UNITED
  STATES

SECURITIES
  AND EXCHANGE COMMISSION

Washington,
  D.C.  20549





FORM
  20-F



(Mark One)







REGISTRATION
  STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF
  1934



or



X

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

For
  the fiscal year ended

February
  28, 2007



or





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

or





SHELL
  COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
  OF 1934

Date
  of event requiring this shell company report



For
  the transition period from ___________________ to ______________________



Commission
  file number:  0-30614





Oromin
  Explorations Ltd.

(Exact
  name of Company as specified in its charter)





Not
  applicable

(Translation
  of Companys name into English)





Province
  of British Columbia, Canada

(Jurisdiction
  of incorporation or organization)





Suite
  2000, 1055 West Hastings Street, Vancouver, B.C., Canada, V6E 2E9

(Address
  of principal executive offices)



Page
  1 of 76 Pages

The
  Exhibit Index is located on Page 75







---

2





Securities
  registered or to be registered pursuant to Section 12(b) of the Act.



|                                                                                   
|-----------------------------------------------------------------------------------
|Title
        of each class
      Name
        of each exchange on which registered
|                                                                                   
|None
      _________________________________                                       





Securities
  registered or to be registered pursuant to Section 12(g) of the Act.



Common
  Shares Without Par Value

(Title
  of Class)





Securities
  for which there is a reporting obligation pursuant to Section 15(d) of the Act.



None

(Title
  of Class)





Indicate
  the number of outstanding shares of each of the issuers classes of capital
  or common stock as of the close of the period covered by the annual report.



50,457,878



Indicate
  by check mark whether the Company is a well-known seasoned issuer, as defined
  in Rule 405 of the Securities Act.



Yes
  _____  No X



Indicate
  by check mark whether the Company (1) has filed all reports required to be filed
  by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
  12 months (or for such shorter period that the Company was required to file
  such reports), and (2) has been subject to such filing requirements for the
  past 90 days.



Yes
  X   No _________



Indicate
  by check mark whether the Company is a large accelerated filer, an accelerated
  filer, or a non-accelerated filer.  See definition of accelerated
  filer and large accelerated filer in Rule 12b-2 of the Exchange
  Act.  (Check one):



Large
  accelerated filer ____  Accelerated filer ____ Non-accelerated filerX





Indicate
  by check mark which financial statement item the Company has elected to follow.



Item
  17 X  Item 18 _________



If
  this is an annual report, indicate by check mark whether the Company is a shell
  company (as defined in Rule 12b-2 of the Exchange Act).



Yes
  _____  No X







---

3



(APPLICABLE
  ONLY TO ISSUES INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS)



Indicate
  by check mark whether the Company has filed all documents and reports required
  to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
  subsequent to the distribution of securities under a plan confirmed by a court.



Yes
  _________  No __________  Not Applicable X





The
  information set forth in this Annual Report on Form 20-F is as at February 28,
  2007 unless an earlier or later date is indicated.



Financial
  information is presented in accordance with accounting principles generally
  accepted in Canada.  Measurement differences between accounting principles
  generally accepted in Canada and in the United States, as applicable to the
  Company, are set forth in Item 5 of this Annual Report and in Note 17 to the
  accompanying Financial Statements of the Company.







































---

4



SECURITIES
  AND EXCHANGE COMMISSION



FORM
  20-F





|                                      |                                                                                                                                                                                                                                                                                                                                                           |                 
|------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------
|TABLE
        OF CONTENTS            
|                                      |                                                                                                                                                                                                                                                                                                                                                           | Page
        No.
|GLOSSARY
        OF OIL AND GAS TERMS | 8                                                                                                                                                                                                                                                                                                                                                        
|GLOSSARY
        OF MINING TERMS      | 9                                                                                                                                                                                                                                                                                                                                                        
|                                      |                                                                                                                                                                                                                                                                                                                                                           |                 
|PART
        I                        |                                                                                                                                                                                                                                                                                                                                                           | 11              
|                                      |                                                                                                                                                                                                                                                                                                                                                           |                 
|ITEM
        1.                       | IDENTITY
        OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                                                                                                                                                                                                                                                                                             | 11              
|                                      |                                                                                                                                                                                                                                                                                                                                                           |                 
|ITEM
        2.                       | OFFER
        STATISTICS AND EXPECTED TIMETABLE                                                                                                                                                                                                                                                                                                           | 11              
|                                      |                                                                                                                                                                                                                                                                                                                                                           |                 
|ITEM
        3.                       | KEY
        INFORMATION                                                                                                                                                                                                                                                                                                                                   | 11              
|                                      |                                                                                                                                                                                                                                                                                                                                                           |                 
|A.                                    | Selected
        Financial Data                                                                                                                                                                                                                                                                                                                           | 11              
|B.                                    | Capitalization
        and Indebtedness                                                                                                                                                                                                                                                                                                                   | 12              
|C.                                    | Reasons
        For The Offer and Use of Proceeds                                                                                                                                                                                                                                                                                                         | 13              
|D.                                    | Risk
        Factors                                                                                                                                                                                                                                                                                                                                      | 13              
|                                      | Exploration
        Risks                                                                                                                                                                                                                                                                                                                                 | 13              
|                                      | Title
        Matters                                                                                                                                                                                                                                                                                                                                     | 14              
|                                      | Conflicts
        of Interest                                                                                                                                                                                                                                                                                                                             | 14              
|                                      | Currency
        Fluctuations                                                                                                                                                                                                                                                                                                                             | 14              
|                                      | Additional
        Funding Requirements                                                                                                                                                                                                                                                                                                                   | 14              
|                                      | History
        of Net Losses; Accumulated Deficit; Lack of Revenue From Operations                                                                                                                                                                                                                                                                       | 15              
|                                      | Limited
        Experience with Development-Stage Resource Operations                                                                                                                                                                                                                                                                                     | 15              
|                                      | Stock
        Subject to Penny Stock Rules                                                                                                                                                                                                                                                                                                                | 15              
|                                      | Uninsurable
        Risks                                                                                                                                                                                                                                                                                                                                 | 15              
|                                      | Competition                                                                                                                                                                                                                                                                                                                                               | 15              
|                                      | Mineral
        Prices                                                                                                                                                                                                                                                                                                                                    | 16              
|                                      | Natural
        Gas and Oil Prices                                                                                                                                                                                                                                                                                                                        | 16              
|                                      | Foreign
        Countries and Regulatory Requirements                                                                                                                                                                                                                                                                                                     | 16              
|                                      | Environmental
        and Other Regulatory Requirements                                                                                                                                                                                                                                                                                                   | 17              
|                                      | Argentina
        Political Risks                                                                                                                                                                                                                                                                                                                         | 17              
|                                      | Sénégal
        Political Risks                                                                                                                                                                                                                                                                                                                           | 18              
|                                      | Dividends                                                                                                                                                                                                                                                                                                                                                 | 18              
|                                      | Share
        Price Volatility; Price Fluctuations                                                                                                                                                                                                                                                                                                        | 18              
|                                      | Companys
        Officers and Directors Resident Outside U.S.;
      Potential
        Unenforceability of Civil Liabilities and Judgments                                                                                                                                                                                                               | 18              
|                                      | If
        the Company is Unable to Successfully Develop and Subsequently Generate
        Sufficient Cash Flow from its Properties, the Company Could be Treated
        as a Passive Foreign Investment Company for U.S. Tax Purposes, Possibly
        Resulting in Additional Taxes to Its U.S. Stockholders and Less Liquidity
        for the Stock | 18              
|                                      |                                                                                                                                                                                                                                                                                                                                                           |                 
|ITEM
        4.                       | INFORMATION
        ON THE COMPANY                                                                                                                                                                                                                                                                                                                        | 19              
|A.                                    | History
        and Development of the Company                                                                                                                                                                                                                                                                                                            | 19              
|                                      | Acquisition
        of the Santa Rosa Property, Argentina                                                                                                                                                                                                                                                                                                 | 19              
|                                      | Acquisition
        of the Sabodala Property, Sénégal                                                                                                                                                                                                                                                                                                     | 20              
|                                      | Acquisition
        of the Carneirinho Property, Brazil                                                                                                                                                                                                                                                                                                   | 21              



---

5





|                 |                                                                                                           |   
|---------------- | --------------------------------------------------------------------------------------------------------- | --
|B.               | Business
        Overview                                                                                 | 21
|C.               | Organizational
        Structure                                                                          | 23
|D.               | Property,
        Plants and Equipment                                                                    | 23
|                 | Santa
        Rosa Property, Argentina                                                                    | 23
|                 | Title                                                                                                     | 23
|                 | Location,
        Access & Physiography                                                                   | 24
|                 | Exploration
        History                                                                               | 24
|                 | Regional
        and Local Geology                                                                        | 25
|                 | Stratigraphy                                                                                              | 25
|                 | Geochemistry
        and Hydrocarbon Migration                                                            | 26
|                 | Structure                                                                                                 | 26
|                 | Sediment
        Distribution                                                                             | 27
|                 | Proposed
        Exploration                                                                              | 27
|                 | Doing
        Business in Argentina                                                                       | 27
|                 | Sabodala
        Property, Sénégal                                                                        | 29
|                 | Title                                                                                                     | 29
|                 | Location,
        Access & Physiography                                                                   | 30
|                 | Plant
        and Equipment                                                                               | 31
|                 | Regional
        and Local Geology                                                                        | 31
|                 | Mineralization                                                                                            | 33
|                 | Exploration
        History                                                                               | 34
|                 | Exploration
         Recent Results                                                                      | 35
|                 | Proposed
        Exploration                                                                              | 36
|                 | Doing
        Business in Sénégal                                                                         | 36
|                 | Carneirinho
        Property, Brazil                                                                      | 37
|                 |                                                                                                           |   
|ITEM
        4A. | UNRESOLVED
        STAFF COMMENTS                                                                         | 38
|                 |                                                                                                           |   
|ITEM
        5.  | OPERATING
        AND FINANCIAL REVIEW AND PROSPECTS                                                      | 38
|A.               | Operating
        Results                                                                                 | 38
|                 | Fiscal
        Year Ended February 28, 2007 Compared to Fiscal Year Ended
      February
        28, 2006 | 40
|                 | Fiscal
        Year Ended February 28, 2006 Compared to Fiscal Year Ended
      February
        28, 2005 | 40
|                 | Fiscal
        Year Ended February 28, 2005 Compared to Fiscal Year Ended
      February
        29, 2004 | 41
|B.               | Liquidity
        and Capital Resources                                                                   | 41
|                 | February
        28, 2007 Compared to February 28, 2006                                                   | 42
|                 | February
        28, 2006 Compared to February 28, 2005                                                   | 42
|                 | February
        28, 2005 Compared to February 29, 2004                                                   | 43
|                 | Material
        Differences between Canadian and U.S. Generally Accepted Accounting Principles           | 44
|                 | Outlook                                                                                                   | 44
|C.               | Research
        and Development, Patents and Licenses, etc.                                              | 44
|D.               | Trend
        Information                                                                                 | 44
|E.               | Off-Balance
        Sheet Arrangements                                                                    | 44
|F.               | Tabular
        Disclosure of Contractual Obligations                                                     | 45
|G.               | Safe
        Harbour                                                                                      | 45
|                 |                                                                                                           |   
|ITEM
        6.  | DIRECTORS,
        SENIOR MANAGEMENT AND EMPLOYEES                                                        | 46
|A.               | Directors
        and Senior Management                                                                   | 46
|B.               | Compensation                                                                                              | 47



---

6





|                 |                                                                                           |   
|---------------- | ----------------------------------------------------------------------------------------- | --
|                 | Option
        Grants in Last Fiscal Year                                                 | 48
|                 | Aggregated
        Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values | 48
|                 | Pension
        and Retirement Benefit Plans                                              | 49
|                 | Termination
        of Employment, Change in Responsibilities and Employment Contracts    | 49
|                 | Directors                                                                                 | 49
|C.               | Board
        Practices                                                                   | 50
|D.               | Employees                                                                                 | 50
|E.               | Share
        Ownership                                                                   | 51
|                 |                                                                                           |   
|ITEM
        7.  | MAJOR
        SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                 | 51
|A.               | Major
        Shareholders                                                                | 51
|B.               | Related
        Party Transactions                                                        | 52
|C.               | Interests
        of Experts and Counsel                                                  | 53
|                 |                                                                                           |   
|ITEM
        8.  | FINANCIAL
        INFORMATION                                                             | 53
|A.               | Consolidated
        Statements and Other Financial Information                           | 53
|B.               | Significant
        Changes                                                               | 53
|                 |                                                                                           |   
|ITEM
        9.  | THE
        OFFER AND LISTING                                                             | 54
|A.               | Offer
        and Listing Details                                                         | 54
|B.               | Plan
        of Distribution                                                              | 55
|C.               | Markets                                                                                   | 55
|D.               | Selling
        Stockholders                                                              | 55
|E.               | Dilution                                                                                  | 55
|F.               | Expenses
        of the Issue                                                             | 55
|                 |                                                                                           |   
|ITEM
        10. | ADDITIONAL
        INFORMATION                                                            | 55
|A.               | Share
        Capital                                                                     | 55
|B.               | Memorandum
        and Articles of Association                                            | 55
|C.               | Material
        Contracts                                                                | 57
|D.               | Exchange
        Controls                                                                 | 58
|E.               | Taxation                                                                                  | 60
|                 | Material
        Canadian Federal Income Tax Consequences                                 | 60
|                 | Dividends                                                                                 | 60
|                 | Capital
        Gains                                                                     | 61
|                 | Material
        United States Federal Income Tax Consequences                            | 61
|                 | U.S.
        Holders                                                                      | 62
|                 | Distributions
        on Common Shares of the Company                                     | 62
|                 | Foreign
        Tax Credit                                                                | 63
|                 | Information
        Reporting and Backup Withholding                                      | 63
|                 | Disposition
        of Common Shares of the Company                                       | 63
|                 | Currency
        Exchange Gains or Losses                                                 | 64
|                 | Other
        Considerations                                                              | 64
|F.               | Dividends
        and Paying Agents                                                       | 66
|G.               | Statements
        by Experts                                                             | 66
|H.               | Documents
        on Display                                                              | 66
|I.               | Subsidiary
        Information                                                            | 66
|                 |                                                                                           |   
|ITEM
        11. | QUANTITATIVE
        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                        | 66



---

7





|                      |                                                                                      |   
|--------------------- | ------------------------------------------------------------------------------------ | --
|                      |                                                                                      |   
|ITEM
        12.      | DESCRIPTION
        OF SECURITIES OTHER THAN EQUITY SECURITIES                       | 66
|                      |                                                                                      |   
|PART
        II       |                                                                                      | 67
|                      |                                                                                      |   
|ITEM
        13.      | DEFAULTS,
        DIVIDEND ARREARS AND DELINQUENCIES                                 | 67
|                      |                                                                                      |   
|ITEM
        14.      | MATERIAL
        MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 67
|                      |                                                                                      |   
|ITEM
        15.      | CONTROLS
        AND PROCEDURES                                                      | 67
|                      |                                                                                      |   
|ITEM
        16A.     | AUDIT
        COMMITTEE FINANCIAL EXPERT                                             | 68
|                      |                                                                                      |   
|ITEM
        16B.     | CODE
        OF ETHICS                                                               | 68
|                      |                                                                                      |   
|ITEM
        16C.     | PRINCIPAL
        ACCOUNTANT FEES AND SERVICES                                       | 68
|                      |                                                                                      |   
|ITEM
        16D.     | EXEMPTIONS
        FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   | 69
|                      |                                                                                      |   
|ITEM
        16E.     | PURCHASES
        OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       | 69
|                      |                                                                                      |   
|PART
        III      |                                                                                      | 69
|                      |                                                                                      |   
|ITEM
        17.      | FINANCIAL
        STATEMENTS                                                         | 69
|                      |                                                                                      |   
|ITEM
        18.      | FINANCIAL
        STATEMENTS                                                         | 69
|                      |                                                                                      |   
|ITEM
        19.      | EXHIBITS                                                                             | 69
|                      |                                                                                      |   
|SIGNATURES            | 72                                                                                  
|                      |                                                                                     
|CERTIFICATIONS        | 73                                                                                  
|                      |                                                                                     
|EXHIBIT
        INDEX | 75                                                                                  





---

8



GLOSSARY
  OF OIL AND GAS TERMS



The following
  is a glossary of some of the terms used in the oil and gas industry and referenced
  herein:



|                                |                                                                                                                                                                                                                             
|------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Anticline                       | Rock
        units folded into a convex-upward shape with the youngest unit on the
        top.                                                                                                                             
|Bituminous                      | Impregnated
        with various mixtures of hydrocarbons.                                                                                                                                                                  
|Central
        Dome            | The
        structural dome centred around 33E15'S latitude
        and 67E40'W longitude.                                                                                                                                  
|Conglomerate                    | Coarse-grained
        clastic rock composed of rounded clasts over 2mm in diameter.                                                                                                                                        
|Fanglomerate                    | Coarse
        unsorted clastic material deposited in alluvial fans.                                                                                                                                                        
|Formation                       | A
        rock unit that has been named and defined by its location, relative age
        and composition.                                                                                                                  
|Geopressured                    | A
        condition in which the interstitial fluids in a rock unit exhibit pressures
        in excess of their hydraulic head.                                                                                            
|Geothermal                      | Heat
        emanating from depths within the earth.                                                                                                                                                                        
|Graben                          | A
        portion of the earths crust that was faulted and dropped to a lower
        position relative to its surrounding during some part of its history.
         It subsequently may have been filled with sediments.  
|Kerogen                         | Various
        organic remains contained within sediments.                                                                                                                                                                 
|Lacrustine                      | Pertaining
        to processes in lakes.                                                                                                                                                                                   
|Orogeny                         | The
        process of mountain building by deforming the earths crust.                                                                                                                                                    
|Plan
        Argentina          | The
        legislative framework in Argentina whereby exploration and exploitation
        permits and certain producing properties are made available for acquisition
        through an international public bid process.
|Regressive                      | Dropping
        sea level or excessive sediment input in sediments overstepping areas
        that were previously water-covered.                                                                                          
|Source
        Rocks            | Rocks
        containing organic material that, through geologic processes, have produced
        hydrocarbons.                                                                                                             
|Stratigraphic
        Pinch-out | A
        rock unit that changes character by diminishing its character to zero,
        commonly in an upward direction.                                                                                                   
|Transgressive                   | Rising
        sea level that results in sediments being deposited over what were previously
        land areas.                                                                                                            





---

9



GLOSSARY
  OF MINING TERMS



The following
  is a glossary of some of the terms used in the mining industry and referenced
  herein:



|                |                                                                                                                                                                                                                                                                                                            
|--------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Andesitic       | A
        term used to describe a dark coloured, fine grained, extrusive volcanic
        rock.                                                                                                                                                                                                            
|Antiform        | The
        peaks of folded layers of rock or stratigraphy where the limbs of an individual
        fold close upward.                                                                                                                                                                                     
|Alluvial        | A
        general term for clay, silt, sand, gravel or similar unconsolidated detrital
        material deposited during comparatively recent geological time by a stream
        or other body of running water.                                                                                          
|Arkosic         | A
        term used to describe a pink to reddish coloured coarse-grained sedimentary
        rock largely comprised of angular grains of quartz and feldspar.                                                                                                                                             
|Colluvium       | A
        general term applied to any loose, heterogeneous and incoherent mass of
        soil material or rock fragments deposited chiefly by mass-wasting, usually
        at the base of a steep slope or cliff.                                                                                        
|Conglomerate    | A
        coarse grained sedimentary rock comprised of poorly sorted and typically
        rounded granules, pebbles, cobbles and boulders.                                                                                                                                                                
|Craton          | A
        relatively immobile part of the earth, generally of large size                                                                                                                                                                                                                                   
|Crustal-scale   | A
        term used to describe large deep seated or regional scale geological features.
         I.e. the San Andreas fault is a "crustal-scale" feature.                                                                                                                                                 
|Dyke            | A
        tabular body of igneous rock that cuts across the structure of adjacent
        rocks or cuts massive rocks.                                                                                                                                                                                     
|Felsic          | A
        term used to describe light coloured igneous rocks.                                                                                                                                                                                                                                              
|Foliation       | A
        term used to describe the linear or platy texture of rocks that have been
        subjected to extreme heat and pressure resulting in the flattening or
        alignment of a rock's constituent mineral grains.                                                                                
|Fuchsite        | A
        bright green, chromium rich variety of a muscovite.                                                                                                                                                                                                                                              
|Granitic        | A
        term used to describe an intrusive igneous rock comprised largely of medium
        to coarse-grained quartz and feldspar.  Granitic rocks generally
        have higher alkali feldspar and lower plagioclase feldspar content than
        granodioritic rocks.                                
|Granodioritic   | A
        term used to describe an intrusive igneous rock comprised largely of medium
        to coarse-grained quartz and feldspar.  Granodioritic rocks have
        a higher plagioclase feldspar and lower alkali feldspar content than granitic
        rocks.                                        
|Greywacke       | A
        dark grey, medium to coarse-grained sedimentary rock comprised of poorly
        sorted angular grains of quartz, feldspar and a variety of darker coloured
        minerals.                                                                                                                    
|Hematitic       | A
        term used to describe a reddish brown rock containing an abundant quantity
        of the iron oxide mineral, hematite.                                                                                                                                                                          
|Intercalation   | A
        bed or stratum of lava between layers of other material.                                                                                                                                                                                                                                         
|Jasper          | Typically
        a reddish brown, very fine grained siliceous rock.                                                                                                                                                                                                                                       
|Lateritic       | A
        term used to describe highly weathered residual surface and near surface
        rock and soil horizons, often found in tropical or forested warm to temperate
        climates.  Lateritic horizons or "laterites" are often
        pale brown to reddish brown in colour and can be very hard.
|Late-tectonic   | A
        point or reference of time during the latter stages of a tectonic event.                                                                                                                                                                                                                         
|Limonite        | A
        geologic field term relating to a group of brown, amorphous, hydrous ferric
        oxides.  It is commonly a secondary mineral formed by the oxidation
        (weathering) of iron-bearing materials.                                                                                          
|Mafic           | Those
        igneous rocks composed chiefly of dark, ferromagnesian minerals.                                                                                                                                                                                                                             
|Metasedimentary | A
        term used to describe a sedimentary rock that has had its chemical and/or
        physical properties altered due to the effects of heat, pressure and fluid
        movement within the earth's crust.                                                                                          



---

10





|                    |                                                                                                                                                                                                                                              
|------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Metavolcanic        | A
        term used to describe a volcanic rock that has had its chemical and/or
        physical properties altered due to the effects of heat, pressure and fluid
        movement within the earth's crust.                               
|Mylonitized         | A
        term used to describe a rock that has undergone intense deformation and
        shearing.                                                                                                                                          
|Orogenic            | A
        term used to describe the large-scale tectonic process of mountain formation
        or orogeny.                                                                                                                                   
|Plutons             | A
        body of igneous rock that has been intruded from depth into pre existing
        rock.                                                                                                                                             
|Polymictic          | A
        term used to describe a clastic sedimentary rock comprised of clasts of
        varied rock types.                                                                                                                                 
|Pluton              | A
        body of igneous rock that has formed beneath the surface of the earth
        by consolidation from magma.                                                                                                                         
|Porphyry            | An
        igneous rock of any composition containing conspicuous phenocrysts (large
        crystals) within a fine-grained ground mass.                                                                                                    
|Post-tectonic       | A
        point or reference of time after a tectonic event.                                                                                                                                                                                 
|Saprolite           | A
        soft, earthy, clay-rich thoroughly decomposed rock formed in-place by
        chemical weathering.  Commonly displays pre-weathering structures
        of original rock units.  Occurs especially in humid, tropical environments.
|Schist              | A
        strongly foliated (platy) metamorphic rock that can be readily split into
        flakes or slabs.                                                                                                                                 
|Shear
        zones | Narrow,
        sub parallel-sided zones of rock that have been crushed and brecciated
        as a result of shear strain.                                                                                                                  
|Siliceous           | A
        term used to describe a rock containing an abundance of free silica.                                                                                                                                                               
|Silicified          | A
        term used to describe a rock that has been altered due to the introduction
        of or replacement by silica.                                                                                                                    
|Splays              | A
        term used to describe a secondary shear in a bifurcated shear zone that
        branches off a larger more continuous shear zone.                                                                                                  
|Stockwork           | A
        mineral deposit, or vein network, consisting of a three-dimensional network
        of planar to irregular veins and veinlets spaced closely enough that the
        entire mass might be mined together as a single entity.       
|Syngenetic          | A
        term used to describe a geological feature (i.e.. ore deposit or sedimentary
        feature) that has formed contemporaneously with and by essentially the
        same processes as the enclosing rocks.                         
|Syntectonic         | A
        point or reference of time during a tectonic event.                                                                                                                                                                                
|Tectonic            | A
        term used to describe the physical forces or events that move and deform
        the earth's crust. Volcanic eruptions, folding and faulting are examples
        of tectonic events.                                              
|Tuffs               | Igneous,
        volcanic clastic rocks formed by the accumulation of volcanic ash and
        crystals that have been extruded from a volcanic vent and subsequently
        buried and lithified.                                          
|Wacke               | A
        shortened or abbreviated form of greywacke.                                                                                                                                                                                        
|Wallrocks           | A
        general term used to describe rock that encases a second type of rock,
        vein, mineralization or structure.                                                                                                                  





---

11



PART
  I





ITEM
  1.

IDENTITY
  OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS



This
  Form 20-F is being filed as an annual report under the Exchange Act and, as
  such, there is no requirement to provide any information under this item.





ITEM
  2.

OFFER
  STATISTICS AND EXPECTED TIMETABLE



This
  Form 20-F is being filed as an annual report under the Exchange Act and, as
  such, there is no requirement to provide any information under this item.





ITEM
  3.

KEY
  INFORMATION



A.

Selected
  Financial Data



The
  following tables summarize selected financial data for the Company (stated in
  Canadian dollars) prepared in accordance with Canadian generally accepted accounting
  principles (Canadian GAAP).  The information in the table was
  extracted from the more detailed financial statements and related notes included
  herein and should be read in conjunction with these financial statements and
  with the information appearing under the heading Item 5  Operating
  And Financial Review And Prospects.  Note 17 of the financial statements
  of the Company included herein sets forth the measurement differences were such
  information to be presented in conformity with United States generally accepted
  accounting principles (U.S. GAAP).  Results for the periods
  ended February 28, 2007 are not necessarily indicative of results for future
  periods.



INFORMATION
  IN ACCORDANCE WITH CANADIAN GAAP:



|    |                                                       |                       |              |              |             |             |           
|--- | ----------------------------------------------------- | --------------------- | ------------ | ------------ | ----------- | ----------- | ----------
|    | Year
        Ended February 28                       
|    |                                                       | 2007                  | 2006         | 2005         | 2004        | 2003       
|(a) | Total
        revenue                                 | $0                    | $0           | $0           | $0          | $0         
|(b) | Earnings
        (loss) from continuing operations(1) |                       |              |              |             |            
|    |                                                       | Total                 | ($1,801,883) | ($2,702,526) | ($448,169)  | ($297,616)  | ($193,126)
|    |                                                       | Per
        Share (1) | ($0.04)      | ($0.09)      | ($0.02)     | ($0.01)     | ($0.01)   
|(c) | Total
        assets                                  | $27,405,610           | $11,268,010  | $3,985,105   | $2,990,680  | $2,444,494 
|(d) | Total
        long-term debt                          | $0                    | $0           | $0           | $0          | $0         
|(e) | Capital
        stock                                 | $34,635,509           | $19,964,141  | $11,878,025  | $11,010,280 | $10,665,871
|(f) | Total
        shareholders equity                    | $24,117,196           | $10,550,846  | $2,917,072   | $2,699,678  | $2,212,367 
|(g) | Cash
        dividends declared per share             | n/a                   | n/a          | n/a          | n/a         | n/a        
|(h) | Net
        earnings (loss) for the period            |                       |              |              |             |            
|    |                                                       | Total                 | ($1,801,883) | ($2,702,526) | ($448,169)  | ($297,616)  | ($193,126)
|    |                                                       | Per
        Share (1) | ($0.04)      | ($0.09)      | ($0.02)     | ($0.01)     | ($0.01)   



|    |                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The effect of potential share
        issuances pursuant to the exercise of options and warrants would be anti-dilutive
        and, therefore, basic and diluted losses per share are the same.





---

12





INFORMATION IN
  CONFORMITY WITH U.S. GAAP:



|    |                                                    |                    |              |              |              |             |           
|--- | -------------------------------------------------- | ------------------ | ------------ | ------------ | ------------ | ----------- | ----------
|    | Year
        Ended February 28                    
|    |                                                    | 2007               | 2006         | 2005         | 2004         | 2003       
|(a) | Total
        revenue                              | $0                 | $0           | $0           | $0           | $0         
|(b) | Earnings
        (loss) from continuing operations |                    |              |              |              |            
|    |                                                    | Total              | ($9,659,151) | ($3,285,319) | ($1,613,646) | ($300,616)  | ($195,376)
|    |                                                    | Per
        Share1 | ($0.23)      | ($0.11)      | ($0.06)      | ($0.01)     | ($0.01)   
|(c) | Total
        assets                               | $17,739,134        | $10,982,762  | $5,840,158   | $2,990,680   | $2,444,494 
|(d) | Total
        long-term debt                       | $0                 | $0           | $0           | $0           | $0         
|(e) | Capital
        stock                              | $34,635,509        | $19,964,141  | $11,878,025  | $11,010,280  | $10,665,871
|(f) | Total
        shareholders equity                 | $14,450,720        | $10,265,598  | $4,772,125   | $2,699,678   | $2,212,367 
|(g) | Cash
        dividends declared per share          | n/a                | n/a          | n/a          | n/a          | n/a        
|(h) | Net
        earnings (loss) for the period         |                    |              |              |              |            
|    |                                                    | Total              | ($9,659,151) | ($3,285,319) | ($1,613,646) | ($300,616)  | ($195,376)
|    |                                                    | Per
        Share1 | ($0.23)      | ($0.11)      | ($0.06)      | ($0.01)     | ($0.01)   



|    |                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The effect of potential share
        issuances pursuant to the exercise of options and warrants would be anti-dilutive
        and, therefore, basic and diluted losses are the same.



The
  Company has not declared or paid any dividends in any of its last five financial
  years.



In
  this Annual Report on Form 20-F, unless otherwise specified, all monetary amounts
  are expressed in Canadian dollars.  On August 15, 2007, the exchange rate,
  based on the noon buying rate published by The Bank of Canada, for the conversion
  of Canadian dollars into United States dollars (the Noon Rate of Exchange)
  was $1.0746.



The
  following table sets out the high and low exchange rates for each of the last
  six months.



|                        |        |        |        |        |        |         
|----------------------- | ------ | ------ | ------ | ------ | ------ | --------
|                        | 2007  
|                        | July   | June   | May    | April  | March  | February
|High
        for period | 1.0686 | 1.0730 | 1.1135 | 1.1584 | 1.1811 | 1.1853  
|Low
        for period  | 1.0372 | 1.0580 | 1.0699 | 1.1067 | 1.1529 | 1.1585  



The following table sets
  out the average exchange rates for the five most recent financial years calculated
  by using the average of the Noon Rate of Exchange on the last day of each month
  during the period.



|                               |        |        |        |        |       
|------------------------------ | ------ | ------ | ------ | ------ | ------
|Year
        Ended February 28
|                               | 2007   | 2006   | 2005   | 2004   | 2003  
|Average
        for the period | 1.1377 | 1.1929 | 1.2816 | 1.3629 | 1.5548



B.

Capitalization
  and Indebtedness



This
  Form 20-F is being filed as an annual report under the Exchange Act and, as
  such, there is no requirement to provide any information under this item.



---

13





C.

Reasons
  For The Offer and Use of Proceeds



This
  Form 20-F is being filed as an annual report under the Exchange Act and, as
  such, there is no requirement to provide any information under this item.



D.

Risk
  Factors



The
  following is a brief discussion of those distinctive or special characteristics
  of the Companys operations and industry that may have a material impact
  on, or constitute risk factors in respect of, the Companys future financial
  performance.



Exploration
  Risks



The
  Company is engaged in the business of acquiring interests in resource properties
  in the hope of locating reserves.  The Company's property interests are
  in the exploration stage only.  Accordingly, there is little likelihood
  that the Company will realise any profits in the short to medium term.  Any
  profitability in the future from the Company's business will be dependent upon
  locating reserves, which itself is subject to numerous risk factors.



Technical
  considerations, delays in obtaining governmental approvals, inability to obtain
  financing or other factors could cause delays in exploring properties.  Such
  delays could materially adversely affect the financial performance of the Company.



The
  business of exploring for minerals involves a high degree of risk.  Few
  properties that are explored are ultimately developed into producing mines.
   In exploring its mineral deposits, the Company will be subjected to an
  array of complex economic factors and accordingly there is no assurance that
  a positive feasibility study or any projected results contained in a feasibility
  study of a mineral deposit will be attained.



The
  business of mining is subject to a variety of risks such as cave-ins and other
  accidents, flooding, environmental hazards, the discharge of toxic chemicals
  and other hazards.  Such occurrences may delay production, increase production
  costs or result in liability.  The Company will have insurance in amounts
  that it considers to be adequate to protect itself against certain risks of
  mining and processing.  However, the Company may become subject to liability
  for hazards against which it cannot insure itself or which it may elect not
  to insure against because of premium costs or other reasons.  In particular,
  the Company is not insured for environmental liability or earthquake damage.



In
  order to develop the Sabodala Property, located in Sénégal, it will
  be necessary to build the necessary infrastructure facilities, including electricity,
  transportation, etc., the costs of which could be substantial.



The
  business of exploring for and producing oil and gas involves a substantial risk
  of investment loss that even a combination of experience, knowledge and careful
  evaluation may not be able to overcome.  Drilling oil and gas wells involves
  the risk that the wells will be unproductive or that, although productive, the
  wells do not produce oil and/or gas in economic quantities.  Other hazards,
  such as unusual or unexpected geological formations, pressures, fires, blowouts,
  loss of circulation of drilling fluids or other conditions may substantially
  delay or prevent completion of any well.  Adverse weather conditions can
  also hinder drilling operations.  A productive well may become uneconomic
  in the event water or other deleterious substances are encountered, which impair
  or prevent the production of oil and/or gas from the well.  In addition,
  production from any well may be unmarketable if it is impregnated with water
  or other deleterious substances.  As with any petroleum property, there
  can be no assurance that oil and gas will be produced from the properties in
  which the Company has interests.  In addition, the marketability of oil
  and gas that may be acquired or discovered will be affected by numerous factors
  beyond the control of the Company.  These factors include the proximity
  and capacity of oil and gas pipelines and processing equipment, market fluctuations
  of prices, taxes, royalties, land tenure, allowable production and environmental
  protection.



---

14



The
  extent of these factors cannot be accurately predicted, but the combination
  of these factors may result in the Company not receiving an adequate return
  on invested capital.  There is no assurance that the Company will discover
  additional crude oil or natural gas in commercial quantities.



Title
  Matters



While
  the Company has diligently investigated title to all exploration concessions
  and, to the best of its knowledge, title to all properties is in good standing,
  this should not be construed as a guarantee of title.  Other parties (including
  indigenous landowners) may dispute title to the exploration properties in which
  the Company has an interest or the right to acquire an interest.  The properties
  may be subject to prior unregistered agreements or transfers or aboriginal land
  claims and title may be affected by undetected defects.



Conflicts
  of Interest



Certain
  of the directors of the Company are directors of other reporting companies or
  have significant shareholdings in other resource companies and, to the extent
  that such other companies may participate in ventures in which the Company may
  participate, the directors of the Company may have a conflict of interest in
  negotiating and concluding terms respecting the extent of such participation.
   In the event that such a conflict of interest arises at a meeting of the
  directors of the Company, a director who has such a conflict will abstain from
  voting for or against the approval of such participation or such terms.  In
  appropriate cases the Company will establish a special committee of independent
  directors to review a matter in which several directors, or management, may
  have a conflict.  In accordance with the laws of the Province of British
  Columbia, the directors of the Company are required to act honestly, in good
  faith and in the best interests of the Company.  In determining whether
  or not the Company will participate in a particular program and the interest
  therein to be acquired by it, the directors will primarily consider the potential
  benefits to the Company, the degree of risk to which the Company may be exposed
  and its financial position at that time.  Other than as indicated, the
  Company has no other procedures or mechanisms to deal with conflicts of interest.



Currency
  Fluctuations



The
  Company maintains its accounts in Canadian dollars.  The Company's property
  interests in Argentina and Sénégal may make it subject to foreign
  currency fluctuations.  Exchange transactions are allowed in U.S. dollars,
  and as a result foreign currency fluctuations will only be material for the
  Company to the extent that fluctuations between the Canadian and U.S. dollar
  are material.  The Company does not at the present nor does it plan in
  the future to engage in foreign currency transactions to hedge any exchange
  rate risks.



Additional
  Funding Requirements



The
  Company has not received cash flow from operations in the past and cash flow
  is not expected in the next few years to satisfy the Companys operational
  requirements and cash commitments.  In the past, the Company has relied
  on sales of equity securities to meet most of its cash requirements, together
  with management fees, property payments and sales or joint ventures of properties.
   There can be no assurance that funding from these sources will be sufficient
  in the future to satisfy operational requirements and cash commitments.



Based
  on its existing working capital, the Company does not expect to require additional
  financing for its currently held properties during the fiscal year currently
  in progress.  The development of the Companys properties depends
  upon the Companys ability to obtain financing through any or all of the
  joint venturing of projects, debt financing, equity financing or other means.
  There is no assurance that the Company will be successful in obtaining the required
  financing.  Failure to obtain additional financing on a timely basis could
  cause the Company to forfeit its interest in its properties and reduce or terminate
  its operations on such properties.



---

15





History
  of Net Losses; Accumulated Deficit; Lack of Revenue From Operations



The
  Company has incurred net losses to date.  Its deficit as of February 28,
  2007 was $13,715,748. The Company has not yet had any revenue from the exploration
  activities on its properties, nor has the Company yet found that development
  activity is warranted on any of its properties.  Even if the Company does
  undertake development activity on any of its properties, the Company may continue
  to incur losses beyond the period of commencement of such activity.  There
  is no certainty that the Company will produce revenue, operate profitably or
  provide a return on investment in the future.



Limited Experience
  with Development-Stage Resource Operations



The
  Company has limited experience in placing resource properties into production,
  and its ability to do so will be dependent upon using the services of appropriately
  experienced personnel or entering into agreements with other major resource
  companies that can provide such expertise.  There can be no assurance that
  the Company will have available to it the necessary expertise when and if the
  Company places its resource properties into production.



Stock
  Subject to Penny Stock Rules



The
  capital stock of the Company would be classified as penny stock
  as defined in Reg. § 240.3a51-1 promulgated under the Securities Exchange
  Act of 1934 (the 1934 Act).  In response to perceived abuse
  in the penny stock market generally, the 1934 Act was amended in 1990 to add
  new requirements in connection with penny stocks.  In connection with effecting
  any transaction in a penny stock, a broker or dealer must give the customer
  a written risk disclosure document that (a) describes the nature and level of
  risk in the market for penny stocks in both public offerings and secondary trading,
  (b) describes the brokers or dealers duties to the customer and
  the rights and remedies available to such customer with respect to violations
  of such duties, (c) describes the dealer market, including bid and
  ask prices for penny stock and the significance of the spread between
  the bid and ask prices, (d) contains a toll-free telephone number for inquiries
  on disciplinary histories of brokers and dealers, and (e) defines significant
  terms used in the disclosure document or the conduct of trading in penny stocks.
   In addition, the broker-dealer must provide to a penny stock customer
  a written monthly account statement that discloses the identity and number of
  shares of each penny stock held in the customers account, and the estimated
  market value of such shares.  The extensive disclosure and other broker-dealer
  compliance related to penny stocks may result in reducing the level of trading
  activity in the secondary market for such stocks, thus limiting the ability
  of the holder to sell such stock.



Uninsurable
  Risks



Although
  management believes the operator of any properties in which the Company and
  its subsidiaries may acquire interests, will acquire and maintain appropriate
  insurance coverage in accordance with standard industry practice, the Company
  and its subsidiaries may suffer losses from uninsurable hazards or from hazards
  which the operator has chosen not to insure against because of high premium
  costs or other reasons.  The Company and its subsidiaries intend to engage
  in participating in the drilling of both exploratory and development wells.
   Exploratory wells have much greater dry hole risk than do wells that are
  drilled offsetting established production.  The Company and its subsidiaries
  may become subject to liability for pollution, fire, explosion, blowouts, cratering
  and oil spills against which it cannot insure or against which it may elect
  not to insure.  Such events could result in substantial damage to oil and
  gas wells, producing facilities and other property and personal injury.  The
  payment of any such liabilities may have a material, adverse effect on the Company's
  financial position.



Competition



Significant
  and increasing competition exists for the limited number of mineral property
  acquisition opportunities available in Sénégal.  As a result
  of this competition, some of which is with large established mining companies
  with substantial capabilities and greater financial and technical resources
  than the Company, the Company may be unable to acquire additional attractive
  mineral properties on terms it considers acceptable.  Accordingly, there
  can be no assurance that the Companys exploration and acquisition programs
  will yield any reserves or result in any commercial mining operation.



---

16



The
  oil and gas industry is also intensely competitive and the Company competes
  with other companies that have greater resources.  Many of such companies
  not only explore for and produce crude oil and natural gas but also carry on
  refining operations and market petroleum and other products on a world-wide
  basis.  There is also competition between the oil and gas industry and
  other industries with respect to the supply of energy and fuel to industrial,
  commercial and individual customers.



Mineral
  Prices



The
  mining industry in general is intensely competitive and there is no assurance
  that, even if commercial quantities of minerals are discovered, a profitable
  market will exist for the sale of same. Factors beyond the control of the Company
  may affect the marketability of any substances discovered.  The prices
  of gold and silver have experienced volatile and significant price movements
  over short periods of time, and are affected by numerous factors beyond the
  control of the Company, including international economic and political trends,
  expectations of inflation, currency exchange fluctuations (specifically, the
  U.S. dollar relative to other currencies), interest rates and global or regional
  consumption patterns (such as the development of gold coin programs), speculative
  activities and increased production due to improved mining and production methods.
   The supply of and demand for gold is affected by various factors, including
  political events, economic conditions and production costs in major producing
  regions and governmental policies with respect to holdings by a nation or its
  citizens.  There can be no assurance that the price of gold will be such
  that the Companys properties can be mined at a profit.



Natural
  Gas and Oil Prices



In
  recent decades, there have been periods of both worldwide overproduction and
  underproduction of hydrocarbons and periods of both increased and relaxed energy
  conservation efforts.  Such conditions have resulted in periods or excess
  supply of, and reduced demand for, crude oil on a worldwide basis and for natural
  gas on a domestic basis.  These periods have been followed by periods of
  short supply of, and increased demand for, crude oil and, to a lesser extent,
  natural gas.  The excess or short supply of crude oil has placed pressures
  on prices and has resulted in dramatic price fluctuations even during relatively
  short periods of seasonal market demand.  The price of natural gas has
  exhibited market demand fluctuations; however, because most of the natural gas
  consumed within the United States is produced within the United States, the
  price of natural gas has not exhibited the dramatic price fluctuations that
  crude oil prices have experienced under conditions of high import levels.



Foreign
  Countries and Regulatory Requirements



Currently,
  the Companys only properties are located in Argentina and Sénégal.
   Consequently, the Company is subject to certain risks associated with
  foreign ownership, including currency fluctuations, inflation, political instability
  and political risk.  Both mineral exploration and mining activities and
  oil and gas exploration and production activities in foreign countries may be
  affected in varying degrees by political stability and government regulations
  relating to the mining industry and the oil and gas industry. Any changes in
  regulations or shifts in political conditions are beyond the control of the
  Company and may adversely affect its business. Operations may be affected in
  varying degrees by government regulations with respect to restrictions on production,
  price controls, export controls, restriction of earnings, taxation laws, expropriation
  of property, environmental legislation, water use and workplace safety.  In
  particular, the status of Argentina and Sénégal as developing countries
  may make it more difficult for the Company to obtain any required production
  financing for its properties from senior lending institutions.  In addition,
  Argentina experienced significant economic and political instability during
  the period 1999 to 2004 from which it is currently recovering. Argentina defaulted
  on its loans during the unstable period and has only recently completed with
  the International Money Fund agreed remedial measures.  The Company maintains
  the majority of its funds in Canada and only forwards sufficient funds to meet
  current obligations and overhead in Argentina.  The Company does not believe
  that any currency restrictions that may be imposed in Argentina would have a
  prolonged impact on the Companys exploration activities.



---

17





Environmental
  and Other Regulatory Requirements



The
  current or future operations of the Company, including development activities
  and commencement of production on its properties, require permits from various
  governmental authorities and such operations are and will be subject to laws
  and regulations governing prospecting, development, mining, production, exports,
  taxes, labour standards, occupational health, waste disposal, toxic substances,
  land use, environmental protection, safety and other matters.  Companies
  engaged in the development and operation of mines and related facilities or
  oil and gas properties and related facilities generally experience increased
  costs, and delays in production and other schedules as a result of the need
  to comply with applicable laws, regulations and permits.  There can be
  no assurance that approvals and permits required to commence production on its
  properties will be obtained.  Additional permits and studies, which may
  include environmental impact studies conducted before permits can be obtained,
  may be necessary prior to operation of the properties in which the Company has
  interests and there can be no assurance that the Company will be able to obtain
  or maintain all necessary permits that may be required to commence construction,
  development or operation of mining facilities or oil and gas extraction facilities
  at these properties on terms which enable operations to be conducted at economically
  justifiable costs.



The
  Companys potential production operations and explora­tion activities
  in Argentina and Sénégal are subject to various federal and provincial
  laws governing land use, the protection of the environ­ment, prospecting,
  development, production, exports, taxes, labour standards, occupational health,
  waste disposal, toxic substances, workplace safety and other matters.  Such
  operations and exploration activities are also subject to substantial regulation
  under these laws by governmental agencies and may require that the Company obtain
  permits from various governmental agencies.  The Company believes it is
  in substantial compliance with all material laws and regulations that currently
  apply to its activities.  There can be no assurance, however, that all
  permits the Company may require for construction of mining facilities and conduct
  of mining operations or of oil and gas extraction facilities and conduct of
  operations will be obtainable on reasonable terms or that such laws and regulations
  would not have a material adverse effect on any mining or oil and gas project
  the Company might undertake.



Failure
  to comply with applicable laws, regulations, and permitting requirements may
  result in enforcement actions thereunder, including orders issued by regulatory
  or judicial authorities causing operations to cease or be curtailed, and may
  include corrective measures requiring capital expenditures, installation of
  additional equipment, or remedial actions.  Parties engaged in mining operations
  or oil and gas exploration or extraction operations may be required to compensate
  those suffering loss or damage by reason of such activities and may have civil
  or criminal fines or penalties imposed for violations of applicable laws or
  regulations.



Amendments
  to current laws, regulations and permits governing operations and activities
  of mining or oil and gas companies, or more stringent implementation thereof,
  could have a material adverse impact on the Company and cause increases in capital
  expenditures or production costs or reduction in levels of production at producing
  properties or abandonment or delays in development of new mineral exploration
  or oil and gas properties.



To
  the best of the Company's knowledge, it is currently operating in compliance
  with all applicable environmental regulations.



Argentina
  Political Risks



Oil
  and gas exploration and production activities in Argentina may be affected in
  varying degrees by political stability and government regulations relating to
  the oil and gas industry.  Any changes in regulations or shifts in political
  conditions are beyond the control of the Company and may adversely affect its
  business. Operations may be affected in varying degrees by government regulations
  with respect to restrictions on production, price controls, export controls,
  income taxes, expropriation of property, environmental legislation and safety.
   Argentina has only recently recovered from a period of economic instability
  arising largely from a history of ineffective monetary policies and large amounts
  of debt. Jurisdiction over oil and gas resources has recently passed from the
  federal government to the provincial governments in Argentina, and the establishment
  by the provinces of a regulatory and oversight regime is not yet complete.



---

18



Sénégal
  Political Risks



Mineral
  exploration and mining activities in Sénégalmay be affected
  in varying degrees by political stability and government regulations relating
  to the mining industry.  Any changes in regulations or shifts in political
  conditions are beyond the control of the Company and may adversely affect its
  business. Operations may be affected in varying degrees by government regulations
  with respect to restrictions on production, price controls, export controls,
  income taxes, expropriation of property, environmental legislation and safety.
   In addition, the Company has entered into contractual arrangements with
  the Government of Sénégal that contain time-sensitive performance
  requirements.  Further, the Company will be dependent on the receipt of
  government approvals or permits for the timely performance of its exploration
  activities and any delays in obtaining such approvals or permits could affect
  the status of the Companys contractual arrangements or its ability to
  meet its contractual obligations and could result in the loss of its interest
  in mineral properties.



Dividends



All
  of the Company's available funds will be invested to finance the growth of the
  Company's business and therefore investors cannot expect and should not anticipate
  receiving a dividend on the Company's common shares in the foreseeable future.



Share
  Price Volatility; Price Fluctuations



In
  recent years, the securities markets in Canada have experienced a high level
  of price and volume volatility, and the market prices of securities of many
  companies, particularly junior mineral exploration companies like the Company,
  have experienced wide fluctuations which have not necessarily been related to
  the operating performance, underlying asset values or prospects of such companies.
   In particular, the per share price of the Company's common stock fluctuated
  from a low of $2.07 to a high of $4.05 in the period beginning February 28,
  2007 and ending on the date of this Annual Report.  There can be no assurance
  that these price fluctuations will not continue to occur.



Company's
  Officers and Directors Resident Outside U.S.; Potential Unenforceability of
  Civil Liabilities and Judgements



The
  Company and its officers and all but two of its directors are residents of countries
  other than the United States, and all of the Company's assets are located outside
  the United States.  As a result, it may not be possible for investors to
  effect service of process within the United States upon such persons or enforce
  in the United States against such persons judgements obtained in United States
  courts, including judgements predicated upon the civil liability provisions
  of United States federal securities laws or state securities laws.



The
  Company believes that a judgement of a United States court predicated solely
  upon civil liability under United States securities laws would probably be enforceable
  in Canada if the United States court in which the judgement was obtained has
  a basis for jurisdiction in the matter that was recognised by a Canadian court
  for such purposes.  However, there is doubt whether an action could be
  brought in Canada in the first instance on the basis of liability predicated
  solely upon such laws.



If
  the Company is Unable to Successfully Develop and Subsequently Generate Sufficient
  Cash Flow from its Properties, the Company Could be Treated as a Passive Foreign
  Investment Company for U.S. Tax Purposes, Possibly Resulting in Additional Taxes
  to Its U.S. Stockholders and Less Liquidity for the Stock



The
  Company, as a foreign corporation with U.S. stockholders, could potentially
  be treated as a passive foreign investment company (PFIC) for U.S.
  tax purposes.  U.S. stockholders owning shares of a PFIC can be subject
  to adverse tax consequences.  In general, the Company would be considered
  a PFIC if: 75% or more of its gross income in a taxable year is passive income
  such as dividends and interest; or, the average percentage of the Companys
  assets (by value) during the taxable year which produce passive income or which
  are held for production of same is at least 50%.  A U.S. stockholder owing
  shares of a PFIC, who does not make certain elections for tax purposes, is subject
  to an additional tax and to an interest charge based on the value of deferral
  of tax for the period



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19



during
  which the common shares of the PFIC are owned.  Also, gain realized on
  the disposition of common shares of the PFIC would be treated as ordinary income
  rather than capital gains.  If U.S. stockholders are subject to adverse
  tax consequences related to their ownership of the Companys stock, they
  might be less willing to acquire the stock, which could result in reduced market
  activity and liquidity for the stock.



ITEM
  4.

INFORMATION
  ON THE COMPANY



A.

History
  and Development of the Company



Oromin
  Explorations Ltd. (the Company) is a British Columbia company in
  the business of exploring its resource properties.  The Company was incorporated
  pursuant to the Company Act(British Columbia) on January 25, 1980 under
  the name Maple Leaf Petroleum Ltd..  On July 26, 1983, the
  Companys Memorandum was amended to increase the authorized capital of
  the Company from 10,000,000 common shares without par value to 20,000,000 common
  shares without par value and the Companys Articles were replaced in their
  entirety with new articles.  There were no material changes to the Articles.
  On April 22, 1986, the Companys Memorandum was further amended to change
  the name of the Company to International Maple Leaf Resource Corporation,
  to consolidate its common shares on a one-for-five basis and to increase the
  authorized capital back up to 20,000,000 common shares without par value. On
  September 11, 1989, the Companys Memorandum was further amended to change
  the name of the Company to Maple Resource Corp., to consolidate
  its common shares on a one-for-2.5 basis and to increase the authorized capital
  back up to 20,000,000 common shares without par value.  On August 14, 1992,
  the Companys Articles were replaced in their entirety with new articles.
   There were no material changes to the Articles. Also on August 14, 1992,
  the Companys Memorandum was further amended to change the name of the
  Company to Birchwood Ventures Ltd., to consolidate its common shares
  on a one-for-4.4 basis and to increase the authorized capital back up to 20,000,000
  common shares without par value. On September 30, 1997, the Companys Memorandum
  was further amended to change the name of the Company to Oromin Explorations
  Ltd., to consolidate its common shares on a one-for-five basis and to
  increase the authorized capital to 100,000,000 common shares without par value.
   On February 25, 2002, it amalgamated with Fresco Developments Ltd. (Fresco)
  and its shares were exchanged for shares of the amalgamated company on a one
  for one basis, while the shares of Fresco were exchanged on the basis of one
  share of the amalgamated company for every two shares of Fresco.



