
      $2,000,000. Nevada Minerals' title to the Rachel Property is the subject of
      litigation. Nevada Minerals acquired the Rachel Property in a foreclosure
      proceeding, and the person from which title to the Rachel Property was acquired
      in the foreclosure has filed a lawsuit against Nevada Minerals to have such
      title reinstated in it. While the company had initially formed an intention
      to
      exercise the option to acquire the Rachel Property, it no longer intends to
      do
      so because of its focus on its Ecuador projects described below and because
      it
      would have to spend $300,000 to build a processing facility on the property.
      The
      option does not expire until failure to exercise upon 10 days written notice
      of
      a bona fide offer to purchase the Rachel Property by a third property, however,
      and the Company may exercise the option to acquire the Rachel Property at any
      time that the Company concludes that it is in its best interest to do so. John
      Edgar Dhonau, who beneficially owns a majority of the Company's common stock
      owns all of and controls Nevada Minerals.





At
      the
      time the Company intended to exercise the option to acquire the Rachel Property,
      it entered into a land use agreement with Nevada Minerals that gave it the
      right
      to enter the property to begin building a processing facility.





Juina
      Mining Corporation





On
      March
      23, 2004, the Company acquired 10 million shares of the Preferred Stock of
      Juina
      Mining Corporation, a Nevada corporation ("Juina"), in exchange for $116,000
      in
      cash and a note in the principal amount of $84,000 (which note was subsequently
      paid in full). At the same time, the Company acquired 25 million, 5 million
      and
      5 million shares of Juina common stock, respectively, from James D. McFadden,
      Mark Hutchison and Richard Taulli in exchange for 833,334 shares, 179,091 shares
      and 150,000 shares respectively, of the Company's common stock. Subsequently,
      the Company converted the preferred stock to 80 million shares of Juina common
      stock, giving the Company 77.1% of Juina's total outstanding common stock.
      At
      the time of this acquisition, there was an understanding between the Company
      and
      Mr. Hutchison that he would become a Director of the Company.





Juina
      owns 49% of a joint venture called Juina Mining Mineracao, Ltd. ("JMML"). The
      remaining 51% of JMML is owned by DIAGEM International Resources Corp., a
      Canadian corporation ("DIAGEM").


5
 ***Table
          of Contents***





The
      sole
      asset of JMML is an 86% working interesting the mineral and mining rights to
      2,471 acres of land in the District of Juina, Mato Grosso, Brazil ("Property
      1000") as well as the equipment and processing facility appurtenant
      thereto.





At
      present, there are no operations being conducted by JMML because, among other considerations,
      the required permits have not been issued by the relevant governmental agencies.
      Permits for mining were never obtained and plans for mining have been abandoned.
      Moreover, JMML is controlled by Diagem, which has publicly disclosed that it
      considers JMML to be inactive.





JMML,
      however, has entered into a Joint Venture Agreement with Mineradora ECO with
      respect to a 49.80 hectare parcel in the western portion of Property 1000.
      As
      part of the Joint Venture Agreement, Mineradora CEO is entitled to 50% of all
      revenue generated by the sale of diamonds produced from this portion of Property
      1000. In return, Mineradora ECO will undertake the task of securing land owner
      permissions and all government permits and licenses in order to commence
      operations and act as the operator on the 49.80 hectare parcel. To
      date


Mineradora
      ECO has been unsuccessful in obtaining these permits and licenses, and there
      is
      no assurance that it will ever do so. This agreement was never fulfilled and
      the
      project was abandoned.





Yellow
      River Mining





On
      March
      22, 2004, Juina Mining issued 5,000,000 of its restricted common shares to
      acquire 80% of the issued and outstanding shares of Yellow River Mining S.A.,
      which owned processing plants in the Provincia Del Oro (Province of Gold) in
      southwest Ecuador. Yellow River is an active mine with unproven reserves and
      has
      not produced significant amounts of revenue. Under the terms of the agreement,
      Yellow River S.A. is to receive 50% of the gold it extracts at its plants.
      The
      other 20% of Yellow River Mining S.A. is owned by an individual who is an
      Ecuadorian resident, from whom the company acquired its 80% interest. The
      Company anticipated using proceeds from subsequent offerings to construct and
      improve mining facilities at Yellow River.