The
  Company has four subsidiaries.  Sabodala Holding Limited is incorporated
  in the British Virgin Islands and is wholly owned by the Company.  Irie
  Isle Limited is incorporated in the British Virgin Islands and is wholly owned
  by the Company.  Cynthia Holdings Limited is incorporated in the British
  Virgin Islands and is owned by Irie Isle Limited as to 82.48%.  Exploraciones
  Oromin, S.A. is incorporated in Argentina and is wholly owned by Cynthia Holdings
  Limited.



The
  head office and principal office address of the Company is located at Suite
  2000, 1055 West Hastings Street, Vancouver, British Columbia, V6E 2E9, Canada.
   Its telephone number is 604-331-8772.



Acquisition
  of the Santa Rosa Property, Argentina



The
  Company has an 82.48% interest in the Santa Rosa Property, as more fully described
  under  Item 4 - Information on the Company - D. Property, Plants
  and Equipment below.  On March 20, 2001, the Secretariat of Energy
  of the Republic of Argentina approved the Companys bid to acquire a 100%
  interest in the oil and gas exploration rights for exploration block #CC&B-9
  (the Santa Rosa Property), covering 7,694 square kilometres in the
  Cuyana basin in the Province of Mendoza in central Argentina.  These rights
  are for a period of 25 years and give the Company the right to carry out production
  on the Santa Rosa Property should commercial quantities of hydrocarbons be discovered.



The
  Company is presently attempting to obtain all necessary permits to allow it
  to begin drilling.



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20





On
  June 26, 2002, the Company, through its wholly owned subsidiary Cynthia Holdings
  Limited (Cynthia), entered into a letter agreement (the Agreement)
  whereby it agreed to sell an effective 50% interest in its Santa Rosa Property
  for the sum of US$1,400,000 to Bible Resources Limited (Bible) a
  private Nevada corporation. The Agreement initially provided for the purchase
  price to be paid in three tranches, with US$400,000 due on or before July 31,
  2002, a further US$400,000 on or before August 30, 2002 and the remaining US$600,000
  to be paid by September 30, 2002.  The Agreement has been amended a number
  of times and during the fiscal year ended February 28, 2005, Cynthia received
  US$600,000 in payment for 212.415 shares of Cynthia (representing a 17.52% effective
  interest in its Santa Rosa Property) and, as consideration for extending the
  agreement, the Companys wholly owned British Virgin Islands subsidiary,
  Irie Isle Limited (Irie), received 1,000,000 common shares in the
  capital stock of Surge Global Energy Inc. (Surge), Bibles
  parent company and the assignee of Bibles interest.  Surge has elected
  not to acquire any further interest in the Santa Rosa Property.



On
  November 15, 2005, the Company entered into a letter of intent (the LOI)
  with Ottoman Energy Ltd. (Ottoman) whereby Ottoman can acquire up
  to a 41.24% interest in the Santa Rosa Property by spending US$2,297,381 on
  exploration and development of the Santa Rosa Property.  The LOI is subject
  to a number of conditions that must be fulfilled or waived by December 31, 2007
  as extended, including completion of legal and financial due diligence to Ottomans
  satisfaction, issuance of formal title to the Santa Rosa Property and the settlement
  and execution of a joint venture agreement respecting the Santa Rosa Property.



Subject
  to the fulfilment or waiver of the conditions referred to above and subject
  to funding, Irie, Ottoman and Surge will jointly undertake the next phase of
  the exploration program which will consist of interpretation of seismic data,
  completion of environmental studies, drilling three exploration wells and, contingent
  upon success, completing one production well.  All required funding for
  the upcoming phase of exploration and all future exploration and development
  of the Santa Rosa Property, will be borne proportionately by each party or they
  will suffer dilution.



Acquisition
  of the Sabodala Property, Sénégal



The
  Company has the right to acquire a 100% interest in the Sabodala Property, as
  more fully described under  Item 4 - Information on the Company -
  D. Property, Plants and Equipment below. The Direction de Mines of Sénégal
  awarded the exploration concession to the Company on behalf of the Oromin Joint
  Venture Group through an international selection process concluded in October
  2004.  The Oromin Joint Venture Group (OJVG) was a joint venture
  between the Company and Bendon International Ltd. (Bendon), each
  as to 50% with the Company and Bendon each holding a 6.5% interest in trust
  for Badr Investment & Finance Company (Badr), a private company
  based in Saudi Arabia, pending its execution of a tripartite joint venture agreement
  on the same terms as the current joint venture agreement between the Company
  and Bendon, such joint venture interest to be transferred to Badr on execution
  of such tripartite agreement.  In order to acquire its interest in the
  Sabodala Property, the OJVG was required to spend at least USD$8 million on
  exploration of the Sabodala Property by April 17, 2007, and this condition was
  fulfilled in October 2006.  Under the terms of the OJVG agreement, Bendon
  provided the initial US$2.8 million in exploration expenditures with the Company
  providing the next US$5.2 million.  Badr was to hold a free carried interest
  until the initial USD$8 million commitment was completed, at which time the
  three parties would bear all future costs associated with the exploration and
  development of the Sabodala Project on a pro rata basis, or be subject to dilution.



By
  an agreement dated December 18, 2006, as amended, between Oromin Joint Venture
  Group Ltd. (OJVG Ltd.), Sabodala Holding Limited (SHL)
  (a wholly-owned subsidiary of the Company), Bendon and Badr, the OJVG was converted
  into a corporate form.  SHL and Bendon each own a 43.5% interest and Badr
  owns a 13% interest in OJVG Ltd.  SHL and Bendon have agreed to each fund
  50% of the costs of exploration and development of the Sabodala Property, with
  Badrs interest being fully carried for as long as it owns an interest
  in OJVG Ltd.  The exploration concession comprising the Sabodala Property
  has been assigned the OJVG Ltd.  SHL is the operator of OJVG Ltd. to which
  it provides exploration and management services.  In March 2007, the Government
  of Sénégal granted a  twenty month extension (to December 22,
  2008) to the current Mining Convention conditional on the joint venture spending
  an additional USD$12 million during the extension period.   Thereafter,
  OJVG Ltd. has ten months (to October 22, 2009) to complete a preliminary feasibility
  study on the project.



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21



Acquisition
  and Disposition of the Carneirinho Property, Brazil



The
  Company and Lund Gold Ltd. (Lund) formerly held an option to jointly
  acquire a 100% interest in the 5,000-hectare Carneirinho gold exploration property
  in north central Brazil.  The option to acquire the Carneirinho Property
  was structured as a two-stage option with Lund and the Company jointly acquiring
  a 50% interest at each stage. In order to exercise the first option, Lund and
  the Company were required to pay the vendor USD$50,000 on or before April 30,
  2005 (paid), USD$100,000 by April 30, 2006 (paid), USD$200,000 by April 30,
  2007 (paid) and a total of US$1,400,000 by April 30, 2009.  Following the
  exercise of the first option, in order to exercise the second option, Lund and
  the Company were required to pay the vendor an additional US$6,000,000 on or
  before April 30, 2010.



By
  an agreement dated March 12, 2007 between the Company and Lund, the Company
  sold all of its interest in the Carneirinho Property to Lund in consideration
  of the issuance to the Company of 1,197,906 common shares of Lund, this consideration
  reflecting the amount that the Company had spent on acquisition, exploration
  and development of the Carneirinho Property. The Company and Lund are related
  parties by virtue of having a number of directors and senior officers in common.





B.

Business
  Overview



The
  Company has historically been involved in the exploration of mineral properties
  in various parts of the world.  Prior to its acquisition of oil and gas
  interests in the Republic of Argentina, the Company was exploring properties
  in the Voiseys Bay area of Labrador, the Port Cartier area of Quebec,
  near Narvik, Norway and in the Bonneville Mining District of Alaska pursuant
  to property option agreements.  All of its formerly held mineral properties
  have been abandoned and the costs of exploring same have been written off.  In
  May 2000, the Company entered into an agreement to acquire various interests
  in three oil and gas leases located in Creek County, Oklahoma from Canok International
  of Haliburton, Ontario, Canada.  As a result of misrepresentations by Canok,
  the Company rescinded the agreement with Canok.



In
  March 2001, the Company acquired a 100% interest in the oil and gas exploration
  rights for the Santa Rosa Property in central Argentina and exploration of the
  Santa Rosa Property is now one of the two principal business activities of the
  Company.   In June 2002, the Company, through its wholly owned subsidiary
  Cynthia Holdings Limited (Cynthia), agreed to sell an effective
  50% interest in its Santa Rosa Property. The Agreement has been amended a number
  of times and during the fiscal year ended February 28, 2005, Cynthia received
  US$600,000 in payment for 212.415 shares of Cynthia (representing a 17.52% effective
  interest in its Santa Rosa Property) and, as consideration for extending the
  agreement, the Companys wholly owned British Virgin Islands subsidiary,
  Irie Isle Limited, received 1,000,000 common shares in the capital stock of
  Surge Global Energy Inc. (Surge), Bibles parent company and
  the assignee of Bibles interest.  In November 2005, the Company entered
  into a letter of intent (the LOI) with Ottoman Energy Ltd. (Ottoman)
  whereby Ottoman can acquire up to a 41.24% interest in the Santa Rosa Property
  by spending US$2,297,381 on exploration and development of the Santa Rosa Property.



In
  October 2004, the Company was awarded an exploration concession known as the
  Sabodala Property in the Republic of Sénégal. The exploration concession
  granted the Company the sole right to acquire a 100% interest in the Sabodala
  Property by spending at least USD$8 million on exploration of the Sabodala Property
  by April 17, 2007.  The Sabodala Property was held by the Oromin Joint
  Venture Group (OJVG), a joint venture between the Company and Bendon
  International Ltd. (Bendon), each as to 50% with the Company and
  Bendon each holding a 6.5% interest in trust for Badr Investment & Finance
  Company (Badr), a private company based in Saudi Arabia, pending
  its execution of a tripartite joint venture agreement on the same terms as the
  current joint venture agreement between the Company and Bendon, such joint venture
  interest to be transferred to Badr on execution of such tripartite agreement.
   By an agreement dated December 18, 2006, as amended, between Oromin Joint
  Venture Group Ltd. (OJVG Ltd.), Sabodala Holding Limited (SHL)
  (a wholly-owned subsidiary of the Company), Bendon and Badr, the OJVG was converted
  into a corporate form.



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22



SHL
  and Bendon each own a 43.5% interest and Badr owns a 13% interest in OJVG Ltd.
   SHL and Bendon have agreed to each fund 50% of the costs of exploration
  and development of the Sabodala Property, with Badrs interest being fully
  carried for as long as it owns an interest in OJVG Ltd.  The exploration
  concession comprising the Sabodala Property has been assigned the OJVG Ltd.
   SHL is the operator of OJVG Ltd. To which it provides exploration and
  management services.



In
  January 2005, the Company and Lund Gold Ltd. (Lund) were granted
  an option to jointly acquire a 100% interest in the 5,000-hectare Carneirinho
  gold exploration property in north central Brazil.  The option to acquire
  the Carneirinho Property is structured as a two-stage option with Lund and the
  Company jointly acquiring a 50% interest at each stage. In order to exercise
  the first option, Lund and the Company must pay the vendor US$50,000 on or before
  April 30, 2005 (paid), US$100,000 by April 30, 2006 (paid), USD$200,000 by April
  30, 2007 (paid)  and a total of US$1,400,000 by April 30, 2009.  Following
  the exercise of the first option, in order to exercise the second option, Lund
  and the Company were required to pay the vendor an additional US$6,000,000 on
  or before April 30, 2010.



By
  an agreement dated March 12, 2007 between the Company and Lund, the Company
  sold all of its interest in the Carneirinho Property to Lund in consideration
  of the issuance to the Company of 1,197,906 common shares of Lund, this consideration
  reflecting the amount that the Company had spent on acquisition, exploration
  and development of the Carneirinho Property.



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23





C.

Organizational
  Structure



The
  following chart sets out the Companys corporate structure and the resource
  properties owned by each of the Companys subsidiaries:



[oromin20faug30002.jpg]





D.

Property,
  Plants and Equipment



The
  properties of the Company are in the exploration stage only and are without
  known reserves.  The Company has not had any revenue from any resource
  products in the last three fiscal years.



Santa
  Rosa Property, Argentina



Dr.
  Norman Haimila, Ph.D., the Companys consulting geologist, is the qualified
  person responsible for the preparation of the technical information concerning
  the Santa Rosa Property in this document.



Title



The
  Company owns, through its majority controlled Argentina subsidiary, Exploraciones
  Oromin, S.A. (Oromin), an 82.48% interest in exploration block #CC&B-9
  (the Santa Rosa Property) pursuant to Resolution No. 2 issued by
  the Secretariat of Energy and Mining on March 16, 2001 pursuant to International
  Public Bidding No. E-01/92 (Plan Argentina), Fiftieth Bid.  The
  Resolution grants Oromin an Exploration Permit to explore for hydrocarbons over
  the area covered by the exploration block for three exploration periods totalling
  six years.  The Exploration Permit will be converted to an Exploitation
  Permit if commercial quantities of hydrocarbons are found.  The Exploitation
  Permit allows for the extraction of hydrocarbons for a period of twenty-five
  (25) years with a possible ten (10) year extension.  In January 2007 jurisdiction
  over hydrocarbon resources in Argentina passed from the federal government to
  the provincial governments. Formal title to the Santa Rosa Property has not
  yet been issued by government authorities of the Province of Mendoza, whose
  review is in process.



On
  June 26, 2002, the Company, through its wholly-owned subsidiary Cynthia Holdings
  Limited (Cynthia), entered into a letter agreement (the Agreement)
  whereby it agreed to sell an effective 50% interest in its Santa Rosa Property
  for the sum of US$1,400,000 to Bible Resources Limited (Bible) a
  private Nevada corporation.



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24



The
  Agreement initially provided for the purchase price to be paid in three tranches,
  with US$400,000 due on or before July 31, 2002, a further US$400,000 on or before
  August 30, 2002 and the remaining US$600,000 to be paid by September 30, 2002.
   The Agreement has been amended a number of times and during the fiscal
  year ended February 28, 2005, Cynthia received US$600,000 in payment for 212.415
  shares of Cynthia (representing a 17.52% effective interest in its Santa Rosa
  Property) and, as consideration for extending the agreement, the Companys
  wholly owned British Virgin Islands subsidiary, Irie Isle Limited (Irie),
  received 1,000,000 common shares in the capital stock of Surge Global Energy
  Inc. (Surge), Bibles parent company and the assignee of Bibles
  interest.  Surge has elected not to acquire any further interest in the
  Santa Rosa Property.



On
  November 15, 2005, the Company entered into a letter of intent (the LOI)
  with Ottoman Energy Ltd. (Ottoman) whereby Ottoman can acquire up
  to a 41.24% interest in the Santa Rosa Property by spending US$2,297,381 on
  exploration and development of the Santa Rosa Property.  The LOI is subject
  to a number of conditions that must be fulfilled or waived by December 31, 2007,
  including completion of legal and financial due diligence to Ottomans
  satisfaction, issuance of formal title to the Santa Rosa Property and the settlement
  and execution of a joint venture agreement respecting the Santa Rosa Property.



Subject
  to the fulfilment or waiver of the conditions referred to above and subject
  to funding, Irie, Ottoman and Surge will jointly undertake the next phase of
  the exploration program, at an estimated cost of US$1,350,000, which will consist
  of interpretation of seismic data, completion of environmental studies, drilling
  three exploration wells and, contingent upon success, completing one production
  well.  All required funding for the upcoming phase of exploration and all
  future exploration and development of the Santa Rosa Property, will be borne
  proportionately by each party or they will suffer dilution.



Location,
  Access & Physiography



The
  Santa Rosa Property is comprised of exploration block #CC&B-9, covering
  7,694 square kilometres in the Cuyana basin in the Province of Mendoza in central
  Argentina.  The Santa Rosa Property is situated over the dome centred on
  33°15'S Latitude and 67°40'W Longitude.  The block extends from
  52km to 130km east of the city of Mendoza and extends north from Rio Tunuyan
  for approximately 100km.  The centre of this area is approximately 925km,
  west of Buenos Aires, the capital city of Argentina.



The
  National Highway Ruta 7 lies within and along the southern boundary of the block
  sub-parallel to Rio Tunuyan as do gas and oil pipelines.  A railroad also
  used to run along this corridor but operations on it have been suspended.  At
  present there is no plant or equipment on the Santa Rosa Property that is related
  to the Exploration Permit.



The
  Santa Rosa Property is situated on the gentle eastern slope of the Andes.  The
  western side of the block is approximately 600m above sea level.  Local
  elevations only vary about 20m over fairly large areas.  The region is
  arid with scrub brush covering low stabilised dune fields.  Irrigated farmland
  exists along the Rio Tunuyan and ranching occurs in the desert areas.



Exploration
  History



The
  Cacheuta Field, located in the northwest corner of the Cuyana Basin, was the
  oldest field in Argentina, producing oil as early as 1886.  Some of the
  larger fields in the Cuyana Basin were discovered during the 1930s and most
  have been in full production since the late 1950s and early 1960s.  The
  decline profiles for these fields, before secondary recovery projects were implemented,
  varied from 6% to 9% per year.



There
  are 1,129km of regional seismic coverage consisting of a regional grid approximately
  20km by 20km over most of the block and a more closely spaced (approximately
  3km by 5km) grid over the southwest corner of the Santa Rosa Property.  One
  well was drilled along the southern boundary of the Santa Rosa Property (Jaguel
  La Esperanza x-4) as part of a four well drill program mainly in the Nacuñan
  Block in 1963.  The Santa Rosa Este x-1001 well was drilled in 1994 and
  the Santa Rosa x-2 well was drilled in 1995.  None of these wells were
  diagnostic tests of the present prospect concept.



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25



Regional
  and Local Geology



The
  Cuyana Basin is situated in west central Argentina between 32°S and 34°30'S
  Latitude.  Related basins extend from 28°S to 36°S Latitude.
   The Cuyana Basin is part of a graben complex that includes the Los Tordillos,

Nacuñan,
  Tupungato, Cacheuta and California Subbasins and depocentres.  The main
  bounding faults are located to the southwest of the Cuyana Basin and northeast
  of the Beazley and Mascasin Subbasins.  Several crosscutting faults connect
  the two boundary fault zones.  Late Triassic alluvial and lacustrine sediments
  fill the deeper portions of the graben complex and are unconformably overlain
  by Jurassic conglomerates and by Early Cretaceous volcanics which, in turn,
  are overlain by Early Tertiary clastics and evaporites.



Erosion
  during the Jurassic, Late Cretaceous and Middle Tertiary has left the central
  portions and the margins of the graben complexes almost devoid of the originally
  deposited sediments.  Since the Late Oligocene the whole area has been
  covered by post-Andean continental clastics.  Compression, both, during
  the early erosional episodes and since the uplift of the Andes has resulted
  in longitudinal and transverse arching between the Cuyana and Beazley-Mascasin
  subbasins forming the large central regional arch and its superimposed domes.



Stratigraphy



Basement
  in the Cuyana area is composed of Precambrian granites and gneisses that are
  overlain by Paleozoic sediments and Permo-Triassic volcanics.



Sedimentation
  during the Late Triassic was initiated with fanglomerates from alluvial fans
  filling local depressions within the grabens.  These red-bed sediments,
  volcaniclastics and flows are known as the Rio Mendoza Formation and the included
  Las Cabras Formation.  The Las Cabras Formation is unconformably overlain
  by the transgressive coarse-grained sandstones of the Potrerillos Formation
  that grades upward into finer-grained sandstones and dark bituminous shales
  with interbedded tuffaceous beds.  The Potrerillos Formation that may be
  up to several hundred meters thick is gradationally overlain by the Cacheuta
  Formation composed of bituminous black shales and mudstones containing thin
  layers of tuffs.  The Cacheuta Formation may be a couple of hundred meters
  thick, thinning to zero at the margins of the basin due to depositional thinning
  and erosion.  The Cacheuta Formation is the richest source rock in the
  basin.



The
  Cacheuta Formation grades upward into the regressive Rio Blanco Formation that
  is composed of grey siltstones and shales with interbeds of fine-to-medium grained
  sandstones.  The Rio Blanco Formation may be over 800m thick in the Cuyana
  Basin, thinning to zero at the margins of the basin and around arches by depositional
  thinning and erosion.



The
  Triassic section is truncated by a regional unconformity that, locally, may
  have removed the entire sequence.  It is overlain by reddish conglomerates
  and sandstones of Jurassic to Lower Cretaceous Barrancas Formation up to 150m
  thick.  The Barrancas Formation is in turn, unconformably overlain by up
  to 180m of volcanic flows of the Punta de las Bardas Formation in the centre
  of the basin.  Also in the centre of the basin are up to 150m thick remnants
  of the Early Tertiary Papagayos and Divisadero Largo Formations.



Following
  a depositional hiatus in which the Andes Mountains began to form, the truncated
  Early Tertiary and earlier sediments were unconformably overlain by the Late
  Tertiary Mariño Formation.  The Mariño Formation begins with
  the Conglomerate Violaceo that is composed of conglomerates and sandstones at
  its base in the west and grades upward and eastward into argillaceous sandstone.
   Away from the Andean source areas the overlying Mariño Formation
  contains higher proportions of mudstones that merge upward into shaley tuffaceous
  sandstones of the Lower Grey Tuffs and then other Late Tertiary Formations.



The
  Late Tertiary sediments may be thousands of meters thick and represent the post-orogenic
  sedimentation from the Middle Tertiary Andean Orogeny.



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26





Geochemistry
  and Hydrocarbon Migration



Over
  350 exploration wells have been drilled in the Cuyana Basin of which 78 wells
  have been classified as discoveries.  Recoverable Reserves have been found
  in 26 combined oil and gas fields of which less than 19 are significant producers.
   These fields are primarily found as almost continuous oil accumulations
  along the crests of two sub-parallel, asymmetric, faulted anticlinal trends.
   The separations between fields were the result of stratigraphic variations
  cutting across the structural axis.  Five of the fields along the southwest
  side of the basin had strong stratigraphic pinch-out components but no similar
  traps have been found yet along the northeast side of this basin.



The
  organic-rich lacustrine shales of the Cacheuta Formation and shales within the
  adjacent Potrerillos and Rio Blanco Formations are the source rocks for the
  hydrocarbons generated in the basin.  The Cacheuta Formation shale in the
  middle of the Triassic section contains Total Organic Carbon of 4% of which
  70% to 100% is Type I Kerogen.  Any sealed sandstone beneath the Mariño
  Formation may constitute a reservoir rock and to a lesser degree sandstones
  within the Late Tertiary section.



Based
  on a geothermal burial history in the Beazley Basin the Cacheuta Formation should
  have been buried to depths greater than 2400 meters and preferably to depths
  greater than 2800 meters in order for it to reach maturity and to generate hydrocarbons.
   A small area of the Cacheuta Subbasin between the two productive anticlines
  and the main part of the Cuyana Basin consisting of the Tupungato and California
  Subbasins in front of the Precordillera should be the main sites of hydrocarbon
  generation in Mendoza Province.  Only small portions of the Los Tordillos,
  Nacuñan and Beazley Subbasins have been buried deeply enough to have generated
  early maturing hydrocarbons.



Because
  the great bulk of the sediments have been deposited since the Middle Tertiary
  Andean Orogeny and deep burial is required for the maturation of the Cacheuta
  and adjacent source beds, most of the hydrocarbon generation occurred between
  the Oligocene and the Present.



The
  Vizcacheras Field only had access to hydrocarbons that migrated from the Tupungato
  Subbasin and additional hydrocarbons likely migrated from this subbasin into
  existing fields along the axis of the eastern anticline.



Any
  hydrocarbons generated to the east of the axis of the depocenter in front of
  the Precordillera should have migrated out of the basin into the large regional
  arch and its superimposed domes between the Cuyana and Beazley Subbasins.



Structure



During
  the late Permian and Early Triassic, a series of en echelon grabens developed
  behind an island-arc along the western margin of South America.  The Triassic
  sediments were deposited within these grabens.  Compression across the
  graben complex after its initial development caused the fault blocks in the
  central portion of the graben to become domed.  Depositional thinning and
  subsequent erosion around the margins of basins and across the domal structures
  resulted in thin Triassic sections being preserved within the Santa Rosa CCyB-9
  Block.



Subsequent
  periods of uplift and erosion in the Cretaceous and Tertiary resulted in the
  Barrancas, Punta de las Bardas and Papagayos Formations being truncated against
  the flanks of the arches.



A
  thin section (less than 60m) of the Las Cabras Formation and an even thinner
  section of the lower Potrerillos Formations are interpreted to have been preserved
  below the Tertiary Unconformity across the Central Dome.



Great
  thicknesses of post-Andean sediments spread from the rising mountains in the
  west with over 1000m of Late Tertiary sediments remaining over Santa Rosa Prospect.
   Although the region is still tectonically active, post-Oligocene compression
  has caused only minor reactivation of faults within the Central Dome but the
  areas between the faults have continued to flex.



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27





Sediment
  Distribution



Based
  on seismic interpretations and well penetrations the Triassic sedimentary section
  preserved beneath the Late Tertiary unconformity varies from zero to 850m along
  the western boundary of the block and thins to less than 90m over the culmination
  of the dome.  The Triassic section thickens to over 175m in the graben
  in which the Santa Rosa Este x-1000 well was drilled and thickens to 608m at
  the southern boundary of the CCyB-9 Block in the Jaquel La Esperanza x-4 well.
   Where the Triassic section is in the order of 250m thick there is the
  potential for the Cacheuta Formation source beds to be preserved beneath the
  unconformity marked by the Conglomerate Violaceo.  Even in the Santa Rosa
  x-2 well where less than 150m of Triassic section lies on basement, the Triassic
  section may consist of a depositionally thinned Potrerillos sequence overlain
  by what appears to be Cacheuta Formation shales and possibly even a thin remnant
  of the Rio Blanco Formation.  The Cacheuta Formation likely subcrops in
  an irregular band along the western flank of the dome within the Santa Rosa
  CCyB-9 Block.  It is also buried deeply enough just to the west of the
  block to be capable of generating oil.



Any
  oil generated would migrate up-dip through porous and permeable Triassic sediments
  until the Middle Tertiary unconformity were reached.  The Conglomerate
  Violaceo at the Tertiary unconformity would become the conduit for migration
  into the dome where porous and permeable sediments were present.  The Conglomerate
  Violaceo varies from over 100m thick around the flanks of the dome to approximately
  8m thick near the culmination of the dome.  Locally, the Conglomerate Violaceo
  may have an argillaceous matrix and the porosity and permeability diminish to
  sub-economic levels.



Seismic
  programs have traced the seismic events that represent the Triassic-Tertiary
  unconformity from its position in the Santa Rosa Este x-1001 well, where the
  unconformity was intersected, to areas near the top of the Santa Rosa Dome Culmination.
   The character of the seismic reflections above and below the Triassic-Tertiary
  unconformity will be studied to determine approximate interval thicknesses and
  reflection amplitudes to indirectly indicate prospective zones within the Conglomerate
  Violaceo and the underlying Potrerillos and Las Cabras Formations.



Proposed
  Exploration



The
  Company intends to undertake interpretation of seismic data, completion of environmental
  studies, drilling three exploration wells and, contingent upon success, completing
  one production well.  Contingent upon success, the Company would undertake
  an additional 3-D seismic program to plan the layout of the development drilling
  program of additional wells.



Doing
  Business in Argentina



The
  following briefly summarizes the Company's understanding of the economic and
  political climate in Argentina based on research and information compiled by
  the Company from various sources which it believes to be reliable:



Political
  and Legal System



Under
  its Constitution, Argentina is organised as a federal republic on lines similar
  to those of the United States.  The country is currently divided into 23
  provinces and the federal capital, the City of Buenos Aires.



The
  federal government consists of the executive branch, which is headed by the
  President; the legislative branch (Congress), consisting of two chambers, the
  senate and the chamber of deputies; and the judicial branch.  Provincial
  governments are organised along similar lines.  The President is elected
  for a period of four years, with the possibility of immediate re-election.  The
  courts of justice, headed by the Supreme Court represent the judicial branch
  at the federal and provincial levels.  Legal concepts have their origin
  in Roman Law and the Napoleonic Code.



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28





Argentina
  benefits from rich natural resources, a highly literate population, an export-oriented
  agricultural sector, and a diversified industrial base. Although one of the
  world's wealthiest countries 100 years ago, Argentina suffered during most of
  the 20th century from recurring political and economic crises, persistent fiscal
  and current account deficits, high inflation, mounting external debt, and capital
  flight. After World War II, an era of Peronist authoritarian rule and interference
  in subsequent governments was followed by a military junta that took power in
  1976. Democracy returned in 1983, and has persisted despite numerous challenges,
  the most formidable of which was a severe economic crisis in 2001-02 that led
  to violent public protests and the resignation of several interim presidents.



Beginning
  in 1998, with external debt equivalent to more than 400% of annual exports,
  the economy slowed and ultimately fell into a full-blown depression; investors'
  fears grew in the wake of Russia's debt default, Brazil's devaluation, and the
  political discord caused by then-President Carlos Menem's unpopular efforts
  to run for a constitutionally prohibited third term. The government of Fernando
  de la Rua, elected President in late 1999, tried several measures to cut the
  fiscal deficit and instill confidence and received large IMF credit facilities,
  but nothing worked to revive the economy. Depositors began withdrawing money
  from the banks in late 2001, and the government responded with strict limits
  on withdrawals. When street protests turned violent, de la Rua was forced to
  resign in December 2001. Interim President Adolfo Rodriguez Saa declared a default
  - the largest in history - on Argentina's foreign debt, but he stepped down
  only a few days later when he failed to garner political support from the country's
  governors. Eduardo Duhalde became President in January 2002 and announced an
  end to the peso's decade-long 1-to-1 peg to the US dollar. When the peso depreciated
  and inflation rose, Duhalde's government froze utility tariffs, curtailed creditors'
  rights, and imposed high taxes on exports. The economy rebounded strongly from
  the crisis, inflation started falling, and Duhalde called for special elections.
  Nestor Kirchner was elected President, taking office in May 2003, and continued
  the restrictions imposed by his predecessor. With the re-emergence of double-digit
  inflation in 2005, the Kirchner administration pressured businesses into a series
  of agreements to hold down prices. The government also restructured its debt
  in 2005 and paid off its IMF obligations in early 2006, reducing Argentina's
  external debt burden. Real GDP growth averaged 9% during the period 2003-06,
  bolstering government revenues and keeping the budget in surplus. The economy
  has recovered strongly since bottoming out in 2002.





The
  Oil and Gas Industry in Argentina



The
  Hydrocarbons Act of June 1967 (Law # 17,319) established the basic legal framework
  for oil and gas exploration and exploitation in Argentina.  It empowers
  the executive branch to implement a national policy for the development of Argentine
  hydrocarbon reserves.  Basically, prior to 1990 virtually all oil and gas
  exploratory activities were performed by Yacimientos Petroliferos Fiscales Sociedad
  del Estado (YPF) or on its behalf.  YPF used to assign to third parties
  certain areas in which the state owned company was not interested.



Under
  its framework, exploration permits and exploitation concessions must be awarded
  on the basis of competitive bids, which may be filed by any physical or artificial
  person who has established domicile in the Republic of Argentina and is financially
  sound and technically qualified to develop the tasks that relate to the right
  so claimed (Sections 5 and 35, Law #17,319).



On
  the basis of the state reform legislation that was approved in August 1989,
  the executive branch issued a series of orders to demonopolize and deregulate
  the oil and gas industry in Argentina.



Argentinas
  energy industry was revitalised in the 1990s as a result of drastic restructuring,
  the privatisation of the state oil company YPF, and increased private and foreign
  investment, the latter a result of favourable investment and tax laws.  Many
  foreign firms have entered the Argentine oil market, attracted by prospects
  of regional energy integration occurring in South America.



International
  Call for Bids #E-01/92 (Plan Argentina) was issued in order to select
  the companies that may be awarded exclusive rights for the exploration and possible
  exploitation and development of Hydrocarbons within the perimeter of each area
  included in Plan Argentina, in accordance with Law # 17,319; National Executive
  Power Decrees # 1055; # 1212 and # 1589, among others.



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29



In
  this regard, once the Enforcement Authority (Secretariat of Energy)
  reaches a decision and proceeds to award the call for bids to the bidder whose
  bid meets the conditions of the call, the awarding of the Area shall be approved
  by the National Executive Branch by issuing an Administrative Decision that
  grants the exploration permit, under the provisions of article 16 and associated
  articles of Law # 17,319.



The
  bid of the Companys Argentine subsidiary, Exploraciones Oromin S.A. (EOSA),
  for the Santa Rosa Property under Plan Argentina, Fiftieth Bid, met the conditions
  of the call for bids and its offer has been approved.  From a legal standpoint,
  Exploraciones Oromin S.A. will be allowed to enter the areas as from the effective
  date of the permit (Administrative Decision) by complying with all of the rights
  and obligations resulting from the bidding conditions.  On May 11, 2001
  the Secretariat of Energy authorized Exploraciones Oromin S.A. the early entry
  to the area in order to commence with exploration works.



During
  the years 2002 to 2004 the economic disruptions occurring in Argentina militated
  against further activity by EOSA and numerous other hydrocarbon concession holders
  until greater stability was restored.



During
  2005 and 2006 the federal government of Argentina worked with the provincial
  governments with the objective of conveying jurisdiction over hydrocarbon resources
  to the provinces. This initiative reached fruition in January 2007 and jurisdiction
  was passed to the various provincial governments. Accordingly, the administration
  of the exploration bid held by EOSA passed to the government of the Province
  of Mendoza. During calendar 2007, authorities of the Province of Mendoza with
  administrative responsibility over hydrocarbon resources have been defining
  a legal and administrative regime and working with concession holders and other
  stakeholders to establish an exploitation system under provincial auspices.
  This work is detailed and complex; the objective of all parties is that development
  of hydrocarbon concessions granted under Plan Argentina will have a defined
  provincial regime towards the end of calendar 2007 or early in 2008.



The
  protection of the environment and the conservation of the natural resources
  within the sphere of the oil and gas activities is the purpose of Article 69
  of Law # 17,319.  Secretariat of Energy Resolutions #105 and #236 among
  others, protect the environment and the conservation of the natural resources
  during the exploration and exploitation of the hydrocarbons stages.  This
  set of rules apply to corporations or group of corporations, concessionaires,
  permissionaires and operators whose activities fall under the scope of National
  jurisdiction and have authorisation to explore or exploit hydrocarbons in an
  area.



By
  means of the National Constitution and the federal organization of the Argentine
  territory, environmental powers have been vested in the Provinces.  On
  a Provincial level, the Province of Mendoza has passed certain laws and decrees
  with the aim of protecting the environment and conserving the natural resources
  of said Province.  Provincial Law # 5,961 protects the environment, the
  ecological equilibrium and steady development of natural resources in all the
  territory of the Province of Mendoza.  Decree # 2109, regulatory of Law
  # 5,961, states that an environmental impact declaration or an exemption to
  it should be filed with the Ministry of Environment and Natural Resources of
  the Province of Mendoza and describes the whole procedure that should be followed
  in order to obtain either one of them.



By
  virtue of the early entry to the area granted in 2001 by the federal Secretariat
  of Energy, EOSA is able to carry out exploration activities on the Santa Rosa
  Property, subject to the completion of the establishment of an administrative
  regime by the Province of Mendoza.



Sabodala
  Property, Sénégal



Gerald
  F. McArthur, FGAC, P.Geo., the Companys consulting geologist, is the qualified
  person responsible for the preparation of the technical information concerning
  the Sabodala Property in this document.



Title



The
  Company has the right to acquire a 100% interest in an exploration concession
  (the Sabodala Property) governed by a Mining Convention signed February
  17, 2005 with the Government of Sénégal.



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30



The
  Direction de Mines of Sénégal awarded the exploration concession to
  the Company on behalf of the Oromin Joint Venture Group through an international
  selection process concluded in October 2004.  The Oromin Joint Venture
  Group (OJVG) was a joint venture between the Company and Bendon
  International Ltd. (Bendon), each as to 50% with the Company and
  Bendon each holding a 6.5% interest in trust for Badr Investment & Finance
  Company (Badr), a private company based in Saudi Arabia, pending
  its execution of a tripartite joint venture agreement on the same terms as the
  current joint venture agreement between the Company and Bendon, such joint venture
  interest to be transferred to Badr on execution of such tripartite agreement.
   In order to acquire its interest in the Sabodala Property, the OJVG was
  required to spend at least USD$8 million on exploration of the Sabodala Property
  by April 17, 2007 which it has done.



By
  an agreement dated December 18, 2006, as amended, between Oromin Joint Venture
  Group Ltd. (OJVG Ltd.), Sabodala Holding Limited (SHL)
  (a wholly-owned subsidiary of the Company), Bendon and Badr, the OJVG was converted
  into a corporate form.  SHL and Bendon each own a 43.5% interest and Badr
  owns a 13% interest in OJVG Ltd.  SHL and Bendon have agreed to each fund
  50% of the costs of exploration and development of the Sabodala Property, with
  Badrs interest being fully carried for as long as it owns an interest
  in OJVG Ltd.  The exploration concession comprising the Sabodala Property
  has been assigned the OJVG Ltd.  SHL is the operator of OJVG Ltd. to which
  it provides exploration and management services.



In
  March 2007, Government of Sénégal a  twenty month extension (to
  December 22, 2008) to the current Mining Convention by spending an additional
  USD$12 million during the extension period.   Thereafter, OJVG Ltd.
  has ten months (to October 22, 2009) to complete a preliminary feasibility study
  on the project, at which point the concession can be converted to an exploitation
  concession.  Upon conversion of the concession from an exploration to an
  exploitation concession, OVJG Ltd. must establish an operating company to further
  develop the Sabodala Property and must offer to Sénégalese nationals
  the right to purchase 25% of such operating company at a price determined by
  an independent valuator.  The Government of Sénégal will receive
  a 10% interest in the operating company at no cost and a royalty of $US 6.50
  per ounce of gold produced.



Location,
  Access & Physiography



The
  Sabodala Property is located approximately 580 kilometres ESE of Sénégals
  capital city of Dakar (Figure 1).  The property is centered at 13o
  09 North Latitude and 12o 06 West Longitude.  It is a
  229.7 km2 trapezoidal concession that completely surrounds, but does
  not include, the 20.3 km2 rectangular Sabodala exploitation concession
  which hosts the Sabodala gold deposit itself.



The
  Sabodala Property is reached by unpaved all-weather roads from the towns of
  either Kédougou (2-3 hours) or Tambacounda (5-6 hours) or the city of Dakar
  (10-12 hours), each of which supplies all basic services, and is criss-crossed
  by a network of roads and trails.   The concession can also be reached
  by privately chartered aircraft from Dakar to a 1200-metre paved airstrip in
  good condition located on the laterite plateau north of Falombo, near the boundary
  between the Sabodala exploration and exploitation concessions

Just
  beyond the eastern boundary of the concession is the village of Khossanto, a
  regional centre, which includes telephone, government office and a medical centre.
  There are seven small indigenous villages, each of which houses 100-300 people
  within the boundaries of the concession.



Topography
  on the property is gentle to hilly.  Approximately 60% of the property
  is covered by flat-lying lateritic plateaus.  Outcrops cover less than
  1% of the property, generally limited to roadcuts, ridges and creeks.  Elevations
  range between approximately 150 and 420 metres, with broad, poorly incised drainages.
   The climate is characterized by dry (September to May) and rainy (June
  to August) seasons in a subtropical regime.  Vegetation is of a tall-grass
  savannah type with common thickets of bamboo and a scattering of trees, some
  up to a diameter of 10 metres. Fauna includes various species of monkeys and
  birds, warthogs, and herds of domesticated goats, sheep and cattle.



Sabodala Property
  Location Map



[oromin20faug30003.jpg]



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31



Plant and Equipment



At
  present, there is no underground or surface plant or equipment on the Sabodala
  Property.



Regional
  and Local Geology



The
  Sabodala Property lies within the Kédougou-Kéniéba
  Inlier of the West African Craton, which comprises Archean and Lower Proterozoic
  terranes.  The West African Craton underlies much of Ghana, Burkina Faso,
  Ivory Coast, Liberia, Sierra Leone and parts of Guinea, Mali and Sénégal.
   These terranes are partially covered by undeformed, Upper Proterozoic
  to recent formations.



Three
  Lower Proterozoic (Birimian) volcano-sedimentary sequences have been identified
  within the Kédougou-Kéniéba Inlier.  From west to east,
  these are the Mako, Dialé and Daléma Supergroups.  The Mako Supergroup,
  which entirely underlies the Sabodala Property, consists largely of mafic to
  intermediate flows and volcaniclastics, with a regional trend of 020o-040o.
   A mafic to ultramafic igneous unit forms discontinuous thick intercalations
  within the volcanic sequences.  The Dialé Supergroup consists of thick
  successions of metasedimentary and metavolcanic rocks with a sub-horizontal
  to moderately inclined dip.  Greywacke is dominant, locally with elongated
  lenses of polymictic conglomerate.  Mafic to intermediate flows, breccias
  and tuffs form extensive but discontinuous intercalations.  The Daléma
  Supergroup is comprised of sandstones and shales which form thick successions
  with subvertical foliation striking NNW to NNE (Titaro and Laroux, 2001; Melisi,
  1987).



Several
  intrusive types have been recognized within the Kédougou-Kéniéba
  Inlier:  (i) large, elongated felsic to intermediate plutons, often with
  oriented fabric, such as the Saraya and Badon-Kakadian Batholiths; (ii) smaller
  equant intrusions of granitic to granodioritic composition; and (iii) mafic
  to felsic dykes.



Two
  major systems of shear zones have been recognized in the Kédougou-Kéniéba
  Inlier, both mapped over several tens of kilometres.  The Sénégal-Malian
  Shear Zone, which trends approximately 350o, forms the tectonic contact
  between the Daléma Supergroup to the east and the Mako and Dialé Supergroups
  to the west.  The Kakadian-Kérékoto Shear Zone trends northeasterly
  to northerly, separating the Mako Supergroup to the west from the Dialé
  Supergroup to the east.  Shear Zone splays pass through the Sabodala exploration
  concession and host the Sabodala deposit as well as all other orogenic gold
  occurrences found in the area.



A
  number of orogenic gold deposits have been discovered in the past twenty years,
  associated with the systems of shear zones in the Kédougou-Kéniéba
  Inlier.  The Sabodala deposit, which is located on a separate exploitation
  concession surrounded by the Sabodala Property, is associated with a Shear Zone.
   Approximately 75-80% of the gold at the Sabodala deposit is hosted within
  a 50-metre wide pyritic stockwork within silica-carbonate-sericite altered mafic
  to intermediate flows and tuffs and a subvolcanic quartz diorite porphyry.  This
  stockwork plunges ~20o towards the NNW and has been traced in drilling
  for 200-300 metres in an east-west direction and 400-500 metres north south.
   Grade within the stockwork increases with increasing fracture density
  and alteration.  The remainder of the gold at the Sabodala deposit is hosted
  by siliceous breccias and quartz veins associated with moderately east-dipping
  shear zones (BRGM, 1983).In 1994 Paget estimated
  measured and indicated reserves of 2.97 million tonnes @ 4.92 g/tonne
  Au (470,000 contained ounces Au) for the Sabodala deposit (Geostec, 2004).  This
  is an unsubstantiated historical estimate of unknown reliability and unclear
  terminology which does not conform to NI 43-101 standards, but could be considered
  relevant as background information on an adjacent property.  In 2007, Mineral
  Deposits Limited (MDL), the owner of the Sabodala exploitation concession,
  announced a 1.9 million ounce gold JORC-compliant resource for the Sabodala
  deposit and a 300,000 ounce gold resource for its Niakafiri deposit.  The
  Sabodala deposit is presently the subject of a bankable feasibility study and
  preliminary mine design with production expected in 2007.



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32





Property Geology



The
  only property-wide mapping of the Sabodala Property was carried out by BRGM
  in the early 1960s as part of a nation-wide 1:200,000 mapping program
  (BRGM, 1963a, b).  They defined an area of intrusive rocks in the west
  as part of the Kakadian Batholith, the central volcanic rocks as part of the
  Mako Supergroup and the sedimentary/volcanic sequence to the east as part of
  the Dialé Supergroup.



The
  central part of the Sabodala Property was later mapped by Husson et al (1987)
  who recognised three main lithological units trending north-northeasterly.  Three
  units were recognized, all possibly parts of the Mako Supergroup.  The
  bulk of the area is underlain by recessive, light-green, carbonate-altered andesitic
  volcanics which are locally brecciated or pillowed.  The andesites are
  flanked to both the east and west by narrow, sheared, jasper-bearing, intermediate
  to felsic, tuffaceous units (including fine-grained siliceous tuffs and chlorite-sericite
  crystal tuffs).  A metasedimentary unit occurs to the east of the tuffaceous
  sequence and has narrow, discontinuous interbeds of mafic volcanics and coarse
  conglomerate.  The distribution of intrusive rocks was not mapped, however,
  syntectonic, late-tectonic and post-tectonic granitoids have been reported by
  BRGM. Four northeast- to north-northeast trending shear zones were mapped, two
  of which follow the andesite tuff contacts and two of which lie within the andesite
  unit.  Many of the gold occurrences are associated with these shear zones.



The
  general lack of outcrop on the concession makes surface mapping difficult. In
  early 2005, therefore, Encom was contracted to produce a geological and structural
  interpretation of the Fugro airborne magnetic survey.  They identified
  a number of magnetically distinct areas.  The area west of Kobokoto has
  a unique high-amplitude response which corresponds to the granitoids of the
  Kakadian Batholith.  To the east, within the Mako volcanic belt, is a northeast-southwest
  oriented zone characterized by high-amplitude, short wavelength response in
  the magnetics.  This zone corresponds to a more massive, weakly deformed,
  mafic volcanic/intrusive portion of the belt.  In the northeastern part
  of the concession, a number of discrete intrusives are interpreted, the largest
  located near Mama Kono.



Encom
  interpreted a number of major structural shear zones which control the gross
  geologic pattern within the concession and are generally sub-parallel to the
  north-northeast trend of the Mako volcanic belt.  These structures are
  interpreted to be old thrusts along which terrain accretion has occurred.  The
  thrusts are interpreted to separate various portions of the stratigraphy with
  deep-seated intrusive rocks exposed in the west and successively younger thrust
  panels of the Mako volcanic belt found in the central and eastern parts of the
  concession.  In the east are found strongly deformed turbiditic sediments
  with lesser, discontinuous lenses of mafic volcanics.  These rocks may
  be part of the adjacent Dialé Supergroup sediments or a dominantly sedimentary
  component of the Mako Supergroup.



Gold
  mineralization is closely related to a weaker set of belt-discordant structures
  trending 040o to 090o and 270o to 330o and a steeper northwest-trending
  set at greater than 330o. The structural intersection between the belt
  parallel thrusts and the later cross-cutting structural trends are sites favourable
  for gold mineralization.



Exploration
  Model



The
  Sabodala Property is prospective for hosting an orogenic gold deposit.  This
  relatively new classification (Groves et al, 1998) combines several earlier
  deposit groups (e.g. lode-gold, mesothermal gold, greenstone gold, Archean gold,
  iron formation-hosted gold) and reflects a recognition that all these deposits
  have similar temporal and spatial associations with orogenesis.  This very
  important category includes some of the largest gold deposits and districts
  in the world (e.g. Kalgoorlie in Australia, Timmins in Ontario and Ashanti in
  Ghana).  This type of deposit is typically hosted by granite-greenstone
  terranes which comprise large parts of Archean and Early Proterozoic cratons,
  including the West African Craton which underlies the Sabodala exploration concession.





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33



These
  deposits are characterized by structurally controlled quartz-carbonate vein
  systems hosted by deformed, regionally metamorphosed terranes.  These systems
  are typically associated with crustal-scale fault structures, although lower-order
  shear zone splays host the most abundant gold mineralization.  Deposition
  of gold is generally synkinematic, syn- to post-peak metamorphism and is largely
  restricted to the brittle-ductile transition zone.



Alteration
  mineral assemblages are dominated by quartz, carbonate, mica, albite, chlorite,
  pyrite, scheelite, tourmaline, siderite, grunerite, garnet, hornblende and hedenbergite,
  although there is much inter-deposit variation.  The absolute timing of
  mineralization has revealed that gold was deposited over large areas during
  short time periods.  Among Archean and Early Proterozoic orogenic gold
  deposits, much variability exists in characteristics such as host rock and structural
  style, but other characteristics, such as the structurally late timing of gold
  deposition and fluid properties are remarkably consistent.



The
  West African craton hosts a number of multi-million ounce orogenic gold deposits
  (Milesi et al, 1989).  The majority of the gold is hosted within Early
  Proterozoic Birimian volcano-sedimentary belts, similar to those of the Kédougou-Kéniéba
  Inlier, where the Sabodala exploration concession is located.



Mineralization



The
  230 square-kilometre Sabodala Property surrounds the 20 square kilometre Sabodala
  exploitation concession of MDL.  To the west and north it is bound by two
  Axmin concessions and the Eeximcor Niamia concession. The three Randgold concessions,
  Kounemba, Kanoumering and Tomborokoto, border the concession to the east.  A
  number of orogenic gold prospects have been discovered in the area covered by
  these exploration and exploitation concessions. All are associated with NNE
  to NE trending shear zones.Several areas of previously discovered
  gold mineralization on the Sabodala Property are the focus of the Companys
  present exploration program.



Niakafiri/Sabodala
  South, Maki Medina and Kobakoto



One
  of the primary exploration targets on the Sabodala Property, Niakafiri/Sabodala
  South, is the southern extension of MDLs gold deposits. Regional
  prospecting and soil sampling conducted in the 1980s by BRGM defined three
  northeast trending structural zones extending from the Sabodala and Niakafiri
  deposits southward on to the Sabodala Property.  This is an area of extensive
  laterite cover and outcrop is scarce.  Along trend, 2.7 kilometres to the
  south, is the Maki Medina showing, a single area of silicified, sheared, mafic
  volcanics which returned values as high as 67 g/t Au. Further south and west
  is the Kobakoto target.  BRGM surface-sampled and trenched a one to two
  metre wide quartz vein system along a 149 metre length.  Sample results
  were highly variable, ranging from 1.5 g/t Au to 63.5 g/t Au.  Trench results
  include 3m@3.5 g/t and 3 m@4.5g/t Au.



Golouma-Kerekounda



A
  large (1 km x 2.4 km) gold-in-soil geochemical anomaly was identified by the
  Soviets during the 1970s and later expanded by BRGM in the 1980s.
   An area of at least 350 metres by 100 metres at Golouma West was identified
  by soil sampling and trenching by BRGM. Six hand trenches in the Golouma West
  area yielded gold values ranging from 3.5m@0.5 g/t to 6.5m@11.4 g/t.  Gold
  mineralization is associated with strongly-sheared and quartz-albite-sericite-ferrocarbonate-tourmaline-pyrite
  altered brecciated and stockwork-veined mafic volcanics.



At
  Kerekounda, located in the northern part of the geochemical anomaly, BRGM drilled
  and trenched two quartz veins and reportedly defined an unsubstantiated resource
  grading 31.5 g/t Au.  Limited mining in the 1990s by a local Sénégalese
  company (Eeximcor) depleted most of the resource.



The
  large Golouma geochemical anomaly is as yet relatively poorly explored and remains
  a high priority target for further exploration.





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34



Masato



The
  Masato area, located 1.4 kilometres west of the Sabodala gold deposit near the
  concession boundary, was discovered by BRGM in 1987 using soil geochemistry.
   Subsequent exploration by BRGM along the 1500 metre length of the anomaly
  included surface trenching and drilling of eleven holes along a 700 metre north-south
  strike length.



Gold
  mineralization was discovered in structurally modified, sheared, quartz-albite-sericite-fuchsite-ferrocarbonate-pyrite
  altered, brecciated and stockwork-veined mafic volcanics which are cross-cut
  by numerous narrow, felsic dykes.



Exploration
  Program 2005



The
  2005 exploration program comprised two phases. The first phase, undertaken from
  April to June, was an initial evaluation of the areas at Golouma and Niakafiri-Sabodala
  South. Initially, a topographic base of the concession was completed using ground-based
  GPS in conjunction with Quick-bird high resolution satellite imagery. In early
  May, 6242 line kilometres of ultra-high resolution MidasTM II helicopter-borne
  magnetic and radiometric survey were completed. Encom Technology (Pty) Ltd.
  of Sydney, Australia produced a geological and structural interpretation of
  the Fugro airborne magnetic data.  Fieldwork included:



·

200
  kilometres of GPS-controlled picket/flag grid location

·

collection
  of 3,895 soil samples

·

66
  kilometres of ground magnetics

·

119
  kilometres of IP

·

31
  hand trenches totalling 706.7 metres

·

32
  mechanical excavation trenches totalling 2956 metres.



Initial
  positive results confirmed previous work by BRGM, outlining 17 new IP and geochemical
  anomalies as well as positive results from excavator trenching at Golouma.



Exploration
  Program 2006



The
  2006 exploration program, a continuation of work from the previous year, was
  conducted from the newly constructed camp near Maki-Medina village on the exploration
  concession. Property-wide reconnaissance exploration continued with grid-based
  soil sampling and IP geophysics. Simultaneously, follow-up soil sampling, IP,
  and hand and excavator trenching was completed at Golouma, Masato and Niakafiri-Sabodala
  South prior to the commencement of diamond drill evaluation in late January.
   The program comprised:



·

800
  kilometres of GPS-controlled picket and flag grid location

·

800
  kilometres of soil sampling yielding 22,696 samples for analysis

·

116.5
  kilometres of deep-penetrating IP by contractor, Sigma Geophysics

·

675
  metres of hand trenching in 30 trenches (TRH 31 - 61)

·

14.9
  kilometres of excavator trenching in 119 trenches (TRX 33-152)

·

11,670
  metres of diamond drilling in 70 holes (SAB DDH 1-70)

·

1,143
  metres of reverse circulation drilling in 10 holes (SAB RC 1-10)



The
  2006 exploration program identified 13 new gold-in-soil geochemical and IP geophysical
  targets.  Very positive results obtained from trench and drill evaluation
  of Golouma West, Golouma South, Niakafiri and Masato have confirmed, expanded
  and defined these mineralized zones.





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35



By
  December 30, 2006, a total of approximately USD$11 million had been expended
  by the OJVG on the Sabodala Property, thus meeting, and exceeding, the Mining
  Convention requirements of a USD$8 million expenditure before April 17, 2007.



Exploration
  Program 2007



The
  2007 exploration program saw the initiation of detailed 40-metre spaced reverse
  circulation drilling designed to evaluate mineralized zones of interest, beginning
  with Golouma South and Golouma West, to provide data for a preliminary resource
  calculation.  In addition the Company continued a property-wide evaluation
  using geochemistry, geophysics and trenching.

The
  program comprised:



·

150
  kilometres of GPS-controlled picket and flag grid location

·

150
  kilometres of soil sampling yielding 6,711 samples for analysis

·

7.4
  kilometres of excavator trenching in 36 trenches (TRX 153-189)

·

8,779
  metres of diamond drilling in 46 holes (SAD DDH 71-117)

·

16,849
  metres of reverse circulation drilling in 97 holes (SAB RC 11-107)



The
  initial 1.5 by 3 kilometre gold-in-soil geochemical anomaly identified the Golouma
  area as highly prospective.  Further exploration by detailed follow-up
  geochemistry, IP geophysics, excavator trenching and drilling have defined to
  date a number of discrete targets within the greater Golouma area.  These
  include: Golouma West, Golouma South, Golouma East, Golouma Northeast and Golouma
  Northwest.



Results
  from 17 trenches and 52 RC and core drill holes have traced mineralization at
  Golouma West 850 metres along strike and to depths of 200-300 metres.  This
  area is presently undergoing 40-metre spaced drill evaluation.



At
  Golouma South, eight trenches and thirty-seven RC and core drill holes have
  traced mineralization 400 metres along strike and to depths of 200 metres.



The
  newly discovered Golouma Northeast zone, located approximately 500 metres northeast
  of Golouma South, has been identified by six drill holes along 100 metres strike
  length to depths of 150 metres.



Located
  350 metres northwest of Golouma West, the newly discovered Golouma Northwest
  zone, has been defined by three drill holes and trenching for a minimum of 250
  metres along strike.



The
  Masato mineralized area is the second most important exploration target on the
  property.  Mineralization is associated with a gold-in-soil anomaly 1.8
  kilometres and 1.2 kilometres in extent.  This large geochemical anomaly
  is coincident with three large IP chargeability anomalies.  Eight core
  holes drilled by the Company and seven historic holes drilled by BRGM have traced
  the mineralization to depths of 150 metres over at least 700 metres.  Initial
  drilling and trenching have identified the new Masato North extension which
  is presently defined by an 800 metre long gold-in-soil geochemical anomaly,
  connected disjointedly with the Masato anomaly.  Four recent drill holes
  returned positive results from this area.



The
  Niakafiri South / Maki Medina zone is the area of third highest priority.  This
  zone comprises several discrete gold-in-soil geochemical anomalies extending
  southward from MDLs Niakafiri deposit.  Preliminary trenching and
  drilling have produced positive results from several of the anomalous areas
  and further evaluation of this highly prospective trend is planned.



Additionally,
  the Company continues to evaluate a number of other targets of interest through
  trenching to bring them to drill readiness.  Ongoing regional evaluation
  is defining further joint geochemical and geophysical anomalies which delineate
  targets for future trenching and potential drilling.



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36



Proposed
  Exploration



Based
  on favourable exploration results to date, the Company intends to continue its
  two-phase exploration program as recommended by McArthur (2006).  Phase
  I consists of property-wide exploration of the concession using soil geochemistry
  and IP geophysics, proven to be very successful tools.  Targets thusly
  identified will be further tested by trenching and, potentially, drilling.  Phase
  II consists of accelerated evaluation and definition of known exploration targets
  by core and reverse circulation definition drilling on known mineralized zones
  in preparation for preliminary resource estimates.  Metallurgical, environmental
  and engineering studies are also recommended.



This
  ongoing exploration program for 2007 will include a minimum of 75,000 metres
  of core and reverse circulation drilling in approximately 450 holes as well
  as 20,000 metres of excavator trenching.  The budget for this program is
  expected to exceed the USD$12 million required to be expended by the Mining
  Convention before December 22, 2008.





Doing
  Business in Sénégal



The
  République du Sénégal gained independence from France in 1960
  and has maintained a democratic political system.  It is a secular republic
  with a strong presidency, weak legislature, reasonably independent judiciary,
  and multiple political parties and is notable as one of the few African states
  that has never experienced a coup detat.  In 2000, power was transferred
  peacefully in fully democratic elections, from former President Abdou Diouf
  to current President Abdoulaye Wade.



The
  president is elected by universal adult suffrage to a 5-year term.  The
  unicameral National Assembly has 120 members, who are elected separately from
  the president.  The Socialist Party dominated the National Assembly until
  April 2001, when in free and fair legislative elections, President Wades
  coalition won a majority (89 of 120 seats).  The Cour de Cassation (the
  countrys highest appeals court) and the Constitutional Council, the justices
  of which are named by the president, are the nation's highest tribunals.  Sénégal
  is divided into 11 administrative regions, each headed by a governor appointed
  by and responsible to the president. The law on decentralisation, which came
  into effect in January 1997, distributed significant central government authority
  to regional assemblies.



Sénégals
  principal political party was for 40 years the Socialist Party.  Its domination
  of political life came to an end in March 2000, when Abdoulaye Wade, the leader
  of the Sénégalese Democratic Party (PDS) and leader of the opposition
  for more than 25 years, won the presidency.  Under the terms of the 2001
  constitution, future presidents will serve for 5 years and be limited to two
  terms.  Wade was the last President to be elected to a 7-year term and
  was re-elected in March 2007 to a second term expiring in 2012.



President
  Wade has advanced a liberal agenda for Sénégal, including privatisations
  and other market-opening measures. He has a strong interest in raising Sénégals
  regional and international profile.  The country, nevertheless, has limited
  means with which to implement ambitious ideas. The liberalisation of the economy
  is proceeding, but at a slow pace. Senegal continues to play a significant role
  in regional and international organisations. President Wade has made excellent
  relations with western democracies a high priority.



There
  are presently some 65 political parties, most of which are marginal and little
  more than platforms for their leaders. The principal political parties, however,
  constitute a true multiparty, democratic political culture, and they have contributed
  to one of the most successful democratic transitions in Africa, even among all
  developing countries. A flourishing independent media, largely free from official
  or informal control, also contributes to the democratic politics of Sénégal.
  The countrys generally tolerant culture, largely free from ethnic or religious
  tensions, has provided a resilient base for democratic politics.



The
  former capital of French West Africa, Sénégal is a semi-arid country
  located on the westernmost point of Africa. Predominantly rural and with limited
  natural resources, the country earns foreign exchange from fish, phosphates,
  peanuts, tourism, and services. Its economy is highly vulnerable to variations
  in rainfall and changes in world commodity prices.



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37



Sénégal
  depends heavily on foreign assistance, which in 2000 represented about 32% of
  overall government spending--including both current expenditures and capital
  investments--or African Financial Community (CFA) 270.8 billion (USD$361 million).



Since
  the January 1994 CFA franc devaluation, the International Monetary Fund (IMF),
  the World Bank, and other multilateral and bilateral creditors have been supporting
  the Government of Sénégals structural and sectoral adjustment
  programs. The broad objectives of the program have been to facilitate growth
  and development by reducing the role of government in the economy, improving
  public sector management, enhancing incentives for the private sector, and reducing
  poverty.



With
  an external debt of USD$3.9 billion, and with its economic reform program on
  track, Sénégal reached its Heavily Indebted Poor Countries (HIPC)
  debt relief completion point in April 2004.  Sénégal will apply
  for cancellation of approximately $850 million in debt from Paris Club and other
  donors. Progress on structural reforms is on track, but the pace of reform remains
  slow, as delays occur in implementing a number of measures on the privatisation
  program, good governance issues, and the promotion of private sector activity.
   Sénégal continues to lead the West African Economic and Monetary
  Union (WAEMU) countries in macroeconomic performance. For 2003,
  inflation was at -0.5%, and in most indicators, Senegal surpassed the WAEMU
  monetary convergence criteria with a tax revenue to gross domestic product ratio
  of 18.3%, public investment to tax revenue ratio of 24.4%, and a current account
  deficit at 4.3%.



Sénégals
  new Agency for the Promotion of Investment plays a pivotal role in the governments
  foreign investment program. Its objective is to increase the investment rate
  from its current level of 20.6% to 30%. Currently, there are no restrictions
  on the transfer or repatriation of capital and income earned, or investment
  financed with convertible foreign exchange.  Economic assistance, about
  $350 million a year, comes largely from France, the IMF, the World Bank, and
  the United States. Canada, Italy, Japan, and Germany also provide assistance.



Sénégal
  has well-developed though costly port facilities, an international airport serving
  28 international airlines that serves as a regional hub, and advanced telecommunications
  infrastructure, including a fibre optics backbone and cellular phone penetration
  approaching 10% of the population.



Sénégals
  mining code is based on French civil law.  The state owns all mineral rights,
  with the terms of exploration and mining established by contract between the
  concession holder and the state.  Exploration concessions are generally
  granted for four years with rights of renewal.  In the case of the Sabodala
  exploration concession, a term of 22 months was granted to the Company with
  the right to convert the exploration concession at the end of the 22 month period
  to an exploitation concession with a term of five years with rights of renewal
  for up to a further 20 years.  Holders of concessions are also eligible
  for a special tax regime and various import duty and tax exonerations aimed
  at promoting the development of the mining sector.



Carneirinho
  Property, Brazil



The
  Company and Lund Gold Ltd. (Lund) formerly held an option to jointly
  acquire a 100% interest in the 5,000-hectare Carneirinho gold exploration property
  in north central Brazil.  The option to acquire the Carneirinho Property
  was structured as a two-stage option with Lund and the Company jointly acquiring
  a 50% interest at each stage. In order to exercise the first option, Lund and
  the Company must pay the vendor USD$50,000 on or before April 30, 2005 (paid),
  USD$100,000 by April 30, 2006 (paid), USD$200,000 by April 30, 2007 (paid) and
  a total of US$1,400,000 by April 30, 2009.  Following the exercise of the
  first option, in order to exercise the second option, Lund and the Company were
  required to pay the vendor an additional US$6,000,000 on or before April 30,
  2010.



By
  an agreement dated March 12, 2007 between the Company and Lund, the Company
  sold all of its interest in the Carneirinho Property to Lund in consideration
  of the issuance to the Company of 1,197,906 common shares of Lund, consideration
  reflecting the amount that the Company had spent on acquisition, exploration
  and development of the Carneirinho Property.



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38



ITEM
  4A.

UNRESOLVED
  STAFF COMMENTS



This
  item is not applicable as the Company is neither an accelerated filer, a large
  accelerated filer, nor a well-known seasoned issuer and has no pending comments
  from the staff of the Commission.



ITEM
  5.

OPERATING
  AND FINANCIAL REVIEW AND PROSPECTS



A.

Operating
  Results



The
  Company is in the business of exploring its resource properties, with the primary
  aim of developing them to a stage where they can be exploited at a profit.  The
  Company does not currently have any producing properties and its current operations
  are exploratory searches for minerals or hydrocarbons .



During
  the fiscal year ended February 28, 2007, the Company was primarily engaged in
  the exploration of its Sabodala mineral property in Sénégal while
  awaiting exploration permitting from governmental authorities for its Santa
  Rosa oil and gas property in Argentina.  The Company's future activities
  are likely to be affected in varying degrees by political stability and government
  regulation in Sénégal and Argentina, all of which are beyond the control
  of the Company.  See Item 3 -  Key Information - D.
  Risk Factors.



During
  the fiscal year ended February 28, 2006, the Company was similarly primarily
  engaged in the exploration of its Sabodala mineral property in Sénégal
  while awaiting exploration permitting from governmental authorities for its
  Santa Rosa oil and gas property in Argentina. The slow pace in permitting is
  attributable principally to the fact that Argentinean government authorities
  at both the federal and provincial levels have been focused in recent years
  on a transfer of jurisdiction over hydrocarbon resources from the national government
  to the provincial governments. This process came to fruition in January 2007
  with the formal transfer of jurisdiction. However, provincial governments are
  now focused on developing their capacities to manage the newly transferred resources.



As
  at February 28, 2007, the Company had incurred net acquisition and exploration
  costs of $9,511,957 with respect to its Sabodala Property in Sénégal,
  an increase of $7,715,495 from the prior years net investment.  The
  major components of fiscal 2007 expenditures are set out in Note 5 to the financial
  statements and are as follows: camp operation costs of $2,222,055 or 29% of
  the total; drilling costs of $2,056,906 or 27% of the total; contractor and
  geological staff costs of $1,702,978 or 22% of the total; and sample analysis
  costs of $945,873 or 12% of the total.  During the fiscal year ended February
  28, 2007, the Company carried out property-wide soil geochemical sampling, extensive
  excavator trenching, ground geophysics, geological mapping/prospecting and completed
  the initial 10,000-metre drilling program.  In addition, the Company initiated
  a 75,000-metre reverse circulation and core drilling program targeting a variety
  of gold targets throughout the Sabodala Property.



As
  at February 28, 2006, the Company had incurred net acquisition and exploration
  costs of $1,796,462 with respect to its Sabodala Property in Sénégal,
  a net increase of $661,942 from the prior years net investment, consisting
  of $3,690,947 in capitalized exploration costs reduced by a cost recovery from
  joint venture partners of $3,029,005.  The major components of fiscal 2006
  expenditure are set out in Note 5 and are as follows: contractor and geological
  staff costs of $1,769,305 or 48% of the total; camp operation costs of $755,401
  or 20% of the total; travel and accommodation costs of $328,172 or 9% of the
  total; drilling costs of $268,010 or 7% of the total; exploration office costs
  of $241,569 or 7% of the total; and sample analysis costs of $223,632 or 6%
  of the total.  During the fiscal year ended February 28, 2006, the Company
  carried out a high-resolution airborne geophysical survey, followed by prospecting,
  geologic mapping, soil geochemical sampling, ground geophysics, hand and excavator
  trenching and most recently the first stage of a minimum 10,000-metre drilling
  program.  The Company also initiated a property-wide, regional reconnaissance
  evaluation.



As
  at February 28, 2007, the Company had incurred acquisition and exploration costs
  of $1,065,300 with respect to its Santa Rosa Property in Argentina, an increase
  of $358,924 from the prior year. The major components of fiscal 2007 expenditures
  are set out in Note 5 and are as follows: land and legal costs of $153,561 or
  43% of the total; presumptive minimum tax costs of $145,842 or 41% of the total;
  and contractor and geological staff costs of $43,077 or 12% of the total.



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39



As
  at February 28, 2006, the Company had incurred acquisition and exploration costs
  of $706,376 with respect to the Santa Rosa Property, an increase of $260,945
  from the prior year. The major components of fiscal 2006 expenditures are set
  out in Note 5 and are as follows: land and legal costs of $90,622 or 35% of
  the total; contractor and geological staff costs of $60,424 or 23% of the total;
  presumptive minimum tax costs of $55,757 or 21% of the total; and travel costs
  of $53,418 or 20% of the total.



The
  Company follows the full cost method of accounting for oil and gas properties
  in accordance with the accounting guidelines published by the Canadian Institute
  of Chartered Accountants.  All costs of exploration and development of
  oil and gas properties are capitalized and accumulated in cost centers.



As
  at February 28, 2007, the Company had incurred acquisition and exploration costs
  of $252,461 with respect to its Carneirinho Property in Brazil, an increase
  of $208,440 from the prior year. The major components of fiscal 2007 expenditures
  are set out in Note 5 and are as follows: contractor and geological staff costs
  of $69,376 or 33% of the total; acquisition costs of $66,667 or 32% of the total;
  camp operation costs of $35,354 or 17% of the total; and travel costs of $21,760
  or 10% of the total. As described elsewhere in this report, the Company sold
  all of its interest in this project to Lund Gold Ltd. by an agreement dated
  March 12, 2007 for consideration reflecting its total costs in the project.



As
  at February 28, 2006, the Company had incurred acquisition and exploration costs
  of $44,021 with respect to the Carneirinho Property, an increase of $40,064
  from the prior year. The major components of fiscal 2006 expenditures are set
  out in Note 5 and are as follows: acquisition costs of $31,275 or 78% of the
  total; and travel costs of $6,677 or 17% of the total.





Significant
  Accounting Policies



The
  Companys significant accounting policies are summarized in Note 2 to the
  consolidated financial statements.   The preparation of the Companys
  consolidated financial statements in conformity with generally accepted accounting
  principles in Canada requires management to make judgements with respect to
  certain estimates and assumptions.   These estimates and assumptions,
  based on managements best judgement, affect the reported amounts of certain
  assets and liabilities, including disclosure of contingent liabilities.  On
  an ongoing basis, management re-evaluates its estimates and assumptions.   Actual
  amounts, however, may differ significantly from those based on such estimates
  and assumptions.



Significant
  areas critical in understanding the judgements that are involved in the preparation
  of the Companys consolidated financial statements and the uncertainties
  inherent within them include the treatment of resource property expenditures
  and of stock-based compensation.



Resource
  properties



All
  costs related to the acquisition, exploration and development of mineral properties
  are capitalized by property.  If economically recoverable ore reserves
  are developed, capitalized costs of the related property are reclassified as
  mining assets and amortized using the unit of production method.  When
  a property is abandoned, all related costs are written off to operations.  If,
  after management review, it is determined that the carrying amount of a mineral
  property is impaired, that property is written down to its estimated net realizable
  value.  A mineral property is reviewed for impairment whenever events or
  changes in circumstances indicate that its carrying amount may not be recoverable.



The
  amounts shown for mineral properties do not necessarily represent present or
  future values.  Their recoverability is dependent upon the discovery of
  economically recoverable reserves, the ability of the Company to obtain the
  necessary financing to complete the development and future profitable production
  or proceeds from the disposition thereof.



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40



The
  Company follows the full cost method of accounting for oil and gas properties
  whereby exploration and development costs are capitalized and accumulated in
  cost centers.  Such costs include lease acquisition costs, geological and
  geophysical expenses, lease rentals on undeveloped properties, costs of drilling
  both productive and non-productive wells, technical consulting costs directly
  related to exploration and development activities and capitalized financing
  costs.



Depletion
  of exploration and development costs and depreciation of production equipment
  are provided on the unit-of-production method based upon estimated proven oil
  and gas reserves before royalties in each cost centre, as determined by independent
  engineers.  For purposes of this calculation, reserves and production of
  natural gas are converted to common units based on their approximate relative
  energy content.  Undeveloped properties are excluded from the depletion
  calculation until the quantities of proven reserves can be determined.  These
  properties are assessed periodically for impairment.  When proven reserves
  are assigned or the property is considered to be impaired, the cost of the property
  or the amount of the impairment is added to the costs subject to depletion.



The
  Company places a limit on the carrying value of oil and gas properties and other
  assets, which may be depleted against revenues of future periods (the ceiling
  test).  The carrying value is assessed to be recoverable when the
  sum of the undiscounted cash flows expected from the production of proven reserves,
  the lower of cost and market of unproven properties and the cost of major development
  projects exceeds the carrying value.  When the carrying value is not assessed
  to be recoverable, an impairment loss is recognized to the extent that the carrying
  value of assets exceeds the sum of the discounted cash flows expected from the
  production of proven and probable reserves, the lower of cost and market of
  unproven properties and the cost of major development projects.  The cash
  flows are estimated using expected future product prices and costs and are discounted
  using a risk-free interest rate.



Stock-based compensation



The
  Company uses the fair value method whereby the Company recognizes compensation
  costs for the granting of all stock options and direct awards of stock.  Any
  consideration paid by the option holder to purchase shares is credited to capital
  stock.



Fiscal
  Year Ended February 28, 2007 Compared to Fiscal Year Ended February 28, 2006



During
  the fiscal year ended February 28, 2007 the Company recorded interest income
  of $271,912, a gain on sale of investments of $83,281, a loss on the write-down
  of investments of ($677,888) and a foreign exchange gain of $5,910.  During
  the fiscal year ended February 28, 2006 the Company recorded interest income
  of $32,837 and a foreign exchange loss of ($78,007). There were no items related
  to gains or write-downs of investments in the 2006 fiscal year. These items
  are highly variable depending on market valuations of investments held for trading
  and dispositions, if any, from the holding. The increase in interest reflects
  higher treasury balances held.



Expenses
  for the fiscal year ended February 28, 2007 were $1,485,098, down significantly
  from $2,657,356 for the fiscal year ended February 28, 2006. The principal reductions
  in cost were in stock based compensation, as a result of reduced vesting of
  stock options, and in loan interest, as there were no loans outstanding during
  the year. The principal cost increases were in travel and public relations costs
  and in professional and consulting fees, associated with increased activities
  in these cost centers.



Net
  loss for the fiscal year ended February 28, 2007 was $1,801,883 or $0.04 per
  share as compared with a net loss for the fiscal year ended February 28, 2006
  of $2,702,526 or $0.09 per share.  The Company expects to incur a net operating
  loss for the fiscal year ending February 28, 2008.



Fiscal
  Year Ended February 28, 2006 Compared to Fiscal Year Ended February 28, 2005



During
  the fiscal year ended February 28, 2006 the Company recorded interest income
  of $32,837 and a foreign exchange loss of $78,007.  During the fiscal year
  ended February 28, 2005 the Company recorded interest income of $14,338 and
  a foreign exchange loss of $117,752.



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41



Expenses
  for the fiscal year ended February 28, 2006 were $2,657,356, up significantly
  from $344,755 for the fiscal year ended February 28, 2005 primarily due to an
  increase in stock based compensation from $127,818 to $2,307,214 as a result
  of stock options granted during the year.



Net
  loss for the fiscal year ended February 28, 2006 was $2,702,526 or $0.09 per
  share as compared with a net loss for the fiscal year ended February 28, 2005
  of $448,169 or $0.02 per share.



Fiscal
  Year Ended February 28, 2005 Compared to Fiscal Year Ended February 29, 2004



During
  the fiscal year ended February 28, 2005 the Company recorded interest income
  of $14,338 and a foreign exchange loss of $117,752.  During the fiscal
  year ended February 29, 2004 the Company recorded interest income of $4,727
  and a foreign exchange loss of $27,960.



Expenses
  for the fiscal year ended February 28, 2005 were $344,755, up from $274,383
  for the fiscal year ended February 29, 2004 primarily due to an increase in
  office and rent costs by $32,420 to $71,490 as a result of revised cost sharing
  arrangements with the other companies with which the Company shares office space.
   In addition, stock based compensation expense increased by $17,300 to
  $127,818; travel and public relations costs increased by $12,157 as a result
  of the increased business activity of the Company; and wages and benefits increased
  by $13,410 to $33,978 as a result of as a result of revised cost sharing arrangements
  with the companies that the Company shares offices with.



Net
  loss for the fiscal year ended February 28, 2005 was $448,169 or $0.02 per share
  as compared with a net loss for the fiscal year ended February 29, 2004 of $297,616
  or $0.01 per share.



B.

Liquidity
  and Capital Resources



In
  management's view, given the nature of the Company's activities, which consist
  of the acquisition and exploration of resource properties, the most meaningful
  and material financial information concerning the Company relates to its current
  liquidity and capital resources.  The Company does not currently own or
  have an interest in any producing resource properties and has not derived any
  revenues from the sale of resource products in the last three financial years.
   The Company's properties, the Sabodala mineral project and the the Santa
  Rosa oil and gas project, are located in Sénégal and Argentina respectively,
  and as a result the Company's operations on these properties may be subject
  to additional risks.



The
  Company's exploration activities have been funded through sales of common shares,
  and the Company expects that it will continue to be able to utilize this source
  of financing until it develops cash flow from its operations.  There can
  be no assurance, however, that the Company will be able to obtain required financing
  in the future on acceptable terms, or at all.  In the near term, the Company
  plans to continue its exploration activities on its currently held properties.
   Based on its existing working capital, the Company does not require additional
  financing for its currently held properties during the upcoming fiscal year.
   The Company has not made use of any financial instruments for hedging
  purposes in the fiscal year ended February 28, 2007.  The Company had no
  material commitments for capital expenditures at the end of its most recent
  fiscal year, but intends to incur additional exploration expenditures on its
  Sabodala Property and Santa Rosa Property during the fiscal year ending February
  28, 2008.



Management
  reviews annually the carrying value of the Companys interest in each resource
  property and, where necessary, properties are written down to the estimated
  recoverable amount determined on a non-discounted basis after giving effect
  to any property option agreements and cost recovery agreements.  Costs
  relating to properties abandoned are written off when the decision to abandon
  is made. Management concluded there was no impairment of resource property carrying
  values during the 2007 fiscal year.



---

42



While
  the Company has been successful in raising the necessary funds to finance its
  exploration activities to date, there can be no assurance that it will be able
  to continue to do so.  If such funds are not available or cannot be obtained
  or are insufficient to cover the costs of the Company's exploration activities,
  the Company will be forced to curtail its exploration activities to a level
  for which funding is available or can be obtained.



Other
  than as discussed herein, the Company is not aware of any trends, demands, commitments,
  events or uncertainties that may result in the Company's liquidity either materially
  increasing or decreasing at present or in the foreseeable future.  Material
  increases or decreases in the Company's liquidity will be substantially determined
  by the success or failure of exploration on the Companys resource properties.



February
  28, 2007 Compared to February 28, 2006



At
  February 28, 2007, the Companys current assets totaled $15,784,761 compared
  to $7,202,239 at February 28, 2006.  The increase is attributable to the
  excess of cash proceeds from the private placement of share capital over amounts
  added to resource property costs.  During the same period, current liabilities
  increased to $3,288,414 from $717,164 due to increased levels of exploration
  activities at the Companys Sabodala Property and to unexpended advances
  from a joint venture partner.  Included in the Companys current liabilities
  were payables or accrued liabilities of $47,683 due to related parties arising
  from general and administrative expenses incurred with companies related by
  way of directors in common or from professional services rendered by directors
  of the Company.  All such amounts are settled in the normal accounts payable
  cycle.  As a result, the Company had working capital of at February 28,
  2007 of $12,586,347 compared to $6,485,075 at February 28, 2006.  At both
  February 28, 2007 and February 28, 2006, the Company had no long-term debt.



At
  February 28, 2007, the Company had total assets of $27,405,610 compared to $11,268,010
  at February 28, 2006.  The increase arises from the private placement of
  share capital and increases in funds provided by trade creditors and a joint
  venture partner.



Share
  capital as at February 28, 2007 was $34,635,509, up from $19,964,141 as at February
  28, 2006 due to the private placement of share capital.  During the fiscal
  year ended February 28, 2007, the Company issued 9,091,500 units at a price
  of $1.65 per unit to generate net proceeds of $13,609,604, each unit comprised
  of one common share and one half of a non-transferable two-year share purchase
  warrant, each whole warrant entitling the purchase of one additional common
  share of the Company at a price of $2.20 per share until December 7, 2008.  During
  the fiscal year ended February 28, 2007, the Company also issued 135,290 shares
  pursuant to the exercise of warrants to generate proceeds of $162,348 and 737,000
  shares pursuant to the exercise of stock options to generate proceeds of $566,350.



The
  Company's largest cash outflows in the fiscal year ended February 28, 2007 resulted
  from net resource property expenditures of $7,073,098.  The most significant
  contribution to working capital in the year ended February 28, 2007 was
  provided by the sale of share capital that generated cash proceeds of $14,715,444.
   The most significant contribution to working capital in the year ended
  February 28, 2006 was also provided by the private placement of share capital,
  in lesser amounts, and the largest cash outflow in that year was also net resource
  property expenditures, also in lesser amounts than the 2007 fiscal year.



February
  28, 2006 Compared to February 28, 2005



At
  February 28, 2006, the Companys current assets totaled $7,202,239 compared
  to $877,621 at February 28, 2005.  The increase is due to the sale of share
  capital.  During the same period, current liabilities decreased to $717,164
  from $1,068,033 due to the retirement of a series of loans arranged to pay exploration
  office costs associated with the Companys Sabodala Property.  Included
  in the Companys current liabilities was payables or accrued liabilities
  of $47,024 due to related parties as a result of general and administrative
  expenses incurred with companies related by way of directors in common and as
  a result of professional services rendered by directors of the Company.  All
  such amounts are payable on demand.  As a result, the Company had working
  capital of $6,485,075 at February 28, 2006 as compared with a working capital
  deficiency of $190,412 at February 28, 2005.  As at both February 28, 2006
  and February 28, 2005, the Company had no long-term debt.



---

43



At
  February 28, 2006, the Company had total assets of $11,268,010 as compared with
  $3,985,105 at February 28, 2005.  The increase is due the sale of share
  capital.



Share
  capital as at February 28, 2006 was $19,964,141, up from $11,878,025 as at February
  28, 2005 due to the sale of share capital.  During the fiscal year ended
  February 28, 2006, the Company issued 7,132,393 units at a price of $0.85 per
  unit to generate net proceeds of $5,910,328, each unit comprised of one common
  share and one half of a non-transferable two-year share purchase warrant, each
  whole warrant entitling the purchase of one additional common share of the Company
  at a price of $1.20 per share until January 16, 2008 as to 625,020 warrants,
  January 20, 2008 as to 882,353 warrants and February 1, 2008 as to 2,058,823
  warrants.  During the period, the Company also issued 2,200,507 shares
  pursuant to the exercise of warrants to generate proceeds of $494,091, 1,162,530
  shares pursuant to the exercise of stock options to generate proceeds of $294,379
  and 3,090,531 units pursuant to the conversion of loans totalling $1,330,288
  (each unit comprised of one common share and one non-transferable two-year share
  purchase warrant entitling the purchase of one additional common share of the
  Company at a price of $0.43 per share until, November 15, 2007 as to 1,701,644
  warrants and at a price of $0.45 per share until February 1, 2008 as to 1,388,887
  warrants.



The
  Company's largest cash outflows in the fiscal year ended February 28, 2006 resulted
  from net resource property expenditures of $1,165,186.  The most significant
  contribution to working capital in the year ended February 28, 2006 was
  provided by the sale of share capital that generated cash proceeds of $6,698,798.
   The most significant contribution to working capital in the year ended
  February 28, 2005 was provided by the sale of a 17.52% interest in the
  Santa Rosa Property that generated cash proceeds of $832,680.



February
  28, 2005 Compared to February 29, 2004



At
  February 28, 2005, the Companys current assets totalled $877,621 compared
  to $528,337 at February 29, 2004.  The increase is due to the sale of a
  17.52% interest in the Santa Rosa Property.  During the same period, current
  liabilities also increased to $1,068,033 from $291,002 due to increased exploration
  activity and a series of loans arranged to pay exploration office costs associated
  with the Companys Sabodala Property.  Included in the Companys
  current liabilities was payables or accrued liabilities of $102,573 due to related
  parties as a result of general and administrative expenses incurred by companies
  related by way of directors in common and as a result of professional services
  rendered by directors of the Company.  All such amounts are payable on
  demand.  As a result, the Company had a working capital of deficiency of
  $190,412 at February 28, 2005 as compared with working capital of $237,335 at
  February 29, 2004.  As at both February 28, 2005 and February 29, 2004,
  the Company had no long-term debt.



At
  February 28, 2005, the Company had total assets of $3,985,105 as compared with
  $2,990,680 at February 29, 2004.  The increase is due the sale of an effective
  17.52% interest in the Santa Rosa Property.



Share
  capital as at February 28, 2005 was $11,878,025, up from $11,010,280 as at February
  29, 2004 due to the sale of share capital.  During the fiscal year ended
  February 28, 2005, the Company issued 3,000,000 units at a price of $0.15 per
  unit to generate net proceeds of $448,818, each unit comprised of one common
  share and one non-transferable two-year share purchase warrant entitling the
  purchase of one additional common share of the Company at a price of $0.25 per
  share until March 1, 2006.  During the period, the Company also issued
  2,781,817 shares pursuant to the exercise of warrants to generate proceeds of
  $417,727 and 6,000 shares pursuant to the exercise of stock options to generate
  proceeds of $1,200.



The
  Company's largest cash outflows in the fiscal year ended February 28, 2005 resulted
  from resource property expenditures of $1,323,326.  The most significant
  contribution to working capital in the year ended February 28, 2005 was
  provided by the sale of a 17.52% interest in the Santa Rosa Property that generated
  cash proceeds of $832,680. The most significant contribution to working capital
  in the year ended February 29, 2004 was provided by the sale of share capital
  that generated net proceeds of $344,409.



---

44



Material
  Differences between Canadian and U.S. Generally Accepted Accounting Principles



The
  Company prepares its financial statements in accordance with Canadian GAAP which
  differ in certain respects from those principles that the Company would have
  followed had its financial statements been prepared in conformity with U.S.
  GAAP.  A reconciliation of several accounting measures from the Canadian
  GAAP basis to that of U.S. GAAP together with a detailed narrative description
  is provided in Note 17 to the financial statements. The significant measurement
  differences between Canadian GAAP and U.S. GAAP which affect the Companys
  financial statements are summarized as follows:



Under
  U.S. GAAP, deferred mineral exploration costs on properties at the stage of
  development as those held by the Company are charged to the statement of operations
  as incurred, while under Canadian GAAP such costs may be deferred and carried
  on the balance sheet.  Under Canadian GAAP for the fiscal periods reported
  on, the investments held by the Company are recorded at the lower of cost and
  net realizable value.  Under U.S. GAAP, certain investments held by the
  Company are classified as available-for-sale securities and recorded
  at market value.  The accumulated difference between cost and market value
  is recorded as part of comprehensive income.  Under U.S. GAAP, shares issued
  pursuant to an escrow agreement may be considered to be compensatory in nature
  under certain circumstances. Compensation is provided for in accordance with
  Financial Accounting Standards Board (FASB) Interpretation 28, Accounting
  for Stock Appreciation Rights and Other Variable Stock Option or Awards Plans,
  whereby the Company records compensation expense for the amount of equity instruments
  granted to officers and employees. The compensation expense is adjusted in subsequent
  periods for changes in the quoted market value of the Companys shares.
  If an equity award is forfeited, the Companyadjusts compensation expense
  recorded in theprevious periods in the period of forfeiture. Under Canadian
  GAAP, such escrow shares are not considered compensatory and no provision is
  required.



Had
  the Company presented its financial statements in accordance with U.S. GAAP,
  its loss for the fiscal year ended February 28, 2007 would have increased by
  $7,857,268, its loss for the fiscal year ended February 28, 2006 would have
  increased by $582,793, and its loss for the fiscal year ended February 28, 2005
  would have increased by $1,165,477.



Outlook



In
  the near term, the Company plans to continue its exploration activities on its
  Sabodala Property and its Santa Rosa Property.  Based on its existing working
  capital, the Company does not require additional financing for its currently
  held properties during the upcoming fiscal year.  The Company had no material
  commitments for capital expenditures at the end of its most recent fiscal year,
  but intends to incur significant additional exploration expenditures on its
  currently held properties during the fiscal year ending February 28, 2008.  In
  addition, the Company reviews acquisition proposals on a regular basis and,
  if an appropriate acquisition presents itself, the Company could, in the future,
  acquire additional mineral exploration or oil and gas properties.  None
  of the Companys resource properties are in production and, therefore,
  do not produce any income.



C.

Research
  and Development, Patents and Licenses, etc.



As
  the Company is an exploration company with no producing properties, the information
  required by this section is inapplicable.



D.

Trend
  Information



As
  the Company is an exploration company with no producing properties, the information
  required by this section is inapplicable.



E.

Off-Balance
  Sheet Arrangements



The
  Company has no off-balance sheet arrangements.



---

45



F.

Tabular
  Disclosure of Contractual Obligations



The
  Company has no contractual obligations of the type required to be disclosed
  in this section.



G.

Safe
  Harbour



This
  Annual Report on Form 20-F contains forward-looking statements within
  the meaning of the United States Private Securities Litigation Reform Act of
  1995 and applicable Canadian securities legislation.  Generally, these
  forward-looking statements can be identified by the use of forward-looking terminology
  such as plans, expects or does not expect,
  is expected, budget, scheduled, estimates,
  forecasts, intends, anticipates or does
  not anticipate, or believes, or variations of such words and
  phrases or state that certain actions, events or results may, can,
  could, would, might or will be taken,
  occur or be achieved.  Forward-looking statements
  are subject to known and unknown risks, uncertainties and other factors that
  may cause the actual results, levels of activity, performance or achievements
  of Oromin Explorations Ltd. to be materially different from those expressed
  or implied by such forward-looking statements, including but not limited to:
  the risk factors described in Item 3.D of this report on Form 20-F; risks related
  to the exploration and potential development of the Companys Sabodala
  mineral project and Santa Rosa oil and gas project; risks related to international
  operations; the actual results of current exploration activities; conclusions
  of economic evaluations; changes in project parameters as plans continue to
  be refined; futures prices of gold and other precious and base metals, and of
  oil, natural gas and other hydrocarbon products.  Although the Company
  has attempted to identify important factors that could cause actual results
  to differ materially from those contained in forward-looking statements, there
  may be other factors that cause results not to be as anticipated, estimated
  or intended.  There can be no assurance that such statements will prove
  to be accurate, as actual results and future events could differ materially
  from those anticipated in such statements.  Accordingly, readers should
  not place undue reliance on forward-looking statements.  Oromin Explorations
  Ltd. does not undertake to update any forward-looking statements that are incorporated
  by reference herein, except in accordance with applicable securities laws.  The
  Companys mineral properties are located in Senegal and Argentina and thus
  may be exposed to various and unpredictable levels of political, economic and
  other risks and uncertainties.  The Company conducts operations through
  foreign subsidiaries which hold the rights to the mineral and hydrocarbon properties.
   Operations may be affected in varying degrees by government regulations
  with respect to, but not limited to, expropriation of property, maintenance
  of claims, environmental legislation, land use and land claims.  Failure
  to comply with applicable laws, regulations and local practices relating to
  mineral rights applications and tenure could result in loss, reduction or expropriation
  of entitlements.





---

46



ITEM
  6.

DIRECTORS,
  SENIOR MANAGEMENT AND EMPLOYEES



A.

Directors
  and Senior Management



Derek
  Bartlett



Mr.
  Bartlett is a director of the Company.  He has worked as a geologist and
  exploration manager for a number of international mining companies since 1966.
   Mr. Bartlett has been the President of Braddick Resources Ltd. and Blue
  Emerald Resources Ltd. since 1994.  Mr. Bartlett is 68 years old.



Robert
  Brennan



Mr.
  Brennan is a director of the Company.  He has been an investment advisor
  with CB Richard Ellis since 1987 and prior thereto was a CPA with Peat Marwick
  and Mitchell, a predecessor firm of KPMG.  Mr. Brennan is 46 years old.



Ian
  Brown



Mr.
  Brown is the Chief Financial Officer of the Company, appointed April 15, 2007.
  He holds the degree Bachelor of Commerce and is a Chartered Accountant, the
  Canadian equivalent of a CPA.  He has been a financial executive with a
  wide array of public companies in the mining exploration industry since 1979.
  Mr. Brown is 59 years old.



Nell
  Dragovan



Ms.
  Dragovan is a director of the Company and is married to Mr. Idziszek.  She
  is a financier with a long, successful history of organizing and financing junior
  resource companies in Canada.  In 1980, she founded Corona Explorations
  that discovered the Hemlo gold deposits in Northern Ontario.  Ms. Dragovan
  is 57 years old.



Norman
  Haimila



Dr.
  Haimila is a director of the Company.  He has forty years experience as
  a geoscientist and has worked throughout the world evaluating petrochemical
  prospects for various companies and government agencies, including Atlantic
  Richfield where he was Senior Research Geologist.  Since 1988, Dr. Haimila
  has worked extensively in Argentina during which time he supervised oil and
  gas exploration and development for Chauvco Resources and Alberta Energy Corporation.
   He also worked in Argentina as the Senior Scientist with the Sub-Andean
  Co-operative Hydrocarbon Studies Project, a regional exploration consortium
  led by the World Bank, which was carried out over a four year period to provide
  an updated comprehensive basin analysis and hydrocarbon assessment of the series
  of sedimentary basins on the eastern side of the Andes mountains and confirm
  the substantial hydrocarbon potential of the region.  Dr. Haimila is 71
  years old.



Chet
  Idziszek



Mr.
  Idziszek is a director and the President of the Company and is married to Ms.
  Dragovan. He has worked as a manager and senior geologist for a number of international
  mining companies since 1971.  In 1990, he received the Mining
  Man of the Year award in recognition of his vital role in the discovery
  and development of the Eskay Creek Deposits in Northwestern British Columbia.
   He also received the Prospector of the Year Award" in 1994,
  again, in recognition of the major role he played in the discovery and development
  of the Eskay Creek Deposits, as well as for his leadership of the Company during
  its exploration and development of the Petaquilla copper-gold deposits in Panama.
   Mr. Idziszek is 60 years old.



---

47



Robert
  Sibthorpe



Mr.
  Sibthorpe is a director of the Company.  Mr. Sibthorpe holds a B.Sc. in
  geology and an M.B.A. from the University of Toronto.  He has worked as
  a mining analyst and director of Yorkton Securities Inc. in Vancouver from 1986
  to 1996.  He was an independent mining consultant from 1996 to 1999 when
  he joined Canaccord Capital Corporation as a mining analyst from 1999 to 2001.
   Since 2001 he has worked as an independent mining consultant.  Mr.
  Sibthorpe is 57 years old.



J.G.
  Stewart



Mr.
  Stewart is a director and the Secretary of the Company.  Mr. Stewart is
  a lawyer who has practised law in both private practice and as corporate counsel
  since 1984 and has extensive experience in the fields of mining, corporate finance
  and securities law.  Mr. Stewart is 49 years old.



Douglas Turnbull



Mr.
  Turnbull is a director of the Company.  Mr. Turnbull is a geologist and
  is the President of Lakehead Geological Services Inc. which provides geological
  consulting services for a number of Canadian private and public companies.  Mr.
  Turnbull has been the President of Lakehead since 1992.  Mr. Turnbull is
  44 years old.



B.

Compensation



During
  the fiscal year ended February 28, 2007, the Company paid or accrued cash compensation
  of $538,061 to its directors and officers. No other funds were set aside or
  accrued by the Company during the fiscal year ended February 28, 2007 to provide
  pension, retirement or similar benefits for directors or officers of the Company
  pursuant to any existing plan provided or contributed to by the Company or its
  subsidiaries under applicable Canadian laws.



The
  Company is required, under applicable securities legislation in Canada to disclose
  to its shareholders details of compensation paid to its executive officers.
   The following fairly reflects all material information regarding compensation
  paid to the Company's executive officers which has been disclosed to the Company's
  shareholders under applicable Canadian law.



The
  following table (presented in accordance with the rules (the Rules)
  made under the Securities Act (British Columbia) sets forth all annual
  and long term compensation for services in all capacities to the Company and
  its subsidiaries for the three most recently completed financial years (to the
  extent required by the Rules) in respect of the Chief Executive Officer and
  the Chief Financial Officer as at February 28, 2007, and the other three most
  highly compensated executive officers of the Company as at February 28, 2007,
  whose individual total compensation for the most recently completed financial
  year exceeded $150,000 (of which there were none) and any individual who would
  have satisfied these criteria but for the fact that individual was not serving
  as such an officer at the end of the most recently completed financial year
  (collectively the Named Executive Officers or NEOs).



The
  following table sets forth the summary of the compensation paid to the Companys
  chief executive officer, Chet Idziszek, and chief financial officer, Naomi Corrigan,
  for the past three fiscal years:



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48





|                                        |                                                       |                                        |                         |                                              |                                                    |                                                               |                         |                                          |  | 
|--------------------------------------- | ----------------------------------------------------- | -------------------------------------- | ----------------------- | -------------------------------------------- | -------------------------------------------------- | ------------------------------------------------------------- | ----------------------- | ---------------------------------------- |  | 
|Annual
        Compensation             | Long
        Term Compensation                       
|                                        |                                                       |                                       
|                                        | Awards                                                | Payouts                                |                        
|Name and Principal Position             | Fiscal Year Ended                                     | Salary
      ($)                       | Bonus
      ($)         | Other Annual
        Compen-sation
      ($) | Securities
        Under Options Granted
      (#) | Shares/Units
        Subject to Resale Restrictions
      ($) | LTIP Payouts
      ($)  | All Other Compen-
      sation
      ($)
|                                        |                                                       |                                        |                         |                                              |                                                    |                                                               |                         |                                         
|Chet Idziszek President and
        CEO | Feb. 28, 2007
      Feb. 28, 2006
      Feb. 28, 2005 | $144,812
      $138,000
      $138,000 | Nil
      Nil
      Nil | Nil
      Nil
      Nil                      | Nil
      850,000
      120,000                    | N/A
      N/A
      N/A                                       | N/A
      N/A
      N/A | Nil
      Nil
      Nil                 
|                                        |                                                       |                                        |                         |                                              |                                                    |                                                               |                         |                                         
|Naomi Corrigan
      Former CFO         | Feb. 28, 2007
      Feb. 28, 2006
      Feb. 28, 2005 | $42,283
      $34,189
      $12,434    | Nil
      Nil
      Nil | Nil
      Nil
      Nil                      | Nil
      30,000
      4,000                       | N/A
      N/A
      N/A                                       | N/A
      N/A
      N/A | Nil
      Nil
      Nil                 



Option Grants
  in Last Fiscal Year



There
  were no share options granted to the Named Executive Officers during the fiscal
  year ended February 28, 2007:



|                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                  |                                         |                                                                                    |                 |  | 
|------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | --------------------------------------- | ---------------------------------------------------------------------------------- | --------------- |  | 
|Name                                  | Options Granted
      (# shares)                                                                                                                                                                                                                                                                                                                                                                                                        | % of Total Options
      Granted | Exercise
      Price
      ($/share)(1) | Market Value of
        Shares Underlying Options at Date of Grant
      ($/share) | Expiration Date
|Chet Idziszek
      President and CEO | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                     | N/A                              | N/A                                     | N/A                                                                                | N/A            
|                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                  |                                         |                                                                                    |                
|Naomi Corrigan
      Former CFO       | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                     | N/A                              | N/A                                     | N/A                                                                                | N/A            
|                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(1)                                   | The
        exercise price of stock options is set at not less than 100% of the market
        value (as defined in the Companys Incentive Stock Option Plan) of
        a common share of the Company on the date of grant.  The exercise
        price of stock options may only be adjusted in the event that specified
        events cause a change in the Companys share capital.  Options
        vest immediately upon grant.



There
  were no repricings of stock options held by Named Executive Officers of the
  Company during the fiscal year ended February 28, 2007.



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



The
  following table sets forth a summary of stock options exercised by and remaining
  outstanding to the Named Executive Officers for the fiscal year ended February
  28, 2007:



|                                |                                       |                                    |                                                          |                                                      
|------------------------------- | ------------------------------------- | ---------------------------------- | -------------------------------------------------------- | -----------------------------------------------------
|Name                            | Shares Acquired on Exercise
      (#) | Aggregate Value Realized
      ($) | Unexercised
        Options at Fiscal Year-End
      (#) | $ Value of Unexercised
      In-the-Money Options (1)
|                                |                                       |                                    |                                                          |                                                      
|Chet Idziszek
      President   | 50,000                                | $87,500                            | 1,145,000                                                | $3,045,150                                           
|                                |                                       |                                    |                                                          |                                                      
|Naomi Corrigan
      Former CFO | 29,000                                | $58,930                            | 30,000                                                   | $57,600                                              



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49





|  |                                                                                                                                                                                                                                                      
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1 | Value of unexercised in-the-money
        options calculated using the closing price of $3.82 for the common shares
        of the Company on the TSX Venture Exchange on February 28, 2007, less
        the exercise price of in-the-money options.



Pension and
  Retirement Benefit Plans



No
  pension or retirement benefit plans have been instituted by the Company, and
  none are proposed at this time.



Termination
  of Employment, Change in Responsibilities and Employment Contracts



During
  the most recently completed financial year there were no employment contracts
  between the Company or its subsidiaries and a NEO, and no compensatory plans,
  contracts or arrangements where a NEO is entitled to receive more than $100,000
  from the Company or its subsidiaries, including periodic payments or installments,
  in the event of:



(a)

the
  resignation, retirement or any other termination of the NEOs employment
  with the Company and its subsidiaries;

(b)

a
  change of control of the Company or any of its subsidiaries; or

(c)

a
  change in the NEOs responsibilities following a change in control.



Directors



The
  Company has no arrangements, standard or otherwise, pursuant to which directors
  are compensated by the Company or its subsidiaries for their services in their
  capacity as directors, or for committee participation, or involvement in special
  assignments during the most recently completed financial year or subsequently
  up to and including the date of this Annual Report, except that directors are
  compensated for their actual expenses incurred in the pursuance of their duties
  as directors and certain directors may be compensated for services rendered
  as consultants or experts.  In this regard, Norman Haimila and a corporation
  controlled by Douglas Turnbull were paid or accrued $46,243 and $167,798 respectively
  for geological consulting services rendered and J.G. Stewarts law firm
  was paid or accrued $103,500 for professional services rendered during the last
  completed fiscal year.



The
  following table sets forth stock options granted by the Company during the fiscal
  year ended February 28, 2007 to directors who are not Named Executive Officers
  of the Company:



|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                |                                           |                                                                                               |                 |     |  | 
|------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ----------------------------------------- | --------------------------------------------------------------------------------------------- | --------------- | --- |  | 
|Name                     | Securities Under
      Options Granted
      ($)(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | % of
        Total Options
      Granted in
      Fiscal Year* | Exercise or Base Price
      ($/Security) | Market Value of
      Securities Underlying
      Options on Date of Grant
      ($/Security) | Expiration Date
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                |                                           |                                                                                               |                 |    
|Derek
        Bartlett   | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                            |                                           | N/A                                                                                           | N/A             | N/A
|Robert
        Brennan   | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                            |                                           | N/A                                                                                           | N/A             | N/A
|Nell
        Dragovan    | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                            |                                           | N/A                                                                                           | N/A             | N/A
|Norman
        Haimila   | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                            |                                           | N/A                                                                                           | N/A             | N/A
|Robert
        Sibthorpe | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                            |                                           | N/A                                                                                           | N/A             | N/A
|J.G.
        Stewart     | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                            |                                           | N/A                                                                                           | N/A             | N/A
|Douglas
        Turnbull | Nil                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | N/A                                                            |                                           | N/A                                                                                           | N/A             | N/A
|*                        | Percentage of all options granted during the fiscal
        year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(1)                      | The
        exercise price of stock options is set at not less than 100% of the market
        value (as defined in the stock option plan referred to below) of a common
        share of the Company on the date of grant.  The exercise price of
        stock options may only be adjusted in the event that specified events
        cause dilution of the Company's share capital and these figures take the
        consolidation of share capital which occurred subsequent to the end of
        the most recently completed fiscal year.  Options vest immediately
        upon grant.



---

50



The
  following table sets forth details of all exercises of stock options during
  the fiscal year ended February 28, 2007 by directors who are not Named Executive
  Officers of the Company, and the fiscal year-end value of unexercised options
  on an aggregate basis:



|                 |                                            |                                     |                                                                                             |                                                                                                                          
|---------------- | ------------------------------------------ | ----------------------------------- | ------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------
|Name             | Securities Acquired on Exercise
      (#)1 | Aggregate Value Realized
      ($)2 | Unexercised Options at Fiscal Year-End
      (#)3,4
      Exercisable/
      Unexercisable5 | Value of Unexercised
        In-the-Money Options at Fiscal Year-End
      ($)3,4
      Exercisable/
      Unexercisable5
|                 |                                            |                                     |                                                                                             |                                                                                                                          
|Derek Bartlett   | Nil                                        | Nil                                 | 145,000/nil                                                                                 | $435,150                                                                                                                 
|Robert Brennan   | Nil                                        | Nil                                 | 200,000/nil                                                                                 | $384,000                                                                                                                 
|Nell Dragovan    | Nil                                        | Nil                                 | 295,000/nil                                                                                 | $929,400                                                                                                                 
|Norman Haimila   | 95,000                                     | $249,000                            | 75,000/nil                                                                                  | $144,000                                                                                                                 
|Robert Sibthorpe | Nil                                        | Nil                                 | 50,000/nil                                                                                  | $96,000                                                                                                                  
|J.G. Stewart     | 30,000                                     | $49,500                             | 195,000/nil                                                                                 | $572,400                                                                                                                 
|Douglas Turnbull | 62,000                                     | $194,060                            | 95,000/nil                                                                                  | $215,400                                                                                                                 



|  |                                                                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1 | Number of common shares of
        the Company acquired on the exercise of stock options.                                                                                                                                              
|2 | Calculated using the closing
        prices on the exercise date for a board lot of common shares of the Company
        on the TSX Venture Exchange.                                                                                  
|3 | The figures relate
        solely to stock options.                                                                                                                                                                                    
|4 | The value of
        in-the-money options was calculated using the closing price of the common
        shares of the Company on the TSX Venture Exchange on February 28, 2007
        of $3.82, less the exercise price of each option.
|5 | All such options
        are currently exercisable.                                                                                                                                                                                    



There
  were no repricings of stock options held by directors of the Company during
  the fiscal year ended February 28, 2007.