CMKM
      Diamonds, Inc. owned a producing mine shaft near one of the Yellow River
      processing plants. The company has an agreement with CMKM Diamonds pursuant
      to
      which CMKM Diamonds must use that processing plant to extract the gold ore
      from
      that mine except for the extent the production of such ore exceeds the
      processing plants capacity. CMKM Diamonds was to pay Nevada Minerals a fee
      equal
      to 20% of its revenues from that mine. The Yellow River Mining Co. processed
      ore
      from the American Shaft in 2004 and 2005.





Subsequent
      to the quarter ended March 31, 2004, on August 3, 2005 the Company executed
      an
      Asset Purchase Agreement with Minera Compania Double Down S.A, which provided
      for the sale of 100% of the company's 80% interest in Yellow River Mining,
      S.A.,
      an Ecuador corporation which owns certain mineral rights to land in Ecuador.
      From April 2005 to September 2005 the company's subsidiary Durangoro had an
      agreement to process Yellow River's ore and Durango received compensation from
      the sale of gold. The buyer holds 46.6% of the Company's common stock. As
      consideration for the Assets, the Buyer paid the Company $800,000 which included
      the assumption of a $127,000 debt owed by the Company to Nevada Minerals, Inc.
      and payment of various debts of the Company to various vendors associated with
      the construction and maintenance of the Yellow River Mining Co.'s assets. Full
      consideration was not transferred to the Company until September 9,
      2005.


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COD
      Mine





On
      May
      11, 2004, the Company entered into a joint venture agreement with El Capitan
      Precious Metals, Inc. to acquire an 80% ownership of mining claims located
      in
      Arizona. The Company was required to contribute 720,000 shares of its common
      stock to acquire the mining rights. The joint venture agreement entitled the
      Company to receive 50% of the anticipated profits from tailings and settlement
      ponds and gave the Company the obligation to provide operating capital for
      the
      first 90 days of operation. After this period, the joint venture partner
      (operator) bore the risk of excess losses and liability.





The
      reserves for which the Company obtained mineral rights through the El Capitan
      joint venture agreement were "proven or probable" that is, the Company had
      been
      provided an outside commercial appraisal of the estimated value of the property
      "as is" for $5,000,000. The estimated reserves at March 2001 were estimated
      to
      yield ground values of approximately $138,000,000 and eventual recovery of
      $120,000,000 in revenues. These estimates were based on gold (22% of total
      values), silver (28.4%), lead (15.5%), zinc(25%), as well as copper (4.0%)
      prices at February 27, 2001. The reserves are purported to have not been
      depleted since the date of the appraisal. No minerals were produced during
      the 3
      months ended March 31, 2005.





CMKM
      Diamonds, Inc.





On
      July
      18, 2004, the Company agreed to purchase a 5% interest in all current and future
      claim holdings and mineral interests of CMKM Diamonds, Inc. in exchange for
      7,500,000 shares of the Company's common stock. The company also executed an
      option agreement to purchase up to an additional 10% of CMKM Diamonds, Inc.
      at a
      price of $1,500,000 for each 1% purchased. The Company had one year from the
      date of the agreement to execute all or part of the option in minimum 1%
      increments.





On
      July
      18, 2004, the Company acquired 5% of all mineral holdings of CMKM Diamonds,
      Inc.
      ("CMKM") for 22,000,000 shares of common stock of the Company. On the same
      date,
      the Company acquired an option to purchase an additional 10% of such mineral
      holdings. The exercise price of this option was $15,000,000. On July 27, 2004,
      the Company made its initial exercise pursuant to this option in the amount
      of
      $3,000,000 which is equivalent to an additional 2% of such mineral
      holdings.





On
      September 9, 2004, the Company exercised an additional portion of the option
      agreement with CMKM in the amount of 1.66% for $2,5000,000. On September 9,
      2004
      the Company exercised an additional portion of the option agreement with CMKM
      in
      the amount of 5.33% for $8,000,000.





Most
      of
      CMKM Diamonds, Inc.'s holdings are in Saskatchewan, Canada in the general
      vicinity of the Company's Fort a La Corne and Smeaton holdings.





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Nevada
      Minerals





On
      July
      19, 2004, the Company entered into an agreement with Nevada Minerals, a related
      party and affiliate of the Company, to purchase an additional 20% interest
      in
      500,000 acres of Canadian property, which was subject to a joint venture between
      two entities. The property is located in Fort a La Corne, Saskatchewan, Canada
      (see above). The company acquired such interest for 100,000 preferred shares
      (pre forward 3:1 split). The interest purchased current and future mineral
      rights but did not include any real property interests. In 2005, an independent
      appraiser had valued the total mineral rights associated with the 500,000 acres
      at approximately $12,000,000. Subsequently management has determined that these
      mineral rights were impaired are valued based on the cost basis of the
      acquisition of such property rights by Nevada Minerals. Management states that
      this value is $127,000.