C.

Board
  Practices



The
  directors hold office for a term of one year or until the next annual general
  meeting of the Company, at which time all directors retire, and are eligible
  for re-election.  Derek Bartlett and Douglas Turnbull have been directors
  of the Company since February 25, 2002.  Robert Brennan has been a director
  of the Company since April 18, 2006.  Nell Dragovan has been a director
  of the Company since January 22, 2004.  Norman Haimila has been a director
  of the Company since July 3, 2001. Chet Idziszek has been a director of the
  Company since February 21, 1994 and the President of the Company since June
  23, 1999.  Robert Sibthorpe has been a director of the Company since June
  4, 2004.  J.G. Stewart has been a director of the Company since July 19,
  1995 and the Secretary of the Company since August 23, 1996.  Neither the
  Company nor any of its subsidiaries have any arrangement to provide benefits
  to directors upon termination of employment.



The
  Companys Audit Committee is comprised of Derek Bartlett, Norman Haimila
  and Robert Sibthorpe.  The Audit Committee is appointed by the Board of
  Directors and its members hold office until removed by the Board of Directors
  or until the next annual general meeting of the Company, at which time their
  appointments expire and they are then eligible for re-appointment.  The
  Audit Committee reviews the audited financial statements of the Company and
  liases with the Companys auditors and recommends to the Board of Directors
  whether or not to approve such statements.  At the request of the Companys
  auditors, the Audit Committee must convene a meeting to consider any matters
  which the auditor believes should be brought to the attention of the Board of
  Directors or the shareholders of the Company.



D.

Employees



During
  the fiscal year ended February 28, 2007, the Company had an average of approximately
  165 employees six of whom worked out of the Companys head office, nine
  of worked out of the Companys Dakar office and approximately 150 worked
  out of the Companys Sabodala exploration camp facility.



---

51



Of
  the average of 165 employees, three worked in management roles (two in Canada
  and one in Sénégal), three in secretarial roles (two in Canada and
  one in Sénégal), two in accounting roles (one in Canada and one in
  Sénégal), six as support workers (in Sénégal) and the balance
  of 150 worked as mineral explorationists (one in Canada and the rest in Sénégal).
   Of those, 6 were employed as geologists while the approximately 140 others
  were casual or temporary employees.  During the fiscal years ended February
  28, 2006, and February 28, 2005, the Company had an average of three employees
  all of whom worked out of the Companys head office.  Of the average
  of three employees, one worked in a management role, one in a secretarial role
  and one in an accounting role.  No employees were casual or temporary employees.
   The number of the Companys employees fluctuates based on the level
  of the Companys exploration activities.



E.

Share
  Ownership



The
  following table sets forth the share ownership of those persons listed in subsection
  6.B above and includes the details of all options to purchase common shares
  of the Company held by such persons:



|                 |                                                             |                                                        |                                                                 |                |             |                                                       |                                                                                                             
|---------------- | ----------------------------------------------------------- | ------------------------------------------------------ | --------------------------------------------------------------- | -------------- | ----------- | ----------------------------------------------------- | ------------------------------------------------------------------------------------------------------------
|Name             | Number
        of Common Shares Held at
      June 11, 2007 | Number
        of Options Outstanding at June 11, 2007 | Beneficial Percentage
        Ownership1                        | Exercise Price | Expiry Date
|Derek Bartlett   | 5,000                                                       |                                                        | 75,000
      20,000
      50,000                                |                | 0.3%        | $0.25
      $0.25
      $1.90                         | January 22, 2009
      March 3, 2009
      February 15, 2011                                                
|Robert Brennan   | 896,350                                                     |                                                        | 200,000                                                         |                | 2.0%        | $1.90                                                 | February 15, 2011                                                                                           
|Naomi Corrigan   | 22,500                                                      |                                                        | 25,000
      4,000
      30,000                                 |                | 0.2%        | $0.25
      $0.25
      $1.90                         | January 22, 2009
      March 3, 2009
      February 15, 2011                                                
|Nell Dragovan    | 1,675,127                                                   |                                                        | 277,777
      200,000
      20,000
      75,000                 |                | 4.1%        | $0.45
      $0.25
      $0.25
      $1.90             | February 1, 2008
      January 22, 2009
      March 3, 2009
      February 15, 2011                         
|Norman Haimila   | 95,000                                                      |                                                        | 75,000                                                          |                | 0.3%        | $1.90                                                 | February 15, 2011                                                                                           
|Chet Idziszek    | 6,674,815                                                   |                                                        | 722,222
      175,000
      120,000
      300,000
      550,000 |                | 15.2%       | $0.45
      $0.25
      $0.25
      $0.70
      $1.90 | February 1, 2008
      January 22, 2009
      March 3, 2009
      September 15, 2010
      February 15, 2011
|Robert Sibthorpe | nil                                                         |                                                        | 50,000                                                          |                | 0.1%        | $1.90                                                 | February 15, 2011                                                                                           
|J.G. Stewart     | 563,000                                                     |                                                        | 277,777
      100,000
      20,000
      75,000                 |                | 1.9%        | $0.45
      $0.25
      $0.25
      $1.90             | February 1, 2008
      January 22, 2009
      March 3, 2009
      February 15, 2011                         
|Douglas Turnbull | 56,400                                                      |                                                        | 20,000
      75,000                                             |                | 0.3%        | $0.25
      $1.90                                     | March 3, 2009
      February 15, 2011                                                                       
|Total:           | 9,988,192                                                   |                                                        | 3,536,776                                                       |                | 24.4%       |                                                       |                                                                                                             



Beneficial
  ownership is determined in accordance with the rules of the Securities and Exchange
  Commission.  In computing the number of shares owned by a person and the
  percentage ownership of that person, Common Shares subject to options and warrants
  held by that person that are currently exercisable or exercisable within 60
  days of June 11, 2007, are deemed outstanding.  Such shares, however, are
  not deemed outstanding for the purposes of computing the percentage ownership
  of any other person.  This table has been prepared based on 54,175,484
  Common Shares outstanding as of June 11, 2007.



ITEM
  7.

MAJOR
  SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



A.

Major
  Shareholders





---

52



The
  following table sets forth the share ownership of those persons beneficially
  owning greater than 5% of the Companys common shares held by such persons:



|                         |                                                       |                                                                 
|------------------------ | ----------------------------------------------------- | ----------------------------------------------------------------
|Name                     | Number
        of Common Shares Held at June 11, 2007 | Percentage
        of Common Shares Outstanding at June 11, 2007
|                         |                                                       |                                                                 
|Abdullah
        Basodan | 3,493,000                                             | 6.4%                                                            
|Chet
        Idziszek    | 6,674,815                                             | 15.2%                                                           



Mr.
  Idziszek's holdings reported on Form 20-F have diminished from 25.2% in 2004
  to 15.2% in 2007 as a function of (1) the increase in issued share capital from
  25,695,308 in 2004 to 54,175,484 shares as reported in this Item 7.A, and (2)
  the net effect of acquisitions and dispositions made by Mr. Idziszek over the
  periods.



Mr.
  Basodans holdings arose principally in the 2007 fiscal year by his acquisition
  of 3,030,500 shares pursuant to a private placement which closed on December
  8, 2006 and, subsequently, by his exercise of 150,000 stock options in April
  2007.



The
  Companys major shareholders do not have different voting rights.  To
  the knowledge of the Company, it is not controlled by another corporation, any
  foreign government or by any other natural or legal persons severally or jointly.



As
  at June 11, 2007 there were 54,175,484 common shares of the Company issued and
  outstanding.  Based on the records of the Company's registrar and transfer
  agent, Computershare Investor Services Inc., of 510 Burrard Street, Vancouver,
  British Columbia, Canada, as at such date there were 109 registered holders
  of the Company's common shares resident in the United States, holding an aggregate
  12,820,929 common shares, including 1,700,400 shares held by Cede & Co.
   This number represents approximately 23.7% of the total issued and outstanding
  common shares of the Company as at June 11, 2007.  Based on replies received
  by the Company from brokers, dealers, banks or nominees to enquiries as to the
  number of beneficial holders of the Company's common shares resident in the
  United States as at June 11, 2007 there were 1,415 beneficial holders of the
  Company's common shares resident in the United States, holding an aggregate
  12,290,377 common shares.  This number represents approximately 22.7% of
  the total issued and outstanding common shares of the Company as at June 11,
  2007, also including the 1,700,400 shares held by Cede & Co.  The total
  number of registered and beneficial holders of the Company's common shares resident
  in the United States, therefore, is 1,523 holders holding aggregate 23,410,906
  common shares.  This number represents approximately 43% of the total issued
  and outstanding common shares of the Company as at June 11, 2007.



B.

Related
  Party Transactions



Other
  than the transactions described in this section, there were no material transactions
  in the fiscal years ended February 28, 2007, February 28, 2006 and February
  28, 2005, or proposed material transactions between the Company or any of its
  subsidiaries and:



|    |                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | enterprises
        that directly or indirectly through one or more intermediaries, control
        or are controlled by, or are under common control with, the Company;                                                                                                                                                                                                                                            
|(b) | associates;                                                                                                                                                                                                                                                                                                                                                                                                         
|(c) | individuals
        owning, directly or indirectly, an interest in the voting power of the
        Company that gives them significant influence over the Company, and close
        members of any such individuals family;                                                                                                                                                                                       
|(d) | key
        management personnel, that is, those persons having authority and responsibility
        for planning, directing and controlling the activities of the Company,
        including directors and senior management of companies and close members
        of such individuals families;                                                                                                                 
|(e) | enterprises
        in which a substantial interest in the voting power is owned, directly
        or indirectly, by any person described in (c) or (d) or over which such
        a person is able to exercise significant influence including enterprises
        owned by directors or major shareholders of the Company and enterprises
        that have a member of key management in common with the Company.



---

53



On
  June 26, 2002, the Company, through its wholly-owned subsidiary Cynthia Holdings
  Limited (Cynthia), entered into a letter agreement (the Agreement)
  whereby it agreed to sell an effective 50% interest in its Santa Rosa Property
  for the sum of US$1,400,000 to Bible Resources Limited (Bible) a
  private Nevada corporation. The Agreement initially provided for the purchase
  price to be paid in three tranches, with US$400,000 due on or before July 31,
  2002, a further US$400,000 on or before August 30, 2002 and the remaining US$600,000
  to be paid by September 30, 2002. At the time that the Agreement was entered
  into, the Company was not related to Bible, however, since the date of the Agreement,
  Chet Idziszek, the President and a director of the Company was appointed as
  a director of Bibles parent company, The Havana Group Inc.  (Havana),
  a position Mr. Idziszek held until April 2007.  The Agreement was amended
  a number of times during the period Mr. Idziszek was a director of Havana and
  during the fiscal year ended February 28, 2005, Cynthia received US$600,000
  in payment for a 17.52% effective interest in its Santa Rosa Property and, as
  consideration for extending the agreement, the Companys wholly owned British
  Virgin Islands subsidiary, Irie Isle Limited (Irie), received 1,000,000
  common shares in the capital stock of Surge Global Energy Inc. (Surge),
  Bibles parent company and the assignee of Bibles interest.  Surge
  has elected not to acquire any further interest in the Santa Rosa Property.



On
  February 2, 2005, the Company entered into loan agreements with two directors
  of the Company and a company controlled by a director of the Company to borrow
  $575,000 to pay exploration office costs associated with the Companys
  Sabodala Property.  These loan agreements were replaced by loan agreements
  dated April 28, 2005 that provide that the loans bear interest at the rate of
  12% per annum; are convertible at the option of the lenders into units of the
  Company at a price of $0.45 per unit, each unit being comprised of one share
  and one share purchase warrant entitling the purchase of an additional share
  of the Company at a price of $0.45 per share for a period of two years following
  the date of conversion of the loan.  The loans were repaid in the fiscal
  year ended February 28, 2006.



By
  an agreement dated March 12, 2007 between the Company and Lund Gold Ltd. (Lund),
  the Company sold all of its interest in the Carneirinho Property to Lund in
  consideration of the issuance to the Company of 1,197,906 common shares of Lund,
  this consideration reflecting the amount that the Company had spent on acquisition,
  exploration and development of the Carneirinho Property.  Chet Idziszek,
  the President and a director of the Company, and J.G. Stewart, the Secretary
  and a director of the Company are also directors and senior officers of Lund.



C.

Interests
  of Experts and Counsel



This
  Form 20-F is being filed as an Annual Report under the Exchange Act and, as
  such, there is no requirement to provide any information under this section.



ITEM
  8.

FINANCIAL
  INFORMATION



A.

Consolidated
  Statements and Other Financial Information



This
  Annual Report contains the consolidated financial statements for the Company
  for the fiscal year ended February 28, 2007 that contain an Independent Auditors
  Report dated June 8, 2007, Consolidated Balance Sheets as at February 28, 2007
  and February 28, 2006, Consolidated Statements of Operations and Deficit for
  the Fiscal Years Ended February 28, 2007, February 28, 2006, and February 28,
  2005, Consolidated Statements of Cash Flows for the Fiscal Years Ended February
  28, 2007, February 28, 2006, and February 28, 2005 and Notes to the Consolidated
  Financial Statements.



B.

Significant
  Changes



No
  significant change has occurred since the date of the annual financial statements
  included in this Annual Report on Form 20-F.



---

54



ITEM
  9.

THE
  OFFER AND LISTING



A.

Offer
  and Listing Details





The
  high and low sale prices for the common shares of the Company on the TSX Venture
  Exchange for each of the most recent six months, each fiscal quarter in each
  of the last two full financial years and subsequent period and each of the last
  five full financial years are as follows:



|                                |       |     |                |  | 
|------------------------------- | ----- | --- | -------------- |  | 
|                                | High  | Low
|Fiscal
        year 2007-2008   |       |     |                | 
|July
        2007               | $2.90 |     | $2.30          | 
|June
        2007               | $2.72 |     | $2.07          | 
|May
        2007                | $3.28 |     | $2.19          | 
|April
        2007              | $3.19 |     | $2.44          | 
|March
        2007              | $4.05 |     | $2.75          | 
|February                        | $4.18 |     | $2.32          | 
|First
        Quarter to May 31 | $4.05 |     | $2.19          | 
|2007                            | $4.18 |     | $1.30          | 
|Fourth
        Quarter          | $4.18 |     | $1.71          | 
|Third
        Quarter           | $2.24 |     | $1.60          | 
|Second
        Quarter          | $2.33 |     | $1.64          | 
|First
        Quarter           | $2.45 |     | $1.30          | 
|2006                            | $2.00 |     | $0.31          | 
|Fourth
        Quarter          | $2.00 |     | $0.88          | 
|Third
        Quarter           | $0.99 |     | $0.57          | 
|Second
        Quarter          | $0.64 |     | $0.31          | 
|First
        Quarter           | $0.62 |     | $0.345         | 
|2005                            | $0.68 |     | $0.15          | 
|2004                            | $0.25 |     | $0.065         | 
|2003                            | $0.18 |     | $0.
        07 | 



The
  closing price of the Company's common shares on the TSX Venture Exchange on
  August 27, 2007 was $2.39.



The
  Companys common shares were listed on the NASD Over The Counter Bulletin
  Board on October 5, 2006.  The high and low sale prices for the common
  shares of the Company on the Over The Counter Bulletin Board for the each of
  the months since the listing date are as follows:



|                                |         |     |         |  | 
|------------------------------- | ------- | --- | ------- |  | 
|                                | High    | Low
|Fiscal
        year 2007-2008   |         |     |         | 
|July
        2007               | US$2.75 |     | US$2.15 | 
|June
        2007               | US$2.60 |     | US$1.98 | 
|May
        2007                | US$3.00 |     | US$2.05 | 
|April
        2007              | US$2.76 |     | US$2.25 | 
|March
        2007              | US$3.51 |     | US$2.44 | 
|First
        Quarter to May 31 | US$3.51 |     | US$2.05 | 
|Fiscal
        year 2006-2007   |         |     |         | 
|February
        2007           | US$3.69 |     | US$1.97 | 
|January
        2007            | US$2.03 |     | US$1.57 | 
|December
        2006           | US$1.85 |     | US$1.52 | 
|November
        2006           | US$1.79 |     | US$1.48 | 
|October
        2006            | US$1.63 |     | US$1.25 | 



---

55



The
  closing price of the Companys common shares on the Over The Counter Bulletin
  Board on August 27, 2007 was US$2.30.



B.

Plan
  of Distribution



This
  Form 20-F is being filed as an Annual Report under the Exchange Act and, as
  such, there is no requirement to provide any information under this section.



C.

Markets



The
  common shares of the Company and one of its predecessor companies, Oromin Explorations
  Ltd., have traded on the Vancouver Stock Exchange since November 6, 1981.  They
  presently trade under the symbol OLE on the TSX Venture Exchange,
  the successor exchange to the Vancouver Stock Exchange since February 25, 2002.
   The common shares of the Company have traded on the NASD Over The Counter
  Bulletin Board since October 5, 2006 and trade under the symbol OLEPF.
   .



D.

Selling
  Stockholders



This
  Form 20-F is being filed as an Annual Report under the Exchange Act and, as
  such, there is no requirement to provide any information under this section.



E.

Dilution



This
  Form 20-F is being filed as an Annual Report under the Exchange Act and, as
  such, there is no requirement to provide any information under this section.



F.

Expenses
  of the Issue



This
  Form 20-F is being filed as an Annual Report under the Exchange Act and, as
  such, there is no requirement to provide any information under this section.



ITEM
  10.

ADDITIONAL
  INFORMATION



A.

Share
  Capital



This
  Form 20-F is being filed as an Annual Report under the Exchange Act and, as
  such, there is no requirement to provide any information under this section.



B.

Memorandum
  and Articles of Association



The
  Company was amalgamated on February 25, 2002 pursuant to the Company Act
  (British Columbia) (the Act) and is registered with the Registrar
  of Companies for British Columbia under corporation number 642805.  The
  Company is not limited in its objects and purposes.



With
  respect to directors, the Articles of the Company provide that a director who
  is, in any way, directly or indirectly interested in an existing or proposed
  contract or transaction with the Company, or who holds any office or possesses
  any property whereby, directly or indirectly, a duty or interest might be created
  to conflict with his duty or interest as a director, shall declare the nature
  and extent of his interest in such contract or transaction or the conflict or
  potential conflict with his duty and interest as a director, as the case may
  be, in accordance with the provisions of the Act and shall abstain from voting
  in respect thereof.  This prohibition does not apply to:



| |     |                                                                                                                                                                                                                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | any
        such contract or transaction relating to a loan to the Company, which
        a director or a specified corporation or a specific firm in which he has
        an interest has guaranteed or joined in guaranteeing the repayment of
        the loan or any part of the loan;



---

56





| |       |                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | any
        contract or transaction made or to be made with, or for the benefit of
        a holding corporation or a subsidiary corporation of which a director
        is a director;                                                                                                                                                                                                                     
| | (iii) | any
        contract by a director to subscribe for or underwrite shares or debentures
        to be issued by the Company or a subsidiary of the Company, or any contract,
        arrangement or transaction in which a director is, directly or indirectly
        interested if all the other directors are also, directly or indirectly
        interested in the contract, arrangement or transaction;
| | (iv)  | determining
        the remuneration of the directors;                                                                                                                                                                                                                                                                                                                                                      
| | (v)   | purchasing
        and maintaining insurance to cover directors against liability incurred
        by them as directors; or                                                                                                                                                                                                                                                                                 
| | (vi)  | the
        indemnification of any director by the Company.                                                                                                                                                                                                                                                                                                                                                 



The
  Articles of the Company also provide that the directors may from time to time
  on behalf of the Company borrow such money in such manner and amount, on such
  security, from such sources and upon such terms and conditions as they think
  fit; issue bonds, debentures and other debt obligations, either outright or
  as security for any liability or obligation of the Company, or any other person;
  and mortgage, charge, whether by way of specific or floating charge, or give
  other security on the undertaking, or on the whole or any part of the property
  and assets of the Company (both present and future).  Variation of these
  borrowing powers would require an amendment to the Articles of the Company that
  would, in turn, require the approval of the shareholders of the Company by way
  of a Special Resolution.  A Special Resolution means a resolution cast
  by a majority of not less than 3⁄4 of the votes cast by shareholders of the
  Company who, being entitled to do so, vote in person or by proxy at a general
  meeting of the Company of which notice as the Articles of the Company provide
  and not being less than 21 days notice specifying the intention to propose the
  resolution as a special resolution, has been duly given (or, if every shareholder
  entitled to attend and vote at the meeting agrees, at a meeting of which less
  than 21 days notice has been given), or a resolution consented to in writing
  by every shareholder of the Company who would have been entitled to vote in
  person or by proxy at a general meeting of the Company, and a resolution so
  consented to is deemed to be a special resolution passed at a general meeting
  of the Company.



There
  is no requirement in the Articles of the Company or in the Act requiring retirement
  or non-retirement of directors under an age limit requirement, nor is there
  any minimum shareholding required for a directors qualification.



Holders
  of common shares of the Company are entitled to vote at meetings of shareholders,
  and a Special Resolution, as described above, is required to effect a change
  in the rights of shareholders.  Holders of common shares are not entitled
  to pre-emptive rights.  Holders of common shares are entitled, ratably,
  to the remaining property of the Company upon liquidation, dissolution or winding
  up of the Company, and such holders receive dividends if, as, and when, declared
  by the directors of the Company.  There are no restrictions on the purchase
  or redemption of common shares by the Company while there is an arrearage in
  the payment of dividends or sinking fund installments.  There is no liability
  on the part of any shareholder to further capital calls by the Company nor any
  provision discriminating against any existing or prospective holder of securities
  of the Company as a result of such shareholder owning a substantial number of
  shares.  There are no limitations on the rights to own securities, including
  the rights of non-resident or foreign shareholders to hold or exercise voting
  rights on the securities imposed by the Act or by the constating document of
  the Company.



The
  Company is required to give its registered shareholders not less than 21 days
  notice of any general meeting of the Company unless all such shareholders consent
  to reduce or waive the period.  In addition, the Company is obliged to
  give notice to registrants and intermediaries who hold shares on behalf of the
  ultimate beneficial owners no fewer than 35 or more than 60 days prior to the
  date of the meeting.  The Company then delivers, in bulk, proxy-related
  materials in amounts specified by the intermediaries.  No shares of the
  Company owned by registrants or intermediaries may be voted at a general meeting
  of the Company unless all proxy-related materials are delivered to the ultimate
  beneficial owners of such shares.  Such ultimate beneficial owner must
  then deliver a proxy to the Company within the time limited by the Company for
  the deposit of proxies in order to vote the shares in respect of which such
  person is the beneficial owner.



---

57



There
  is no provision in the Company's Articles that would have an effect of delaying,
  deferring or preventing a change in control of the Company and that would operate
  only with respect to a merger, acquisition or corporate restructuring involving
  the Company (or any of its subsidiaries).



Securities
  legislation in the Companys home jurisdiction of British Columbia requires
  that shareholder ownership must be disclosed once a person owns beneficially
  or has control or direction over greater than 10% of the issued shares of the
  Company.  This threshold is higher than the 5% threshold under U.S. securities
  legislation at which shareholders must report their share ownership.



C.

Material
  Contracts



On
  June 26, 2002, the Company, through its wholly-owned subsidiary Cynthia Holdings
  Limited (Cynthia), entered into a letter agreement (the Agreement)
  whereby it agreed to sell an effective 50% interest in its Santa Rosa Property
  for the sum of US$1,400,000 to Bible Resources Limited (Bible) a
  private Nevada corporation. The Agreement initially provided for the purchase
  price to be paid in three tranches, with US$400,000 due on or before July 31,
  2002, a further US$400,000 on or before August 30, 2002 and the remaining US$600,000
  to be paid by September 30, 2002. At the time that the Agreement was entered
  into, the Company was not related to Bible, however, since the date of the Agreement,
  Chet Idziszek, the President and a director of the Company was appointed as
  a director of Bibles parent company, The Havana Group Inc.  (Havana).
   The Agreement has been amended a number of times subsequent to Mr. Idziszek
  becoming a director of Havana and during the fiscal year ended February 28,
  2005, Cynthia received US$600,000 in payment for a 17.52% effective interest
  in its Santa Rosa Property and, as consideration for extending the agreement,
  the Companys wholly owned British Virgin Islands subsidiary, Irie Isle
  Limited (Irie), received 1,000,000 common shares in the capital
  stock of Surge Global Energy Inc. (Surge), Bibles parent company
  and the assignee of Bibles interest.  Surge has elected not to acquire
  any further interest in the Santa Rosa Property.



By
  a letter agreement dated January 27, 2005, the Company and Lund Gold Ltd. (Lund)
  were granted an option by Dirceu Santos F. Sobrinho to jointly acquire a 100%
  interest in the 5,000-hectare Carneirinho gold exploration property in north
  central Brazil.  The option to acquire the Carneirinho Property is structured
  as a two-stage option with Lund and the Company jointly acquiring a 50% interest
  at each stage. In order to exercise the first option, Lund and the Company must
  pay the vendor US$50,000 on or before April 30, 2005 (paid) and a total of US$1,700,000
  by April 30, 2009.  Following the exercise of the first option, in order
  to exercise the second option, Lund and the Company must pay the vendor an additional
  US$6,000,000 on or before April 30, 2010. By an agreement dated March 12, 2007
  between the Company and Lund Gold Ltd. (Lund), the Company sold
  all of its interest in the Carneirinho Property to Lund in consideration of
  the issuance to the Company of 1,197,906 common shares of Lund, consideration
  reflecting the amount that the Company had spent on acquisition, exploration
  and development of the Carneirinho Property.



On
  February 2, 2005, the Company entered into loan agreements to borrow $625,000
  (of which $575,000, in total, was provided by two directors of the Company and
  a company controlled by a director of the Company) to pay exploration office
  costs associated with the Companys Sabodala Property.  These loan
  agreements were replaced by loan agreements dated April 28, 2005 that provide
  that the loans bear interest at the rate of 12% per annum; are convertible at
  the option of the lenders into units of the Company at a price of $0.45 per
  unit, each unit being comprised of one share and one share purchase warrant
  entitling the purchase of an additional share of the Company at a price of $0.45
  per share for a period of two years following the date of conversion of the
  loan.  These loans were converted by the lenders during the fiscal year
  ended February 28, 2006 resulting in the issuance of 1,388,887 units to the
  lenders.



In
  August 2005, the Company entered into a loan agreement to borrow USD$600,000
  to pay for work to be performed on the Companys Santa Rosa Property in
  Argentina.  The loan agreement provides that the loan is due on the earlier
  of October 7, 2007 and five business days following the closing of the Companys
  next financing sufficient to repay such loan and those loans advanced in February
  2005; bears interest at the rate of 12% per annum; is convertible at the option
  of the lender into units of the Company at a price of $0.43 per unit, each unit
  being comprised of one share and one share purchase warrant entitling the purchase
  of an additional share of the Company at a price of $0.43 per share for a period
  of two years following the date of conversion of the loan.  The proceeds
  of the loan were advanced on October 7, 2005.  This loan was converted
  into 1,701,644 units in November 2005.



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58



By
  a Mining Convention signed February 17, 2005 between the Company and the Government
  of Sénégal, the Company, on behalf of the Oromin Joint Venture Group
  (OJVG), was granted an exploration concession to explore the Sabodala
  Property, a 230 square kilometre property in the Republic of Sénégal.
   The OJVG was a joint venture between the Company and Bendon International
  Ltd. (Bendon), each as to 50% with the Company and Bendon each holding
  a 6.5% interest in trust for Badr Investment & Finance Company (Badr),
  a private company based in Saudi Arabia, pending its execution of a tripartite
  joint venture agreement on the same terms as the current joint venture agreement
  between the Company and Bendon, such joint venture interest to be transferred
  to Badr on execution of such tripartite agreement.  In order to acquire
  a 100% interest in the Sabodala Property, the OJVG was required to spend at
  least USD$8 million on exploration of the Sabodala Property by April 17, 2007
  which it has done.



By
  an agreement dated December 18, 2006, as amended, between Oromin Joint Venture
  Group Ltd. (OJVG Ltd.), Sabodala Holding Limited (SHL)
  (a wholly-owned subsidiary of the Company), Bendon and Badr, the OJVG was converted
  into a corporate form.  SHL and Bendon each own a 43.5% interest and Badr
  owns a 13% interest in OJVG Ltd.  SHL and Bendon have agreed to each fund
  50% of the costs of exploration and development of the Sabodala Property, with
  Badrs interest being fully carried for as long as it owns an interest
  in OJVG Ltd.  The exploration concession comprising the Sabodala Property
  has been assigned the OJVG Ltd.  SHL is the operator of OJVG Ltd. to which
  it provides exploration and management services.



In
  March 2007, Government of Sénégal a  twenty month extension (to
  December 22, 2008) to the current Mining Convention by spending an additional
  USD$12 million during the extension period.   Thereafter, OJVG Ltd.
  has ten months (to October 22, 2009) to complete a preliminary feasibility study
  on the project, at which point the concession can be converted to an exploitation
  concession.  Upon conversion of the concession from an exploration to an
  exploitation concession, OVJG Ltd. must establish an operating company to further
  develop the Sabodala Property and must offer to Sénégalese nationals
  the right to purchase 25% of such operating company at a price determined by
  an independent valuator.  The Government of Sénégal will receive
  a 10% interest in the operating company at no cost and a royalty of $US 6.50
  per ounce of gold produced.



D.

Exchange
  Controls



There
  are no governmental laws, decrees or regulations in Canada relating to restrictions
  on the export or import of capital, or affecting the remittance of interest,
  dividends or other payments to non-resident holders of the Companys common
  shares.  Any remittances of dividends to United States residents are, however,
  subject to a 15% withholding tax (5% if the shareholder is a corporation owning
  at least 10% of the outstanding common shares of the Company) pursuant to Article
  X of the reciprocal tax treaty between Canada and the United States.  See
  Item 10  Additional Information  E.  Taxation below.



Except
  as provided in the Investment Canada Act (the Act), which
  has provisions which govern the acquisition of a control block of voting shares
  by non-Canadians of a corporation carrying on a Canadian business, there are
  no limitations specific to the rights of non-Canadians to hold or vote the common
  shares of the Company under the laws of Canada or the Province of British Columbia
  or in the charter documents of the Company.



Management
  of the Company considers that the following general summary fairly describes
  those provisions of the Act pertinent to an investment in the Company by a person
  who is not a Canadian resident (a non-Canadian).



The
  Act requires a non-Canadian making an investment which would result in the acquisition
  of  control of the Canadian business to notify the Investment Review Division
  of Industry Canada, the federal agency created by the Act; or in the case of
  an acquisition of a Canadian business, the gross value of the assets of which
  exceeds certain threshold levels or the business activity of which is related
  to Canadas cultural heritage of national identity, to file an application
  for review with the Investment Review Division.



The
  notification procedure involves a brief statement of information about the investment
  on a prescribed form that is required to be filed with Investment Canada by
  the investor at any time up to 30 days following implementation of the investment.
   Once the completed notice has been filed, a receipt bearing the certificate
  date will be issued to the non-Canadian investor.



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59



The
  receipt must advise the investor either that the investment proposal is unconditionally
  non-reviewable or that the proposal will not be reviewed as long as notice of
  review is not issued within 21 days of the date certified under the receipt.
   It is intended that investments requiring only notification will proceed
  without government intervention unless the investment is in a specific type
  of business activity related to Canadas cultural heritage and national
  identity.



If
  an investment is reviewable under the Act, an order for review must be issued
  within 21 days after the certified date on which notice of investment was received.
   An application for review in the form prescribed is required to be filed
  with Investment Canada prior to the investment taking place.  Once the
  application has been filed, a receipt will be issued to the applicant, certifying
  the date on which the application was received.  For incomplete applications,
  a deficiency notice will be sent to the applicant, and if not done within 15
  days of receipt of application, the application will be deemed to be complete
  as of the date it was received.  Within 45 days after the complete application
  has been received, the Minister responsible for the Investment Canada Act must
  notify the potential investor that the Minister is satisfied that the investment
  is likely to be of net benefit to Canada.  If within such 45-day period
  the Minister is unable to complete the review, the Minister has an additional
  30 days to complete the review, unless the applicant agrees to a longer period.
   Within such additional period, the Minister must advise either that he
  is satisfied or not satisfied that the investment is likely to be of net benefit
  to Canada.  If the time limits have elapsed, the Minister will be deemed
  to be satisfied that the investment is likely to be of net benefit to Canada.
   The investment may not be implemented until the review has been completed
  and the Minister is satisfied that the investment is likely to be of net benefit
  to Canada.



If
  the Minister is not satisfied that the investment is likely to be of net benefit
  to Canada, the non-Canadian must not implement the investment or, if the investment
  has been implemented, could be penalized by being required to divest himself
  of control of the business that is the subject of the investment.  To date,
  the only types of business activities which have been prescribed by regulation
  as related to Canadas cultural heritage or national identity deal largely
  with publication, film and music industries.  Because the Companys
  total assets are less than the $5 million notification threshold, and because
  the Companys business activities would likely not be deemed related to
  Canadas cultural heritage or national identity, acquisition of a controlling
  interest in the Company by a non-Canadian investor would not be subject to even
  the notification requirements under the Investment Canada Act.



The following investments
  by non-Canadians are subject to notification under the Act:



|   |                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------
|1. | an
        investment to establish a new Canadian business; and                                                    
|2. | an
        investment to acquire control of a Canadian business that is not reviewable
        pursuant to the Act.



The
  following investments by a non-Canadian are subject to review under the Act:



|   |                                                                                                                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | direct
        acquisition of control of Canadian businesses with assets of $5 million
        or more, unless the acquisition is being made by a World Trade Organization
        (WTO) member country investor (the United States being a member
        of the WTO);                                                                                            
|2. | direct
        acquisition of control of Canadian businesses with assets of $172,000,000
        or more by a WTO investor;                                                                                                                                                                                                                                          
|3. | indirect
        acquisition of control of Canadian business with assets of $5 million
        or more if such assets represent more than 50% of the total value of the
        assets of the entities, the control of which is being acquired, unless
        the acquisition is being made by a WTO investor, in which case there is
        no review;            
|4. | indirect
        acquisition of control of Canadian businesses with assets of $50 million
        or more even if such assets represent less than 50% of the total value
        of the assets of the entities, the control of which is being acquired,
        unless the acquisition is being made by a WTO investor, in which case
        there is no review; and
|5. | an
        investment subject to notification that would not otherwise be reviewable
        if the Canadian business engages in the activity of publication, distribution
        or sale of books, magazines, periodicals, newspapers, film or video recordings,
        audio or video music recordings, or music in print or machine-readable
        form.      





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60



Generally
  speaking, an acquisition is direct if it involves the acquisition of control
  of the Canadian business or of its Canadian parent or grandparent and an acquisition
  is indirect if it involves the acquisition of control of a non-Canadian parent
  or grandparent of an entity carrying on the Canadian business.  Control
  may be acquired through the acquisition of actual voting control by the acquisition
  of voting shares of a Canadian corporation or through the acquisition of substantially
  all of the assets of the Canadian business.  No change of voting control
  will be deemed to have occurred if less than one-third of the voting control
  of a Canadian corporation is acquired by an investor.



A
  WTO investor, as defined in the Act, includes an individual who is a national
  of a member country of the World Trade Organization or who has the right of
  permanent residence in relation to that WTO member, a government or government
  agency of a WTO investor-controlled corporation, limited partnership, trust
  or joint venture and a corporation, limited partnership, trust or joint venture
  that is neither WTO-investor controlled or Canadian controlled of which two-thirds
  of its board of directors, general partners or trustees, as the case may be,
  or any combination of Canadians and WTO investors.



The
  higher thresholds for WTO investors do not apply if the Canadian business engages
  in activities in certain sectors such as uranium, financial services, transportation
  services or communications.



The
  Act specifically exempts certain transactions from either notification or review.
   Included among this category of transactions is the acquisition of voting
  shares or other voting interests by any person in the ordinary course of that
  persons business as a trader or dealer in securities.



E.

Taxation



Material
  Canadian Federal Income Tax Consequences



Through
  consultation with counsel, management of the Company believes that the following
  general summary accurately describes all material Canadian federal income tax
  consequences applicable to a holder of common shares of the Company who is a
  resident of the United States and who is not a resident of Canada and who does
  not use or hold, and is not deemed to use or hold, his common shares of the
  Company in connection with carrying on a business in Canada (a non-resident
  holder).



This
  summary is based upon the current provisions of the Income Tax Act (Canada)
  (the ITA), the regulations thereunder (the Regulations),
  the current publicly announced administrative and assessing policies of Canada,
  Customs and Revenue Agency, and all specific proposals (the Tax Proposals)
  to amend the ITA and Regulations announced by the Minister of Finance (Canada)
  prior to the date hereof.  This summary assumes that the Tax Proposals
  will be enacted in their form as of the date of this Annual Report.  This
  description, except for the Tax Proposals, does not take into account or anticipate
  any changes in law, whether by legislative, government or judicial action, nor
  does it take into account provincial, territorial, or foreign tax considerations
  which may differ significantly from those discussed herein.



Dividends



Dividends
  paid on the common shares of the Company to a non-resident holder will be subject
  to withholding tax.  The Canada-U.S. Income Tax Convention (1980) (the
  Treaty) provides that the normal 25% withholding tax rate under
  the ITA is reduced to 15% on dividends paid on shares of a corporation resident
  in Canada (such as the Company) to beneficial owners of the dividends who are
  residents of the United States, and also provides for a further reduction of
  this rate to 5% where the beneficial owner of the dividends is a corporation
  that is a resident of the United States which owns at least 10% of the voting
  shares of the corporation paying the dividend.





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61



Capital
  Gains



Under
  the ITA, a taxpayers capital gain or capital loss from a disposition of
  a share of the Company is the amount, if any, by which his proceeds of disposition
  exceed (or are exceeded by) the aggregate of his adjusted cost base of the share
  and reasonable expenses of disposition.  One half of a capital gain (the
  taxable capital gain) is included in income, and one half of a capital
  loss in a year (the allowable capital loss) is deductible from taxable
  capital gains realized in the same year.  The amount by which a shareholders
  allowable capital loss exceeds his taxable capital gains in a year may be deducted
  from a taxable capital gain realized by the shareholder in the three previous
  or any subsequent year, subject to certain restrictions in the case of a corporate
  shareholder.



A
  non-resident holder is not subject to tax under the ITA in respect of a capital
  gain realized upon the disposition of a share of a public corporation unless
  the share represents taxable Canadian property to the holder thereof.
   The Company is a public corporation for purposes of the ITA and a common
  share of the Company will be taxable Canadian property to a non-resident holder
  if, at any time during the period of five years immediately preceding the disposition,
  the non-resident holder, persons with whom the non-resident holder did not deal
  at arms length, or the non-resident holder and persons with whom he did
  not deal at arms length together owned not less than 25% of the issued
  shares of any class of shares of the Company.



Where
  a non-resident holder who is an individual ceased to be resident in Canada,
  and at the time he ceased to be a Canadian resident elected to have his Company
  shares treated as taxable Canadian property, he will be subject to Canadian
  tax on any capital gain realized on disposition of the Companys shares,
  subject to the relieving provisions of the Treaty described below.  Shares
  of the Company may also be taxable Canadian property to a holder if the holder
  acquired them pursuant to certain tax-deferred rollover transactions
  whereby the holder exchanged property that was taxable Canadian property for
  shares of the Company.



Where
  the non-resident holder realized a capital gain on a disposition of the Company
  shares that constitute taxable Canadian property, the Treaty relieves the non-resident
  shareholder from liability for Canadian tax on such capital gains unless:



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | the
        value of the shares is derived principally from real property
        in Canada, including the right to explore for or exploit natural resources
        and rights to amounts computed by reference to production from natural
        resources, which is the case for the Company,                                                                                                                               
|(b) | the
        non-resident holder is an individual who was resident in Canada for not
        less than 120 months during any period of 20 consecutive years preceding,
        and at any time during the 10 years immediately preceding, the disposition
        and the shares were owned by him when he ceased to be resident in Canada
        or are property substituted for property that was owned at that time,
        or
|(c) | the
        shares formed part of the business property of a permanent establishment
        or pertained to a fixed base used for the purpose of performing independent
        personal services that the shareholder has or had in Canada within the
        12 months preceding the disposition.                                                                                                                            



Material
  United States Federal Income Tax Consequences



The
  following summary is a general discussion of the material United States Federal
  income tax considerations to U.S. holders of shares of the Company under current
  law.  This discussion assumes that U.S. holders hold their shares of the
  Companys common stock as capital assets within the meaning of Section
  1221 of the Internal Revenue Code of 1986, as amended (the Code).
   It does not discuss all the tax consequences that may be relevant to particular
  holders in light of their circumstances or to holders subject to special rules,
  such as tax-exempt organizations, qualified retirement plans, financial institutions,
  insurance companies, real estate investment trusts, regulated investment companies,
  broker-dealers, non-resident alien individuals or foreign corporations whose
  ownership of shares of the Company is not effectively connected with the conduct
  of a trade or business in the United States, shareholders who acquired their
  stock through the exercise of employee stock options or otherwise as compensation,
  shareholders who hold their stock as ordinary assets and not capital assets
  and any other non-U.S. holders.  In addition, U.S. holders may be subject
  to state, local or foreign tax consequences.  No opinion or representation
  with respect to the United States Federal income tax consequences to any such
  holder or prospective holder is being made by the Company herein.



---

62



Holders
  and prospective holders should therefore consult with their own tax advisors
  with respect to their particular circumstances.  This discussion covers
  all material tax consequences.



The
  following discussion is based upon the sections of the Code, Treasury Regulations,
  published Internal Revenue Service (IRS) rulings, published administrative
  positions of the IRS and court decisions that are currently applicable, any
  or all of which could be materially and adversely changed, possibly on a retroactive
  basis, at any time.  This decision does not consider the potential effects,
  both adverse and beneficial, of any recently proposed legislation that, if enacted,
  could be applied, possibly on a retroactive basis, at any time.  Accordingly,
  holders and prospective holders of shares of the Company should consult their
  own tax advisors about the Federal, state, local, estate, and foreign tax consequences
  of purchasing, owning and disposing of shares of the Company.



U.S. Holders



As
  used herein, a U.S. Holder includes a holder of shares of the Company
  who is a citizen or resident of the United States, a corporation created or
  organized in or under the laws of the United States or of any political subdivision
  thereof, any entity that is taxable as a corporation for U.S. tax purposes and
  any other person or entity whose ownership of shares of the Company is effectively
  connected with the conduct of a trade or business in the United States.  A
  U.S. Holder does not include persons subject to special provisions of Federal
  income tax law, such as tax exempt organizations, qualified retirement plans,
  financial institutions, insurance companies, real estate investment trusts,
  regulated investment companies, broker-dealers, non-resident alien individuals
  or foreign corporations whose ownership of shares of the Company is not effectively
  connected with conduct of trade or business in the United States, shareholders
  who acquired their stock through the exercise of employee stock options or otherwise
  as compensation and shareholders who hold their stock as ordinary assets and
  not as capital assets.



Distributions
  on Common Shares of the Company



U.S.
  Holders receiving dividend distribution (including constructive dividends) with
  respect to shares of the Company are required to include in gross income for
  United States Federal income tax purposes the gross amount of such distribution
  to the extent that the Company has current or accumulated earnings and profits
  as defined under U.S. Federal tax law, without reduction for any Canadian income
  tax withheld from such distributions.  Such Canadian tax withheld may be
  credited, subject to certain limitations, against the U.S. Holders United
  States Federal income tax liability or, alternatively, may be deducted in computing
  the U.S. Holders United States Federal taxable income by those who itemize
  deductions.  (See more detailed discussion at Foreign Tax Credit
  below).  To the extent that distributions exceed current or accumulated
  earnings and profits of the Company, they will be treated first as a return
  of capital up to the U.S. Holders adjusted basis in the shares and thereafter
  as gain from the sale or exchange of the shares.  Preferential tax rates
  for long-term net capital gains are applicable to a U.S. Holder that is an individual,
  estate or trust.  There are currently no preferential tax rates for long-term
  capital gains for a U.S. Holder that is a corporation.



Dividends
  paid on the shares of the Company will not generally be eligible for the dividends
  received deduction provided to corporations receiving dividends from certain
  United States corporations.  A U.S. Holder that is a corporation may, under
  certain circumstances, be entitled to a 70% deduction of the United States source
  portion of dividends received from the Company (unless the Company qualifies
  as a foreign personal holding company or a passive foreign
  investment company, as defined below) if such U.S. Holder owns shares
  representing at least 10% of the voting power and value of the Company.  The
  availability of this deduction is subject to several complex limitations that
  are beyond the scope of this discussion.



In
  the case of foreign currency received as a dividend that is not converted by
  the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have
  a tax basis in the foreign currency equal to its U.S. dollar value on the date
  of receipt.  Generally, any gain or loss recognized upon a subsequent sale
  or other disposition of the foreign currency, including the exchange for U.S.
  dollars, will be ordinary income or loss.  However, for tax years after
  1997, an individual whose realized foreign exchange gain does not exceed U.S.
  $200 will not recognize that gain, to the extent that there are not expenses
  associated with the transaction that meet the requirement for deductibility
  as a trade or business expense other than travel expenses in connection with
  a business trip (or as an expense for the production of income).



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63



Foreign
  Tax Credit



A
  U.S. Holder who pays (or has withheld from distribution) Canadian income tax
  with respect to the ownership of shares of the Company may be entitled, at the
  option of the U.S. Holder, to either a deduction or a tax credit for such foreign
  tax paid or withheld.  Generally, it will be more advantageous to claim
  a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar
  basis, while a deduction merely reduces the taxpayers income subject to
  tax.  This election is made on a year-by-year basis and applies to all
  foreign taxes paid by (or withheld from) the U.S. Holder during the year.  There
  are significant and complex limitations that apply to the credit, among which
  is the general limitation that the credit cannot exceed the proportionate share
  of the U.S. Holders United States Federal income tax liability that the
  U.S. Holders foreign source income bears to this or its worldwide taxable
  income.  In the determination of the application of this limitation, the
  various items of income and deduction must be classified into foreign and domestic
  sources.  Complex rules govern this classification process.  There
  are further limitations on the foreign tax credit for certain types of income
  such as passive income, high withholding tax interest,
  financial services income, shipping income, and certain
  other classifications of income.  The availability of the foreign tax credit
  and the application of the limitations on the credit are fact specific and holders
  and prospective holders of shares of the Company should consult their own tax
  advisors regarding their individual circumstances.



Information
  Reporting and Backup Withholding



U.S
  information reporting requirements may apply with respect to the payment of
  dividends to U.S. Holders of the Companys common shares.  Under Treasury
  regulations currently in effect, non-corporate holders may be subject to backup
  withholding at a 31% rate with respect to dividends when such holder (1) fails
  to finish or certify a correct taxpayer identification number to the payor in
  the required manner, (2) is notified by the IRS that it has failed to report
  payments of interest or dividends properly or (3) fails, under certain circumstances,
  to certify that it has been notified by the IRS that it is subject to backup
  withholding for failure to report interest and dividend payments.  Any
  amounts withheld under the backup withholding rules from a payment to a U.S.
  Holder generally will be allowed as a credit against the U.S. Holders
  U.S. federal income tax liability and may entitle the U.S. Holder to a refund,
  provided that the required information is furnished to the IRS.  Certain
  U.S. Holders, including corporations, are not subject to backup withholding.



Disposition
  of Common Shares of the Company



A
  U.S. Holder will recognize a gain or loss upon the sale of shares of the Company
  equal to the difference, if any, between (i) the amount of cash plus the fair
  market value of any property received, and (ii) the shareholders tax basis
  in the shares of the Company.  This gain or loss will be a capital gain
  or loss if the shares are a capital asset in the hands of the U.S. Holder, and
  will be a short-term or long-term capital gain or loss depending upon the holding
  period of the U.S. Holder.  Gains and losses are netted and combined according
  to special rules in arriving at the overall capital gain or loss for a particular
  tax year.  Deductions for net capital loss are subject to significant limitations.
   Corporate capital losses (other than losses of corporations electing under
  Subchapter S of the Code) are deductible to the extent of capital gains.  Non-corporate
  taxpayers may deduct net capital losses, whether short-term or long-germ, up
  to U.S. $3,000 a year (U.S. $1,500 in the case of a married individual filing
  separately).  For U.S. Holders who are individuals, any unused portion
  of such net capital loss may be carried over to be used in later tax years until
  such net capital loss is thereby exhausted.  For U.S. Holders which are
  corporations (other than corporations subject to Subchapter S of the Code),
  an unused net capital loss may be carried back three years from the loss year
  and carried forward five years from the loss year to be offset against capital
  gains until such net capital loss is thereby exhausted.



---

64



Currency
  Exchange Gains or Losses



U.S.
  holders generally are required to calculate their taxable incomes in United
  States dollars.  Accordingly, a U.S. holder who purchases common shares
  of the Company with Canadian dollars will be required to determine the tax basis
  of such shares in United States dollars based on the exchange rate prevailing
  on the settlement date of the purchase (and may be required to recognize the
  unrealized gain or loss, if any, in the Canadian currency surrendered in the
  purchase transaction).  Similarly, a U.S. holder receiving dividends or
  sales proceeds from common shares of the Company in Canadian dollars will be
  required to compute the dividend income or the amount realized on the sale,
  as the case may be, in United States dollars based on the exchange rate prevailing
  at the time of receipt in the case of dividends and on the settlement date in
  the case of sales on an established securities exchange.  Gain or loss,
  if any, recognized on a disposition of Canadian currency in connection with
  the described transactions generally will be treated as ordinary gain or loss.



Other
  Considerations



In
  the following circumstances, the above sections of this discussion may not describe
  the United States Federal income tax consequences resulting from the holding
  and disposition of common shares of the Company (the Company does not believe
  that it will qualify in the next year, or has qualified within the past three
  fiscal years, as a foreign personal holding company, foreign
  investment company, passive foreign investment company or
  controlled foreign corporation as discussed below):



Foreign
  Personal Holding Company



If
  at any time during a taxable year more than 50% of the total combined voting
  power or the total value of the Companys outstanding shares is owned,
  directly or indirectly, by five or fewer individuals who are citizens of the
  United States and 60% or more of the Companys gross income for such year
  was derived from certain passive sources (e.g., from dividends received from
  its subsidiaries), the Company would be treated as a foreign personal
  holding company.  In that event, U.S. Holders that hold common shares
  of the Company (on the earlier of the last day of the Companys tax year
  or the last date in which the Company was a foreign personal holding company)
  would be required to include in gross income for such year their allocable portions
  of such passive income to the extent the Company does not actually distribute
  such income.



Foreign
  Investment Company



If
  50% or more of the combined voting power or total value of the Companys
  outstanding shares are held, directly or indirectly, by citizens or residents
  of the United States, United States domestic partnerships or corporations, or
  estates or trusts other than foreign estates or trusts (as defined by the Code
  Section 7701(a)(31)), and the Company is found to be engaged primarily in the
  business of investing, reinvesting, or trading in securities, commodities, or
  any interest therein, it is possible that the Company might be treated as a
  foreign investment company as defined in Section 1246 of the Code,
  causing all or part of any gain realized by a U.S. Holder selling or exchanging
  common shares of the Company to be treated as ordinary income rather than capital
  gains.



Passive
  Foreign Investment Company



As
  a foreign corporation with U.S. Holders, the Company could potentially be treated
  as a passive foreign investment company (PFIC), as defined in Section
  1297 of the Code, depending upon the percentage of the Companys income
  which is passive, or the percentage of the Companys assets which are producing
  passive income (generally 75% or more of its gross income in a taxable year
  is passive income, or the average percentage of the Companys assets (by
  value) during the taxable year which produce passive income or which are held
  for production of same is at least 50%).  Passive income is generally defined
  to include gross income in the nature of dividends, interest, royalties, rents
  and annuities; excess of gains over losses from certain transactions in any
  commodities not arising inter aliafrom a PFIC whose business is actively
  involved in such commodities; certain foreign currency gains; and other similar
  types of income.  U.S. Holders owning shares of a PFIC are subject to an
  additional tax and to an interest charge based on the value of deferral of tax
  for the period during which the common shares of the PFIC are owned, in addition
  to treatment of gain realized on the disposition of common shares of the PFIC
  as ordinary income rather than capital gain.



---

65



However,
  if the U.S. Holder makes a timely election to treat a PFIC as a qualified electing
  fund (QEF) with respect to such shareholders interest therein,
  the above-described rules generally will not apply.  Instead, the electing
  U.S. Holder would include annually in his gross income his pro rata share of
  the PFICs ordinary earnings and net capital gain regardless of whether
  such income or gain was actually distributed.  A U.S. Holder of a QEF can,
  however, elect to defer the payment of United States Federal income tax on such
  income inclusions.  Special rules apply to U.S. Holders who own their interests
  in a PFIC through intermediate entities or person.



Effective
  for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders
  who hold, actually or constructively, marketable stock of a foreign corporation
  that qualifies as a PFIC may elect to mark such stock to the market (a mark-to-market
  election).  If such an election is made, such U.S. Holder will not
  be subject to the special taxation rules of PFIC described above for the taxable
  year for which the mark-to-market election is made.  A U.S. Holder who
  makes such an election will include in income for the taxable year an amount
  equal to the excess, if any, of the fair market value of the shares of the Company
  as of the close of such tax year over such U.S. Holders adjusted basis
  in such shares.  In addition, the U.S. Holder is allowed a deduction for
  the lesser of (i) the excess, if any, of such U.S. Holders adjusted tax
  basis in the shares over the fair market value of such shares as of the close
  of the tax year, or (ii) the excess, if any of (A) the mark-to-market gains
  for the shares in the Company included by such U.S. Holder for prior tax years,
  including any amount which would have been included for any prior year but for
  Section 1291 interest on tax deferral rules discussed above with respect to
  a U.S. Holder, who has not made a timely QEF election during the year in which
  he holds (or is deemed to have held) shares in the Company and the Company is
  a PFIC (Non-Electing U.S. Holder), over (B) the mark-to-market losses
  for shares that were allowed as deductions for prior tax years.  A U.S.
  Holders adjusted tax basis in the shares of the Company will be increased
  or decreased to reflect the amount included or deducted as a result of mark-to-market
  election.  A mark-to-market election will apply to the tax year for which
  the election is made and to all later tax years, unless the PFIC stock ceases
  to be marketable or the IRS consents to the revocation of the election.



The
  IRS has issued proposed regulations that, subject to certain exceptions, would
  treat as taxable certain transfers of PFIC stock by a Non-Electing U.S. Holder
  that are generally not otherwise taxed, such as gifts, exchanges pursuant to
  corporate reorganizations, and transfers at death.  Generally, in such
  cases, the basis of the Companys shares in the hands of the transferee
  and the basis of any property received in the exchange for those shares would
  be increased by the amount of gain recognized.  A U.S. Holder who has made
  a timely QEF election (as discussed below) will not be taxed on certain transfers
  of PFIC stock, such as gifts, exchanges pursuant to corporate reorganization,
  and transfers at death.  The transferees basis in this case will
  depend on the manner of transfer.  The specific tax effect to the U.S.
  Holder and the transferee may vary based on the manner in which the shares of
  the Company are transferred.  Each U.S. Holder should consult a tax advisor
  with respect to how the PFIC rules affect their tax situation.



The
  PFIC and QEF election rules are complex.  U.S. Holders should consult a
  tax advisor regarding the availability and procedure for making the QEF election
  as well as the applicable method for recognizing gains or earnings and profits
  under the foregoing rules.



Controlled
  Foreign Corporation



If
  more than 50% of the voting power of all classes of stock or total value of
  the stock of the Company is owned, directly or indirectly, by citizens or residents
  of the United States, United States domestic partnerships and corporations or
  estates or trusts other than foreign estates or trusts, each of whom owns 10%
  or more of the total combined voting power of all classes of stock of the Company
  (United States shareholder), the Company could be treated as a controlled
  foreign corporation under Subpart F of the Code.  This classification
  would effect many complex results including the required inclusion by such United
  States shareholders in income of their pro rata shares of Subpart F income
  (as specifically defined by the Code) of the Company.  Subpart F requires
  current inclusions in the income of United States shareholders to the extent
  of a controlled foreign corporations accumulated earnings invested in
  excess passive assets (as defined by the Code).  In addition,
  under Section 1248 of the Code, gain from sale or exchange of stock by a holder
  of common shares of the Company who is or was a United States shareholder at
  any time during the five year period ending with the sale or exchange is treated
  as ordinary dividend income to the extent of earnings and profits of the Company
  attributable to the stock sold or exchanged.



---

66



Because
  of the complexity of Subpart F, and because it is not clear that Subpart F would
  apply to the holders of common shares of the Company, a more detailed review
  of these rules is outside the scope of this discussion.



If
  the Company is both a PFIC and controlled foreign corporation, the Company will
  generally not be treated as a PFIC with respect to United States shareholders
  of the controlled foreign corporation.  This rule generally will be effective
  for taxable years of the Company ending with or within such taxable years of
  United States shareholders.



The
  foregoing summary is based upon the sections of the Internal Revenue Code of
  1986, as amended (the Code), Treasury Regulations, published Internal
  Revenue Service (IRS) rulings, published administrative positions
  of the IRS and court decisions that are currently applicable, any or all of
  which could be materially and adversely changed, possibly on a retroactive basis,
  at any time.  This discussion does not consider the potential effects,
  both adverse and beneficial, of any recently proposed legislation that, if enacted,
  could be applied, possibly on a retroactive basis, at any time.  Accordingly,
  holders and prospective holders of shares of the Company should consult their
  own tax advisors about the Federal, state, local, estate, and foreign tax consequences
  of purchasing, owning and disposing of shares of the Company.



F.

Dividends
  and Paying Agents



This
  Form 20-F is being filed as an Annual Report under the Exchange Act and, as
  such, there is no requirement to provide any information under this section.



G.

Statements
  by Experts



This
  Form 20-F is being filed as an Annual Report under the Exchange Act and, as
  such, there is no requirement to provide any information under this section.



H.

Documents
  on Display



Any
  documents referred to in this Annual Report may be inspected at the head office
  of the Company, Suite 2000, 1055 West Hastings Street, Vancouver, British Columbia,
  V6E 2E9, during normal business hours.



I.

Subsidiary
  Information



There
  is no information relating to the Companys subsidiaries which must be
  provided in Canada and which is not otherwise called for by the body of generally
  accepted accounting principles used in preparing the financial statements.





ITEM
  11.

QUANTITATIVE
  AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK



The
  Company anticipates its primary market risk, if any, to be related to fluctuations
  in exchange rates.  Exchange rate risk may arise if the Company is required
  to use different currencies for various aspects of its operations.  At
  present, the functional currency for the Company is the Canadian dollar.  Based
  on the Companys overall exchange rate risk as at February 28, 2007, the
  Company believes that a ten percent change in exchange rates would not have
  a material adverse effect on its financial position, results of operations,
  or changes in financial position.  The Company intends to monitor its exchange
  rate risk and take reasonable steps to reduce its exposure.  The Company
  does not intend to purchase or sell derivative instruments for speculative purposes.





ITEM
  12.

DESCRIPTION
  OF SECURITIES OTHER THAN EQUITY SECURITIES



This
  Form 20-F is being filed as an annual report under the Exchange Act and, as
  such, there is no requirement to provide any information under this item.



---

67



PART
  II





ITEM
  13.

DEFAULTS,
  DIVIDEND ARREARS AND DELINQUENCIES



There
  has not been a material default in the payment of principal, interest, a sinking
  or purchase fund installment, or any other material default not cured within
  thirty days, relating to indebtedness of the Company or any of its significant
  subsidiaries.  There are no payments of dividends by the Company in arrears,
  nor has there been any other material delinquency relating to any class of preference
  shares of the Company.



ITEM
  14.

MATERIAL
  MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS



Neither
  the Company nor, to the best of its knowledge, anyone else has modified materially
  or qualified the rights evidenced by any class of registered securities.





ITEM
  15.

CONTROLS
  AND PROCEDURES



(a)

Disclosure
  Controls and Procedures.  As of the end of the Companys fiscal
  year ended February 28, 2007, an evaluation of the effectiveness of the Companys
  disclosure controls and procedures (as such term is defined in Rules
  13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the
  Exchange Act)) was carried out by the Companys management
  with the participation of the principal executive officer and principal financial
  officer.  Based upon that evaluation, the Companys principal executive
  officer and principal financial officer have concluded that as of the end of
  that fiscal year, the Companys disclosure controls and procedures are
  effective to ensure that information required to be disclosed by the Company
  in reports that it files or submits under the Exchange Act is (i) recorded,
  processed, summarized and reported within the time periods specified in Securities
  and Exchange Commission rules and forms and (ii) accumulated and communicated
  to the Companys management, including its principal executive officer
  and principal financial officer, to allow timely decisions regarding required
  disclosure.



It
  should be noted that while the Companys principal executive officer and
  principal financial officer believe that the Companys disclosure controls
  and procedures provide a reasonable level of assurance that they are effective,
  they do not expect that the Companys disclosure controls and procedures
  or internal control over financial reporting will prevent all errors and fraud.
   A control system, no matter how well conceived or operated, can provide
  only reasonable, not absolute, assurance that the objectives of the control
  system are met.



(b)

Managements
  Annual Report on Internal Control Over Financial Reporting.

Management
  is responsible for establishing and maintaining adequate internal control over
  the Companys financial reporting.  The Companys internal control
  system was designed to provide reasonable assurance that all transactions are
  accurately recorded, that transactions are recorded as necessary to permit preparation
  of financial statements in accordance with Generally Accepted Accounting Principles,
  and that the Companys assets are safeguarded.

Management
  has assessed the effectiveness of the Companys internal control over financial
  reporting as at February 28, 2007.  Based on this assessment, management
  has concluded that the Companys internal control over financial reporting
  was effective as of February 28, 2007.



---

68



This
  annual report does not include an attestation report of the Companys registered
  public accounting firm regarding internal control over financial reporting.
   Managements report was not subject to attestation by the Companys
  registered public accounting firm pursuant to temporary rules of the Securities
  and Exchange Commission that permit the Company to provide only Managements
  report in this annual report.

(d)

Changes
  in Internal Control Over Financial Reporting.  During the fiscal year
  ended February 28, 2007, there were no changes in the Companys internal
  control over financial reporting that have materially affected, or are reasonably
  likely to materially affect, the Companys internal control over financial
  reporting.



ITEM
  16.

[RESERVED]



ITEM
  16A.

AUDIT
  COMMITTEE FINANCIAL EXPERT



The
  Company has determined that each of Robert Brennan and Robert Sibthorpe qualifies
  as an audit committee financial expert and as an independent
  director as defined by the rules of the SEC.  Mr. Brennan has been
  an investment advisor with CB Richard Ellis since 1987 and prior thereto was
  a CPA with Peat Marwick and Mitchell, a predecessor firm of KPMG.  Mr.
  Sibthorpe holds a B.Sc. in geology and an M.B.A. from the University of Toronto.
   He worked as a mining analyst and director of Yorkton Securities Inc.
  from 1986 to 1996.  He was an independent mining consultant from 1996 to
  1999 when he joined Canaccord Capital Corporation as a mining analyst from 1999
  to 2001.  Since 2001 he has worked as an independent mining consultant.



ITEM
  16B.

CODE
  OF ETHICS



The
  Company has adopted a Code of Ethics applicable to its directors, principal
  executive officer, principal financial officer, principal accounting officer,
  controller and persons performing similar functions.  The Company undertakes
  to provide a copy of the Companys Code of Ethics to any person, without
  charge, upon request in writing to the Secretary of the Company.



ITEM
  16C.

PRINCIPAL
  ACCOUNTANT FEES AND SERVICES



In
  respect of work undertaken for the fiscal year ended February 28, 2007 the Company
  paid or accrued the following amounts of fees to Davidson & Company, the
  Companys principal accountants, for the following categories of services:



|                                  |                                 | 
|--------------------------------- | ------------------------------- | 
|Type
        of Fees              | Amount
        Paid or Incurred | 
|Audit
        fees                | $38,000                         | 
|Audit-related
        fees        | nil                             | 
|Tax
        fees (not yet billed) | estimated
        $4,000        | 
|All
        other fees            | nil                             | 
|Total
        fees                | $42,000                         | 



In
  respect of work undertaken for the fiscal year ended February 28, 2006, the
  Company paid or accrued the following amounts of fees to Davidson & Company,
  the Companys principal accountants, for the following categories of services:



|                           |                                 | 
|-------------------------- | ------------------------------- | 
|Type
        of Fees       | Amount
        Paid or Incurred | 
|Audit
        fees         | $27,000                         | 
|Audit-related
        fees | nil                             | 
|Tax
        fees           | $4,000                          | 
|All
        other fees     | nil                             | 
|Total
        fees         | $31,000                         | 



---

69



Tax
  fees relate to fees for tax compliance services including tax return preparation.





As
  required by Rule 2-01(c)(7)(i) of Regulation S-X, before the accountant was
  engaged by the Company to render audit or non-audit services, the Companys
  audit committee approved the engagement.





ITEM
  16D.

EXEMPTIONS
  FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES



The
  information referred to in this Item is not required for the fiscal year ended
  February 28, 2007, which is the period covered by this Annual Report on Form
  20-F.





ITEM
  16E.

PURCHASES
  OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS



There
  were no such purchases; accordingly, the information referred to in this Item
  is not required for the fiscal year ended February 28, 2007, which is the period
  covered by this Annual Report on Form 20-F.











PART
  III





ITEM
  17.

FINANCIAL
  STATEMENTS



See
  the Financial Statements and Exhibits listed in Item 19 hereof and filed as
  part of this Annual Report.  These financial statements were prepared in
  accordance with Canadian GAAP and are expressed in Canadian dollars.  Such
  financial statements have been reconciled to U.S. GAAP (see Note 17 therein).
   For a history of exchange rates in effect for Canadian dollars as against
  U.S. dollars, see page 12 of this Annual Report.



ITEM
  18.

FINANCIAL
  STATEMENTS



Not
  applicable





ITEM
  19.

EXHIBITS



(a)

Financial
  Statements



|                                                                                                                                                        |                 
|------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------
|Description
        of Document                                                                                                                         | Page
        No.
|Cover
        Sheet                                                                                                                                     | F-1             
|Independent
        Auditors Report dated June 8, 2007                                                                                                 | F-2             
|Consolidated
        Balance Sheets as at February 28, 2007 and February 28, 2006                                                                       | F-3             
|Consolidated
        Statements of Operations and Deficit for the Fiscal Years Ended February
        28, 2007, February 28, 2006 and February 28, 2005 | F-4             
|Consolidated
        Statements of Cash Flows for the Fiscal Years Ended February 28, 2007,
        February 28, 2006 and February 28, 2005             | F-5             
|Notes
        to the Consolidated Financial Statements                                                                                                  | F-6             



---

70



(b)

Exhibits



|                       |                                                                                                                                                                                                         |                    
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------
|Exhibit
        Number | Description
        of Document                                                                                                                                                                         | Page
        Number
|*1.A.                  | Certificate
        of British Columbia Registrar of Companies as to the incorporation of
        Maple Leaf Petroleum Ltd.                                                                             |                    
|*1.B.                  | Certificate
        of British Columbia Registrar of Companies as to the change of name to
        International Maple Leaf Resource Corporation                                                        |                    
|*1.C.                  | Certificate
        of British Columbia Registrar of Companies as to the change of name to
        Maple Resource Corp.                                                                                 |                    
|*1.D.                  | Certificate
        of British Columbia Registrar of Companies as to the change of name to
        Birchwood Ventures Ltd.                                                                              |                    
|*1.E.                  | Certificate
        of British Columbia Registrar of Companies as to the change of name to
        Oromin Explorations Ltd.                                                                             |                    
|*1.F.                  | Articles
        of the Company                                                                                                                                                                         |                    
|*4.A.                  | Option
        Agreement dated April 5, 1999 between the Company, Camnor Resources (USA)
        Inc. and Camnor Resources Ltd. regarding the South Salcha property                                     |                    
|*4.B.                  | Option
        Agreement dated April 15, 1999 between the Company and Camnor Resources
        Ltd. regarding the Cirque property                                                                       |                    
|*4.C.                  | Loan
        Agreement dated December 4, 2000 between the Company and Chet Idziszek                                                                                                                     |                    
|*4.D.                  | Resolution
        No. 2 of the Secretariat of Energy and Mining of the Republic of Argentina
        respecting the Santa Rosa property dated March 16, 2001                                           |                    
|*4.E.                  | Letter
        agreement dated April 30, 2003 between Cynthia Holdings Limited,  The
        Havana Group Inc., Bible Resources Limited and Irie Isle Limited regarding
        the Santa Rosa property |                    
|*4.F.                  | Letter agreement
        dated January 27, 2005 between the Company, Lund Gold Ltd. and Dirceu
        Santos F. Sobrinho regarding the Carneirinho Property                                            |                    
|*4.G.                  | English
        Language Summary of the Mining Convention between the Company and the
        Government of Sénégal signed February 17, 2005 respecting the
        Sabodala Property                   |                    
|*4.H.                  | Loan
        Agreement dated April 28, 2005 between the Company and Chet Idziszek                                                                                                                       |                    
|*4.I                   | Loan
        Agreement dated April 28, 2005 between the Company and Nell Dragovan                                                                                                                       |                    
|*4.J                   | Loan
        Agreement dated April 28, 2005 between the Company and J.G. Stewart Law
        Corporation Ltd.                                                                                           |                    
|*4.K                   | Loan
        Agreement dated April 28, 2005 between the Company and David Scott                                                                                                                         |                    
|*4.L                   | Loan
        Agreement dated August 9, 2005 between the Company and Naples Explorations,
        LLC                                                                                                    | E-113              
|*4.M                   | Joint
        Venture Agreement made as of the 20th day of September 2005 between the
        Company and Bendon International Ltd.                                                                     | E-121              
|*4.N                   | Letter
        of Intent dated November 15, 2005 between the Company and Ottoman Energy
        Limited                                                                                                 | E-193              
|4.O                    | Shareholders
        Agreement dated December 18, 2006 between the Company, Badr Investment
        & Finance Company, Bendon International Ltd. and Sabodala Holding
        Limited                   | E-201              



---

71





|     |                                                                                                                                                                                                                  |       
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------
|4.P  | Amendment
        Agreement to the Shareholders Agreement, dated January 1, 2007 between
        the Company, Badr Investment & Finance Company, Bendon International
        Ltd. and Sabodala Holding Limited. | E-277 
|4.Q  | Ministry
        of Energy and Mines, Republic of Senegal, Transfer and Extension Decree,
        dated February 7, 2007 for the Sabodala Property                                                               | E-286 
|4.R  | Certificate
        of Incorporation  Sabodala Holding Limited                                                                                                                                                  | E-289 
|99.1 | Certification
        of Chief Executive Officer pursuant to 18 U.S.C. 99.1 Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                           | E-99.1
|99.2 | Certification
        of Chief Financial Officer pursuant to 18 U.S.C. 99.1 Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                           | E-99.2





---

72



SIGNATURES



The
  Company hereby certifies that it meets all of the requirements for filing on
  Form 20-F and has duly caused and authorized the undersigned to sign this Annual
  Report on its behalf.







Dated
  at Vancouver, British Columbia, this 27th day of August, 2007





OROMIN
  EXPLORATIONS LTD.





Chet
  Idziszek



Per:
   (signed) Chet Idziszek

Title:
   President



---

73



CERTIFICATIONS



I, Chet Idziszek,
  certify that:



|   |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | I
        have reviewed the annual report on Form 20-F of Oromin Explorations Ltd.
        (the Company);                                                                                                                                                                                                                                                           
|2. | Based
        on my knowledge, this report does not contain any untrue statement of
        a material fact or omit to state a material fact necessary to make the
        statements made, in light of the circumstances under which such statements
        were made, not misleading with respect to the period covered by this report;                            
|3. | Based
        on my knowledge, the financial statements, and other financial information
        included in this annual report, fairly present in all material respects
        the financial condition, results of operations and cash flows of the Company
        as of, and for, the periods presented in this report;                                           
|4. | The
        Companys other certifying officers and I are responsible for establishing
        and maintaining disclosure controls and procedures (as defined in Exchange
        Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
        reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for
        the Company and have:
|   | a)                                                                                                                                                                                                                                                                                                                                                                     | designed
        such disclosure controls and procedures, or caused such disclosure controls
        and procedures to be designed under our supervision, to ensure that material
        information relating to the Company, including its consolidated subsidiaries,
        is made known to us by others within those entities, particularly during
        the period in which this report is being prepared;
|   | b)                                                                                                                                                                                                                                                                                                                                                                     | designed
        such internal control over financial reporting, or caused such internal
        control over financial reporting to be designed under our supervision,
        to provide reasonable assurance regarding the reliability of financial
        reporting and the preparation of financial statements for external purposes
        in accordance with generally accepted accounting principles;    
|   | c)                                                                                                                                                                                                                                                                                                                                                                     | evaluated
        the effectiveness of the Companys disclosure controls and procedures
        and presented in this report our conclusions about the effectiveness of
        the disclosure controls and procedures, as of the end of the period covered
        by this report based on such evaluation; and                                                                                                   
|   | d)                                                                                                                                                                                                                                                                                                                                                                     | disclosed
        in this report any change in the Companys internal control over
        financial reporting that occurred during the period covered by this annual
        report that has materially affected, or is reasonably likely to materially
        affect, the Companys internal control over financial reporting;
        and                                                                      
|5. | The
        Companys other certifying officers and I have disclosed, based on
        our most recent evaluation of internal control over financial reporting,
        to the Companys auditors and the audit committee of the Companys
        board of directors (or persons performing the equivalent function):                                                
|   | a)                                                                                                                                                                                                                                                                                                                                                                     | all
        significant deficiencies and material weaknesses in the design or operation
        of internal control over financial reporting which are reasonably likely
        to adversely affect the Companys ability to record, process, summarize
        and report financial information; and                                                                                                             
|   | b)                                                                                                                                                                                                                                                                                                                                                                     | any
        fraud, whether or not material, that involves management or other employees
        who have a significant role in the Companys internal control over
        financial reporting.                                                                                                                                                                                                                    



Date:    August
  27, 2007



(signed) CHET
  IDIZSEK

___________________________

Chet Idziszek,
  President and Chief Executive Officer



---

74





I, Ian Brown,
  certify that:



|   |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | I
        have reviewed the annual report on Form 20-F of Oromin Explorations Ltd.
        (the Company);                                                                                                                                                                                                                                                           
|2. | Based
        on my knowledge, this report does not contain any untrue statement of
        a material fact or omit to state a material fact necessary to make the
        statements made, in light of the circumstances under which such statements
        were made, not misleading with respect to the period covered by this report;                            
|3. | Based
        on my knowledge, the financial statements, and other financial information
        included in this annual report, fairly present in all material respects
        the financial condition, results of operations and cash flows of the Company
        as of, and for, the periods presented in this report;                                           
|4. | The
        Companys other certifying officers and I are responsible for establishing
        and maintaining disclosure controls and procedures (as defined in Exchange
        Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
        reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for
        the Company and have:
|   | a)                                                                                                                                                                                                                                                                                                                                                                     | designed
        such disclosure controls and procedures, or caused such disclosure controls
        and procedures to be designed under our supervision, to ensure that material
        information relating to the Company, including its consolidated subsidiaries,
        is made known to us by others within those entities, particularly during
        the period in which this report is being prepared;
|   | b)                                                                                                                                                                                                                                                                                                                                                                     | designed
        such internal control over financial reporting, or caused such internal
        control over financial reporting to be designed under our supervision,
        to provide reasonable assurance regarding the reliability of financial
        reporting and the preparation of financial statements for external purposes
        in accordance with generally accepted accounting principles;    
|   | c)                                                                                                                                                                                                                                                                                                                                                                     | evaluated
        the effectiveness of the Companys disclosure controls and procedures
        and presented in this report our conclusions about the effectiveness of
        the disclosure controls and procedures, as of the end of the period covered
        by this report based on such evaluation; and                                                                                                   
|   | d)                                                                                                                                                                                                                                                                                                                                                                     | disclosed
        in this report any change in the Companys internal control over
        financial reporting that occurred during the period covered by this annual
        report that has materially affected, or is reasonably likely to materially
        affect, the Companys internal control over financial reporting;
        and                                                                      
|5. | The
        Companys other certifying officers and I have disclosed, based on
        our most recent evaluation of internal control over financial reporting,
        to the Companys auditors and the audit committee of the Companys
        board of directors (or persons performing the equivalent function):                                                
|   | a)                                                                                                                                                                                                                                                                                                                                                                     | all
        significant deficiencies and material weaknesses in the design or operation
        of internal control over financial reporting which are reasonably likely
        to adversely affect the Companys ability to record, process, summarize
        and report financial information; and                                                                                                             
|   | b)                                                                                                                                                                                                                                                                                                                                                                     | any
        fraud, whether or not material, that involves management or other employees
        who have a significant role in the Companys internal control over
        financial reporting.                                                                                                                                                                                                                    



Date:   August
  27, 2007





(signed) IAN
  BROWN

____________________________

Ian Brown, Chief
  Financial Officer



---

75



EXHIBIT
  INDEX



|                       |                                                                                                                                                                                                                 |                    
|---------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------
|Exhibit
        Number | Description
        of Document                                                                                                                                                                                 | Page
        Number
|*1.A.                  | Certificate
        of British Columbia Registrar of Companies as to the incorporation of
        Maple Leaf Petroleum Ltd.                                                                                     |                    
|*1.B.                  | Certificate
        of British Columbia Registrar of Companies as to the change of name to
        International Maple Leaf Resource Corporation                                                                |                    
|*1.C.                  | Certificate
        of British Columbia Registrar of Companies as to the change of name to
        Maple Resource Corp.                                                                                         |                    
|*1.D.                  | Certificate
        of British Columbia Registrar of Companies as to the change of name to
        Birchwood Ventures Ltd.                                                                                      |                    
|*1.E.                  | Certificate
        of British Columbia Registrar of Companies as to the change of name to
        Oromin Explorations Ltd.                                                                                     |                    
|*1.F.                  | Articles
        of the Company                                                                                                                                                                                 |                    
|*4.A.                  | Option
        Agreement dated April 5, 1999 between the Company, Camnor Resources (USA)
        Inc. and Camnor Resources Ltd. regarding the South Salcha property                                             |                    
|*4.B.                  | Option
        Agreement dated April 15, 1999 between the Company and Camnor Resources
        Ltd. regarding the Cirque property                                                                               |                    
|*4.C.                  | Loan
        Agreement dated December 4, 2000 between the Company and Chet Idziszek                                                                                                                             |                    
|*4.D.                  | Resolution
        No. 2 of the Secretariat of Energy and Mining of the Republic of Argentina
        respecting the Santa Rosa property dated March 16, 2001                                                   |                    
|*4.E.                  | Letter
        agreement dated April 30, 2003 between Cynthia Holdings Limited,  The
        Havana Group Inc., Bible Resources Limited and Irie Isle Limited regarding
        the Santa Rosa property         |                    
|*4.F.                  | Letter
        agreement dated January 27, 2005 between the Company, Lund Gold Ltd. and
        Dirceu Santos F. Sobrinho regarding the Carneirinho Property                                                    |                    
|*4.G.                  | English
        Language Summary of the Mining Convention between the Company and the
        Government of Sénégal signed February 17, 2005 respecting the
        Sabodala Property                           |                    
|*4.H.                  | Loan
        Agreement dated April 28, 2005 between the Company and Chet Idziszek                                                                                                                               |                    
|*4.I                   | Loan
        Agreement dated April 28, 2005 between the Company and Nell Dragovan                                                                                                                               |                    
|*4.J                   | Loan
        Agreement dated April 28, 2005 between the Company and J.G. Stewart Law
        Corporation Ltd.                                                                                                   |                    
|*4.K                   | Loan
        Agreement dated April 28, 2005 between the Company and David Scott                                                                                                                                 |                    
|*4.L                   | Loan
        Agreement dated August 9, 2005 between the Company and Naples Explorations,
        LLC                                                                                                            | E-113              
|*4.M                   | Joint
        Venture Agreement made as of the 20th day of September 2005 between the
        Company and Bendon International Ltd.                                                                             | E-121              
|*4.N                   | Letter
        of Intent dated November 15, 2005 between the Company and Ottoman Energy
        Limited                                                                                                         | E-193              
|4.O                    | Shareholders
        Agreement dated December 18, 2006 between the Company, Badr Investment
        & Finance Company, Bendon International Ltd. and Sabodala Holding
        Limited                           | E-201              
|4.P                    | Amendment
        Agreement to the Shareholders Agreement, dated January 1, 2007 between
        the Company, Badr Investment & Finance Company, Bendon International
        Ltd. and Sabodala Holding Limited | E-277              



---

76





|     |                                                                                                                                                                        |       
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------
|4.Q  | Ministry
        of Energy and Mines, Republic of Senegal, Transfer and Extension Decree,
        dated February 7, 2007 for the Sabodala Property                     | E-286 
|4.R  | Certificate
        of Incorporation  Sabodala Holding Limited                                                                                                        | E-289 
|99.1 | Certification
        of Chief Executive Officer pursuant to 18 U.S.C. 99.1 Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | E-99.1
|99.2 | Certification
        of Chief Financial Officer pursuant to 18 U.S.C. 99.1 Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | E-99.2
|*    | These
        exhibits were previously filed with the Companys Registration Statement
        or a previous Annual Report on Form 20-F (file no. 30614).              |       











---























OROMIN
  EXPLORATIONS LTD.

(An
  Exploration Stage Company)





CONSOLIDATED
  FINANCIAL STATEMENTS

(Expressed
  in Canadian Dollars)





FEBRUARY
  28, 2007























F-1



---



[financials002.jpg]







INDEPENDENT
  AUDITORS REPORT





To the
  Shareholders of

Oromin
  Explorations Ltd.



We have audited the consolidated balance sheets
  of Oromin Explorations Ltd. as at February 28, 2007 and 2006 and the consolidated
  statements of operations and deficit and cash flows for the years ended February
  28, 2007, 2006 and 2005.  These financial statements are the responsibility
  of the Company's management.  Our responsibility is to express an opinion
  on these financial statements based on our audits.



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



In our opinion, these consolidated  financial
  statements present fairly, in all material respects, the financial position
  of the Company as at February 28, 2007 and 2006 and the results of its operations
  and cash flows for the years ended February 28, 2007, 2006 and 2005 in accordance
  with Canadian generally accepted accounting principles.







"DAVIDSON
  & COMPANY LLP"





|                  |                      
|----------------- | ---------------------
|Vancouver, Canada | Chartered Accountants
|                  |                      
|June 8, 2007      |                      









F-2





A Member ofSCINTERNATIONAL



1200
  - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada,
  V7Y 1G6

Telephone
  (604) 687-0947  Fax (604) 687-6172



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Expressed in Canadian Dollars)

As at
  February 28



|                                                     |                      |                     
|---------------------------------------------------- | -------------------- | --------------------
|                                                     | 2007                 | 2006                
|                                                     |                      |                     
|ASSETS                                               |                      |                     
|                                                     |                      |                     
|Current                                              |                      |                     
|Cash                                                 | $ 15,792,822         | $ 6,455,591         
|Receivables                                          | 77,067               | 36,216              
|Receivables
         project cost recovery (Note 5) | -                    | 705,560             
|Prepaid
        expenses and deposits                | 4,872                | 4,872               
|                                                     |                      |                     
|Total
        current assets                         | 15,874,761           | 7,202,239           
|                                                     |                      |                     
|Investments(Note 3)                                  | 554,679              | 1,377,940           
|Equipment (Note 4)                                   | 7,207                | 8,164               
|Resource properties
        (Note 5)                 | 10,829,718           | 2,546,859           
|Performance bond 
        restricted cash(Note 6)   | 139,245              | 132,808             
|                                                     |                      |                     
|                                                     | $
        27,405,610 | $
        11,268,010
|                                                     |                      |                     
|LIABILITIES AND SHAREHOLDERS'
        EQUITY         |                      |                     
|                                                     |                      |                     
|Current                                              |                      |                     
|Accounts
        payable and accrued liabilities     | $ 1,275,271          | $ 717,164           
|Due to
        joint venture (Note 5)                | 2,013,143            | -                   
|                                                     |                      |                     
|Total
        current liabilities                    | 3,288,414            | 717,164             
|                                                     |                      |                     
|Shareholders' equity                                 |                      |                     
|Capital
        stock (Note 8)                       |                      |                     
|Authorized                                           |                      |                     
|100,000,000
        common shares without par value  |                      |                     
|Issued
        and outstanding                       |                      |                     
|50,457,878
        common shares (2006  40,494,088) | 34,635,509           | 19,964,141          
|Contributed
        surplus (Note 8)                 | 3,197,435            | 2,500,570           
|Deficit                                              | (13,715,748)         | (11,913,865)        
|                                                     |                      |                     
|                                                     | 24,117,196           | 10,550,846          
|                                                     |                      |                     
|                                                     | $
        27,405,610 | $
        11,268,010



Nature of operations(Note 1)

Subsequent events (Note 16)

|                                 |          |                                     |         
|-------------------------------- | -------- | ----------------------------------- | --------
|On
        behalf of the Board:  |          |                                     |         
|                                 |          |                                     |         
|                                 |          |                                     |         
|                                 |          |                                     |         
|Signed:
         Chet Idziszek | Director | Signed:
         James G. Stewart | Director
|Chet Idziszek                    |          | James G. Stewart                    |         



The accompanying notes are an integral part
  of these consolidated financial statements.

F-3



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND
  DEFICIT

(Expressed in Canadian Dollars)



|                                                             |                                      |                                      |                                     
|------------------------------------------------------------ | ------------------------------------ | ------------------------------------ | ------------------------------------
|                                                             | Year
        Ended February 28, 2007 | Year
        Ended February 28, 2006 | Year
        Ended February 28, 2005
|                                                             |                                      |                                      |                                     
|                                                             |                                      |                                      |                                     
|                                                             |                                      |                                      |                                     
|EXPENSES                                                     |                                      |                                      |                                     
|Amortization                                                 | $ 3,133                              | $ 2,593                              | $ 1,993                             
|Filing
        and transfer agent fees                       | 52,012                               | 40,164                               | 23,104                              
|Loan
        interest                                        | -                                    | 89,011                               | -                                   
|Office
        and rent                                      | 124,112                              | 140,575                              | 71,490                              
|Office
        administration recovery (Note 5)              | -                                    | (310,172)                            | -                                   
|Professional
        and consulting fees                     | 223,742                              | 113,399                              | 64,518                              
|Shareholder
        information                              | 3,112                                | 1,743                                | 4,159                               
|Stock-based
        compensation (Note 9)                    | 652,789                              | 2,307,214                            | 127,818                             
|Travel
        and public relations                          | 226,061                              | 100,305                              | 17,695                              
|Wages
        and benefits                                   | 200,137                              | 172,524                              | 33,978                              
|                                                             |                                      |                                      |                                     
|                                                             | (1,485,098)                          | (2,657,356)                          | (344,755)                           
|                                                             |                                      |                                      |                                     
|                                                             |                                      |                                      |                                     
|OTHER INCOME
        (EXPENSE)                               |                                      |                                      |                                     
|Interest
        income                                      | 271,912                              | 32,837                               | 14,338                              
|Gain
        on sale of investments (Note 3)                 | 83,281                               | -                                    | -                                   
|Write-down
        of investments (Note 3)                   | (677,888)                            | -                                    | -                                   
|Foreign
        exchange gain (loss)                         | 5,910                                | (78,007)                             | (117,752)                           
|                                                             |                                      |                                      |                                     
|                                                             | (316,785)                            | (45,170)                             | (103,414)                           
|                                                             |                                      |                                      |                                     
|                                                             |                                      |                                      |                                     
|Loss for
        the year                                    | (1,801,883)                          | (2,702,526)                          | (448,169)                           
|                                                             |                                      |                                      |                                     
|                                                             |                                      |                                      |                                     
|Deficit,
        beginning of year                           | (11,913,865)                         | (9,211,339)                          | (8,763,170)                         
|                                                             |                                      |                                      |                                     
|                                                             |                                      |                                      |                                     
|Deficit,
        end of year                                 | $
        (13,715,748)               | $
        (11,913,865)               | $
        (9,211,339)               
|                                                             |                                      |                                      |                                     
|                                                             |                                      |                                      |                                     
|Basic
        and diluted  loss  per common share            | $
        (0.04)                     | $
        (0.09)                     | $
        (0.02)                    
|                                                             |                                      |                                      |                                     
|                                                             |                                      |                                      |                                     
|Weighted
        average number of common shares outstanding | 42,853,558                           | 29,511,921                           | 25,383,623                          







F-4





The accompanying notes are an integral part
  of these consolidated financial statements.



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)



|                                                                        |                                      |                                      |                                     
|----------------------------------------------------------------------- | ------------------------------------ | ------------------------------------ | ------------------------------------
|                                                                        | Year
        Ended February 28, 2007 | Year
        Ended February 28, 2006 | Year
        Ended February 28, 2005
|                                                                        |                                      |                                      |                                     
|                                                                        |                                      |                                      |                                     
|CASH FLOWS
        FROM OPERATING ACTIVITIES                            |                                      |                                      |                                     
|Loss
        for the year                                               | $ (1,801,883)                        | $ (2,702,526)                        | $ (448,169)                         
|Items
        not affecting cash:                                       |                                      |                                      |                                     
|Amortization                                                            | 3,133                                | 2,593                                | 1,993                               
|Accrued
        interest on performance bond                            | (6,437)                              | (4,043)                              | (5,110)                             
|Foreign
        exchange (gain) loss                                    | (5,910)                              | 10,568                               | 18,260                              
|Stock-based
        compensation                                        | 652,789                              | 2,307,214                            | 127,818                             
|Write-down
        of investments                                       | 677,888                              | -                                    | -                                   
|Gain
        on sale of investments                                     | (83,281)                             | -                                    | -                                   
|                                                                        |                                      |                                      |                                     
|Changes
        in non-cash working capital items:                      |                                      |                                      |                                     
|Increase
        in receivables                                         | (40,851)                             | (24,860)                             | (3,686)                             
|Increase
        (decrease) in accounts payable and accrued liabilities | 59,816                               | (16,570)                             | (227,229)                           
|                                                                        |                                      |                                      |                                     
|Net
        cash used in operating activities                           | (544,736)                            | (427,624)                            | (536,123)                           
|                                                                        |                                      |                                      |                                     
|CASH FLOWS
        FROM FINANCING ACTIVITIES                            |                                      |                                      |                                     
|Capital
        stock issued for cash                                   | 15,729,673                           | 6,851,004                            | 538,927                             
|Share
        issue costs                                               | (1,014,229)                          | (152,206)                            | (1,182)                             
|Due
        to joint venture                                            | 2,013,143                            | -                                    | -                                   
|Proceeds
        from sale of investments                               | 228,654                              | -                                    | -                                   
|Related
        party and other loans                                   | -                                    | 705,288                              | 625,000                             
|                                                                        |                                      |                                      |                                     
|Net
        cash provided by financing activities                       | 16,957,241                           | 7,404,086                            | 1,162,745                           
|                                                                        |                                      |                                      |                                     
|CASH FLOWS
        FROM INVESTING ACTIVITIES                            |                                      |                                      |                                     
|Expenditures
        on resource properties                             | (7,778,658)                          | (3,701,255)                          | (1,323,326)                         
|Recoveries
        on resource properties                               | 705,560                              | 2,536,069                            | 832,680                             
|Purchase
        of equipment                                           | (2,176)                              | (4,454)                              | (3,002)                             
|                                                                        |                                      |                                      |                                     
|Net
        cash used in investing activities                           | (7,075,274)                          | (1,169,640)                          | (493,648)                           
|                                                                        |                                      |                                      |                                     
|Increase
        in cash                                                | 9,337,231                            | 5,806,822                            | 132,974                             
|                                                                        |                                      |                                      |                                     
|Cash, beginning
        of year                                         | 6,455,591                            | 648,769                              | 515,795                             
|                                                                        |                                      |                                      |                                     
|Cash,
        end of year                                               | $
        15,792,822                 | $
        6,455,591                  | $
        648,769                   



Supplemental disclosure with respect to cash flows(Note
  15)





F-5



The accompanying notes are an integral part
  of these consolidated financial statements.



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







1.

NATURE OF OPERATIONS



The Company was incorporated
  on January 25, 1980 under the Company Act of British Columbia.  On February 25,
  2002, the Company amalgamated with Fresco Developments Ltd. (Fresco).
   The amalgamated Company continued as Oromin Explorations Ltd. (the Company).



The Company is in the business
  of exploring its resource properties.  The Companys current oil and
  gas and mineral exploration activities are in the pre-production stage.  Consequently,
  the Company considers itself to be in the exploration stage.  The recoverability
  of the Companys expenditures on resource properties is dependent upon
  the discovery of economically recoverable reserves, the ability of the Company
  to obtain necessary financing to complete the exploration and future profitable
  commercial production or proceeds from the disposition thereof.





2.

SIGNIFICANT ACCOUNTING
  POLICIES



These consolidated financial
  statements have been prepared in accordance with Canadian generally accepted
  accounting principles (Canadian GAAP).  The significant accounting
  policies adopted by the Company are as follows:



Basis of consolidation



These consolidated financial
  statements include the accounts of the Company and its subsidiaries and, on
  a proportionate basis, the accounts of the Oromin Joint Venture Group Ltd from
  its formation during the current fiscal year.  The Companys subsidiaries
  include Exploraciones Oromin, S.A., which is incorporated under the laws of
  Argentina, and Sabodala Holding Limited, Irie Isle Limited and Cynthia Holdings
  Limited, all of which are incorporated under the laws of the British Virgin
  Islands.



Significant inter-company
  balances and transactions have been eliminated upon consolidation.





Use of estimates



The preparation of consolidated
  financial statements in accordance with Canadian generally accepted accounting
  principles requires management to make estimates and assumptions that affect
  the reported amount of assets and liabilities and disclosure of contingent assets
  and liabilities at the date of the financial statements and the reported amount
  of revenues and expenses during the reporting periods. Actual results may differ
  from these estimates.





Investments



Long-term investments are
  carried at cost.  If it is determined that the value of the investments
  is permanently impaired, they are written down to net realizable value.





Equipment



Equipment is recorded at
  cost less accumulated amortization.  Amortization has been calculated annually
  at the following rates:



| |                    |                              
| | ------------------ | -----------------------------
| | Office furniture   | 20% declining
        balance
| | Computer equipment | 30% declining
        balance

F-6



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







2.

SIGNIFICANT ACCOUNTING
  POLICIES(contd)





Resource properties





Mineral properties



All costs related to the
  acquisition, exploration and development of mineral properties are capitalized
  by property.  If economically recoverable ore reserves are developed, capitalized
  costs of the related property are reclassified as mining assets and amortized
  using the unit of production method.  When a property is abandoned, all
  related costs are written off to operations.  If, after management review,
  it is determined that the carrying amount of a mineral property is impaired,
  that property is written down to its estimated net realizable value.  A
  mineral property is reviewed for impairment whenever events or changes in circumstances
  indicate that its carrying amount may not be recoverable.



The amounts shown for mineral
  properties do not necessarily represent present or future values.  Their
  recoverability is dependent upon the discovery of economically recoverable reserves,
  the ability of the Company to obtain the necessary financing to complete the
  development and future profitable production or proceeds from the disposition
  thereof.



Oil and gas properties



The Company follows the
  full cost method of accounting for oil and gas properties whereby exploration
  and development costs are capitalized and accumulated in cost centres.  Such
  costs include lease acquisition costs, geological and geophysical expenses,
  lease rentals on undeveloped properties, costs of drilling both productive and
  non-productive wells, technical consulting costs directly related to exploration
  and development activities and capitalized financing costs.



Depletion of exploration
  and development costs and depreciation of production equipment are provided
  on the unit-of-production method based upon estimated proven oil and gas reserves
  before royalties in each cost centre, as determined by independent engineers.
   For purposes of this calculation, reserves and production of natural gas
  are converted to common units based on their approximate relative energy content.
   Undeveloped properties are excluded from the depletion calculation until
  the quantities of proven reserves can be determined.  These properties
  are assessed periodically for impairment.  When proven reserves are assigned
  or the property is considered to be impaired, the cost of the property or the
  amount of the impairment is added to the costs subject to depletion.



The Company places a limit
  on the carrying value of oil and gas properties and other assets, which may
  be depleted against revenues of future periods (the ceiling test).
   The carrying value is assessed to be recoverable when the sum of the undiscounted
  cash flows expected from the production of proven reserves, the lower of cost
  and market of unproven properties and the cost of major development projects
  exceeds the carrying value.  When the carrying value is not assessed to
  be recoverable, an impairment loss is recognized to the extent that the carrying
  value of assets exceeds the sum of the discounted cash flows expected from the
  production of proven and probable reserves, the lower of cost and market of
  unproven properties and the cost of major development projects.  The cash
  flows are estimated using expected future product prices and costs and are discounted
  using a risk-free interest rate.







F-7



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







2.

SIGNIFICANT ACCOUNTING
  POLICIES(contd)





Asset retirement obligations



The Company recognizes
  the fair value of a liability for an asset retirement obligation in the year
  in which it is incurred when a reasonable estimate of fair value can be made.
   The carrying amount of the related long-lived asset is increased by the
  same amount as the liability.



Changes in the liability
  for an asset retirement obligation due to the passage of time will be measured
  by applying an interest method of allocation.  The amount will be recognized
  as an increase in the liability and an accretion expense in the statement of
  operations.  Changes resulting from revisions to the timing or the amount
  of the original estimate of undiscounted cash flows are recognized as an increase
  or a decrease to the carrying amount of the liability and the related long-lived
  asset.



Loss per share



The Company uses the treasury
  stock method to compute the dilutive effect of options, warrants and similar
  instruments.  Under this method, the dilutive effect on loss per share
  is recognized on the use of the proceeds that could be obtained upon exercise
  of options, warrants and similar instruments.  It assumes that the proceeds
  would be used to purchase common shares at the average market price during the
  period.  For the years presented, this calculation proved to be anti-dilutive.
   At February 28, 2007, February 28, 2006 and February 28, 2005, the total
  number of potentially dilutive shares excluded from loss per share was 15,297,287,
  10,477,727, and 4,827,166 respectively.



Basic loss per share is
  calculated using the weighted average number of common shares outstanding during
  the year.





Income taxes



Future income taxes are
  recorded using the asset and liability method whereby future tax assets and
  liabilities are recognized for the future tax consequences attributable to differences
  between the financial statement carrying amounts of existing assets and liabilities
  and their respective tax bases.  Future tax assets and liabilities are
  measured using the enacted or substantively enacted tax rates expected to apply
  when the asset is realized or the liability settled.  The effect on future
  tax assets and liabilities of a change in tax rates is recognized in income
  in the period that substantive enactment or enactment occurs.  To the extent
  that the Company does not consider it more likely than not that a future tax
  asset will be recovered, it provides a valuation allowance against the excess.





Stock-based compensation



The Company uses the fair
  value method whereby the Company recognizes compensation costs over the vesting
  period for the granting of all stock options and direct awards of stock.  Fair
  value is determined using the Black-Scholes option pricing model.  Any
  consideration paid by the option holder to purchase shares is credited to capital
  stock.



F-8



---

OROMIN EXPLORATIONS LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







2.

SIGNIFICANT ACCOUNTING
  POLICIES(contd)





Foreign currency translation



The Company's subsidiaries
  are considered integrated operations and are translated into Canadian dollars
  using the temporal method.  Under this method, monetary items are translated
  at the exchange rate in effect at the balance sheet date, non-monetary items
  are translated at historical rates, and revenue and expense items are translated
  at exchange rates approximating those in effect on the date of the transaction.
   Exchange gains or losses arising on translation of foreign currency items
  are included in operating results.



Foreign currency denominated
  monetary items are translated at year-end exchange rates. Exchange gains and
  losses arising on translation are included in operating results.



Recent accounting pronouncements



CICA Handbook Section 1530:
   Comprehensive Income, effective for fiscal years beginning
  on or after October 1, 2006, establishes standards for reporting comprehensive
  income, defined as a change in value of net assets that is not due to owner
  activities, by introducing a new requirement to temporarily present certain
  gains and losses outside of net income.



CICA Handbook Section 3251:
   Equity, effective for fiscal years beginning on or after October
  1, 2006, establishes standards for the presentation of equity and changes in
  equity during the reporting period.



CICA Handbook Section 3855:
   Financial Instruments  Recognition and Measurement,
  effective for fiscal years beginning on or after October 1, 2006, establishes
  standards for the recognition, classification and measurement of financial instruments
  including the presentation of any resulting gains or losses.  Assets classified
  as available-for-sale securities will have revaluation gains and losses included
  in other comprehensive income until these assets are no longer included on the
  balance sheet.  At February 28, 2007, the Company had certain investments
  that would be classified as available-for-sale securities under this standard,
  and any unrealized gains or losses would be included in comprehensive income.



CICA Handbook Section 1506:
   Accounting Changes (CICA 1506), effective for fiscal years
  beginning on or after January 1, 2007, establishes standards and new disclosure
  requirements for the reporting of changes in accounting policies and estimates
  and the reporting of error corrections.  CICA 1506 clarifies that a change
  in accounting policy can be made only if it is a requirement under Canadian
  GAAP or if it provides reliable and more relevant financial statement information.
   Voluntary changes in accounting policies require retrospective application
  of prior period financial statements, unless the retrospective effects of the
  changes are impracticable to determine, in which case the retrospective application
  may be limited to the assets and liabilities of the earliest period practicable,
  with a corresponding adjustment made to opening retained earnings.



The Company will be required
  to adopt the above new accounting procedures for its fiscal period beginning
  March 1, 2007.





F-9



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







3.

INVESTMENTS





Investments consist of
  894,500 (2006  1,000,000) shares of Surge Global Energy Inc. (Surge)
  (Note 5 (a)), a publicly traded company, with an original cost of $1,232,567
  (2006  $1,377,940) and a market value of $554,679 (2006 - $2,901,900).
   During the fiscal year 2007, 105,500 shares were sold resulting in a net
  gain of $83,281.  The difference between cost and market value of $677,888
  as at February 28, 2007 has been charged to the statement of operations.







4.

EQUIPMENT



| |                            |                |                                |                              |  |                |                                |                             
| | -------------------------- | -------------- | ------------------------------ | ---------------------------- |  | -------------- | ------------------------------ | ----------------------------
| |                            | 2007           |                                | 2006                        
| |                            | Cost           | Accumulated
      Amortization | Net
      Book
        Value |  | Cost           | Accumulated
      Amortization | Net
      Book
        Value
| |                            |                |                                |                              |  |                |                                |                             
| | Office
        furniture   | $
      6,301  | $
      5,805                  | $
      496                  |  | $
      6,301  | $
      5,681                  | $
      620                 
| | Computer
        equipment | 20,570         | 13,859                         | 6,711                        |  | 18,394         | 10,850                         | 7,544                       
| |                            |                |                                |                              |  |                |                                |                             
| |                            | $
      26,871 | $
      19,664                 | $
      7,207                |  | $
      24,695 | $
      16,531                 | $
      8,164               













F-10



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







5.

RESOURCE PROPERTIES



| |                                |                    |                  
| | ------------------------------ | ------------------ | -----------------
| |                                | 2007               | 2006             
| |                                |                    |                  
| | Oil and gas
        properties |                    |                  
| | Santa
        Rosa, Argentina  | $
      1,065,300  | $
      706,376  
| |                                |                    |                  
| | Mineral properties             |                    |                  
| | Sabodala,
        Senegal      | 9,511,957          | 1,796,462        
| | Carneirinho,
        Brazil    | 252,461            | 44,021           
| |                                |                    |                  
| |                                | $
      10,829,718 | $
      2,546,859



| |                                          |                             |                         |                           |                     
| | ---------------------------------------- | --------------------------- | ----------------------- | ------------------------- | --------------------
| |                                          | Santa Rosa,
      Argentina | Sabodala,
      Senegal | Carneirinho,
      Brazil | Total               
| |                                          |                             |                         |                           |                     
| | Balance,
        February 28, 2005       | $ 445,431                   | $ 1,134,520             | $ 3,957                   | $ 1,583,908         
| | Acquisition
        costs                | -                           | -                       | 31,275                    | 31,275              
| | Camp
        operation                   | 724                         | 755,401                 | -                         | 756,125             
| | Contractors
        and geological staff | 60,424                      | 1,769,305               | 1,768                     | 1,831,497           
| | Drilling                                 | -                           | 268,010                 | -                         | 268,010             
| | Engineering
        and feasibility      | -                           | -                       | 50                        | 50                  
| | Exploration
        office               | -                           | 241,569                 | -                         | 241,569             
| | Insurance                                | -                           | 34,645                  | -                         | 34,645              
| | Land
        and legal                   | 90,622                      | 70,213                  | 294                       | 161,129             
| | Presumptive
        minimum tax          | 55,757                      | -                       | -                         | 55,757              
| | Sample
        analysis                  | -                           | 223,632                 | -                         | 223,632             
| | Travel
        and accommodation         | 53,418                      | 328,172                 | 6,677                     | 388,267             
| | Cost
        recovery                    | -                           | (3,029,005)             | -                         | (3,029,005)         
| |                                          |                             |                         |                           |                     
| | Balance,
        February 28, 2006       | 706,376                     | 1,796,462               | 44,021                    | 2,546,859           
| | Acquisition
        costs                | -                           | -                       | 66,667                    | 66,667              
| | Camp
        operation                   | 171                         | 2,222,055               | 35,354                    | 2,257,580           
| | Contractors
        and geological staff | 43,077                      | 1,702,978               | 69,376                    | 1,815,431           
| | Drilling                                 | -                           | 2,056,906               | -                         | 2,056,906           
| | Engineering
        and feasibility      | -                           | 74,489                  | -                         | 74,489              
| | Exploration
        office               | -                           | 106,715                 | -                         | 106,715             
| | Insurance                                | -                           | 23,820                  | -                         | 23,820              
| | Land
        and legal                   | 153,561                     | 238,159                 | -                         | 391,720             
| | Presumptive
        minimum tax          | 145,842                     | -                       | -                         | 145,842             
| | Sample
        analysis                  | -                           | 945,873                 | 15,283                    | 961,156             
| | Travel
        and accommodation         | 16,273                      | 344,500                 | 21,760                    | 382,533             
| |                                          |                             |                         |                           |                     
| | Balance,
        February 28, 2007       | $
        1,065,300         | $
        9,511,957     | $
        252,461         | $
        10,829,718



F-11



---

OROMIN EXPLORATIONS LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







5.