Juina
      Mining





On
      July
      28, 2004, the Company entered into an asset purchase agreement with Juina Mining
      Corporation to purchase its entire investment in Yellow River Mining, SA in
      exchange for 50,000 shares of the Company's common stock. During the period
      July
      28, 2004 through 2005, the Company commenced construction of the processing
      plant and facilities located at the Yellow River site. The Company made a
      significant investment in such construction. Subsequently, the Yellow River
      Mining Company, S.A. was transferred to our company. We held a majority interest
      in this investment but did not control this investment. It was later sold to
      Nevada Minerals, a related party and affiliate, for $800,000, as discussed
      previously. At December 31, 2004 and 2005, the value of our remaining interest
      in Juina is reported by management at cost of $151,000. At the date of our
      disposition of our interest in Juina is reported by management at cost of
      $151,000. At the date of our disposition of our interest in Juina in September
      2006, the value of our interest in Juina is recorded at the lesser of cost
      or
      fair market value and is $151,000.





Langley
      Park Investment Trust





The
      Company also entered into a stock purchase agreement to sell 1,714,000 shares
      of
      common stock to an unrelated party at the average per share price of the closing
      bid of the Company's common stock for the 10 trading days immediately preceding
      July 30, 2004. The acquiring entity was to use its shares as consideration
      for
      the purchase. On August 8, 2004 the company issued 1,714,000 shares to Langley
      Park Investment Trust (LPIT) in exchange for shares of Langley Park Investment
      Trust. Langley Park Investment Trust is a mutual fund traded on the London
      AIM
      exchange investing primarily in microcap mining stocks. The Company received
      4,958,896 shares of LPIT in exchange for 1,714,000 shares of company stock.
      In
      2005 the Company sold 2,479,448 shares leaving 2,479,448 shares of LPIT in
      escrow upon which LPIT held a call option exercisable at 1 pence per share
      if
      the company's stock decreased in value by an agreed upon percentage. Due to
      the
      precipitous decline of the value of the company's stock in 2005, this option
      became exercisable in October, 2006. LPIT called the stock at 1 pence per share
      as per the 2004 acquisition agreement.





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**MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS**





The
      Company has a limited operating history upon which an evaluation of the Company,
      its current business and its prospects can be based. The Company's prospects
      must be considered in light of the risks, uncertainties, expenses and
      difficulties frequently encountered by companies in their early stages of
      development. Such risks include inadequate funding the company's inability
      to
      anticipate and adapt to a developing market, the failure of the company's
      infrastructure, changes in laws that adversely affect the company's business,
      the ability of the Company to manage its operations, including the amount and timing
      of
      capital expenditures and other costs relating to the expansion of the company's
      operations, the introduction and development of different or more extensive
      communities by direct and indirect competitors of the Company, including those
      with greater financial, technical and marketing resources, the inability of
      the
      Company to attract, retain and motivate qualified personnel and general economic
      conditions.





The
      Company expects that its operating expenses will increase significantly,
      especially as it implements its business plan. To the extent that increases
      in
      its operating expenses precede or are not followed by commensurate increases
      in
      revenues, or that the Company is unable to adjust operating expense levels
      accordingly, the Company's business, results of operations and financial
      condition would be materially and adversely affected. There can be no assurances
      that the Company can achieve or sustain profitability or that the Company's
      operating losses will not increase in the future.





**RESULTS
      OF OPERATIONS**





The
      Company has achieved no significant revenue or profits to date, and the Company
      anticipates that it will continue to incur net losses for the foreseeable
      future. The Company incurred a net loss of approximately $ 675,101 for the
      three
      months ended March 31, 2005, compared with a net loss of $2,461,487 for the
      three months ended March 31, 2004.





The
      quarter's activities were financed primarily through sale of restricted common
      stock.





**LIQUIDITY
      AND CAPITAL RESOURCES**





Since
      its
      inception the Company has had limited operating capital, and has relied heavily
      on debt and equity financing.