RESOURCE PROPERTIES
  (contd)



Title to resource properties
  involves certain inherent risks due to the difficulties of determining the validity
  of certain claims as well as the potential for problems arising from the frequently
  ambiguous conveyancing history characteristics of many resource properties.
   The Company has investigated title to all of its resource properties and,
  to the best of its knowledge, title to all of its properties are in good standing.



The Companys oil
  and gas assets, being the Santa Rosa property, are considered unproved and as
  such no depletion has been recognized.



a)

Santa Rosa, Argentina



On September 29, 2000,
  the Company, through its subsidiary Exploraciones Oromin, S.A. (Oromin
  S.A.), submitted a bid to the Secretariat of Energy of the Republic of
  Argentina to acquire certain oil and gas rights in the Cuyana Basin of central
  Argentina.  In March 2001, the Secretariat of Energy of the Republic of
  Argentina approved the Companys bid to acquire a 100% interest in the
  oil and gas exploration rights in the Province of Mendoza in central Argentina
  (the Santa Rosa Property).



The Companys exploration
  rights will remain in effect for a period of six years from the date of formal
  acceptance by government authorities and will be converted into exploitation
  rights for a further period of 25 years if commercial quantities of hydrocarbons
  are discovered.  Upon the successful bid, the Company agreed to incur US$600,000
  of exploration expenditures by March 20, 2003 (incurred) as a performance guarantee
  on the property.  The Company has yet to receive formal title to the Santa
  Rosa Property and the formal acceptance of its exploration rights by government
  authorities has yet to occur.  When formal acceptance occurs, the Company
  will be required to post a minimum US$600,000 performance bond.



On June 26, 2002, the Company,
  through its wholly owned subsidiary Cynthia Holdings Limited (Cynthia),
  entered into a letter agreement whereby it agreed to sell an effective 50% interest
  in its Santa Rosa Property for the sum of US$1,400,000 to Bible Resources Limited
  (Bible), a private Nevada corporation. The agreement initially provided
  for the purchase price to be paid in three tranches, with US$400,000 due on
  or before July 31, 2002, a further US$400,000 on or before August 30, 2002 and
  the remaining US$600,000 to be paid by September 30, 2002.  Oromin, S.A.
  is a wholly-owned subsidiary of Cynthia.



The agreement has been
  amended a number of times and during the fiscal year ended February 28, 2005,
  Cynthia received $832,680 (US$600,000) in payment for a 17.52% effective interest
  in its Santa Rosa Property.  In addition, as consideration for extending
  the agreement, Surge, Bibles parent company and the assignee of Bibles
  interests, issued 1,000,000 unregistered common shares at a value of $1,377,940
  (Note 3) to Irie Isle Limited (Irie).  Cynthia is a subsidiary
  of Irie.  During the year ended February 28, 2005, Cynthia issued 212,415
  common shares to Surge, representing the 17.52% effective interest in the Property.
   Surge has elected not to acquire any further interest in the Santa Rosa
  Property.



A director of the Company
  served as a director of Surge from August 2002 until April 2007.





F-12



---

OROMIN EXPLORATIONS LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







5.

RESOURCE PROPERTIES
  (contd)





a)

Santa Rosa, Argentina(contd)





On November 15, 2005, the
  Company entered into a letter of intent (the LOI) with Ottoman Energy
  Ltd. (Ottoman) whereby Ottoman can acquire up to a 41.24% interest
  in the Santa Rosa Property by spending up to  US$2,297,381 on exploration
  and development of the Santa Rosa Property.  The LOI is subject to a number
  of conditions that must be fulfilled or waived by December 31, 2007, as amended,
  including completion of legal and financial due diligence to Ottomans
  satisfaction, issuance of formal title to the Santa Rosa Property and the settlement
  and execution of a joint venture agreement respecting the Santa Rosa Property.





b)

Sabodala, Senegal





In October 2004, the Company
  was awarded an exploration concession in Senegal known as the Sabodala Project.
  The exploration concession grants the Company the sole right to acquire a 100%
  interest in the Sabodala Project.    The Sabodala Project is
  held by Oromin Joint Venture Group Ltd. (OJVG), a company incorporated
  in the British Virgin Islands and owned 43.5% by Sabodala Holding Limited (SHL),
  a company wholly-owned by the Company, 43.5% by Bendon International Ltd. (Bendon),
  a company incorporated in the British Virgin Islands, and 13.0% by Badr Investment
  & Finance Company (Badr), a private company based in Saudi Arabia.
  The Company provides exploration and management services to OJVG.  In order
  to acquire its interest in the Sabodala Property, OJVG was obliged to spend
  at least US$8 million on exploration of the Sabodala Property by April 17, 2007.
  This condition was met in October 2006.



OJVG was incorporated in
  August 2006 in anticipation of the completion of the US$8 million expenditure
  obligation, and in December 2006, SHL, Bendon and  Badr completed a shareholders
  agreement governing the conduct of OJVG and the Sabodala Project. Under the
  terms of a prior agreement which has been superseded by the establishment of
  OJVG, Bendon  provided the initial US$2.8 million in exploration expenditures
  with the Company providing the next US$5.2 million.  During the year ended
  February 28, 2006, the Company incurred exploration and general and administrative
  costs as project manager and have recovered $3,329,267 (US$2.8 million) from
  Bendon of which $705,560 (US$620,000) was received subsequent to February 28,
  2006.  Part of the recovery includes $310,172 representing reimbursement
  for general and administrative expenses.  The Company also received reimbursement
  for initial due diligence costs of $228,946, of which $219,036 was recovered
  in the 2005 fiscal year.  Following the completion of the US$8 million
  obligation which occurred in October 2006, SHL and Bendon are required to fund
  further exploration and related costs of the Sabodala Project equally; Badr
  has a free carried interest through the commencement of production.  As
  at February 28, 2007 Bendon had  made excess contributions of $2,013,143.
   This amount has been advanced to the Company, in its capacity as operator
  for the OJVG, and has been recorded as an amount due to the joint venture.





F-13



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







5.

RESOURCE PROPERTIES
  (contd)



b)

Sabodala, Senegal(contd)





The Companys interest
  in the OJVG is summarized as follows:



| |                                           |                          
| | ----------------------------------------- | -------------------------
| |                                           | 2007                     
| |                                           |                          
| | ASSETS                                    |                          
| |                                           |                          
| | Resource
        properties               | $       9,511,957        
| |                                           |                          
| |                                           |                          
| | LIABILITIES                               |                          
| |                                           |                          
| | Current
        liabilities               | $      1,057,005         
| |                                           |                          
| | SHAREHOLDERS
        EQUITY              | 8,454,952                
| |                                           |                          
| |                                           | $
              9,511,957
| |                                           |                          
| | Cash flows
        provided by (used in): |                          
| | Operating
        activities              | $                     -  
| | Financing
        activities              | 2,169,026                
| | Investing
        activities              | $
           (2,169,026) 



The Companys share
  of OJVGs loss for the year ended February 28, 2007 was $Nil.





c)

Carneirinho, Brazil



During the year ended
  February 28, 2005, the Company and Lund Gold Ltd. (Lund),  a
  company related by way of common directors, were granted an option to jointly
  acquire a 100% interest in the Carneirinho gold property in north-central Brazil.
   The option is structured as a two-stage option with the companies jointly
  acquiring a 50% interest at each stage.  In order to exercise the first
  option, the agreement required joint payments to  the vendor of US$50,000
  by April 30, 2005 (paid), US $100,000 by April 30, 2006 (paid), US $200,000
  by April 30, 2007 (paid subsequent to February 28, 2007) and a total of US$1,400,000
  by April 30, 2009.  Subsequent to February 28, 2007 the Company agreed
  to sell all its interest in the Carneirinho property to Lund.  In consideration,
  Lund issued  1,197,906 shares to the Company.





F-14



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







6.

PERFORMANCE BOND 
  RESTRICTED CASH



The Company has a bond
  held at a bank in Argentina with a face value of US$119,013 (2006  US$116,703)
  maturing on August 3, 2012.  The bond bears interest at the six month LIBOR
  rate which is payable semi-annually.  The bond was required to secure the
  Santa Rosa property bid in Argentina (Note 5 (a)).





7.

RELATED PARTY AND OTHER
  LOANS



a)

In
  February 2005 and amended in April 2005, the Company arranged loans totalling
  $625,000 bearing interest at 12% per annum, of which $575,000 was due to directors
  and a company controlled by a director.  These loans were convertible at
  the option of the lenders into units of the Company at a price of $0.45 per
  unit, each unit consisting of one share and one share purchase warrant entitling
  the holder to purchase one additional share of the Company at a price of $0.45
  per share for a period of two years following the date of conversion of the
  loan.  The value attributable to the conversion options was not significant.



The loans were converted
  to 1,388,887 units during the year ended February 28, 2006 and the warrants
  issued thereon expire on February 1, 2008.  The Company paid interest of
  $78,552 pursuant to these loans of which $72,320 was paid to related parties.





b)

During the year ended February
  28, 2006, the Company arranged and received a loan in the amount of US $600,000
  bearing interest at 12% per annum compounded monthly.  The loan was convertible
  at the option of the lender into units of the Company at a price of $0.43 per
  unit, each unit consisting of one share and one share purchase warrant entitling
  the holder to purchase one additional share of the Company at a price of $0.43
  per share for a period of two years following the date of conversion of the
  loan.  The value attributable to the conversion option was not significant.



The loan was converted
  to 1,701,644 units during the year ended February 28, 2006 and the warrants
  issued thereon expire November 15, 2007.  The Company paid interest of
  $10,459 pursuant to this loan.







F-15



---

OROMIN EXPLORATIONS LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007









8.

CAPITAL STOCK AND CONTRIBUTED
  SURPLUS



| |                                                                              |                        |                      |                          
| | ---------------------------------------------------------------------------- | ---------------------- | -------------------- | -------------------------
| |                                                                              | Number
      of Shares | Amount               | Contributed
      Surplus
| |                                                                              |                        |                      |                          
| | Authorized                                                                   |                        |                      |                          
| | 100,000,000
        common shares without par value                          |                        |                      |                          
| |                                                                              |                        |                      |                          
| | Issued                                                                       |                        |                      |                          
| | Balance
        as at February 29, 2004                                      | 21,195,308             | $ 11,010,280         | $ 122,568                
| | For
        cash pursuant to private placement (a)                           | 3,000,000              | 448,818              | -                        
| | For
        cash on exercise of warrants                                     | 2,781,817              | 417,727              | -                        
| | For
        cash on exercise of stock options                                | 6,000                  | 1,200                | -                        
| | Stock-based
        compensation                                             | -                      | -                    | 127,818                  
| |                                                                              |                        |                      |                          
| | Balance
        as at February 28, 2005                                      | 26,983,125             | 11,878,025           | 250,386                  
| | For
        cash pursuant to private placement (b)                           | 7,132,393              | 5,910,328            | -                        
| | For
        cash on exercise of warrants                                     | 2,200,507              | 494,091              | -                        
| | For
        cash on exercise of stock options                                | 1,162,530              | 294,379              | -                        
| | Transfer
        from contributed surplus on exercise of
      stock options | -                      | 65,635               | (65,635)                 
| | Loan
        conversions (Note 7)                                            | 3,090,531              | 1,330,288            | -                        
| | Escrow
        shares cancelled                                              | (74,998)               | (8,605)              | 8,605                    
| | Stock-based
        compensation                                             | -                      | -                    | 2,307,214                
| |                                                                              |                        |                      |                          
| | Balance
        as at February 28, 2006                                      | 40,494,088             | 19,964,141           | 2,500,570                
| | For
        cash pursuant to private placement (c)                           | 9,091,500              | 13,609,604           | -                        
| | Broker
        compensation warrants                                         | -                      | -                    | 377,142                  
| | For
        cash on exercise of warrants                                     | 135,290                | 162,348              | -                        
| | For
        cash on exercise of stock options                                | 737,000                | 566,350              | -                        
| | Transfer
        from contributed surplus on exercise of
      stock options | -                      | 333,066              | (333,066)                
| | Stock-based
        compensation                                             | -                      | -                    | 652,789                  
| |                                                                              |                        |                      |                          
| | Balance
        as at February 28, 2007                                      | 50,457,878             | $
        34,635,509 | $
        3,197,435      







F-16



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007









8.

CAPITAL STOCK AND CONTRIBUTED
  SURPLUS (contd)





a)

In March 2004, the Company
  closed a non-brokered private placement consisting of 3,000,000 units at a price
  of $0.15 per unit for proceeds of $448,818 (net of share issue costs of $1,182).
   Each unit consisted of one common share and one-half of one non-transferable
  share purchase warrant.  Each whole warrant entitled the holder to purchase
  one additional common share at a price of $0.25 per share until March 1, 2006.
   The Company had received subscription proceeds of $330,000 towards this
  private placement during the year ended February 29, 2004.  Of the warrants
  issued pursuant to this private placement, 99,999 were exercised during the
  year ended February 28, 2005 and the remaining 1,400,000 warrants were exercised
  during the year ended February 28, 2006.





b)

In January and February
  2006, the Company closed a non-brokered private placement of 7,132,393 units
  at a price of $0.85 per unit for proceeds of $5,910,328, (net of share issue
  costs of $152,206).  Each unit consisted of one share and one half share
  purchase warrant, every whole warrant entitling the purchase of one additional
  share at a price of $1.20 per share until January 16, 2008 for 625,020 warrants,
  until January 20, 2008 for 882,353 warrants and until February 1, 2008 for 2,058,823
  warrants.  Of the warrants issued pursuant to this private placement, 135,290
  were exercised during the year ended February 28, 2007 and the remaining 3,430,906
  warrants were exercised subsequent to February 28, 2007 (Note 16).





c)

In December 2006, the Company
  closed a non-brokered private placement of 3,030,500 units and a brokered private
  placement of 6,061,000 units, all at a price of $1.65 per unit for proceeds
  of $13,609,604 (net of share issue costs of $1,391,371).  Each unit consisted
  of one share and one half share purchase warrant, every whole warrant entitling
  the purchase of one additional share at a price of $2.20 per share until December
  7, 2008.  The warrants are subject to forced conversion provisions whereby
  after April 7, 2007 if the closing trading price of the Companys shares
  exceeds $3.40 for twenty consecutive trading days, the Company may provide notice
  that the warrants will expire within 21 days following such notice. The Company
  also issued 606,100 broker compensation warrants with a value of $377,142. Each
  broker warrant can be exercised for one common share at $1.65 per share until
  December 7, 2008. The assumptions used for the Black-Scholes valuation of the
  broker warrants were: a risk-free interest rate 3.79% , an expected life of
  two years, a dividend rate of 0% and an annualized volatility of 64.69%.





Escrow shares





During the year ended February
  28, 2006, all 74,998 common shares held in escrow were returned to treasury
  and cancelled and $8,605, being the assigned value of the escrow shares, was
  transferred to contributed surplus.





9.

STOCK OPTIONS





The Company has a stock
  option plan under which it is authorized to grant options to directors, officers,
  employees and consultants, enabling them to acquire up to 10% of the issued
  and outstanding common shares of the Company.  Under the plan, the exercise
  price of each option granted must not be less than the market price of the Companys
  shares.  Options granted under the plan typically will vest immediately
  and are exercisable over five years.



F-17



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007









9.

STOCK OPTIONS(contd.)







Stock option transactions
  are summarized as follows:







| |                                  |                        |                                                   |      |                        |                                                   |  |                        |                                                  
| | -------------------------------- | ---------------------- | ------------------------------------------------- | ---- | ---------------------- | ------------------------------------------------- |  | ---------------------- | -------------------------------------------------
| |                                  | 2007                   |                                                   | 2006 |                        | 2005                                             
| |                                  | Number
      of Shares | Weighted
      Average
      Exercise
      Price |      | Number
      of Shares | Weighted
      Average
      Exercise
      Price |  | Number
      of Shares | Weighted
      Average
      Exercise
      Price
| |                                  |                        |                                                   |      |                        |                                                   |  |                        |                                                  
| | Balance, beginning
      of year | 3,821,000              | $ 1.03                                            |      | 2,563,530              | $ 0.25                                            |  | 2,118,749              | $ 0.24                                           
| | Granted                          | 540,000                | 2.00                                              |      | 2,420,000              | 1.49                                              |  | 595,781                | 0.27                                             
| | Exercised                        | (737,000)              | 0.77                                              |      | (1,162,530)            | 0.25                                              |  | (6,000)                | 0.20                                             
| | Expired                          | -                      | -                                                 |      | -                      | -                                                 |  | (145,000)              | 0.20                                             
| | Cancelled                        | -                      | -                                                 |      | -                      | -                                                 |  | -                      | -                                                
| |                                  |                        |                                                   |      |                        |                                                   |  |                        |                                                  
| | Balance,
        end of year     | 3,624,000              | $
        1.23                                    |      | 3,821,000              | $
        1.03                                    |  | 2,563,530              | $
        0.25                                   







The weighted average fair
  value of stock options granted during the current year was $1.21 (2006 - $0.95;
  2005 - $0.21) per option.







The total fair value of
  stock options granted during the current year was $652,789 (2006 - $2,307,214;
  2005 - $127,818), which has been recorded in the results of operations.







The following weighted
  average assumptions were used for the Black-Scholes valuation of options granted
  during the years:





| |                                 |                     |                     |                     
| | ------------------------------- | ------------------- | ------------------- | --------------------
| |                                 | 2007                | 2006                | 2005                
| | Risk-free interest
        rate | 4.0  4.4
        % | 3.3  4.1
        % | 3.5  3.91
        %
| | Expected life                   | 2 to 5 years        | 1 to 5 years        | 5 years             
| | Annualized volatility           | 62  79 %           | 71 
        99 %   | 111 %               
| | Dividend rate                   | 0 %                 | 0 %                 | 0 %                 



F-18



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007









9.

STOCK OPTIONS(contd.)



As at February 28, 2007,
  the following stock options were outstanding and exercisable:



| |                      |                        |  |                            | 
| | -------------------- | ---------------------- |  | -------------------------- | 
| | Exercise
      Price | Number
      of Shares |  | Expiry Date                | 
| |                      |                        |  |                            | 
| | $          1.77      | 100,000                |  | July 1, 2008               | 
| | 0.16                 | 50,000                 |  | December 1, 2008           | 
| | 0.25                 | 620,000                |  | January 22, 2009           | 
| | 0.25                 | 240,000                |  | March 3, 2009              | 
| | 0.30                 | 150,000                |  | October 29, 2009           | 
| | 0.40                 | 75,000                 |  | June 1, 2010               | 
| | 0.35                 | 89,000                 |  | July 12, 2010              | 
| | 0.70                 | 300,000                |  | September 15,
        2010 | 
| | 0.80                 | 100,000                |  | November 22,
        2010  | 
| | 1.90                 | 1,660,000              |  | February 15,
        2011  | 
| | 2.02                 | 70,000                 |  | April 21, 2011             | 
| | 2.13                 | 100,000                |  | May 4, 2011                | 
| | 2.04                 | 70,000                 |  | January 9, 2012            | 
| |                      |                        |  |                            | 
| |                      | 3,624,000              |  |                            | 



10.

WARRANTS



Share purchase warrant transactions
  are summarized as follows:



| |                                  |                        |                                                   |      |                        |                                                   |  |                        |                                                  
| | -------------------------------- | ---------------------- | ------------------------------------------------- | ---- | ---------------------- | ------------------------------------------------- |  | ---------------------- | -------------------------------------------------
| |                                  | 2007                   |                                                   | 2006 |                        | 2005                                             
| |                                  | Number
      of Shares | Weighted
      Average
      Exercise
      Price |      | Number
      of Shares | Weighted
      Average
      Exercise
      Price |  | Number
      of Shares | Weighted
      Average
      Exercise
      Price
| |                                  |                        |                                                   |      |                        |                                                   |  |                        |                                                  
| | Balance, beginning
      of year | 6,656,727              | $ 1.00                                            |      | 2,263,636              | $ 0.22                                            |  | 3,545,454              | $ 0.15                                           
| | Issued                           | 5,151,850              | 2.14                                              |      | 6,656,727              | 1.00                                              |  | 1,499,999              | 0.25                                             
| | Exercised                        | (135,290)              | 1.20                                              |      | (2,200,507)            | 0.22                                              |  | (2,781,817)            | 0.15                                             
| | Expired                          | -                      | -                                                 |      | (63,129)               | 0.18                                              |  | -                      | -                                                
| |                                  |                        |                                                   |      |                        |                                                   |  |                        |                                                  
| | Balance,
        end of year     | 11,673,287             | $
        1.41                                    |      | 6,656,727              | $
        1.00                                    |  | 2,263,636              | $
        0.22                                   





F-19



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007







10.

WARRANTS(contd)



As at February 28, 2007,
  the following share purchase warrants were outstanding and exercisable:



| |                        |                      |  |                          
| | ---------------------- | -------------------- |  | -------------------------
| | Number
      of Shares | Exercise
      Price |  | Expiry
        Date      
| |                        |                      |  |                          
| | 1,701,644              | $          0.43      |  | November
        15, 2007
| | 489,730                | 1.20                 |  | January
        16, 2008 
| | 882,353                | 1.20                 |  | January
        20, 2008 
| | 2,058,823              | 1.20                 |  | February
        1, 2008 
| | 1,388,887              | 0.45                 |  | February
        1, 2008 
| | 4,545,750              | 2.20                 |  | December
        7, 2008*
| | 606,100                | 1.65                 |  | December
        7, 2008 
| |                        |                      |  |                          
| | 11,673,287             |                      |  |                          



* These warrants are subject
  to forced conversion provisions as outlined in Note 8(c).





11.

RELATED PARTY TRANSACTIONS





The Company incurred costs
  with directors and companies related by directors in common as follows:





| |                                          |          |          |         
| | ---------------------------------------- | -------- | -------- | --------
| |                                          | 2007     | 2006     | 2005    
| |                                          |          |          |         
| | Rent                                     | $ 50,920 | $ 51,031 | $ 31,236
| | Professional
        and consulting fees | 350,965  | 243,208  | 162,708 
| | Wages
        and benefits               | 144,813  | 138,000  | 138,000 





Professional and consulting
  fees and wages and benefits have been expensed to operations, capitalized to
  resource properties or recorded as share issue costs, based on the nature of
  the expenditure.





Additional related party
  transactions are disclosed in Notes 5(a), 5(c) and 7(a).





Included in accounts payable
  and accrued liabilities at February 28, 2007 is $47,683 (February 28, 2006 -
  $47,024) due to directors and companies with common directors.





These transactions are
  in the normal course of operations and are measured at the exchange amount,
  which is the amount of consideration established and agreed to by the related
  parties.



F-20



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007









12.

FINANCIAL INSTRUMENTS





a)

Fair value



The Company's financial
  instruments consist of cash, receivables, investments, performance bond, accounts
  payable, accrued liabilities and amounts due to joint venture.  Unless
  otherwise noted, it is management's opinion that the Company is not exposed
  to significant interest or credit risks arising from these financial instruments.
   The fair value of these financial instruments approximates their carrying
  values, unless otherwise noted.  To limit its credit risk exposure in excess
  of federally insured amounts, the Company places its deposits with financial
  institutions with high credit standing.





b)

Financial risk



Financial risk is the risk
  arising from fluctuations in interest rates and changes in foreign currency
  exchange rates. The Company does not use any derivative instruments to reduce
  its exposure to fluctuations in interest rates and foreign currency exchange
  rates.







13.

INCOME TAXES







A reconciliation of income
  taxes at statutory rates with the reported taxes is as follows:





| |                                                             |                       |                       |                    
| | ----------------------------------------------------------- | --------------------- | --------------------- | -------------------
| |                                                             | 2007                  | 2006                  | 2005               
| |                                                             |                       |                       |                    
| | Loss
        for the year                                   | $
        (1,801,883) | $
        (2,702,526) | $
        (448,169)
| |                                                             |                       |                       |                    
| | Expected income
        tax recovery                        | $ 644,840             | $ 1,034,716           | $ 159,548          
| | Permanent and
        other differences                     | (547,324)             | (941,644)             | (19,070)           
| | Differences in
        foreign tax rates                    | -                     | (13,057)              | -                  
| | Losses for which
        no tax benefit has been recognised | (97,516)              | (80,015)              | (140,478)          
| |                                                             |                       |                       |                    
| |                                                             | $
        -           | $
        -           | $
        -        









F-21



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007











13.

INCOME TAXES(contd)







The significant components
  of the Companys future income tax assets are as follows:





| |                                           |             |            
| | ----------------------------------------- | ----------- | -----------
| |                                           | 2007        | 2006       
| |                                           |             |            
| | Future income
        tax assets          |             |            
| | Resource
        properties and equipment | $ 1,809,963 | $ 1,927,141
| | Non-capital
        loss carry-forwards   | 516,486     | 549,519    
| | Share
        issue costs                 | 280,022     | 44,219     
| |                                           |             |            
| |                                           | 2,606,471   | 2,520,879  
| |                                           |             |            
| | Less:
        valuation allowance         | (2,606,471) | (2,520,879)
| |                                           |             |            
| |                                           | $
        - | $
        -





The Company has non-capital
  losses of approximately $1,218,000 available for deduction against future years
  taxable income in Canada.  These losses, if unutilized, will expire beginning
  in 2027.  The future tax benefits which may arise as a result of these
  non-capital losses, resource expenditures and other future tax assets have not
  been recognized in these consolidated financial statements and have been offset
  by a valuation allowance.





14.

SEGMENT INFORMATION



The Company has one operating
  segment, being the exploration of resource properties. The Companys equipment
  and resource properties are located in the following geographic areas:



| |           |                      |                    
| | --------- | -------------------- | -------------------
| |           | 2007                 | 2006               
| |           |                      |                    
| | Argentina | $
        1,065,300  | $
        706,376  
| | Brazil    | 252,461              | 44,021             
| | Senegal   | 9,511,957            | 1,796,462          
| | Canada    | 7,207                | 8,164              
| |           |                      |                    
| |           | $
        10,836,925 | $
        2,555,023



F-22



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007









15.

SUPPLEMENTAL DISCLOSURE
  WITH RESPECT TO CASH FLOWS



| |                                                                       |                       |                        |                     
| | --------------------------------------------------------------------- | --------------------- | ---------------------- | --------------------
| |                                                                       | 2007                  | 2006                   | 2005                
| |                                                                       |                       |                        |                     
| | Non-cash
        operating activities                                 |                       |                        |                     
| | Accounts
        payable incurred for resource property expenditures  | $
        1,168,252   | $
        669,961      | $
        379,260   
| | Receivables
         recovery of resource property expenditures      | -                     | (705,560)              | (219,036)           
| |                                                                       |                       |                        |                     
| |                                                                       | $
        1,168,252   | $
        (35,599)     | $
        160,224   
| |                                                                       |                       |                        |                     
| | Non-cash
        financing activities                                 |                       |                        |                     
| | Related
        party and other loans settled with stock              | $
        -           | $
         (1,330,288) | $
        -         
| | Shares
        issued in conversion of related party and other loans  | -                     | 1,330,288              | -                   
| | Exercise
        of stock options                                     | (333,066)             | (65,635)               | -                   
| | Contributed
        surplus allocated to capital stock on exercise of |                       |                        |                     
| | stock
        options                                                 | 333,066               | 65,635                 | -                   
| | Broker
        compensation warrants                                  | 377,142               |                        |                     
| | Contributed
        surplus arising from broker compensation warrants | (377,142)             |                        |                     
| | Cancellation
        of escrow shares                                 | -                     | (8,605)                | -                   
| | Contributed
        surplus on cancellation of escrow shares          | -                     | 8,605                  | -                   
| | Shares
        issued on share subscriptions from prior year          | -                     | -                      | 330,000             
| | Share
        subscriptions                                           | -                     | -                      | (330,000)           
| |                                                                       |                       |                        |                     
| |                                                                       | $
        -           | $
        -            | $
        -         
| |                                                                       |                       |                        |                     
| | Non-cash
        investing activities                                 |                       |                        |                     
| | Resource
        property expenditures incurred through accounts      |                       |                        |                     
| | payable                                                               | $
        (1,168,252) | $
         (669,961)   | $
         (379,260)
| | Resource
        property expenditure recovery in receivables         | -                     | 705,560                | 219,036             
| | Sale
        of partial interest in Argentina project for investments | -                     | -                      | 1,377,940           
| | Investments
        received in exchange for sale of partial          |                       |                        |                     
| | interest
        in Argentina project                                 | -                     | -                      | (1,377,940)         
| |                                                                       |                       |                        |                     
| |                                                                       | $
        (1,168,252) | $
        35,599       | $
        (160,224) 
| |                                                                       |                       |                        |                     
| | Interest
        paid during the year                                 | $
        -           | $
        89,011       | $
        -         
| | Income
        taxes paid during the year                             | -                     | -                      | -                   
| |                                                                       |                       |                        |                     





16.

SUBSEQUENT EVENTS



The following events occurred
  subsequent to February 28, 2007:



a)

The Company sold its interest
  in the Carneirinho project as described in Note 5(c).



b)

The Company received cash
  proceeds of $4,282,142 upon the exercise of 3,517,606 share purchase warrants
  at prices ranging from $1.20 to $2.20.



c)

The Company received cash
  proceeds of $53,000 upon the exercise of  200,000 stock options at prices
  ranging from $0.16 to $0.30 per share and granted a total of 485,000 stock options
  at prices ranging from $2.60 to $2.91 per share. These options granted have
  terms ranging from two years to five years.

F-23



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

FEBRUARY 28, 2007









17.

DIFFERENCES BETWEEN CANADIAN
  AND UNITED STATES GENERALLY ACCEPTED

ACCOUNTING PRINCIPLES



These consolidated financial
  statements have been prepared in accordance with generally accepted accounting
  principles in Canada (Canadian GAAP).  Material variations
  in the accounting principles, practices and methods used in preparing these
  financial statements from principles, practices and methods accepted in the
  United States (U.S. GAAP) are described and quantified below.



Loss for the year



| |                                                               |                        |                       |                    
| | ------------------------------------------------------------- | ---------------------- | --------------------- | -------------------
| |                                                               | 2007                   | 2006                  | 2005               
| |                                                               |                        |                       |                    
| | Loss
        for the year - Canadian GAAP                     | $  (1,801,883)         | $  (2,702,526)        | $ (448,169)        
| | Exploration
        expenditures expensed under U.S. GAAP (a) | (7,857,268)            | (670,731)             | (1,138,477)        
| | Compensation
        recovery (expense)  (c)                  | -                      | 87,938                | (27,000)           
| |                                                               |                        |                       |                    
| | Loss
        for the year - U.S. GAAP                         | (9,659,151)            | (3,285,319)           | (1,613,646)        
| | Holding
        gains (losses) on investments (d)             | (1,669,333)            | (1,469,570)           | 2,993,530          
| |                                                               |                        |                       |                    
| | Comprehensive
        income (loss) - U.S. GAAP               | $
        (11,328,484) | $
        (4,754,889) | $
        1,379,884
| |                                                               |                        |                       |                    
| | Basic
        and diluted income (loss) per share - U.S. GAAP | $
        (0.23)       | $
            (0.11)  | $
        (0.06)   



Investments



| |                                      |  |                   |                        
| | ------------------------------------ |  | ----------------- | -----------------------
| |                                      |  | 2007              | 2006                   
| |                                      |  |                   |                        
| | Investments -
        Canadian GAAP  |  | $ 554,679         | $   1,377,940          
| |                                      |  |                   |                        
| | Holding gains
        on investments |  | -                 | 1,523,960              
| |                                      |  |                   |                        
| | Investments
        - U.S. GAAP      |  | $
        554,679 | $
            2,901,900







F-24



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

FEBRUARY 28, 2007









17.

DIFFERENCES BETWEEN CANADIAN
  AND UNITED STATES GENERALLY ACCEPTED

ACCOUNTING PRINCIPLES
  (contd ...)





Resource properties



| |                                                          |                     |                  
| | -------------------------------------------------------- | ------------------- | -----------------
| |                                                          | 2007                | 2006             
| |                                                          |                     |                  
| | Resource properties
         Canadian GAAP              | $ 10,829,718        | $ 2,546,859      
| | Cumulative exploration
        expenditures expensed (a) | (9,666,476)         | (1,809,208)      
| |                                                          |                     |                  
| | Resource
        properties -  U.S. GAAP                 | $
        1,163,242 | $
        737,651





Shareholders equity



| |                                                          |                      |                     
| | -------------------------------------------------------- | -------------------- | --------------------
| |                                                          | 2007                 | 2006                
| |                                                          |                      |                     
| | Shareholders
        equity  Canadian GAAP             | $ 24,117,196         | $  10,550,846       
| |                                                          |                      |                     
| | Cumulative exploration
        expenditures expensed (a) | (9,666,476)          | (1,809,208)         
| | Compensation
        recovery (c)                        | -                    | 87,938              
| | Paid-in capital                                          | -                    | (87,938)            
| | Holding gains
        on investments (d)                 | -                    | 1,523,960           
| |                                                          |                      |                     
| | Shareholders
        equity - U.S. GAAP                 | $
        14,450,720 | $
        10,265,598





Cash flows



| |                                              |                       |                       |                      
| | -------------------------------------------- | --------------------- | --------------------- | ---------------------
| |                                              | 2007                  | 2006                  | 2005                 
| |                                              |                       |                       |                      
| | Cash flows
        from operating activities |                       |                       |                      
| | Per Canadian
        GAAP                    | $ (544,736)           | $ (427,624)           | $ (536,123)          
| | Expenditures
        on resource properties  | (6,647,507)           | (889,536)             | (1,191,515)          
| |                                              |                       |                       |                      
| | Per U.S. GAAP                                | $
        (7,192,423) | $
        (1,317,160) | $
        (1,727,638)
| |                                              |                       |                       |                      
| | Cash flows
        from investing activities |                       |                       |                      
| | Per Canadian
        GAAP                    | $ (7,075,274)         | $ (1,169,640)         | $ (493,648)          
| | Expenditures
        on resource properties  | 6,647,507             | 889,536               | 1,191,515            
| |                                              |                       |                       |                      
| | Per
        U.S. GAAP                        | $
        (427,767)   | $
        (280,104)   | $
        697,867    



F-25



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

FEBRUARY 28, 2007







17.

DIFFERENCES BETWEEN
  CANADIAN AND UNITED STATES GENERALLY ACCEPTED

ACCOUNTING PRINCIPLES
  (contd)



a)

Resource properties



Oil and gas properties



The Company follows the
  full cost method of accounting for oil and gas properties, and accordingly,
  there are no significant measurement differences with U.S. GAAP.



Mineral properties



Mineral property costs
  and related exploration expenditures are accounted for in accordance with Canadian
  GAAP as disclosed in Note 2. For U.S. GAAP purposes, the Company capitalizes
  acquisition costs and expenses as incurred exploration costs relating to unproven
  mineral properties. When proven and probable reserves are determined for a property
  and a feasibility study prepared, then subsequent development costs of the property
  would be capitalized. The capitalized costs of such properties would then be
  measured periodically for recoverability of carrying values.



Effective for reporting
  periods beginning after April 29, 2004, the Company has adopted the provisions
  of EITF 04-02 Whether Mineral Rights are Tangible or Intangible Assets
  which concluded that mineral rights are tangible assets.  Accordingly,
  effective for the fiscal years ended February 28, 2007 and 2006, the Company
  capitalizes costs related to the acquisition of mineral rights.





b)

Stock-based compensation



Effective March 1, 2006,
  the Company adopted SFAS No. 123 (revised), Share-Based Payment
  (SFAS 123(R)), utilizing the modified prospective approach. The
  impact of adopting this standard did not materially affect the Companys
  financial position, results of operations or cash flows because the Company
  previously adopted the fair value based method of accounting for stock options
  prescribed by SFAS 123, Accounting for Stock-Based Compensation.



Under SFAS 123 the Company
  used the fair value based method of accounting for stock-based employee compensation.
  The Companys results for the year ended February 28, 2007 were not significantly
  affected as a result of adopting SFAS 123(R) on March 1, 2006.



Under Canadian GAAP, the
  Company accounts for stock-based compensation using the fair value method as
  disclosed in Note 2.  Accordingly, there is no difference between Canadian
  GAAP and U.S. GAAP on the accounting for stock-based compensation for the years
  ended February 28, 2007, 2006 and  2005.



c)

Compensation expense
  for escrow shares



Under U.S. GAAP, shares
  issued pursuant to an escrow agreement may be considered to be compensatory
  in nature under certain circumstances. Compensation is provided for in accordance
  with Financial Accounting Standards Board (FASB) Interpretation
  28, Accounting for Stock Appreciation Rights and Other Variable Stock
  Option or Awards Plans, whereby the Company records compensation expense
  for the amount of equity instruments granted to officers and employees. The
  compensation expense is adjusted in subsequent periods for changes in the quoted
  market value of the Companys shares. If an equity award is forfeited,
  the Company adjusts compensation expense recorded in the previous periods in
  the period of forfeiture. Under Canadian GAAP, such escrow shares are not considered
  compensatory and no provision is required.

F-26



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OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

FEBRUARY 28, 2007









17.

DIFFERENCES BETWEEN
  CANADIAN AND UNITED STATES GENERALLY ACCEPTED

ACCOUNTING PRINCIPLES
  (contd)



c)

Compensation expense
  for escrow shares (contd)



During the year ended February
  28, 2006, the Company cancelled all escrow shares. Accordingly, compensation
  expense recognized in previous periods was reversed in fiscal 2006 under U.S.
  GAAP.



d)

Investments



Under
  Canadian GAAP, the investments held by the Company are recorded at the lower
  of cost and net realizable value. Under U.S. GAAP, these investments are classified
  as available-for-sale securities and recorded at market value. The
  accumulated difference between cost and market value is recorded as part of
  comprehensive income.



e)

Convertible notes



Under Canadian GAAP, upon
  issuance of the convertible notes, the net proceeds received are allocated between
  the liability and equity components of the notes.  The liability portion
  of the convertible notes is calculated by determining the carrying amount of
  the convertible notes by discounting the stream of future payments of principal
  at the prevailing market rate for a similar liability that does not have an
  associated equity component.  For Canadian GAAP purposes, for the years
  ended February 28, 2006 and 2005, no amount was allocated to the equity component
  for convertible loans issued.



Under
  U.S. GAAP, on issuance, the convertible notes would be recorded as a liability
  and then reclassified as equity only upon conversion. Further, under U.S. GAAP,
  the beneficial conversion feature represented by the excess of the fair value
  of the shares issuable on conversion of the notes, measured on the commitment
  date, over the amount of the proceeds to be allocated to the common shares upon
  conversion, would be allocated to additional paid in capital. This results in
  a discount on the note that is accreted as additional interest expense over
  the term of the note and any unamortized balance is expensed immediately upon
  conversion of the note. For U.S. GAAP purposes, for the years ended February
  28, 2006 and 2005, the Company was not required to record a beneficial conversion
  feature on the convertible notes, as the fair value of the shares issuable on
  conversion of the notes did not exceed the amount of the proceeds to be allocated
  to the common shares upon conversion.



f)

Joint ventures



Under Canadian GAAP, investments
  in jointly-controlled entities are permitted to be accounted for using the proportionate
  consolidation method. Under U.S. GAAP, investments in jointly-controlled entities
  are accounted for using the equity method. Although there are material differences
  between these accounting methods, the Company relies on an accommodation of
  the United States Securities and Exchange Commission (SEC) permitting
  the Company to exclude the disclosure of such differences, which affect only
  the display and classification of the financial statement items excluding shareholders
  equity and net income.







F-27



---

OROMIN EXPLORATIONS
  LTD.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

FEBRUARY 28, 2007









17.

DIFFERENCES BETWEEN
  CANADIAN AND UNITED STATES GENERALLY ACCEPTED

ACCOUNTING PRINCIPLES
  (contd)



g)

Recent accounting pronouncements



In July 2006, FASB issued
  Financial Instrument No. 48, Accounting for Uncertainty in Income Taxes-an
  interpretation of FASB Statement No. 109 (FIN 48), which is
  a change in accounting for income taxes.  FIN 48 specifies how tax benefits
  for uncertain tax positions are to be recognized, measured and derecognized
  in financial statements; require certain disclosures of uncertain tax matters;
  specifies how reserves for uncertain tax positions should be classified on the
  balance sheet; and provides transition and interim period guidance, among other
  provisions.  FIN 48 is effective for fiscal years beginning after December
  15, 2006.



In September 2006, FASB
  issued SFAS No. 157 (SFAS 157), Fair Value Measurements.
   Among other requirements, SFAS 157 defines fair value and establishes
  a framework for measuring fair value and also expands disclosure about the use
  of fair value to measure assets and liabilities.  SFAS 157 is effective
  for fiscal years beginning after November 15, 2007.



The adoption of these new
  pronouncements is not expected to have a material effect on the Companys
  consolidated financial position or results of operations.





















F-28



---



SHAREHOLDERS
  AGREEMENT

THIS
  AGREEMENT is dated for reference the 18th day of December,
  2006.

BETWEEN:

OROMIN
  JOINT VENTURE GROUP LTD.,a company incorporated under the laws of the
  British Virgin Islands having its registered office at Craigmuir Chambers, P.O.
  Box 71, Road Town, British Virgin Islands

(the
  Company)

OF
  THE FIRST PART

AND:

BADR
  INVESTMENT & FINANCE COMPANY, a company incorporated under the laws
  of Panama having an office at P.O. Box 9966, Jeddah 21413, Kingdom of Saudi
  Arabia

(Badr)

OF
  THE SECOND PART

AND:

BENDON
  INTERNATIONAL LTD., a company incorporated under the laws of the British
  Virgin Islands having its registered office at Craigmuir Chambers, P.O. Box
  71, Road Town, British Virgin Islands

(Bendon)

OF
  THE THIRD PART

AND:

SABODALA
  HOLDING LIMITED, a company incorporated under the laws of the British
  Virgin Islands having its registered office at Craigmuir Chambers, P.O. Box
  71, Road Town, British Virgin Islands

(Sabodala)

OF
  THE FOURTH PART

WHEREAS:

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A.

Oromin
  Explorations Ltd., the one hundred percent (100%) owner of Sabodala, representing
  itself, Badr and Bendon, has been awarded the Mining Convention governing the
  exploration concession for the Property;

B.

To
  date, Oromin Explorations Ltd., Badr and Bendon have operated as a joint venture
  to carry out the exploration and development of the Property and now desire
  to transfer their respective interests in the Property to the Company and to
  enter into a definitive agreement respecting their joint ownership of the Property,
  the governance of the Company and the undertaking of Operations and their respective
  rights and obligations in respect thereof on the terms and conditions hereinafter
  set forth.  Oromin Explorations Ltd. will hereafter own its interest in
  the Company and the Property through Sabodala;

NOW
  THEREFORE THIS AGREEMENT WITNESSESin consideration of the mutual promises
  contained in this agreement and for other good and valuable consideration (the
  receipt and sufficiency of which are hereby acknowledged), the parties agree
  as follows:

1.

INTERPRETATION

1.1

In
  this Agreement, including the Recitals and Schedules, the following words, phrases
  and expressions shall have the following meanings:

(a)

Accounting
  Procedure means the procedure attached to this Agreement as Schedule C
  hereto;

(b)

Act
  means the BVI Business Companies Act, 2004, as amended from time to time;

(c)

Affiliate
  means, with respect to any Person, any other Person (including directors and
  officers of such Person) directly or indirectly Controlling, Controlled by or
  under direct or indirect common Control with such Person;

(d)

Agreement
  means this agreement as amended, supplemented or modified from time to time;

(e)

Approval
  Date means the date on which the Shareholders approve a Work Plan and
  Budget or other item or activity that requires Shareholder approval;

(f)

Assets
  means all tangible and intangible goods, chattels, improvements or other items
  including, without limiting the generality of the foregoing, land, buildings,
  and equipment, excluding the Property, acquired for or made to the Property
  under this Agreement [or the cost of which is included in Prior Exploration
  Costs];

(g)

Auditors
  means such firm of chartered accountants as may be appointed by the Company
  from time to time;

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(h)

Budget
  means a detailed estimate of all Costs proposed to be incurred for any Operations
  during a Budget Year (or Semi-Annual Period, in respect of Exploration Operations);

(i)

Budget
  Year means January 1 to December 31;

(j)

Business
  Day means a day on which commercial banks are ordinarily open for the
  transaction of commercial business in New York; provided that for the purposes
  of any transfer of funds by any Party hereto, Business Day means
  a day on which commercial banks are ordinarily open for the transaction of commercial
  business in Canada and the United Kingdom;

(k)

By-laws
  means the Articles of Association of the Company, attached hereto as Schedule B;

(l)

Charge
  means any lien, mortgage, charge encumbrance or other security of whatsoever
  description over a Percentage Interest or over any Partys Proportionate
  Share of Products or proceeds of sale thereof;

(m)

Chargee
  means any person having the benefit of a Charge;

(n)

Commercial
  Production means the operation of the Property as a producing mine and
  the production of mineral products therefrom (excluding bulk sampling, pilot
  plant or test operations); Commercial Production will be deemed to have commenced
  on the first day of the month following the first sixty (60) day period during
  which ore is processed at an average rate of not less than twenty-five percent
  (25%) of the Mines initial rated capacity;

(o)

Compete
  has the meaning ascribed to such term in Section 17.1(b)(iv) hereof;

(p)

Completion
  Date means the date on which the Mine is deemed to have commenced Commercial
  Production;

(q)

Construction
  means every kind of work carried out pursuant to Development Operations during
  the Construction Period by the Operator in accordance with a Feasibility Report
  approved by the Shareholders;

(r)

Construction
  Period means, unless the Production Notice is subsequently withdrawn,
  the period beginning on the date a Production Notice is given and ending on
  the Completion Date;

(s)

Control
  means, as to any Person:

(i)

the
  ability, directly or indirectly through one or more intermediaries, to direct
  or cause the direction of the management and policies of any other Person through:

A.

the
  legal or beneficial ownership of voting securities;

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B.

the
  right to appoint managers, directors or corporate management; or

C.

contract,
  operating agreement, voting trust or otherwise; or

(ii)

the
  possession of no less than twenty percent (20%) of the total and voting share
  capital of or other ownership interests in such other Person, directly or indirectly;

(t)

Costs
  means all costs, expenses, charges and liabilities incurred or to be incurred
  by the Parties in connection with a Work Plan and Budget providing for Operations
  (but, which, for the avoidance of doubt, shall not include the amount in which
  Operator shall be reimbursed for administration expenses);

(u)

Cross
  Charge means a deed of charge in the form attached to this Agreement as
  Schedule D hereto, creating in favour of the other Parties
  a first ranking charge upon a Partys Percentage Interest including, without
  limiting the generality of the foregoing, a charge over its Proportionate Share
  of Products, the proceeds of the sale thereof and its interest in all contracts
  for the sale of its Proportionate Share of Products;

(v)

Data
  means all data and information relating to Operations, wherever located or maintained,
  including but not limited to, all logs and drill hole records, maps showing
  the location of all drill holes, all land surveys, all analytical and interpretation
  data and information, all geological and geophysical records, all reserve and
  feasibility studies and all other similar records of whatever nature and kind;

(w)

Defaulting
  Party has the meaning ascribed to such term in Section 15.5 hereof;

(x)

Development
  Costs means all costs, expenses, charges and liabilities incurred or to
  be incurred by the Parties in connection with a Work Plan and Budget providing
  for Development Operations including:

(i)

the
  Overhead Charge;

(ii)

working
  capital which the Shareholders deem sufficient to ensure continuity of Production
  Operations, at the ore production rate no lower than that achieved during the
  period in which Commercial Production was achieved, until such time as revenues
  calculated on the basis of the greater of metal prices actually realised and
  metal prices projected in a Feasibility Report approved under Article  8
  are sufficient to meet cash costs of Production Operations; and

(iii)

for
  further certainty, any expenditures to defray budget overruns for the Development
  Operations Work Plan and Budget;

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(y)

Development
  Operations means all activity or work involved in the construction, erection,
  installation and commissioning of a Mine on the Property and all associated
  facilities in accordance with a Feasibility Report until Commercial Production
  has been achieved and thereafter any expansion of the rate of ore production
  from the Mine that was contemplated by that Feasibility Report; for greater
  certainty, such work may include non-exploration related infrastructure activities
  such as surveying, mapping, drilling, road construction, power generation and
  distribution, soil testing, engineering design, cost analysis, preparation of
  environmental impact statements or studies, environmental permitting activities,
  overburden stripping and pilot testing programs;

(z)

Development
  Plan means a Work Plan and Budget relating to Development Operations;

(aa)

Distributable
  Cash means all cash flow from Production Operations after expenses, fees,
  provision for taxes, debt service, adequate working capital, sustaining capital,
  reclamation costs and contingencies in such amount or on such basis as the Shareholders
  may from time to time determine;

(bb)

Effective
  Date means the date on which the Parties have entered into all of the
  following:

(i)

this
  Agreement;

(ii)

the
  Share Purchase Agreements providing for the sale by Whitestone Capital Services
  Ltd. and the purchase by each of Badr, Bendon and Sabodala of the Shares comprising
  Badrs, Bendons and Sabodalas respective Initial Percentage
  Interests; and

(iii)

the
  Deeds of transfer providing for the transfer to the Company by each of Badr,
  Bendon and Sabodala of all of its right, title and interest in the Property;

(cc)

Exploration
  Costs means all costs, expenses, charges and liabilities incurred or to
  be incurred by the Parties in connection with a Work Plan and Budget providing
  for Exploration Operations, including the Overhead Charge;

(dd)

Exploration
  Operations means:

(i)

all
  activity or work involved in ascertaining the existence, location, quantity,
  quality or commercial value of Minerals within the Property including without
  limitation all prospecting, mapping, ground and airborne geophysical work and
  geochemical surveys and, after the discovery and location of Minerals, the investigation
  of the Minerals by drilling, surface and/or underground workings, sampling,
  testing and assaying to determine the extent, mode of occurrence and recoverable
  grade of Minerals; and

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(ii)

all
  activity or work involved in delineating and testing an ore body or deposit
  of Minerals within the Property, together with all work required for the preparation
  of Feasibility Reports;

(ee)

Exploration
  Period means the period beginning on the Effective Date and ending on
  the date an effective Production Notice is given;

(ff)

Feasibility
  Report means that document or those documents consisting of a Development
  Plan, reports, estimates, studies and comprehensive financial analyses prepared
  pursuant to this Agreement to examine the feasibility of bringing into Commercial
  Production any Mineral deposit on the Property and establishing and operating
  a Mine (and includes a Non-Operators Feasibility Report) in such form
  and of such a standard as may be required by the Shareholders and as would allow
  banking or other financial institutions familiar with the mining business to
  make a decision to loan funds on reasonable commercial terms sufficient to construct
  the Mine with security based solely on the reserves and Mine described in the
  Feasibility Study;

(gg)

Government
  means the government of the République du Sénégal and includes
  any minister, department, office, commission, delegate, instrumentality, agency,
  board, authority, organ or subdivision thereof in any such case having jurisdiction
  over the Property or the Company;

(hh)

Initial
  Percentage Interest means, with respect to Badr, Bendon and Sabodala on
  the Effective Date, a Percentage Interest of thirteen percent (13%), forty-three
  and one half of one percent (43.5%) and forty-three and one-half of one percent
  (43.5%), respectively;

(ii)

Interest
  means simple interest in respect of a principal amount at an annual rate equal
  to the Prime Rate plus five percent (5%) per annum calculated daily from the
  date of advance of the principal amount to the date of repayment;

(jj)

Memorandum
  means the Memorandum of Association of the Company, attached hereto as Schedule A;

(kk)

Mine
  means the workings established and Assets acquired, including development headings,
  plant and concentrator installations, infrastructure, housing, airport and other
  facilities in order to bring the Property into Commercial Production and:

(i)

any
  adit, decline, drift, shaft, pit, drill hole, excavation, tunnel, well or opening,
  whether on the surface, underground or otherwise, made or constructed on a basis
  provided in a Feasibility Report and pursuant to Development Operations, Production
  Operations or Subsequent Mine Construction Operations, and from which Minerals
  have been or may be removed or extracted by any method whatsoever, whether now
  known or hereafter developed, in quantities larger than those required for purposes
  of sampling, assaying, testing, analysis or evaluation;

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(ii)

mills,
  leaching facilities and other facilities for the treatment, removal, extraction,
  production, concentrating, beneficiation, processing, storage, and disposal
  of Minerals and waste, including tailings;

(iii)

fixtures,
  buildings, facilities and improvements for mining, processing, handling and
  transporting Minerals, waste and materials; and

(iv)

housing,
  offices, roads, airstrips, power lines, power generation facilities, port facilities,
  evaporation and drying facilities, pipelines, railroads, infrastructure related
  to the foregoing;

and
  other facilities for any of the foregoing purposes;

(ll)

Minerals
  means all metallic minerals and mineral substances of every nature and kind
  that are permitted to be extracted from the Property pursuant to the Mining
  Convention or any subsequent exploitation or concession agreement, including
  without limitation ores, concentrates, precipitates, beneficiated products and
  solutions containing such Minerals and all forms in which Minerals may be found,
  extracted or produced, as well as any by-products thereof having present or
  known future commercial value;

(mm)

Mining
  Convention means that certain mining convention governing the Property,
  a copy of which is attached hereto as Schedule E;

(nn)

Notice
  includes all notices, consents, requests, waivers, demands, directions or other
  communications by a Party to another Party permitted or required by this Agreement;

(oo)

Operating
  Account has the meaning given in the Accounting Procedure;

(pp)

Operating
  Plan means a Work Plan and Budget relating to Production Operations as
  more particularly described in Section 6.6;

(qq)

Operations
  means any of Exploration Operations, Development Operations and Production Operations
  undertaken and conducted pursuant to approved Work Plans and Budgets;

(rr)

Operator
  means that person appointed pursuant to Article 5;

(ss)

Overhead
  Charge means the charge contemplated in Article 11;

(tt)

Party
  or Parties means the parties to this Agreement which from time to
  time hold a Percentage Interest and their respective successors and permitted
  assigns which become parties pursuant to this Agreement;

(uu)

Percentage
  Interest means the percentage ownership of any Person of all the voting
  rights attaching to such Persons Shares;

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(vv)

Person
  means any natural person or any company, partnership, joint venture, firm, corporation,
  trust, enterprise, unincorporated organization or other body or any other entity,
  whether acting in an individual, fiduciary or any other capacity;

(ww)

Prime
  Rate means, at any particular time, the annual rate of interest announced
  from time to time by the Chase Manhattan Bank, Main Branch, New York City, New
  York (or any successor bank to it) as the reference rate then in effect for
  determining floating rates of interest on United States dollar loans made in
  the United States and as to which from time to time a certificate of an officer
  of such bank shall be conclusive evidence;

(xx)

Prior
  Exploration Costs means the initial eight million Dollars ($8,000,000)
  contributed by Bendon and Sabodala (or by Oromin Explorations Ltd. on behalf
  of Sabodala) for Exploration Operations prior to the Effective Date;

(yy)

Production
  Costs means all costs, expenses, charges and liabilities incurred or to
  be incurred by the Parties, including the Overhead Charge, in order to maintain
  and operate one or more Mines on or in respect of the Property or to otherwise
  continue Production Operations after one or more Mines have reached Commercial
  Production, and for greater certainty, shall include all capital costs for Production
  Operations other than any costs of expansion of the rate of production from
  Mines contemplated by an approved Feasibility Report and accordingly included
  in Development Costs;

(zz)

Production
  Notice means a notice which is given to each of the Parties pursuant to
  Section 9.2;

(aaa)

Production
  Operations means all activities undertaken with respect to the Property
  after one or more Mines in the Property have reached Commercial Production and
  includes the work or activity of developing mining, removing, extracting, producing,
  treating, processing, milling, drying, shipping and marketing Products and associated
  by-products (in quantities larger than those required for purposes of sampling,
  analysis or evaluation) within the Property by open pit, underground, in situ
  methods, heap leaching, solution mining or any other methods now known or hereafter
  developed, all operations necessary to maintain such Mines (including during
  a temporary suspension of mining operations), and all reclamation and restoration
  performed upon or for the benefit of the Property pursuant to this Agreement;

(bbb)

Products
  means Minerals at their highest state of beneficiation on the Property;

(ccc)

Program
  means a Work Plan and Budget for Operations prepared by the Operator and submitted
  to the Shareholders for approval;

(ddd)

Property
  means the mineral property described in the Mining Convention, all information
  obtained from Operations and those rights and benefits appurtenant to the Property
  that are acquired for the purpose of conducting Operations; a reference to Property
  shall include a reference to any portion thereof;

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(eee)

Proportionate
  Share means that share which is equal to a Persons Percentage Interest;

(fff)

Reserved
  Matter means any of the activities listed in Section 4.6 hereof;

(ggg)

Resolution
  of Directors means either:

(i)

a
  resolution approved at a duly convened and constituted meeting of directors
  of the Company or of a committee of directors of the Company by the affirmative
  vote of a Simple Majority of the directors present at the meeting who voted;
  or

(ii)

a
  resolution consented to in writing by all directors or by all members of a committee
  of directors of the Company, as the case may be;

(hhh)

Resolution
  of Shareholders means either:

(i)

a
  resolution approved at a duly convened and constituted meeting of the Shareholders
  of the Company by the affirmative vote of a Simple Majority, or, in the case
  of any Reserved Matter, the affirmative vote of eighty percent (80%), of the
  total Shares entitled to vote thereon; or

(ii)

a
  resolution consented to in writing by a Simple Majority, or eighty percent (80%),
  as the case may be, of the votes of the total Shares entitled to vote thereon;

(iii)

Semi-Annual
  Period means a six month period beginning either January 1 or July 1,
  as the case may be;

(jjj)

Share
  of Minerals means each Partys Proportionate Share of Minerals;

(kkk)

Share
  means a share issued or to be issued by the Company;

(lll)

Shareholder
  means a Person whose name is entered in the register of members of the Company
  as the holder of Shares;

(mmm)

Simple
  Majority means any number greater than fifty percent (50%);

(nnn)

Subordinated
  Loan means each advance made by a Party or any Affiliate of a Party to
  the Company, which:

(i)

is
  subordinated in right of payment and security (if applicable) to any Third Party
  Development Debt;

(ii)

if
  incurred otherwise than to fund Exploration Costs, may be secured;

(iii)

if
  incurred otherwise than to fund Exploration Costs, shall bear interest at the
  rate of Interest, compounded annually; and

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(iv)

if
  incurred to fund Exploration Costs, shall be unsecured and bear simple interest
  at the rate of Interest;

(ooo)

Third
  Party Development Debt means indebtedness incurred by the Company for
  the financing or refinancing of Development Operations or Production Operations
  from a financial institution that is not an Affiliate; and

(ppp)

Work
  Plan means a detailed written plan for Operations to be conducted during
  a Budget Year (or Semi-Annual Period, in respect of Exploration Operations)
  and adopted by the Shareholders.