The
      financial statements as of and for the period ended on December 31, 2004
      expressed their substantial doubt as to the Company's ability to continue as
      a
      going concern. Without additional capital, it is unlikely that the Company
      can
      continue as a going concern. The Company plans to raise operating capital via
      debt and equity offerings. However, there are no assurances that such offerings
      will be successful or sufficient to fund the operations of the Company. In
      the
      event the offerings are insufficient, the Company has not formulated a plan
      to
      continue as a going concern. Moreover, if such offerings are successful, they
      may result in substantial dilution to the existing shareholders.





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**CRITICAL
      ACCOUNTING POLICIES**





In
      Financial Reporting release No. 60, "CAUTIONARY ADVICE REGARDING DISCLOSURE
      ABOUT CRITICAL ACCOUNTING POLICIES" ("FRR 60"), the Securities and Exchange
      Commission suggested that companies provide additional disclosure and commentary
      on their most critical accounting policies. In FRR 60, the SEC defined the
      most
      critical accounting policies as the ones that are most important to the
      portrayal of a company's financial condition and operating results, and require
      management to make its most difficult and subjective judgments, often as a
      result of the need to make estimates of matters that are inherently uncertain.
      Based on this definition, our most critical accounting policies include:
      non-cash compensation valuation that affects the total expenses reported in
      the
      current period and the valuation of shares and underlying mineral rights
      acquired with shares. The methods, estimates and judgments we use in applying
      these most critical accounting policies have a significant impact on the results
      we report in our financial statements.





**ITEM
      3. CONTROLSAND PROCEDURES**





**EVALUATION
      OF DISCLOSURE CONTROLS AND PROCEDURES**





The
      Company carried out an evaluation of the effectiveness of the design and
      operation of its disclosure controls and procedures pursuant to Exchange Act
      Rule 13a-14. This evaluation was done under the supervision and with the
      participation of the Company's President and Chief Financial Officer. Based
      upon
      that evaluation, they concluded that on March
      30, 2006 ,
      the
      Company's disclosure controls and procedures are effective in gathering,
      analyzing and disclosing information needed to satisfy the Company's disclosure
      obligations under the Exchange Act.





**PART
      II OTHER INFORMATION**





**ITEM
      1. LEGALPROCEEDINGS**





The
      Company is not a party to any legal proceedings.





On
      October 28, 2004, the U.S. Securities and Exchange Commission announced the
      temporary suspension of trading in the Company's securities. The suspension
      expired by its terms at 11:59 PM on November 10, 2004. The SEC stated that
      the
      suspension was because of questions that had been raised about the accuracy
      of
      publicly disseminated information concerning other things, the Company's
      financing and mining activities and the value of the Company's purported
      assets.





**ITEM
      2. CHANGESIN SECURITIES AND USE OF
      PROCEEDS**





On
      January 13, 2005 the Company issued 40,000 shares of its common stock to reflect
      3:1 forward split to LJDT LLC.





On
      February 23 2005 the Company issued 450,000 shares of its common stock for
      conversion of preferred stock.





On
      March
      4, 2005 the Company issued 480 shares of its common stock for certificates
      from
      old transfer agent.





On
      March
      18, 2005 the Company issued 100,000 shares of its common stock for
      services.


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On
      March
      21, 2005 the Company issued 960 shares of its common stock for replacement
      of
      stock





**ITEM
      3.DEFAULTS UPON SENIOR SECURITIES**





None.





**ITEM
      4. SUBMISSIONOF MATTERS TO A VOTE OF SECURITY
      HOLDERS**





None.





**ITEM
      5.OTHER INFORMATION**





None.





**ITEM
      6. EXHIBITSAND REPORTS ON FORM 8-K**





The
      following documents are included or incorporated by reference as exhibits to
      this report:





**Exhibit****Number**
            **Description**31.1
            Certification
                of Chief Executive Officer pursuant to
                Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 200231.2
            Certification
                of Chief Financial Officer pursuant to
                Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 200232.1
            Certification
                of Chief Executive Officer pursuant to 18
                U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 200232.1
            Certification
                of Chief Financial Officer pursuant to 18
                U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002








(b)
      REPORTS ON FORM 8-K






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**SIGNATURES**





In
      accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned thereunto duly authorized.




Date:
      March 5, 2007





**U.S.
                Canadian Minerals, Inc.**RegistrantBy:
                /s/Adam
                JennAdam
                Jenn
              President
                and
              Chief
                Executive Officer









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