1.2

In
  this Agreement including the recitals unless the contrary intention appears:

(a)

words
  denoting the singular include the plural and vice versa;

(b)

a
  reference to any one of an individual, corporation, partnership, joint venture,
  association, authority, trust or government includes (as the context requires)
  any other of them;

(c)

the
  table of contents and headings are for convenience only and do not affect interpretation;

(d)

a
  reference to any instrument (such as a deed, agreement or document) is to that
  instrument (or, if required by the context, to a part of it) as amended, novated,
  substituted or supplemented at any time and from time to time;

(e)

a
  reference to a Party is a reference to a Party to this Agreement and includes
  that Partys executors, administrators, successors and permitted
  assigns;

(f)

a
  reference to $ or dollars is a reference to an amount
  in U.S. currency;

(g)

a
  reference to a recital, clause, schedule or annexure is to a recital, clause
  (including sub-clause, paragraph, sub-paragraph or further subdivision of a
  clause), schedule or annexure of or to this Agreement, and a reference to a
  paragraph is to a paragraph in a schedule;

(h)

a
  reference to any legislation or legislative provision includes any statutory
  modification or re-enactment of, or substitution for, and any subordinate legislation
  under, that legislation or legislative provision;

(i)

where
  an expression is defined, another part of speech or grammatical form of that
  expression has the corresponding meaning;

(j)

where
  a matter is expressed to be within or to the knowledge of any person the matter
  is taken to be to the best of the knowledge and behalf of the person after having
  made reasonable enquiry;

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(k)

the
  word including and similar expressions are not and must not be treated
  as words of limitation; and

(l)

the
  Schedules form part of this Agreement.

1.3

When
  calculating a Partys Percentage Interest, the Costs of a Party shall include
  any deemed Costs attributed to such Party pursuant to this Agreement (after
  reduction for costs attributed to Badr) and, in the case of Badr, its Costs
  shall be deemed to be that number which is equal to thirteen percent (13%) of
  the aggregate of all of the Costs of all Parties.

2.

SCOPE
  OF THIS AGREEMENT

2.1

Except
  as expressly provided in this Agreement, including Articles 17 and 26,
  each Party shall have the right independently to engage in and receive full
  benefits from business activities, whether or not competitive with the Company,
  without consulting any other Party; provided, however, that so long as Sabodala
  is affiliated with the Operator, Sabodala shall not engage (and shall ensure
  that the Operator does not engage) in other activities which would interfere
  with the ability of the Operator to devote a sufficient amount of its time and
  resources to the Property in order to fulfill its obligations to the best of
  its ability.  Subject to Articles 17 and 26, the doctrines of corporate
  opportunity or business opportunity shall not be applied to
  any other activity, venture or operation of any Party and no Party shall have
  any obligation to another Party with respect to any opportunity to acquire any
  assets outside of the perimeter of the Property.  Unless otherwise agreed
  in writing, no Party shall have any obligation to mill, beneficiate or otherwise
  treat any Minerals or any other Partys share of Minerals in any facility
  owned or controlled by such Party.

3.

REPRESENTATIONS
  AND WARRANTIES

3.1

Each
  of Badr, Bendon and Sabodala represents and warrants to the others that:

(a)

it
  is a corporation duly incorporated and validly subsisting and in good standing
  with respect to the filing of annual reports and other documents as required
  under the laws of its jurisdiction of incorporation;

(b)

it
  has the power, capacity and authority to enter into and perform its obligations
  under this Agreement and all transactions contemplated herein and to take all
  actions required of it under this Agreement, and all corporate and other actions
  required to authorise it to enter into and perform this Agreement have been
  properly taken;

(c)

no
  consent, approval, authorisation, order, registration, notification or qualification
  of or with any court, government, agency, stock exchange or other regulatory
  authority or any other third party is required by it that has not already been
  given or waived for the consummation of the transactions contemplated herein;

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(d)

following
  the consummation of the transactions contemplated herein, Badr, Bendon and Sabodala
  will collectively be the beneficial owner of a one hundred percent (100%) interest
  in the Property and have the right of access thereto, free and clear of all
  liens, charges, encumbrances and agreements in respect thereof which would have
  a material adverse effect on the intended use or value of the Property;

(e)

to
  the best of its knowledge, no Person, other than the surface owners, has any
  form of right to explore, develop or otherwise exploit the Property, and such
  rights would not materially interfere with the Companys rights under the
  Convention;

(f)

there
  are no material adverse claims or challenges of any kind whatsoever, including,
  without limitation, claims or challenges by third parties, against or to the
  ownership of, or title to, the Property that, if determined adversely, would
  have a material adverse effect on the ownership or use thereof, nor is there
  any basis therefor;

(g)

none
  of the execution and delivery by it of this Agreement, the performance of its
  obligations under this Agreement or the completion of the transactions contemplated
  under this Agreement will:

(i)

materially
  conflict with, or result in a material breach of or the acceleration of any
  material indebtedness under, or constitute a material default under, any material
  indenture, mortgage, agreement, lease, license or other instrument of any kind
  whatsoever to which it is a party or by which it is bound, or any judgment or
  order of any kind whatsoever of any court or administrative body of any kind
  whatsoever by which it is bound, which would have a material adverse effect
  on the enforceability of this Agreement or the consummation of the transactions
  contemplated hereunder; or

(ii)

result
  in a material violation of any material law or regulation of any kind whatsoever
  by it, which would have a material adverse effect on the enforceability of this
  Agreement or the consummation of the transactions contemplated hereunder;

(h)

it
  has operated in the ordinary course of business and, without limiting the foregoing,
  it has not, other than as expressly permitted hereunder, acquired or disposed
  of, or agreed to acquire or dispose of, any material asset or property, terminate
  or enter into any material contract, take on any material liabilities or obligations
  other than in the ordinary course of business or charge or encumber in any material
  way the Property or any interest of any of them therein; and

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(i)

it
  is not insolvent and has committed no act of bankruptcy, proposed a compromise
  or arrangement to its creditors generally, had any petition for the granting
  of a receiving order in bankruptcy filed against it, made a voluntary assignment
  into bankruptcy or taken any proceeding to have itself wound-up or declared
  bankrupt or to have a receiver appointed in respect of all or any portion of
  its assets or commenced proceedings for any amalgamation, continuation or other
  corporate reorganisation.

3.2

The
  Company represents and warrants to each of Badr, Bendon and Sabodala that:

(a)

it
  is a body corporate duly incorporated, organised, validly subsisting and in
  good standing under the laws of the British Virgin Islands;

(b)

it
  has the power, capacity and authority to enter into and perform its obligations
  under this Agreement and all transactions contemplated herein and to take all
  actions required of it under this Agreement, and all corporate and other actions
  required to authorise it to enter into and perform its obligations under this
  Agreement have been properly taken;

(c)

it
  has full power and authority to carry on its business and to enter into this
  Agreement and any agreement or instrument referred to or contemplated by this
  Agreement;

(d)

neither
  the execution and delivery by it of this Agreement or any of the agreements
  referred to herein or contemplated hereby, nor the consummation of the transaction
  hereby contemplated conflict with, shall result in the breach of or accelerate
  the performance required by any agreement to which it is a party;

(e)

the
  execution and delivery of this Agreement and any of the agreements contemplated
  hereby will not violate or result in the breach of the laws of any jurisdiction
  applicable or pertaining thereto or of its contacting documents;

(f)

to
  the best of its knowledge, there are no actions, suits, judgments, investigations
  or proceedings of any kind whatsoever outstanding, pending or threatened against
  or affecting it at law or in equity before or by any federal, provincial, municipal
  or other governmental department, commission, board, bureau or agency of any
  kind whatsoever and there is no basis therefor;

(g)

to
  the best of its knowledge, the execution and delivery of this Agreement, the
  performance of its obligations under this Agreement and the completion of its
  transactions contemplated under this Agreement will not:

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(i)

materially
  conflict with, or result in the breach of or the acceleration of any indebtedness
  under, or constitute default under, the contacting documents of the Company
  or any indenture, mortgage, agreement, lease, licence or other instrument of
  any kind whatsoever to which it is a party or by which it is bound, or any judgment
  or order of any kind whatsoever of any court or administrative body of any kind
  whatsoever by which the Company is bound, which would have a material adverse
  effect on [the enforceability of] this Agreement and the completion of the transactions
  contemplated hereunder; or

(ii)

result
  in violation of any law or regulation of any kind whatsoever by it, which would
  have a material adverse effect on [the enforceability of] this Agreement and
  the completion of the transactions contemplated hereunder;

(h)

no
  consent, approval, authorisation, order, registration, notification or qualification
  of or with any court, government, agency, stock exchange or other regulatory
  authority or any other third party is required that has not already been given
  or waived for the consummation of the transactions contemplated herein; and

(i)

the
  Shares have been fully paid, validly issued and free and clear of all liens,
  charges, security interests and encumbrances whatsoever and there are no agreements,
  options, warrants, rights of conversion, rights of pre-emption or similar rights
  or other rights pursuant to which the Company is or may become obligated to
  issue any of its Shares or other securities to any Person.

3.3

The
  parties hereto agree that:

(a)

the
  representations and warranties of the parties hereinare conditions
  upon which the Parties have relied on in entering into this Agreement;

(b)

if
  the Company is in breach of any representation, warranty, covenant, agreement
  or condition made by it and contained in this Agreement it shall be liable and
  shall indemnify and save harmless Badr, Bendon and Sabodala from any and all
  loss (including economic loss), costs, damages, actions and suits arising out
  of or in connection with any breach of any representation, warranty, covenant,
  agreement or condition made by it and contained in this Agreement; provided
  always that notice of any such breach is delivered to the Company by Badr, Bendon
  or Sabodala within two (2) years of the Effective Date;



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(c)

if
  Badr, Bendon or Sabodala is in breach of any representation, warranty, covenant,
  agreement or condition made by it and contained in this Agreement, it shall
  be liable and shall indemnify and save harmless the Company from any and all
  loss (including economic loss), costs, damages, actions and suits arising out
  of or in connection with any breach of such representation, warranty, covenant,
  agreement or condition; provided always that notice of any such breach is delivered
  to Badr, Bendon or Sabodala by the Company or one of the non-breaching Shareholders
  within two (2) years of the Effective Date.

3.4

The
  representations and warranties of the parties contained in this Agreement or
  in any agreement, certificate or other document delivered or given pursuant
  to this Agreement, and the covenants and agreements of the parties under this
  Agreement shall survive the completion of the transactions contemplated by this
  Agreement and, notwithstanding such completion or any investigation or enquiry
  made by or on behalf of any Party or any waiver of any condition by any Party,
  shall continue in full force and effect for a period of two (2) years after
  the Effective Date, but not thereafter.

4.

DIRECTORS
  AND SHAREHOLDERS

4.1

The
  Company shall have a board of directors fixed at five (5) directors with each
  of Bendon and Sabodala authorized to nominate two (2) directors and Badr authorized
  to nominate one (1) director.  Notwithstanding any provision to the contrary,
  the Parties agree that with respect to the appointment of directors, the Shareholders
  shall vote for the directors nominated in accordance with Section 4.1 hereof.

4.2

The
  directors duties and powers shall be as set forth in the Memorandum, the
  By-laws and under the Act.

4.3

A
  meeting of directors is duly constituted for all purposes if at the commencement
  of the meeting there are present in person or by alternate no fewer than four
  (4) directors.

4.4

A
  director may be represented at a meeting of directors by a proxy who may speak
  and vote on behalf of the director.  The instrument appointing a proxy
  shall be produced at the place designated for the meeting before the time for
  holding the meeting at which the Person named in such instrument proposes to
  vote.  The instrument appointing a proxy shall identify the proxy and provide
  the date of the meeting at which the Person named in such instrument proposes
  to vote and shall be signed by the director appointing such proxy.  In
  addition, the instrument appointing a proxy may specify any restrictions on
  voting that the director appointing the proxy may wish to impose.





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4.5

Except
  for such matters as are required under the act to be approved by the directors
  and the day-to-day management of the Company or other technical matters related
  to exploration, development or operating activities which are expressly delegated
  to the Operator under the terms hereof or are expressly delegated to appointed
  officers of the Company, the management and control of the Company shall be
  vested exclusively in the Shareholders.  Resolutions of Shareholders may
  be passed by a Simple Majority; provided, however, that in accordance with Section 4.6,
  certain decisions shall require approval of Shareholders owning Percentage Interests
  of not less than eighty percent (80%).

4.6

Notwithstanding
  any provision to the contrary, the Parties agree that the Company shall not
  be permitted to undertake any of the following activities (each a Reserved
  Matter) without the agreement of Shareholders holding not less than eighty
  percent (80%) of the votes of Shares in issue:

(a)

changing
  the number or composition of the board of directors from that set forth in this
  Agreement or in the Memorandum and By-laws;

(b)

delegating
  any powers of the directors or the Shareholders, except as may be permitted
  by this Agreement or required by the Memorandum and By-laws;

(c)

acquiring,
  on behalf of the Company, assets other than those relating to the Property,
  except as contemplated by this Agreement or a Feasibility Study approved pursuant
  to this Agreement;

(d)

disposing
  of assets outside the ordinary course of business, except as contemplated by
  this Agreement or a Feasibility Study approved pursuant to this Agreement;

(e)

taking
  any action related to the winding up or dissolution of the Company;

(f)

changing
  the Companys dividend or distribution policy;

(g)

determining
  salaries or bonuses or fees to directors of the Company, and any part-time or
  full-time employees who are associated with any Party;

(h)

deciding
  to appoint or discharge the Operator, or taking any other major action (such
  as declaring a default by the Operator); provided however that if the Operator
  or any Affiliated Person is a Shareholder, such Shareholder shall recuse itself
  from any proposal to remove the Operator in accordance with Sections  5.3(b)
  through (h) hereof and, in such case, the proposed action shall not be taken
  without the affirmative vote of not less than eighty percent (80%) of the Shares
  entitled to vote (for this purpose, Shares entitled to vote shall be all Shares
  in issue less those Shares held by the recused Shareholder);

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(i)

approving
  a Feasibility Study as contemplated by Article  8 or any material
  amendment or supplement of a Feasibility Study or any Work Plan and Budget which
  provides a material variation from any then applicable Feasibility Study;

(j)

entering
  into any transaction between the Company and any Party or an Affiliate of any
  Party which is not on ordinary commercial terms or which in any event is for
  an amount exceeding one hundred twenty-five thousand Dollars ($125,000) (except
  creation of and payments under Subordinated Loans made for any of the purposes
  contemplated by this Agreement);

(k)

suing,
  prosecuting, settling or compromising all claims against third parties, compromising,
  settling or accepting judgment of claims against the Company and executing all
  documents and making all representations, admissions and waivers in connection
  therewith in excess of one hundred thousand Dollars ($100,000);

(l)

determining
  whether to develop the Property for Commercial Production and, following the
  commencement of Development Operations, the permanent termination of Production
  Operations unless Production Operations have been suspended for twelve (12)
  consecutive months;

(m)

temporarily
  suspending Production Operations, unless the cash operating costs per ounce
  of gold (net of other metal credits) exceed eighty percent (80%) of the weighted
  average gold price realized by the Company for final settlements on the sale
  by the Company of its gold concentrates during a four (4) month period calculated
  at any time within thirty (30) days of the determination, in which event the
  determination of a temporary suspension may be passed by a Simple Majority as
  provided in Section 4.5 above;

(n)

changing
  the Companys minerals marketing or hedging policies;

(o)

issuing
  any additional Shares, the receipt of any Subordinated Loans or the issuance
  of any other securities of the Company, except (i) as provided by this Agreement
  or (ii) securities evidencing or securing approved Third Party Development Debt
  or working capital indebtedness approved in accordance with this Agreement;

(p)

amending
  the Memorandum or By-laws of the Company;

(q)

undertaking
  any business activity unrelated or not reasonably ancillary to the exploration,
  development and operation of one or more Mines;



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(r)

incurring
  indebtedness by the Company, including Third Party Development Debt and encumbrances
  in respect of its assets to secure such indebtedness;

(s)

approving
  any Work Plan or Budget, or amendment or supplement to a previously approved
  Work Plan or Budget, including any Exploration, Development or Production Operations;

(t)

changing
  the Companys financial year-end;

(u)

having
  or maintaining one or more offices, other than the office to be maintained by
  the Operator in Vancouver and a branch office of the Company in Senegal;

(v)

forming
  or causing to be formed and owning the stock of one or more companies (other
  than any Senegalese company required to be formed pursuant to the terms of the
  Convention or any concession);

(w)

approving
  any expenditure which is more than one hundred ten percent (110%) of the amount
  set forth for such item in the approved Budget or Work Plan, unless the Operator
  has agreed to be solely responsible for such overrun;

(x)

filing
  a voluntary petition for the Company under any applicable bankruptcy law or
  seeking the protection of any applicable bankruptcy or insolvency laws or debt
  relief statutes;

(y)

approving
  any request for additional capital or loans to be funded on a pro rata basis
  from the Parties (other than Badr);

(z)

redeeming
  Shares in the Company; or

(aa)

appointing
  or changing the Companys Auditors.

The
  dollar amounts provided in this Section 4.6 shall be adjusted annually
  on the anniversary of the Effective Date by a fraction, the numerator of which
  is the United States Gross National Product implicit price deflator for the
  year last completed and the denominator of which is the United States Gross
  National Product implicit price deflator for 2006.

4.7

Notwithstanding
  any provision to the contrary, the Parties agree that pursuant to Section 12.3(f)
  hereof, all Shareholders must approve the creation of any Charge by a Party
  against its Shares.

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4.8

The
  Shareholders must hold their initial meeting within thirty (30) Business Days
  of the Effective Date and thereafter, not less frequently than once a quarter.
   The Operator must call meetings of the Shareholders to consider each proposed
  Work Plan and Budget prepared and distributed by the Operator in accordance
  with Section 6.6 or 7.1, as the case may be.  The Operator must call
  a special meeting at any time, if so requested by any Party on not less than
  ten (10) Business Days Notice and if the Notice containing the request
  specifies the matters to be placed on the agenda for the meeting.  Any
  Party may itself call a meeting of the Shareholders by giving not less than
  ten (10) Business Days Notice to the Operator and to the other Parties,
  specifying the matters to be placed on the agenda.  Additional agenda items
  may be submitted as provided in Section 4.15.

4.9

No
  later than ten (10) Business Days in advance of the date of any Shareholders
  meeting, the Operator must prepare and send to each Shareholder a copy of the
  proposed agenda (including appropriate supplementary information related to
  each item thereof which might reasonably be expected by a Party for that Party
  to make an informed decision) for every meeting of the Shareholders, together
  with Notice of the date, time and place of the meeting.  Other items may
  be placed on the agenda of any meeting by Notice (including appropriate supplementary
  information related to each item thereof which might reasonably be expected
  by a Party for that Party to make an informed decision) given by any Party to
  all other Parties not less than five (5) Business Days before the date of the
  meeting.

4.10

Any
  matter which could properly be considered by the Shareholders at a meeting may
  alternatively be consented to in writing by such Shareholders after a request
  in that regard is made in a Notice from the Operator or any Shareholder to all
  other Shareholders which includes an agenda for the meeting and a description
  of the items to be discussed (including appropriate supplementary information
  related to each item thereof which might reasonably be expected by a Shareholder
  for that Shareholder to make an informed decision for action without holding
  a meeting).  Within ten (10) Business Days after receipt of any such request,
  each Shareholder must give Notice of its decision thereon to the Operator.  A
  Shareholder who fails to give Notice of its decision is deemed to have voted
  in favor of the issue in question.  Any submission which receives the affirmative
  vote of a Simple Majority or eighty percent (80%) of the total Shares entitled
  to vote, as applicable, of Shareholders is binding on all Shareholders to the
  same effect as if made at a meeting of the Shareholders.  The Operator
  must notify the Shareholders of the results of the decision within two (2) Business
  Days after the expiry of the period of ten (10) Business Days referred to above
  and must prepare and circulate a minute of the decision in accordance with Section 4.16
  below even if no meeting of the Shareholders was held.









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4.11

A
  meeting of Shareholders is duly constituted if, at the commencement of the meeting,
  there are present in person or by proxy not less than fifty percent (50%) of
  the votes of the Shares entitled to vote on resolutions to be consented to in
  writing at the meeting.  If within half an hour from the time appointed
  for a meeting of Shareholders a quorum is not present, the meeting will automatically
  be adjourned to the next Business Day at the same time and place and if at the
  adjourned meeting a quorum is not present within half an hour from the time
  appointed, the Shareholder or Shareholders present or casting a vote by Notice
  delivered to the Operator pursuant to this Section 4.11 will constitute
  a quorum.  Any meeting at which a quorum is present shall remain properly
  constituted for the transaction of all business which might be properly brought
  before it until terminated by a Resolution of Shareholders passed in accordance
  with Sections 4.5 or 4.6 above.

4.12

A
  meeting of the Shareholders of which proper Notice has been given and at which
  a quorum is constituted may be held by telephone, or other instantaneous means
  of communication that permits all Shareholders present to be heard by all others
  present.  Unless otherwise agreed, all meetings of the Shareholders shall
  be held in Paris, France.

4.13

A
  Shareholder may be represented at a meeting of Shareholders by a proxy who may
  speak and vote on behalf of the Shareholder as appointed in accordance with
  the procedures set forth in the Memorandum and By-laws.  Each Party shall
  bear those expenses incurred by its proxies in attending meetings of the Shareholders.

4.14

A
  representative of the Operator (the Operators Representative)
  will be the chairman of all meetings of the Shareholders provided that, if at
  any duly convened meeting at which a quorum is present the Operators Representative
  is not present, the Shareholders who are present must elect a chairman from
  amongst their number.  The chairman will not, in any circumstances, have
  a tie-breaking vote or any additional rights.

4.15

Unless
  the agenda of any meeting of the Shareholders is amended by unanimous written
  agreement of those Shareholders present at the meeting and those voting in accordance
  with Section 4.10, the Shareholders may, at any meeting, take action only
  on those matters specified in the agenda for that meeting.

4.16

The
  Operator must prepare written minutes of each meeting which accurately reflect
  the meeting and distribute copies to all Shareholders within five (5) Business
  Days after the meeting.  The minutes must include details of each resolution
  passed at the meeting and must be signed by the chairman of the meeting.  Every
  Shareholder must notify the Operator within five (5) Business Days of receipt
  of the minutes whether or not he approves or disapproves of them.  A Shareholder
  who fails to do so is deemed to have approved the minutes.  If any Shareholder
  disapproves the minutes the Operator must endeavour to resolve the issue before
  the next meeting of the Shareholders and if the Operator fails to do so the
  question is ipso factoto be an agenda item for resolution by a vote
  at the next meeting of the Shareholders.  Minutes of the meeting approved
  or deemed approved by all Shareholders in accordance with this clause are a
  correct record of the matters discussed and Resolutions of Directors.  The
  approval or disapproval of minutes does not affect the validity of decisions
  of the Shareholders at the meeting to which the minutes relate, provided that
  the minutes are subsequently approved in accordance with this Section 4.16.

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4.17

Resolutions
  of Shareholders made in accordance with the foregoing shall be binding upon
  all of the Parties.

5.

OPERATOR

5.1

Subject
  to the prior approval of the Shareholders by way of a Resolution of Shareholders,
  the Operator shall be appointed by the directors.  The initial Operator
  shall be Sabodala.

5.2

The
  Operator may resign as Operator on at least sixty (60) Business Days Notice
  to all the parties, but in any event no earlier than the Completion Date.  The
  Shareholders shall thereupon select for nomination another Operator not later
  than the ninetieth (90th) day after receipt of the previous Operators
  Notice of resignation.  Subject to the prior approval of the Shareholders
  by way of a Resolution of Shareholders, a replacement Operator shall be appointed
  by the directors.

5.3

Subject
  to the prior approval of the Shareholders by way of a Resolution of Shareholders,
  the directors may remove an Operator:

(a)

by
  one (1) months Notice following the entry into a Resolution of Shareholders
  in accordance with Article 4;

(b)

in
  the event that a court of competent jurisdiction determines the Operator to
  be in material default of its duties under this Agreement;

(c)

in
  the event of institution by or against the Operator of a proceeding under any
  Section or chapter of any bankruptcy, insolvency, or debtor-relief law to which
  the Operator is subject as now existing or hereafter amended or becoming effective,
  which proceeding is not dismissed, stayed or discharged within a period of sixty
  (60) days after the filing thereof, or, if stayed, which stay is thereafter
  lifted without a contemporaneous discharge or dismissal of such proceeding;

(d)

in
  the event of the appointment of a receiver, trustee or like officer to take
  possession of the Percentage Interest of the Operator which remains undischarged
  for a period of sixty (60) days from the date of its imposition;

(e)

in
  the event of the attachment, execution, foreclosure or other judicial seizure
  of all of the Percentage Interest of the Operator, or in the event the Operator
  transfers its Percentage Interest to a third party;

(f)

the
  Operator is in default under this Agreement and fails to cure such default within
  thirty (30) days of receiving notice of default from a non-Operator; provided,
  however, that if such default is capable of being cured and the Operator is
  diligently proceeding to complete said cure within the initial thirty (30) day
  period, the Operator shall have an additional thirty (30) days to complete such
  cure;

(g)

the
  Operator undergoes a change in Control; or

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(h)

pursuant
  to Section 7.10 or Section 10.1;

and
  shall appoint a new Operator, provided however that the Operator, if a Party,
  and any other Party that is affiliated with the Operator, shall not be entitled
  to vote on the removal of the Operator at a meeting of the Shareholders.

5.4

The
  new Operator shall assume all of the rights, duties, liabilities and status
  of Operator as provided in this Agreement.  The new Operator shall have
  no obligation to hire any employees of the former Operator.

5.5

Upon
  ceasing to be Operator, the former Operator shall forthwith deliver to the person
  nominated for that purpose by the Shareholders, the custody of all Assets, Property,
  books, records, and other property both real and personal relating to this Agreement
  and the Property.

5.6

If
  the Operator resigns other than in accordance with Section 5.2 above or
  is removed in accordance with Sections (b), (c), (d), (e), (f) or (h) above,
  the other Parties shall have an option to purchase the Operators Shares
  in proportion to their respective then Percentage Interests.

6.

RIGHTS,
  DUTIES AND STATUS OF OPERATOR

6.1

The
  Operator in its operations hereunder shall be deemed to be an independent contractor.

6.2

The
  Operator shall not act or hold itself out as agent for any of the parties nor
  make any commitments on their individual behalf unless specifically permitted
  by this Agreement or directed in writing by such Party.

6.3

Subject
  to any specific provision of this Agreement the Operator shall diligently perform
  its duties hereunder in accordance with the directions of the Shareholders and
  in accordance with generally accepted exploration and operating practice, applicable
  law and the terms of this Agreement.

6.4

The
  Operator shall manage and carry out such Operations as the Shareholders may
  direct and in connection therewith shall, in advance if reasonably possible,
  notify the Shareholders of any change in Operations which the Operator considers
  material and if it is not reasonably possible, the Operator shall notify the
  Shareholders so soon thereafter as is reasonably possible.

6.5

Other
  than as provided elsewhere in this Agreement, the Operator shall have the right
  and authority to manage and carry out all Operations, to enter into contracts
  and sub-contracts with third parties on behalf of itself or the Company in respect
  thereof and to incur all Costs required for that purpose.  In so doing
  the Operator shall, unless it obtains the approval of the Shareholders to do
  otherwise:

(a)

comply
  with the provisions of all agreements or instruments of title under which the
  Property is held;

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(b)

subject
  to its receipt of all contributions for Costs by each of the Parties in its
  Proportionate Share or otherwise as set forth herein, pay all Costs properly
  incurred promptly as and when due;

(c)

keep
  the Property and Assets free of all liens and encumbrances other than those,
  if any, in effect on the Effective Date, those the creation of which is permitted
  pursuant to this Agreement, or builders or repairmans
  liens filed by third parties arising out of Operations and, in the event of
  any lien being filed as aforesaid, proceed with diligence to contest discharge
  the same;

(d)

prosecute
  claims or, where a defence is available, defend litigation arising out of the
  Operations, provided that any Party may join in the prosecution or defence at
  its own expense;

(e)

subject
  to Section 7.11, perform such assessment work or make payments in lieu
  thereof and pay such rentals, taxes or other payments and do all such other
  things as may be necessary to maintain the Property in good standing, including,
  without limiting the generality of the foregoing, applying for licenses, leases,
  grants, concessions, permits, patents and other rights to and interests in the
  Property;

(f)

maintain
  accounts in accordance with the Accounting Procedure, provided that the judgement
  of the Operator as to matters related to the accounting, for which provision
  is not made in the Accounting Procedure, shall govern if the Operators
  accounting practices are in accordance with accounting principles generally
  accepted in the international mining industry;

(g)

perform
  its duties and obligations hereunder in a sound and workmanlike manner, in accordance
  with sound operating and engineering practices and in substantial compliance
  with all applicable federal, state, provincial, territorial and municipal laws,
  by-laws, ordinances, rules and regulations and this Agreement;

(h)

represent
  the Parties in any dealings with the Government in respect of the Property and
  sign and make submissions to the Government on their behalf, but without prejudice
  to the right of any Party to make its own submissions to or to be present at
  any discussions with the Government, provided always, that any submission by
  the Operator or a Party to the Government must first be approved by the Shareholders;

(i)

during
  the Exploration Period while Programs are being carried out, provide the Parties
  with monthly progress reports and with a final report within 60 days following
  the conclusion of each Program; the final report shall show the Exploration
  Operations performed and the results obtained and shall be accompanied by a
  statement of Costs and copies of pertinent plans, assay maps, diamond drill
  records and other factual engineering data;

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(j)

during
  the Construction Period and periods in which Production Operations are carried
  out, provide monthly progress reports to the Parties, which reports shall include
  information on any changes or developments affecting the Mine that the Operator
  considers are material;

(k)

prepare
  and submit draft Programs for each Semi-Annual Period for consideration by the
  Shareholders not less than forty (40) Business Days before such Semi-Annual
  Period; and

(l)

prepare
  and submit draft Operating Plans for each Budget Year for consideration by the
  Shareholders in accordance with Section 14.2 below.

6.6

The
  following rules shall be applicable to all Work Plans and Budgets prepared by
  the Operator for approval by the Shareholders:

(a)

each
  Work Plan will describe in reasonable detail:

(i)

the
  maintenance, exploration, development, construction and production objectives
  for the Budget Year or Semi-Annual Period, as applicable, covered thereby;

(ii)

the
  work to be performed in attaining such objectives;

(iii)

the
  part or parts of the Property on which the Operations are to be performed;

(iv)

the
  technical basis, including any Data, for the type of Operations proposed;

(v)

a
  list of the number and type of personnel required; and

(vi)

such
  other information as the Operator may deem appropriate or any Shareholder may
  reasonably request;

(b)

a
  Work Plan for Development Operations will include, in addition to those items
  described in (a) above and to the extent not previously delivered, the following
  items:

(i)

any
  pertinent geological and engineering information;

(ii)

a
  description of the objectives and estimated costs of the Development Operations
  including any milling or other facilities necessary to obtain a product that
  is commercially marketable or otherwise acceptable to the Parties;

(iii)

the
  estimated time required to perform such development, drilling, shaft sinking
  and mine construction;

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(iv)

the
  schedule for the first years operation of the Mine proposed to be constructed;

(v)

a
  copy of the relevant Feasibility Report; and

(vi)

such
  other information as the Operator may deem appropriate or any Shareholder may
  reasonably request;

(c)

a
  Work Plan for Production Operations will include, in addition to those items
  described in (a) above, the following items:

(i)

expected
  tonnage of Minerals to be mined and rate of such production during the period
  covered by the Work Plan;

(ii)

the
  grade, quality and quantity of Minerals expected to be mined and Minerals produced;

(iii)

the
  quality and quantity of concentrates expected to be derived from the Minerals
  produced and rate of such production during the period covered by the Work Plan;
  and

(iv)

such
  other information as the Operator may deem appropriate or any Shareholder may
  reasonably request;

(d)

with
  each such Work Plan, the Operator shall deliver the Budget corresponding thereto,
  including where appropriate the particulars of any debt proposed to be incurred
  by the Company or the Parties;

(e)

all
  Work Plans and Budgets in respect of Production Operations shall be prepared
  on a basis consistent with the Feasibility Study (as the same may have been
  amended or supplemented, from time to time);

(f)

the
  Operator shall be entitled to include in the estimate of Production Costs the
  reasonable estimated costs of satisfying continuing obligations that may remain
  after this Agreement terminates, in excess of amounts actually expended; such
  continuing obligations shall include such things as monitoring, stabilisation,
  reclamation or restoration obligations, severance and other employee benefit
  costs and all other obligations incurred or imposed as a result of the Operations
  which continue or arise after termination of this Agreement and settlement of
  all accounts;

(g)

the
  Operator may at any time and from time to time prepare and submit to the Shareholders
  supplemental or revised Work Plans and Budgets, provided that any such supplement
  or revision will be submitted to the Shareholders as far in advance of implementing
  the supplemental or revised Work Plan and Budget as is reasonably possible.

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6.7

After
  the conclusion of each Work Plan and Budget the Operator shall add to the total
  value of Costs incurred by the Parties for Operations the actual amount of Costs
  incurred pursuant to such completed Work Plan and Budget and shall advise each
  of the Parties of the revised aggregate Costs incurred by the Parties.

7.

EXPLORATION
  PROGRAMS

7.1

Within
  twenty (20) Business Days of the draft Work Plan and Budget being submitted
  by the Operator to the Shareholders, the Shareholders shall meet to review the
  draft Program prepared and, if it deems fit, adopt the same with such modifications,
  if any, as the Shareholders deem necessary.

7.2

The
  Operator shall be entitled to an allowance for a Cost overrun of ten percent
  (10%) of a Program Budget and any Costs so incurred shall be deemed to be included
  in the Program, as adopted; provided that such overruns are not attributable
  to the Operators negligence in preparing the initial Program Budget.  Any
  overruns in excess of ten percent (10%) of a Program Budget incurred without
  the written approval of the Shareholders shall be borne by and shall be for
  the sole account of the Operator.

7.3

Each
  Party may, within ten (10) Business Days of adoption of the Program, give notice
  to the Operator committing to contribute its Proportionate Share of the Exploration
  Costs on that Program.  A Party that fails to give Notice within such period
  shall be deemed to have elected not to contribute.

7.4

If
  any Party elects or is deemed to have elected not to contribute to a Program,
  the amounts to be contributed by the Parties who contribute to that Program
  shall be increased pro rata, subject to the right of any of them to elect not
  to contribute more than the amount initially committed pursuant to Section 7.3
  hereof.  If a Party elects not to contribute more than the amount initially
  committed, any other Party may contribute the pro rata share of the Party who
  has elected not to contribute more than the amount initially committed (pro
  rata if more than one Party), failing which the Operator may elect not to proceed
  with the Program or may prepare an amended Program and the Party that elected
  or was deemed to have elected not to contribute to a Program, shall not be entitled
  to participate in such amended Program and the provisions of this Article  7
  shall apply to such amended Program.

7.5

The
  Operator shall be entitled to invoice each Party (other than Badr, which is
  not required to contribute capital to the Company in order to maintain its Percentage
  Interest and shall not be subject to any dilution provisions in this Agreement
  related to nonfunding):

(a)

no
  more frequently than monthly, for its Proportionate Share of Exploration Costs
  incurred and paid by the Operator; or

(b)

in
  advance of requirements but not more than sixty (60) days, for an advance of
  that Partys Proportionate Share of Exploration Costs.

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Some
  responsible official of the Operator shall sign each invoice.  Each Party
  shall pay to the Operator the amount invoiced, within ten (10) Business Days
  of receipt of the invoice.  If a Party protests the correctness of an invoice
  it shall nevertheless be required to make the payment, subject to later adjustment
  if such protest is sustained.

7.6

The
  Operator shall expend all monies advanced by a Party on a pro rata basis with
  the advances of the other Parties.  If the Operator suspends or prematurely
  terminates a Program, any funds advanced by a Party in excess of that Partys
  Proportionate Share of Exploration Costs incurred prior to the suspension or
  premature termination shall be refunded forthwith.

7.7

If
  any Program is altered, suspended or terminated prematurely so that the Exploration
  Costs incurred on that Program as altered, suspended or terminated are less
  than eighty percent (80%) of the Exploration Costs originally proposed, any
  Party which elected or which is deemed to have elected not to contribute to
  that Program shall be given Notice of the alteration, suspension or termination
  by the Operator and shall be entitled to contribute its Proportionate Share
  of the Exploration Costs incurred on that Program by payment thereof to the
  Operator within twenty (20) Business Days after receipt of the Notice.  If
  payment is not made by that Party within the twenty (20) Business Days aforesaid
  it shall, without a demand for payment being required to be made thereafter
  by the Shareholders, relinquish its right to contribute to that Program.

7.8

Subject
  to Section 7.7, if a Party (other than Badr, which is not required to contribute
  capital to the Company in order to maintain its Percentage Interest and shall
  not be subject to any dilution provisions in this Agreement related to nonfunding)
  elects or is deemed to have elected not to contribute to the Exploration Costs
  of any Program, the Percentage Interest of that Party shall be decreased and
  the Percentage Interest of each Party contributing in excess of its Proportionate
  Share of the Exploration Costs shall be increased so that, subject to Section 7.9,
  at all times during the Exploration Period the Percentage Interest of each Party
  will be that percentage which is equivalent to the sum of that Partys
  Exploration Costs and fifty percent (50%) of the Prior Exploration Costs divided
  by the sum of the Exploration Costs and Prior Exploration Costs of all Parties
  holding a Percentage Interest, multiplied by eighty-seven (87).  Notwithstanding
  the foregoing but subject to Section 7.9, the Party whose Percentage Interest
  has been reduced shall be entitled to receive details of and to contribute to
  future Programs to the extent of its then Percentage Interest.

7.9

Any
  adjustments to any Partys Percentage Interest made pursuant to Section 7.8
  above shall be effected through the granting of options to buy the appropriate
  number of shares by the Party electing, or deemed not to be contributing to
  Exploration Costs of any Program to the Party or Parties contributing in excess
  of its Proportionate Share of Exploration Costs.

7.10

Unless
  the Operator obtains an extension from the Shareholders, if the Operator fails
  to prepare and submit a draft Program for each Semi-Annual Period for consideration
  by the Shareholders not less than forty (40) Business Days before the beginning
  of such Semi-Annual Period, the Shareholders shall meet forthwith and shall
  appoint a new Operator or may elect to impose another penalty on the Operator
  which it considers appropriate; provided however that the Operator, if a Party,
  shall not be entitled to vote at such a meeting nor shall it be entitled to
  act as Operator at any time in the future without the unanimous consent of the
  Parties.

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7.11

If
  the Shareholders for any reason fail to adopt a Program for a Semi-Annual Period
  at least thirty (30) Business Days before the beginning of such Semi-Annual
  Period, subject to direction to the contrary by the Shareholders and the receipt
  of the necessary funds, the Operator shall carry out such work and make such
  disbursements as to meet the minimum requirements to maintain the Property in
  good standing and each Party hereby covenants and agrees to pay its Proportionate
  Share of any invoice delivered by the Operator under this Section 7.11
  within ten (10) Business Days of the date of receipt of such invoice and if
  no payment is made within the period of ten (10) Business Days next succeeding
  the receipt of a demand Notice for payment from the Operator, the Percentage
  Interest of the Party not paying its Proportionate Share of such invoice shall
  immediately be reduced by one percent (1%) for each one hundred thousand dollars
  ($100,000) it fails to pay, and such Percentage Interest shall be transferred
  to the other Parties who have paid the defaulting Partys share pro rata
  in accordance with their amounts paid.

8.

FEASIBILITY
  REPORTS

8.1

Subject
  to the provisions of this Article  8, a Feasibility Report shall only
  be prepared with the approval of the Shareholders.  The Operator shall
  provide copies of the completed Feasibility Report to each of the Parties with
  a Percentage Interest forthwith upon receipt.

8.2

The
  Shareholders shall meet at reasonable intervals and times during the preparation
  of the Feasibility Report.

8.3

At
  any time following the fourth anniversary of the Effective Date, any of the
  Parties holding a Percentage Interest of not less than ten percent (10%), the
  Operator or the Shareholders by a Resolution of Shareholders may propose by
  Notice to the other Parties, that the Company undertake the preparation of a
  Feasibility Report.

8.4

The
  Shareholders shall consider and vote upon a proposal set out in the Notice given
  pursuant to Section 8.3 within forty-five (45) days after delivery of the
  Notice.  If approved by the Shareholders, the proposal shall be adopted
  as a Budget and be carried out by the Operator on behalf of and at the cost
  of the Company.

9.

PRODUCTION
  NOTICE

9.1

The
  Shareholders shall meet to consider any Feasibility Report not earlier than
  forty (40) Business Days and not later than sixty (60) Business Days after the
  Feasibility Report was provided to each of the Parties with a Percentage Interest.

9.2

The
  Shareholders shall consider each Feasibility Report and may approve it, with
  such modifications, if any, as it considers necessary or desirable.  If
  a Feasibility Report is approved as aforesaid, the Shareholders shall forthwith
  cause a Production Notice to be given to each of the Parties with a Percentage
  Interest by the Operator stating that the Shareholders intend to establish and
  bring a Mine into production in conformity with the Feasibility Report as so
  approved and the provisions of Article  10 shall apply.

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10.

DEVELOPMENT
  OPERATIONS

10.1

In
  the event that a Production Notice is given under Section 9.2, each Party
  with a Percentage Interest (other than Badr, which is not required to contribute
  capital to the Company in order to maintain its Percentage Interest and shall
  not be subject to any dilution provisions in this Agreement related to nonfunding)
  may, within one hundred and twenty (120) Business Days of receipt of the Feasibility
  Study in respect of which the Production Notice has been given, give the Operator
  Notice committing to contribute its Proportionate Share of the Development Costs.
   If a Party which is the Operator (or is the owner of or owned by the Operator)
  elects not to contribute its Proportionate Share of Development Costs, it (or
  if applicable as aforesaid, its parent or subsidiary) shall thereupon cease
  to be the Operator, and the Party or Parties which prepared the Non-Operators
  Feasibility Report shall appoint a new Operator and the provisions of Section 5.3
  shall apply mutatis mutandisin respect of the new Operator.

10.2

If
  any Party with a Percentage Interest declines or fails to contribute to Development
  Costs, that Party shall, subject to Section 10.5, suffer dilution of its
  Percentage Interest as provided in this Section.  Those Parties which contribute
  as to Development Costs may thereupon elect to increase their contribution to
  the Development Costs in proportion to their respective Percentage Interests
  by the amount which any Party has declined or failed to contribute.

(a)

Where:

(i)

a
  Party gives Notice declining to contribute to Development Costs or fails to
  give Notice pursuant to Section 10.1, the Percentage Interest of the Parties
  shall be adjusted so that the Percentage Interest of each Party with a Percentage
  Interest at all times is that percentage which is equivalent to the sum of that
  Partys Exploration Costs and fifty percent (50%) of the Prior
  Exploration Costs and its contribution to Development Costs divided by the Exploration
  Costs, Prior Exploration Costs and the contributions to Development Costs of
  all Parties with a Percentage Interest, multiplied by eighty-seven (87); and

(ii)

a
  Party gives Notice committing to contribute to Development Costs, but subsequently
  fails to pay its Proportionate Share of Development Costs, the Percentage Interest
  of each Party shall be adjusted by multiplying the percentage change calculated
  in accordance with Subparagraph 10.2(a)(i) above by a factor of two (2)
  and in such event, the Development Costs of each Party contributing in excess
  of its Proportionate Share shall be deemed to have been increased so that the
  quotient obtained by dividing the sum of each such Partys Exploration
  Costs and fifty percent (50%) of the Prior Exploration Costs and Development
  Costs by the sum of the Exploration Costs, Prior Exploration Costs and Development
  Costs of all Parties holding a Percentage Interest, multiplied by eighty-seven
  (87), shall equal such Partys adjusted Percentage Interest.

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10.3

Any
  adjustments to the respective Percentage Interests made pursuant to Section 10.2
  above shall be effected through the granting of options to buy the appropriate
  number of Shares by the Party electing not to contribute, or deemed not to be
  contributing, to Development Costs of any Program to the Party contributing
  in excess of its Proportionate Share of Development Costs.

10.4

If,
  after the operation of Section 10.2, Development Costs are not fully committed,
  the Production Notice shall be deemed to be withdrawn and the Percentage Interests
  of the Parties shall be restored to the Percentage Interests held prior to any
  adjustment made pursuant to Section 10.2.

10.5

If,
  after the operation of Section 10.2, Development Costs are fully committed,
  the Parties shall diligently proceed to implement the Feasibility Report in
  accordance with normal standards in the mining industry.  If the Parties
  fail to so implement the Feasibility Report within twelve (12) months of the
  issuance of the Production Notice:

(a)

any
  Party which elected not to contribute to Development Costs pursuant to Section 10.2(a)(i)
  shall have the right, exercisable during the thirty (30) days following the
  expiration of such twelve (12) month period, to re-acquire from the Parties
  not less than all of its Percentage Interest as last held, by paying its Proportionate
  Share of Development Costs; and

(b)

any
  Party which elected to contribute to Development Costs, but subsequently failed
  to pay its Proportionate Share of Development Costs pursuant to Section 10.2(a)(ii)
  shall have the right, exercisable during the thirty (30) days following the
  expiration of such twelve (12) month period, to re-acquire from the Parties
  not less than all of its Percentage Interest as last held, by paying twice its
  Proportionate Share of Development Costs, together with Interest commencing
  on the date of the last Notice delivered to the Operator under Section 10.1
  to commit to pay Development Costs, to the Parties in proportion to their Percentage
  Interests.

11.

OVERHEAD
  CHARGES

11.1

The
  Operator shall be reimbursed for administration expenses incurred at places
  other than the Property, including any charges for head office overhead and
  salaries of officers of the Operator that are not charged directly.  The
  Operator shall be entitled to charge an amount equal to ten percent (10%) of
  all Costs prior to the date on which an effective Production Notice is given
  and five percent (5%) of all Costs following the date on which an effective
  Production Notice is given; provided, however, that for purposes of calculating
  the amount of the Overhead Charge, Costs shall not include the Overhead Charge.

12.

DEVELOPMENT
  AND PRODUCTION FINANCING

12.1

The
  Parties (other than Badr, which is not required to contribute capital to the
  Company in order to maintain its Percentage Interest and shall not be subject
  to any dilution provisions in this Agreement related to nonfunding) shall individually
  and separately provide their contributions toward approved Development Costs
  and Production Costs.

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12.2

A
  Party shall not create a Charge except in accordance with the provisions of
  this Article  12.

12.3

The
  following applies to all Charges:

(a)

the
  rights of the Chargee upon the exercise of any power of sale or the enforcement
  of any other rights conferred by law or by the instrument creating the Charge
  must be made expressly subject to this Agreement, including but not limited
  to this Article  12 and any Cross Charge granted under Section 15.2;

(b)

each
  Charge must expressly provide that the Chargee will not seek partition of jointly
  owned property in which the Party granting the Charge (the Charging Party)
  has an interest;

(c)

every
  Charge must require the person exercising or enforcing any power of sale thereunder
  or conferred by law to obtain from any purchaser of the whole or a part of the
  Percentage Interest subject an agreement to abide by and be bound by the terms
  of this Agreement;

(d)

every
  Charge must reflect the requirements of Section 12.4 and 12.5 hereof and
  regulation 4 of the By-laws;

(e)

every
  Charge must specifically acknowledge the existence and priority of any Cross
  Charge granted under Section 15.2;

(f)

every
  Charge must be consented to in writing by all Parties; and

(g)

the
  Charge must be registered in accordance with regulation 16 of the By-laws.

12.4

A
  Party (not being a Defaulting Party) which purchases a Percentage Interest or
  a part thereof which is sold by or on behalf of a Chargee may set off against
  the purchase price payable by it the amount of any debt due and payable to it
  by the Defaulting Party pursuant to Section 15.7 if that debt is referable
  to the Percentage Interest purchased.  Except to the extent of such set
  off, the Chargee must apply the proceeds of sale in the manner specified in
  Section 14.1 of Schedule D mutatis mutandisexcept that any
  surplus to which Section 14.1(f) thereof would, but for this Section, apply
  must be applied first, in meeting the Chargees costs and expenses of sale,
  second in discharging the obligations of the Charging Party to the Chargee and
  any surplus thereafter, to the Charging Party.

12.5

A
  Chargee which becomes a mortgagee in possession or becomes or appoints a receiver
  of a Partys Percentage Interest is not entitled to receive any statements,
  Notices and reports which a Party is entitled to receive and is not entitled
  to vote on Resolutions of Shareholders.



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13.

CONSTRUCTION

13.1

Subject
  to Article  10, the Shareholders shall cause the Operator to, and
  the Operator shall, proceed with Construction with all reasonable dispatch after
  a Production Notice has been given.  Construction shall be substantially
  in accordance with the Feasibility Report subject to any variations proposed
  in the Production Notice, and subject also to the right of the Shareholders
  to cause such other reasonable variations in Construction to be made as the
  Shareholders deem advisable.

14.

PRODUCTION
  OPERATIONS

14.1

Commencing
  with the Completion Date, all Production Operations shall be planned and conducted
  pursuant to an annual Operating Plan.

14.2

With
  the exception of that portion of a Budget Year commencing on the Completion
  Date, an Operating Plan for each Budget Year shall be submitted by the Operator
  to the Parties not later than the end of the third quarter in the Budget Year
  immediately preceding the Budget Year to which the Operating Plan relates.  With
  respect to that portion of a Budget Year commencing on the Completion Date,
  the Operator shall submit the Operating Plan to the Parties at the earliest
  date practical.  Upon request of any Party, the Operator shall meet with
  that Party to discuss the Operating Plan and shall provide such additional or
  supplemental information as that Party may reasonably require with respect thereto.
   In the event that the Operator fails to prepare and submit draft Operating
  Plans for each Budget Year for consideration by the Shareholders in accordance
  with this Section 14.2, the Shareholders shall meet forthwith and shall
  appoint a new Operator, provided however that the Operator, if a Party, shall
  not be entitled to vote at such a meeting, nor shall any Party affiliated with
  the Operator be entitled to vote.  If the Shareholders for any reason fail
  to adopt an Operating Plan for each Budget Year at least thirty (30) Business
  Days before such Budget Year, subject to direction to the contrary by the Shareholders
  and the receipt of the necessary funds, the Operator shall carry out such work
  and make such disbursements as to meet the minimum requirements to maintain
  the Property in good standing and each Party (other than Badr, which is not
  required to contribute capital to the Company in order to maintain its Percentage
  Interest and shall not be subject to any dilution provisions in this Agreement
  related to nonfunding) hereby covenants and agrees to pay its Proportionate
  Share of any invoice delivered by the Operator under this Section 14.2
  within ten (10) Business Days of the date of receipt of such invoice.

14.3

The
  Shareholders shall, within thirty (30) Business Days of receipt, make a decision
  as to whether or not to adopt each Operating Plan, with such changes as it deems
  necessary; provided, however, that the Shareholders may from time to time and
  at any time amend any Operating Plan.





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14.4

If
  the Shareholders do not approve any Operating Plan when voted upon, and they
  do not elect to apply the last sentence of Section 14.2 which provides
  for expenditures only to be made at a minimum maintenance level, then, until
  such time as such Operating Plan is either approved or the Shareholders elect
  instead to maintain the Property at a minimum expenditure level, the Shareholders
  will be deemed to have approved an Operating Plan for the continuation of the
  Companys activities at the level of the last approved Operating Plan but
  with the Budget increased at the rate of inflation.  For the purpose of
  this Section the rate of inflation in respect of a Budget Year and
  in respect of each item comprised in a Budget means the increase during the
  immediately preceding Calendar Year:

(a)

in
  the case of consumable supplies, in the actual purchase costs of the item concerned;
  or

(b)

in
  the case of wages, in the applicable award; or

(c)

in
  all other cases (including salaries and benefits), in the consumer price index
  which is most appropriate to the item concerned as published by Consumer Price
  Index published by the United States Department of Labors Bureau of Labor
  Statistics (or in the absence of that index, some other periodically published
  measure of inflation in the United States which as nearly as possible equates
  to that index, agreed upon by the Parties or failing agreement selected by the
  Auditor.

14.5

The
  Parties agree that any emergency expenditure (which is any expenditure reasonably
  required for the protection of life, limb or property and is of sufficient urgency
  that consultation with the other Parties is not reasonably possible) made by
  the Operator will be deemed to constitute an approved supplement to the then
  current Work Plan and Budget without the need or necessity for any action or
  approval by the Shareholders, provided that the Operator shall minimise, to
  the degree possible, the work done without prior Shareholder approval.  If
  the Operator determines that emergency expenditures are required it will promptly
  call a meeting of the Shareholders to consider the circumstances which gave
  rise to such expenditures and shall account for such expenditures to the Shareholders.

15.

PAYMENT
  OF PRODUCTION COSTS

15.1

The
  Operator will prepare and submit to each Party (other than Badr, which is not
  required to contribute capital to the Company in order to maintain its Percentage
  Interest and shall not be subject to any dilution provisions in this Agreement
  related to nonfunding) at least ten (10) Business Days prior to the first day
  of each month an invoice containing projections for all Production Costs to
  be incurred in connection with Production Operations, as the case may be, pursuant
  to approved Work Plans and Budgets for such month and the sources of funds required
  to defray those Costs.  On or before the first day of each month, each
  Party will pay its Proportionate Share of such Production Costs, as the case
  may be, for such month to the Operator.  All invoices prepared and submitted
  under this Section 15.1 shall contain a current statement showing in reasonable
  detail:

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(a)

total
  cash expenditure and accrued liabilities for the preceding month on all currently
  approved Work Plans and Budgets;

(b)

total
  estimated cash expenditure and accrued liabilities in respect of currently approved
  Work Plans and Budgets for the current and next month;

(c)

all
  charges and credits to the Operating Account and the nature of those items;

(d)

unusual
  charges and credits which must be separately identified and described in detail;

(e)

the
  unexpended balance of funds remaining from previous advances by the Parties
  to the Operating Account and the extent to which expenditure and liabilities
  referred to in Section 15.1(b) can be satisfied from that balance; and

(f)

the
  amount required to be paid by each Party pursuant to that statement, together
  with the due date for such payment which shall be no earlier than twenty (20)
  Business Days after the date of receipt of such invoice (the Due Date).

15.2

For
  the purpose of better securing:

(a)

payment
  to the Operator of all contributions for Production Costs (but, for the avoidance
  of doubt, not for Development Costs); and

(b)

to
  each of the Parties payment of any amount due and payable to it pursuant to
  this Agreement;

Sabodala
  and Bendon must execute and deliver to the other Party a Cross Charge.  Each
  Party creating a Cross Charge must obtain all necessary consents and approvals
  in relation thereto and duly lodge the same for registration or recording in
  every jurisdiction where lodgement, registration or recording is required to
  perfect the security created thereby.  Further, each Party in whose favor
  a Cross Charge is created shall, if so instructed by the Shareholders, subordinate
  its rights under such Charge to the rights of any lender at any time hereafter
  providing project financing to the Company.

15.3

All
  contributions for Production Costs paid by the Parties in advance of any expenditure
  must be kept by the Operator in a separate interest-bearing trust account with
  a bank or other financial institution approved by the Shareholders.  All
  interest must be credited to the Parties in the Operating Account taking into
  consideration the date of payment by each Party and its Percentage Interest.
   The amount accrued from time to time for the satisfaction of continuing
  obligations included in Production Costs pursuant to Section 6.6(f) shall
  be classified as Costs hereunder but shall be segregated into a separate interest-bearing
  trust account.





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15.4

On
  or before the Due Date, each Party must pay to the Operator the contribution
  for Production Costs shown to be required of it by that statement.  If
  payment of each contribution for Production Costs is not received by the Operator
  on or before the Due Date or, if a Party, the Operator fails to pay a contribution
  for Production Costs due to be paid by it on that date, the Operator must immediately
  give Notice of non-payment of such contributions for Production Costs to each
  non-paying Party with copies to all other Parties and any lender which holds
  a Charge granted by such non-paying Party.

15.5

A
  Party that fails to pay any contribution for Production Costs on or before the
  Due Date is in default.  If any Party (in this Article  15 called
  a Defaulting Party) fails to remedy that default by paying the unpaid
  contribution for Production Costs required to be paid by it together with Interest
  thereon, within twenty (20) Business Days of receiving a Notice under Section 15.4,
  the succeeding provisions of this Article  15 apply, provided however,
  that any lender which holds a Charge granted by such Defaulting Party may remedy
  the default by paying the unpaid contribution for Production Costs required
  to be paid by it together with Interest thereon, within twenty (20) Business
  Days of receiving a Notice under Section 15.3.

15.6

In
  the event the outstanding balance of required contribution for Production Costs
  of Production Costs under this Article   15 which the Defaulting Shareholder
  has failed to fund exceeds five hundred thousand Dollars ($500,000), and the
  Defaulting Shareholder has not reduced its deficiency below such level within
  twenty (20) Business Days after notice from the other Shareholder that has funded
  such deficiencies on behalf of the Defaulting Shareholder, said Defaulting Shareholder
  shall be disqualified from voting on Resolutions of Shareholders for so long
  as it remains a Defaulting Shareholder with an outstanding deficiency in excess
  of five hundred thousand Dollars ($500,000); provided, however, that notwithstanding
  the foregoing, the following actions shall require the consent of the Defaulting
  Shareholder if necessary to achieve an eighty percent (80%) approval level:

(a)

the
  making of any additional contributions for Production Costs or other Costs to
  be borne pro rata by both Bendon and Sabodala;

(b)

entering
  into any agreement or material transaction with the non-Defaulting Shareholder
  or its Affiliates (other than loans to the Company on an arms-length basis);

(c)

admitting
  new Shareholders;

(d)

selling
  all or substantially all of the assets of the Company;

(e)

obtaining
  financing on behalf of the Company which is secured by assets of the Company;

(f)

liquidating
  the Company in a manner other than as contemplated by this Agreement; and

(g)

merging
  or consolidating the Company into another entity or merging or consolidating
  another entity into the Company.

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15.7

The
  non-Defaulting Parties must pay (in proportion to their respective Percentage
  Interests) to the Operator on behalf of the Defaulting Party within five (5)
  Business Days after receipt of a statement from the Operator specifying all
  necessary details, any part of every contribution for Production Costs unpaid
  by a Defaulting Party.  The Operator may give a Notice under this Section 15.6
  either before the procedures specified in the Cross Charge have been followed,
  or afterwards, if amounts available as a result of the application of those
  procedures are insufficient to satisfy the then unsatisfied obligations of the
  Defaulting Party.  Such payments must, if the Operator requires, include
  payment of any Interest payable by the Defaulting Party pursuant to Section 15.7
  below.  Each amount paid by the non-Defaulting Parties on behalf of a Defaulting
  Party constitutes a debt due and payable by that Defaulting Party to the non-Defaulting
  Parties which debt carries Interest until paid.  The failure of a non-Defaulting
  Party to make a payment required of it under this clause will be regarded for
  the purposes of Section 15.5 as failure to pay a contribution for Production
  Costs.

15.8

After
  paying to the Operator any amount it is required to pay under Section 15.7
  above, each non-Defaulting Party may elect to either:

(a)

purchase
  such number of Shares of the Defaulting Party so as to raise such non-Defaulting
  Partys Percentage Interest to that percentage which is determined using
  a calculation similar to the one described in Section 10.2(a)(i) but also
  taking into account such Partys contribution for Production Costs;

(b)

make
  a loan to the Company which is to be repaid ahead of all returns of capital;
  or

(c)

make
  a loan to the Defaulting Party to be repaid out of such Defaulting Partys
  Proportionate Share of Distributable Cash.

15.9

If
  a Party fails to pay a contribution for Production Costs, whether or not that
  Party is or becomes a Defaulting Party, Interest is payable to the Operator
  for the account of the non-Defaulting parties pursuant to Section 15.7
  above, commencing on the Due Date of such unpaid contribution for Production
  Costs to the date of the actual payment.  Costs attributable to or arising
  from such unpaid contribution for Production Costs are deemed part of the unpaid
  contribution for Production Costs for all purposes.

15.10

The
  rights and remedies provided in this Article  15 are in addition to
  any other rights or remedies available either at law or in equity.

15.11

No
  default by a Defaulting Party in the payment of any contribution for Production
  Costs will have been remedied unless and until:

(a)

the
  Defaulting Party or any person on its behalf has paid to the Operator that contribution
  for Production Costs and all Interest accrued thereon to the date of payment;
  or

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(b)

the
  Defaulting Party or any other person on its behalf has paid to the Operator
  such part of the contribution for Production Costs and Interest accrued thereon
  as has not been paid by the non-Defaulting Parties and the Defaulting Party
  or any person on its behalf has paid any amounts due to the non-Defaulting parties
  pursuant to Section 15.7 and, with respect to Production Costs, such debt
  has been recovered by the contributing Parties to the extent necessary to fulfill
  the requirements of Section 14.1 of the Cross Charge.

15.12

No
  non-Defaulting Party will be under any liability to a Defaulting Party in respect
  of any matter arising as a result of the sale of the Defaulting Partys
  Proportionate Share of Products provided that the Defaulting Partys Proportionate
  Share was sold pursuant to the Cross Charge, nor will the Defaulting Party,
  after ceasing to be a Defaulting Party, be entitled to any additional Proportionate
  Share of Products in replacement of the Proportionate Share of Products delivered
  to the Operator pursuant to the Cross Charge while the Defaulting Party was
  in default.

15.13

As
  a condition of any sale of a Partys Percentage Interest pursuant to the
  Cross Charge, the purchaser shall agree to be bound by this Agreement and, prior
  to acquiring the Percentage Interest, shall deliver notice to that effect to
  the Parties, such notice to identify the intended purchaser of the Percentage
  Interest (which must be acceptable to the other Parties if it is a party other
  than the non-Defaulting Party or its Affiliate).  Any sale or disposal
  made as aforesaid shall be a perpetual bar both at law and in equity by the
  Defaulting Party and its successors and assigns against all other Parties and
  the Operator.

16.

DISTRIBUTIONS
  IN KIND OR IN CASH

16.1

Subject
  to Article 15, each of the parties shall be entitled to use, dispose of
  or otherwise deal with its Share of Minerals as it sees fit.  Each Party
  shall take in kind, f.o.b. truck or railcar on the Property, and separately
  dispose of its Share of the Minerals produced from the Mine provided that in
  the event that the Share of Minerals of each Party cannot be determined at the
  Property, such determination shall be made at the refinery or other facility
  at which, by separation of payable metals, such determination can be made.  Extra
  costs and expenses incurred by reason of the Parties taking in kind and making
  separate dispositions shall be paid by each Party directly and not through the
  Operator or Shareholders.

16.2

Each
  Party shall construct, operate and maintain, all at its own cost and expense,
  any and all facilities which maybe necessary to receive and store and dispose
  of its Share of the Minerals at the rate the same are produced.



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16.3

If
  a Party has not made the necessary arrangements to take in kind and store its
  Proportionate Share of Products as aforesaid the Operator shall, at the sole
  cost and risk of the Party store, in any location where it will not interfere
  with Production Operations, the production owned by that Party.  The Operator
  and the other Parties shall be under no responsibility with respect thereto.
   All of the Costs involved in arranging and providing storage shall be
  billed directly to, and be the sole responsibility of the Party whose Proportionate
  Share of Products is so stored.  The Operators charges
  for such assistance and any other related matters shall be billed directly to
  and be the sole responsibility of the Party.

16.4

The
  availability and timing of distributions, whether in the form of cash or distributions
  in kind, shall be determined by the directors and Shareholders in accordance
  with this Agreement, the Companys Memorandum and By-laws and applicable
  law.  Once the directors have made a solvency determination in accordance
  with applicable law, the funds available for distribution shall be distributed
  as follows:

(a)

first,
  to the extent not already paid, to satisfy the amounts then currently due and
  payable under any outstanding third-party loans or contracts or otherwise then
  due and payable as expense of the Company;

(b)

second,
  on a pari passu basis, to pay accrued interest on any outstanding loans
  from Shareholders;

(c)

third,
  on a pari passu basis, to pay principal on any outstanding loans from
  Shareholders; and

(d)

fourth,
  the remaining balance shall be distributed among the Shareholders on a pari
  passu basis in accordance with their respective Percentage Interests (after
  taking into account the effects of any dilution pursuant to the terms hereof)
  in the Companys Shares.

17.

SURRENDER
  OF INTEREST

17.1

Any
  Party may, at any time, surrender its entire Percentage Interest pro rata to
  the other Parties with a Percentage Interest by giving those Parties Notice
  of surrender; provided, however, that the Operator or its affiliated Party may
  not surrender its interest if such surrender would constitute default under
  the Mining Convention or any subsequent mineral concession.

The
  Notice of surrender shall:

(a)

indicate
  a date for surrender not less than sixty (60) Business Days after the date on
  which the Notice is given; provided, that in the case of the Operator, such
  notice shall be extended by up to an additional sixty (60) Business Days to
  allow the Company to hire a new Operator; and

(b)

contain
  an undertaking that the surrendering Party will:

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(i)

satisfy
  its Proportionate Share, based on its then Percentage Interest, of all obligations
  and liabilities which arose at any time prior to the date of surrender;

(ii)

if
  the Operator has not included in Production Costs the costs of continuing obligations
  as set out in Section 6.6(f) hereof, pay its reasonably estimated Proportionate
  Share, based on the surrendering Partys then Percentage Interest,
  of the Costs of monitoring, stabilisation, reclamation or restoration obligations,
  severance and other employee benefit costs and all other obligations incurred
  or imposed as a result of Operations which continue or arise after termination
  of this Agreement and settlement of all accounts all as at the date of surrender;

(iii)

will
  hold in confidence, for a period of five (5) years from the date of surrender,
  all information and data which it acquired pursuant to this Agreement; and

(iv)

for
  a period of five (5) years from the date of surrender, not Compete (as defined
  below) with the Company.  The term Compete means owning or managing, investing
  in or serving as an officer, director, employee, consultant, operator, representative
  or agent of any company, corporation, partnership, joint venture or other entity
  or business, or any division or part thereof, engaged in the exploration or
  development of any gold mine or other mine located in Senegal.

17.2

Upon
  the surrender of its entire Percentage Interest as contemplated in Section 17.1
  and upon delivery of a release in writing, in form acceptable to counsel for
  the Company, releasing the other Parties from all claims and demands hereunder
  and satisfying or securing the performance of, to the satisfaction of the remaining
  Part(ies), the undertaking referred to in Section 17.1(b), the surrendering
  Party shall be relieved of all obligations or liabilities hereunder except for
  those which arose or accrued or were accruing due on or before the date of the
  surrender.

17.3

A
  Party to whom a Notice of surrender has been given as contemplated in Section 17.1
  may elect, by Notice within sixty (60) Business Days to the Party which first
  gave the Notice, to accept the surrender, in which case Sections 17.1 and
  17.2 shall apply, or to join in the surrender.  If all of the Parties join
  in the surrender the Company shall be liquidated and wound up and Operations
  shall be terminated in accordance with Article  18.



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18.

TERMINATION
  OR SUSPENSION OF MINING OPERATIONS

18.1

The
  Operator may, at any time subsequent to the Completion Date, on at least twenty
  (20) Business Days notice to all Parties, recommend that the Shareholders approve
  the suspension of Production Operations.  The Operators recommendation
  shall include a plan and budget (in this Article  18 called the Mine
  Maintenance Plan) in reasonable detail of the activities to be performed
  to maintain the Assets and Property during the period of suspension and the
  Costs to be incurred.  The Shareholders may, at any time subsequent to
  the Completion Date, cause the Operator to suspend Production Operations in
  accordance with the Operators recommendation (or upon their
  own recommendation) with such changes to the Mine Maintenance Plan as the Shareholders
  deem necessary.  The Parties (other than Badr, which is not required to
  contribute capital to the Company in order to maintain its Percentage Interest
  and shall not be subject to any dilution provisions in this Agreement related
  to nonfunding) shall be committed to contribute their Proportionate Share of
  the Costs incurred in connection with the Mine Maintenance Plan.  The Shareholders
  may cause Production Operations to be resumed at any time.

18.2

The
  Operator may, at any time following a period of at least ninety (90) days during
  which Production Operations have been suspended, upon at least thirty (30) days
  notice to all Parties, recommend that the Shareholders approve the permanent
  termination of Production Operations.  The Operators recommendation
  shall include a Work Plan and Budget (in this Article  18 called the
  Mine Closure Plan) in reasonable detail of the activities to be
  performed to close the Mine and reclaim and rehabilitate the Property as required
  by applicable environmental or mining laws or regulations.  The Shareholders
  may approve the Operators recommendation with such changes
  to the Mine Closure Plan as the Shareholders deem necessary.

18.3

If
  the Shareholders approve the Operators recommendation under Section 18.2
  as aforesaid, it shall cause the Operator to:

(a)

implement
  the Mine Closure Plan whereupon the Parties shall be committed to pay, in proportion
  to their respective Percentage Interests, such Costs as may be required to implement
  that Mine Closure Plan;

(b)

remove,
  sell and dispose of such assets as may reasonably be removed and disposed of
  profitably and such other Assets as the Operator may be required to remove pursuant
  to applicable environmental and mining laws; and

(c)

sell,
  abandon or otherwise dispose of the Property.

The
  disposal price for the Assets and the Property shall be the best price obtainable
  and the net revenues, if any, from the removal and sale shall be credited and
  paid to the Parties in proportion to their respective Percentage Interests immediately
  upon receipt of same by the Operator.

18.4

If
  the Shareholders do not approve the Operators recommendation
  contemplated in Section 18.2, the Operator shall maintain Production Operations
  in accordance with the Mine Maintenance Plan pursuant to Section 18.1.

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19.

THE
  PROPERTY

19.1

Title
  to the Property shall be held in the name of the Company (or if required by
  the Government or Senegalese law, by the Companys local subsidiary).

20.

INFORMATION
  AND DATA

20.1

At
  all times during the term of this Agreement, the duly authorized representatives
  of each Party shall, at its and their sole risk and expense and at reasonable
  intervals and times, have access to the Property and to all technical records
  and other factual engineering data and information relating to the Property
  which is in the possession of the Operator.

20.2

All
  information and data concerning or derived from the Property, the Company or
  Operations shall not be used to the detriment of any Party, shall be kept confidential
  and, as may be required by law, rule or regulation or by the order of a court
  or other governmental authority (and then, only to most limited extent required),
  shall not be disclosed to any person other than an Affiliate without the prior
  consent of all Parties which shall not be unreasonably withheld.

20.3

The
  Parties shall use their best endeavours to agree upon the wording of all public
  announcements and statements, including statements to Shareholders whether contained
  in an annual report, press release, or made at a general meeting or otherwise,
  relating to the Property and the subject matter of this Agreement.

21.

LIABILITY
  OF THE OPERATOR

21.1

Subject
  to Section 21.2, each Party, on a several basis only, shall indemnify and
  save the Operator harmless from and against any loss, liability, claim, demand,
  damage, expense, injury or death (including, without limiting the generality
  of the foregoing, legal fees) resulting from any acts or omissions of the Operator
  or its officers, employees, agents or sub-contractors related to the performance
  of its responsibilities set forth hereunder.

21.2

Notwithstanding
  Section 21.1, the Operator shall not be indemnified or held harmless by
  any of the parties for any loss, liability, claim, damage, expense, injury or
  death (including, without limiting the generality of the foregoing, legal fees)
  resulting from the negligence or misconduct (including but not limited to breaches
  of its obligations and omissions) of the Operator or its officers, employees,
  agents or sub-contractor.  The Operator agrees to indemnify the Parties
  and the Company for any losses, liabilities, claims, damages, expenses, injury
  or death (including legal fees) as a result of its gross negligence, intentional
  misconduct, fraud, misappropriation or material breach of its obligations set
  forth hereunder.

21.3

An
  act or omission of the Operator or its officers, employees, agents or sub-contractors
  done or omitted to be done:

(a)

at
  the direction, or within the scope of the direction, of the Shareholders; and

(b)

with
  the concurrence of the Shareholders; or

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(c)

unilaterally
  and in good faith by the Operator to protect life or property; shall be deemed
  not to be negligence or misconduct.

21.4

The
  obligation of the other parties to indemnify and save the Operator harmless
  pursuant to Section 21.1 shall be in proportion to their respective Interests
  as at the date that the loss, liability, claim, demand, damage, expense, injury
  or death occurred or arose, and no other Party shall be required to pay its
  share unless Operator has first made a claim and received a pro rata payment
  from any affiliated Party.

22.

INSURANCE

22.1

The
  Shareholders shall cause the Operator to place and maintain with a reputable
  insurer or insurers, at the best available rates, such insurance, if any, as
  the Shareholders in their reasonable discretion deems advisable and in accordance
  with prudent industry practice in order to protect the Parties and the Company,
  who shall be named as co-insured beneficiaries under such policies together
  with such other insurance as any Party may by notice reasonably request.  The
  Operator shall also promptly comply with any insurance requirements of any lender
  to the Project.  The Operator shall, upon the written request of any Party,
  provide it with evidence of that insurance.

22.2

Section 22.1
  shall not preclude any Party from placing, for its own account, insurance for
  greater or other coverage than that placed by the Operator.

23.

RELATIONSHIP
  OF PARTIES

23.1

The
  rights, duties, obligations and liabilities of the parties shall be several
  and not joint nor joint and several, it being the express purpose and intention
  of the parties that their respective Percentage Interests shall be held as tenants
  in common.

23.2

No
  Party shall, except when required by this Agreement or by any law, by-law, ordinance,
  rule, order or regulation, use, suffer or permit to be used, directly or indirectly,
  the name of any other Party for any purpose related to the Property.

24.

PARTITION
  AND RESTRICTIONS ON ALIENATION

24.1

Each
  of the Parties waives, during the term of this Agreement, any right to partition
  of the Property or the Assets or any part thereof and no Party shall seek to
  be entitled to partition of the Property or the Assets whether by way of physical
  partition, judicial sale or otherwise during the term of this Agreement.

24.2

No
  Party shall transfer, convey, assign, mortgage, Charge, or grant an option in
  respect of or grant a right to purchase or in any manner transfer or alienate
  all or any portion of its Percentage Interest or rights under this Agreement
  otherwise than in accordance with this Article  24.

24.3

Nothing
  in this Article  24 shall prevent:

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(a)

a
  sale by any Party of all of its Percentage Interest or an assignment of all
  its rights under this Agreement to an Affiliate provided that such transfer
  is approved by the Government (if required) and such Affiliate first complies
  with the provisions of Section 15.13 hereof and agrees with the other Parties
  in writing to re-transfer such Percentage Interest to the originally assigning
  Party before ceasing to be an Affiliate of such Party;

(b)

a
  variation in Percentage Interests pursuant to Sections 7.8 or 10.2 hereof;
  or

(c)

a
  disposition pursuant to an amalgamation or corporate reorganisation which will
  have the effect in law of the amalgamated or surviving company possessing all
  the property, rights and interests and being subject to all the debts, liabilities
  and obligations of each amalgamating or predecessor company; or

(d)

any
  Charge or other encumbrance permitted under Article  12 or Cross Charge
  required under Section 15.2.

24.4

Prior
  to the Completion Date, the only remitted transfers shall be those described
  in Section 24.3.  Following the Completion Date, any of the Parties
  intending to dispose of all or any portion of its Percentage Interest or rights
  under this Agreement (in this Article  24 called the Offeror)
  shall first give Notice in writing to the other Parties (in this Article  24
  called the Offeree) of such intention together with the terms and
  conditions on which the Offeror intends to dispose of its Percentage Interest
  or a portion thereof or rights under this Agreement.

24.5

If
  the Offeror receives any offer (the Original Offer) to dispose of
  all or any portion of its Percentage Interest or rights under this Agreement
  which it intends to accept, the Offeror shall not accept the same unless and
  until:

(a)

the
  Offeror has first offered to sell such Percentage Interest or rights to the
  Offeree on the same terms and conditions as in the offer received and the same
  has not been accepted by the Offeree in accordance with Section 24.7 hereof;
  and

(b)

the
  other Parties hereto have consented to such transfer, which consent will not
  be unreasonably withheld or delayed.

24.6

Any
  communication of an intention to sell pursuant to Section 24.4 or 24.5
  hereof (the Offer) for the purposes of this Article  27
  shall be in writing delivered in accordance with Article  27 hereof
  and shall:

(a)

set
  out in reasonable detail all of the terms and conditions of any intended sale;

(b)

if
  it is made pursuant to Section 24.4 hereof, include a photocopy of the
  Offer; and

(c)

if
  it is made pursuant to Section 24.5 hereof, clearly identify the offering
  Party and include such information as is known by the Offeror about such offering
  Party;

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and
  such communication will be deemed to constitute an Offer by the Offeror to the
  Offerees to sell the Offerors Percentage Interest or its rights (or a
  portion thereof as the case may be) under this Agreement to the Offerees on
  the terms and conditions set out in such Offer.  For greater certainty
  it is agreed and understood that any Offer hereunder shall deal only with the
  disposition of the Percentage Interest or rights of the Offeror hereunder and
  not with any other interest, right or property of the Offeror and such disposition
  shall be expressed solely in monetary terms.  To the extent that some or
  all of the consideration contained in the Offer is comprised of non-cash consideration,
  the Parties must agree, within five (5) Business Days of delivery of such Offer
  pursuant to this Section 24.6, on the value of such non-cash consideration,
  failing which such non-cash consideration must be converted to cash consideration.

24.7

Any
  Offer made as contemplated in Section 24.6 hereof shall be open for acceptance
  by one or more, and if more than one, then pro rata by the Offerees for a period
  of forty (40) Business Days from the date of receipt of the Offer by the Offerees.

24.8

If
  one or more of the Offerees accepts the Offer within the period provided for
  in Section 24.7 hereof, such acceptance shall constitute a binding agreement
  of purchase and sale between the Offeror and the Offerees or such one or more
  of them as accept the Offer for the Percentage Interest or its rights (or a
  portion thereof as the case may be) under this Agreement on the terms and conditions
  set out in such Offer.

24.9

If
  none of the Offerees accept the Offer within the period provided for in Section 24.7
  hereof or do accept but fail to close the transaction contemplated thereby within
  sixty (60) Business Days following receipt of such Offer, the Offeror may complete
  a sale of its Percentage Interest or a portion thereof or rights under this
  Agreement on the terms and conditions not less favourable to the Offeror than
  those set out in the Offer and, in the case of an Original Offer, only to the
  Party making the Original Offer to the Offeror and in any event such sale and
  purchase shall be completed within six (6) months from the expiration of the
  right of the Offerees to accept such Offer or the Offeror must again comply
  with provisions of this Article  24.

24.10

While
  any Offer is outstanding no other Offer may be made until the first mentioned
  Offer is disposed of and any sale resulting therefrom completed or abandoned
  in accordance with the provisions of this Article  24.

24.11

Before
  the completion of any sale by a Party of its Percentage Interest or rights or
  any portion thereof under this Agreement, the purchasing party shall enter into
  an agreement with the Parties not selling on the same terms and conditions as
  set out in this Agreement, which said agreement shall provide, in the case of
  the sale of a portion of an Offerors Percentage Interest, for the purchasing
  party to be deemed to have paid Costs in an amount equal to the product obtained
  by multiplying the aggregate unreimbursed Costs paid by the Offeror in the form
  of capital by a fraction, the numerator of which equals the Percentage Interest
  sold and the denominator of which equals the total Percentage Interest held
  by the Offeror before the sale, and the Offerors unreimbursed
  Costs shall be deemed to have been reduced accordingly.

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24.12

In
  the event that an Offeror intends to transfer, convey, assign, mortgage or grant
  an option in respect or grant a right to purchase, or in any manner transfer
  or alienate less than all of its Percentage Interest except as security under
  Articles 12 and 15 and the Offeror is permitted under Section 24.9
  to complete such disposition, the Offeror and the person making the original
  Offer shall deliver to the Offeree, prior to the completion of such disposition,
  an acknowledgement:

(a)

by
  the person making the Original Offer that it agrees to be bound by all of the
  provisions of this Agreement as if it were an original signatory to this Agreement;

(b)

by
  the Offeror that it shall not be released from any duties or obligations under
  this Agreement; and

(c)

that
  the person making the Original Offer shall be bound by and shall abide by any
  decision of the Shareholders, subject to any right it may have inter sewith
  the Offeror respecting its right to elect not to contribute to a Program.

24.13

Each
  Party agrees that its failure to comply with the restrictions set out in this
  Article  24 would constitute an injury and result in damage to the
  other Parties impossible to measure monetarily and, in the event of any such
  failure, the other Parties shall, in addition and without prejudice to any other
  rights and remedies at law or in equity, be entitled to injunctive relief restraining
  or enjoining any sale of any Interest or rights under this Agreement save in
  accordance with the provisions of this Article  24 and any Party intending
  to make a sale or making a sale contrary to the provisions of this Article  24
  hereby waives any defence it might have in law to such injunctive relief.

25.

TAXATION

25.1

All
  Costs incurred hereunder shall be for the account of the Party or Parties making
  or incurring the same; if more than one, then in proportion to their respective
  Percentage Interests (but, for the avoidance of doubt, not including Badrs
  Percentage Interest) and each such Party on whose behalf any Costs have been
  incurred shall be entitled to claim all tax benefits, write-offs, and deductions
  with respect thereto.

26.

FORCE
  MAJEURE

26.1

Notwithstanding
  anything herein contained to the contrary, if any Party is prevented from or
  delayed in performing any obligation under this Agreement, and such failure
  is occasioned by any cause beyond its reasonable control, excluding only lack
  of finances, then, subject to Section 26.2, the time for the observance
  of the condition or performance of the obligation in question shall be extended
  for a period equivalent to the total period the cause of the prevention or delay
  persist or remains in effect regardless of the length of such total period.

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26.2

Any
  Party claiming suspension of its obligations as aforesaid shall promptly notify
  the other Parties to that effect and shall take all reasonable steps to remove
  or remedy the cause and effect of the force majeure described in the said notice
  insofar as it is reasonably able so to do and as soon as possible; provided
  that the terms of settlement of any labour disturbance or dispute, strike or
  lockout shall be wholly in the discretion of the Party claiming suspension of
  its obligations by reason thereof, and that Party shall not be required to accede
  to the demands of its opponents in any such labour disturbance or dispute, strike,
  or lockout solely to remedy or remove the force majeure thereby constituted.
   The Party claiming suspension of its obligations shall promptly notify
  the other Parties when the cause of the force majeure has been removed.

26.3

The
  extension of time for the observance of conditions or performance of obligations
  as a result of force majeure shall not relieve the Operator from its obligations
  to keep the Property in good standing.

26.4

If
  a force majeure event is reasonably foreseeable and relates to the Operators
  responsibilities, it shall be obligated to use its best efforts to avoid or
  at least minimize its effects.  Also, to the extent the Convention or any
  mineral concession with Senegal has more limited provisions relating to force
  majeure events applicable to the Operators or any other Partys responsibilities
  hereunder, the provisions of this Section 26 shall be deemed modified so
  the force majeure exemption cannot be claimed by the Operator or another Party
  hereunder unless it is also recognized as such under the Convention or applicable
  concession.

27.

NOTICE

27.1

Every
  Notice shall be in writing and shall be given by the delivery of same or by
  mailing same by prepaid registered or certified mail or by sending same by telegram,
  telex, telecommunication or other similar form of communication, in each case
  addressed to the intended recipient at the address of the respective Party set
  out on the first page hereof or, if by facsimile, to the Company at (202) 662-4643,
  to Badr at 9662-605-1116, to Bendon at 9662-694-3466 and to Sabodala at (604) 331-8773.

27.2

A
  Notice given in accordance with Section 27.1 and any invoice given pursuant
  to Section 14.1 given in accordance with Section 27.1 will be treated
  as having been received:

(a)

if
  it is delivered before 5:00 p.m. on a Business Day, at the time of delivery
  otherwise at 9:00 a.m. on the next following Business Day;

(b)

on
  the third Business Day (or seventh Business Day if sent overseas) after posting,
  except in the event of disruption of the postal service in which event Notice
  or invoice, as the case may be, will be deemed to be received only when actually
  received; and

(c)

if
  sent by facsimile, upon production of a correct and complete transmission report
  by the machine from which the facsimile was sent which indicates that the facsimile
  was sent in its entirety to the facsimile number of the recipient notified for
  the purposes of this paragraph (but if the communication is not completed by
  5:00 p.m. on a Business Day, otherwise at 9:00 a.m. on the next following
  Business Day.

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27.3

Any
  Party may, at any time, give Notice in writing to the others of any change of
  address, and from and after the giving of such notice, the address therein specified
  will be deemed to be the address of such Party for the purposes of giving notice
  hereunder.

28.

WAIVER

28.1

No
  waiver of any breach of this Agreement shall be binding unless evidenced in
  writing executed by the Party against whom waiver is claimed.  Any waiver
  shall extend only to the particular breach so waived and shall not limit any
  rights with respect to any future breach.

29.

AMENDMENTS

29.1

This
  Agreement constitutes the entire agreement between the Parties with respect
  to the subject matter hereof and supersedes all prior agreements, memoranda,
  correspondence, communications, negotiations and representations, whether oral
  or written, express as implied, statutory or otherwise between the Parties as
  any of them with respect to the subject matter hereof.  An amendment or
  variation of this Agreement shall only be binding upon a Party if evidenced
  in writing executed by that Party.

30.

TERM

30.1

Unless
  terminated by agreement of all parties or as a result of one Party acquiring
  a one hundred percent (100%) Percentage Interest or pursuant to Section 17.3
  above, this Agreement shall remain in full force and effect.  Termination
  of this Agreement shall not, however, relieve any Party from any obligations
  theretofore accrued but unsatisfied, nor from its obligations with respect to
  rehabilitation of the Property and reclamation and the representations in Section 3.2(i)

31.

SURVIVAL
  AND SEVERABILITY

31.1

If
  any one or more of the provisions contained herein should be invalid, illegal
  or unenforceable in any respect in any jurisdiction, the validity, legality
  and enforceability of such provision shall not in any way be affected or impaired
  thereby in any other jurisdiction and the validity, legality and enforceability
  of the remaining provisions contained herein shall not in any way be affected
  or impaired thereby, unless in either case as a result of such determination
  this Agreement would fail in its essential purpose.

31.2

The
  terms of Article  35 shall survive the termination or expiration of this
  Agreement.

32.

FURTHER
  ASSURANCES

32.1

Each
  Party must do, sign, execute and deliver and must ensure that each of its employees
  and agents does, signs, executes and delivers all deeds, documents, instruments
  and acts reasonably required of it or them by Notice from another Party effectively
  to carry out and give full effect to this Agreement and the rights and obligations
  of the Parties under it.

33.

TIME
  OF ESSENCE; COUNTERPARTS

33.1

Time
  is of the essence of this Agreement.

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33.2

This
  Agreement may be executed in any number of counterparts, each of which shall
  be an original, but all of which shall constitute one and the same Agreement.

34.

SUCCESSORS
  AND ASSIGNS

34.1

This
  Agreement shall enure to the benefit of and be binding upon the Parties and
  their respective successors and permitted assigns which have a Percentage Interest.

35.

DISPUTE
  RESOLUTION

35.1

Any
  dispute, claim or controversy arising out of or relating to this Agreement,
  or the performance, breach, validity, interpretation, application or termination
  thereof (Dispute), shall be resolved in accordance with the procedures
  specified in this Article  35, which shall be the sole and exclusive procedures
  for the resolution of any such Disputes.

35.2

In
  the event of any Dispute, the Parties shall first attempt in good faith to resolve
  such Dispute promptly by negotiation between representatives who have authority
  to settle the Dispute.  Any Party may give the other Party written notice
  of any Dispute not resolved in the normal course of business.  Within fifteen
  (15) days after delivery of the notice, the receiving Party shall submit to
  the other a written response.  The notice and the response shall each include
  (a) a statement of the Partys position and a general summary of arguments
  supporting that position, and (b) the name and title of the person(s) who will
  represent that Party in the negotiations.  Within thirty (30) days after
  delivery of the notice of Dispute, the representatives of the Parties shall
  meet at a mutually acceptable time and place, and thereafter as often as they
  reasonably deem necessary, to attempt to resolve the Dispute.  All reasonable
  requests for information made by one Party to the other will be honored; however,
  no Party is required to provide confidential, trade secret, proprietary or privileged
  information.  All negotiations pursuant to this clause are confidential
  and shall be treated as compromise and settlement negotiations for purposes
  of applicable rules of evidence.  If a Party refuses to negotiate as provided
  herein, any other Party may immediately initiate arbitration as provided in
  Section 35.4.

35.3

If
  any Dispute has not been resolved by negotiation as set out above within forty-five
  (45) days of delivery of the notice of Dispute, or if the Parties failed to
  meet within thirty (30) days of delivery of the notice of Dispute, the Parties
  shall endeavor to settle the Dispute by good faith mediation.  Upon the
  expiration of the negotiating period, any Party may give written notice of mediation.
   The Parties shall attempt to agree upon a qualified, neutral individual
  who shall serve as mediator.  If the Parties fail to agree upon a mediator
  within fifteen (15) days of delivery of the notice of mediation, the mediator
  will be appointed by the American Arbitration Association from its roster of
  neutral mediators.  The mediation shall occur in Paris, France within thirty
  (30) days after appointment of a mediator, or at such other time and place as
  the Parties may agree.  Any Dispute which remains unresolved forty-five
  (45) days after appointment of a mediator shall be settled by arbitration in
  accordance with Section 35.4 of this Agreement.  If a Party refuses
  to participate in the mediation process as provided herein, any other Party
  may immediately initiate arbitration as provided in Section 35.4 of this
  Agreement.  Unless otherwise agreed by the Parties or ordered by the Arbitral
  Tribunal in a subsequent

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arbitral
  proceeding as provided herein, the Parties shall bear the cost of the mediation
  equally between them.  In the event that either Party fails or refuses
  to participate in mediation in good faith as provided herein, the Arbitral Tribunal
  in any subsequent arbitration is authorized to determine whether the failure
  to participate in the mediation was due to the bad faith of a Party, and if
  so may award to the other Party all costs associated with the mediation efforts,
  including attorneys fees and costs, mediators fees, and administrative
  fees, if any.  Other than with respect to its occurrence or the failure
  to occur, the mediation is in all respects confidential and shall be treated
  as compromise and settlement negotiations for purposes of applicable rules of
  evidence.  The mediator may not serve as an arbitrator in any subsequent
  arbitration proceedings concerning the Dispute.

35.4

Any
  Dispute which has not been resolved by a non-binding procedure as provided in
  Sections  35.2 and 35.3 within sixty (60) days of the initiation of such
  procedure, shall be finally resolved by arbitration under the then current United
  Nations Commission on International Trade Law Arbitration Rules (UNCITRAL
  Rules) in effect as of the date of this Agreement, and judgment on the
  award may be entered in any court having jurisdiction thereof.

35.5

In
  the event that any Partys claim or counterclaim equals or exceeds one
  million Dollars ($1,000,000), exclusive of interest or attorneys fees,
  the Dispute shall be heard and determined by three (3) arbitrators, each of
  whom shall be independent and impartial; otherwise, the Dispute shall be heard
  and determined by one (1) arbitrator.  The AAA shall be the Appointing
  Authority, as defined in the UNCITRAL Rules, for purposes of this Agreement.
   In the event that one (1) arbitrator shall hear the Dispute, the Parties
  shall attempt to agree upon a qualified individual to serve as arbitrator.  If
  the Parties are unable to so agree within thirty (30) days of the response to
  the notice of arbitration, then the arbitrator shall be selected and appointed
  in accordance with the UNCITRAL Rules.  In the event that three arbitrators
  shall hear the Dispute, each Party shall, within thirty (30) days after commencement
  of the arbitration, select one person to act as arbitrator.  The two (2)
  arbitrators so selected shall, within fifteen (15) days of their appointment,
  select a third arbitrator who shall serve as the chairperson of the Arbitral
  Tribunal.  The arbitrators selected shall be qualified by education, training,
  and experience to hear and determine matters in the nature of the Dispute.  If
  a Party fails to appoint an arbitrator as provided herein, or if the arbitrators
  selected by the Parties are unable or fail to agree upon a third arbitrator
  within twenty (20) days of their appointment, then that arbitrator shall be
  selected and appointed in accordance with the UNCITRAL Rules.  Should an
  arbitrator die, resign, refuse to act, or become incapable of performing his
  or her functions as an arbitrator, the Appointing Authority may declare a vacancy
  on the Arbitral Tribunal.  The vacancy shall be filled by the method by
  which that arbitrator was originally appointed.  The arbitrator(s) shall
  be bound by and shall follow the then current International Bar Association
  standards of Ethics for International Arbitrators.  As used herein, the
  expression Arbitral Tribunal includes a sole arbitrator or all the
  arbitrators where more than one.

35.6

The
  language of the arbitration shall be English.  The seat of the arbitration
  shall be Paris, France.  Upon agreement of the Parties and the arbitrator(s),
  pre-hearing conferences may be held in other locations, however the seat of
  the arbitration will be deemed to remain unchanged and any awards or orders
  will be deemed to have been made at the seat of the arbitration.

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35.7

The
  Arbitral Tribunal shall determine the matters at issue in the Dispute in accordance
  with the substantive law of New York.  The arbitration proceedings shall
  be governed by this Agreement, the UNCITRAL Rules, the procedural arbitration
  laws of France and by the United Nations Convention on the Recognition and Enforcement
  of Foreign Arbitral Awards.  The Arbitral Tribunal shall decide the issues
  submitted as arbitrators at law only and shall base its award, and any interim
  awards, upon the terms of this Agreement and the laws of New York.  The
  Arbitral Tribunal is not empowered to and shall not act as amiable compositeur
  or ex aequo et bono.

35.8

At
  the request of a Party, the Arbitral Tribunal may take such interim measures
  and make such interim orders as it deems necessary, including measures for the
  preservation of assets, the conservation of goods, or the sale of perishable
  goods.  The Arbitral Tribunal may require appropriate security as a condition
  of ordering such measures.  At any time after the Arbitral Tribunal is
  constituted and upon motion of any Party, the Tribunal shall hear and determine
  any preliminary issue of law asserted by a Party to be dispositive, in whole
  or in part, of any claim or defense, pursuant to such procedures as the Tribunal
  deems appropriate.  At any time after the Arbitral Tribunal is constituted
  and upon motion of any Party, the Tribunal may summarily determine and dismiss,
  in whole or in part, any claim or issue in dispute (a) if the Party asserting
  it has failed to state a claim as a matter of law, or (b) if the pleadings and
  evidence show that no genuine issue of material fact exists with respect to
  any element of the claim or defense and that the moving Party is entitled to
  disposition of the claim or defense as a matter of law.  If the Arbitral
  Tribunal deems it appropriate, keeping in mind the expedited and efficient nature
  of arbitration, the arbitral proceedings may be bifurcated according to claims
  or issues, and claims or issues may be heard and determined separately as may
  be appropriate.

35.9

Pursuant
  to a schedule to be established by the Arbitral Tribunal, the Parties shall
  exchange those documents upon which the producing Party may rely in support
  of any claim or defense.  The Parties may further exchange documents in
  response to written requests for disclosure of non-privileged documents directly
  relevant to the determination of the issues presented for determination by the
  Tribunal.  Any dispute regarding such requests for disclosure or the adequacy
  of any Partys disclosures shall be determined by the Tribunal consistent
  with the expedited nature of arbitration.  The Arbitral Tribunal shall
  take into account applicable principles of legal privilege and related protections,
  such as those involving the confidentiality of communications between a lawyer
  and a client and the work product of a lawyer, and no Party or witness may be
  required to waive any privilege recognized at law.  The Arbitral Tribunal
  shall issue orders as reasonably necessary to protect the confidentiality of
  proprietary information, trade secrets, and other sensitive information disclosed.

35.10

All
  awards shall be in writing and shall state the reasoning upon which the award
  rests.  Any award shall be made and signed by at least a Simple Majority
  of the arbitrators.  The Parties hereby waive any claim to exemplary, punitive,
  or similar damages in excess of compensatory damages, attorneys fees,
  costs, and expenses of arbitration, and the Arbitral Tribunal is not empowered
  to and shall not award exemplary, punitive, or similar damages in excess of
  compensatory damages and attorneys fees, costs, and expenses of mediation
  and arbitration.  The Arbitral Tribunal is expressly empowered to grant
  any remedy or relief not expressly

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prohibited
  herein available under the applicable law, including but not limited to specific
  performance of this Agreement to the extent allowed by law, declaration of the
  validity, meaning, and effect of this Agreement and the rights or duties of
  the Parties hereunder, and, to the extent allowed by law, prohibiting or mandating
  actions by a Party with respect to the performance of this Agreement or matters
  arising out of or in connection therewith.  In its award, the Arbitral
  Tribunal may apportion the costs of arbitration between or among the Parties
  in such manner as it deems reasonable, taking into account the circumstances
  of the case, the conduct of the Parties during the proceedings, and the result
  of the arbitration, including requiring one Party to bear all or the majority
  of such costs.  Unless otherwise ordered by the Arbitral Tribunal as part
  of its award, each Party shall bear its own costs and expenses and the costs
  of arbitration, including the fees and expenses of the arbitrator(s) and of
  any expert or other assistance engaged by the Tribunal, shall be borne by the
  Parties to the arbitration in equal shares.

35.11

The
  failure or refusal of any Party, having been given due notice thereof, to participate
  at any stage of the dispute resolution proceedings shall not prevent the proceedings
  from continuing, nor shall such failure or refusal impair the validity of the
  award or cause the award to be void or voidable, nor shall it be a basis for
  challenge of the validity or enforceability of the award or of the arbitration
  proceedings.  If any Party fails to timely pay an advance on fees and costs
  ordered by the Arbitral Tribunal within twenty (20) days after the date set
  for such deposit, that Party shall be deemed to be in default.  The Tribunal
  shall then determine whether the funds on deposit are sufficient to satisfy
  the anticipated estimated expenses for the proceeding to continue on an expedited
  basis without the participation of the defaulting Party.  If so, the proceeding
  will continue without the participation of the defaulting Party, and the Tribunal
  may enter an award on default.  Prior to entering an award on default,
  the Tribunal shall require the non-defaulting Party to produce such evidence
  and legal argument in support of its contentions as the Tribunal may deem appropriate.
   The Tribunal may receive such evidence and argument without the defaulting
  Partys presence or participation.  If the funds on deposit are deemed
  insufficient to satisfy the estimated costs of continuing as provided herein,
  the non-defaulting Party may make all of part of the requested deposit in an
  amount sufficient to allow the proceeding to continue without the participation
  of the defaulting Party.  If the non-defaulting Party chooses not to make
  the requested deposit, the Arbitral Tribunal may suspend or terminate the proceedings.

35.12

In
  accepting appointment, each arbitrator shall commit that his/her schedule permits
  him/her to devote the reasonably necessary time and attention to the arbitration
  proceedings and to resolving the Dispute within the time periods set by this
  Agreement and by the UNCITRAL Rules.  Any time limits set out in this dispute
  resolution agreement or in the UNCITRAL Rules may be modified upon written agreement
  of the Parties and the Arbitral Tribunal or by order of the Arbitral Tribunal.
   Any failure of the Arbitral Tribunal to satisfy such time limits or to
  render a final award within the time specified shall not impair the validity
  of the award or cause the award to be void or voidable, nor shall it be a basis
  for challenge of the validity or enforceability of the award or of the arbitration
  proceedings.

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35.13

At
  any time after submission of a written notice of dispute, any Party may request
  a court of competent jurisdiction to grant interim measures of protection: (a)
  to preserve the status quo pending resolution of the dispute; (b) to prevent
  the destruction of documents and other information or things related to the
  dispute; (c) to prevent the transfer, dissipation, or hiding of assets; and/or
  (d) to aid the arbitral proceedings and the award.  A request for such
  interim measures to a judicial authority shall not be deemed incompatible with
  or a waiver of a Partys right to arbitrate a dispute.  The Parties
  agree that a court at the seat of the arbitration at the request of a Party,
  or the Arbitral Tribunal with the consent of all Parties, may consolidate two
  or more arbitral proceedings among the Parties to this Agreement if there exist
  common questions of law or fact.

35.14

Unless
  the Parties agree otherwise, the Parties, the arbitrator(s), and the Appointing
  Authority shall treat the dispute resolution proceedings provided for herein,
  any related disclosures, and the decisions of the Arbitral Tribunal, as confidential,
  except in connection with judicial proceedings ancillary to the dispute resolution
  proceedings, such as a judicial challenge to, or enforcement of, the arbitral
  award, and unless otherwise required by law to protect a legal right of a Party.























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IN
  WITNESS WHEREOFthe Parties have executed this Agreement as of the day,
  month and year first above written.

|                                                                                         | 
|---------------------------------------------------------------------------------------- | 
|OROMIN
        JOINT VENTURE GROUP LTD.Signed:Gerald McDuffeePer: Authorized Signatory | 
|BENDON
        INTERNATIONAL LTD.Signed:Gerald McDuffeePer: Authorized Signatory       | 
|BADR
        INVESTMENT & FINANCE COMPANYSigned:Ayman FadilPer: Authorized Signatory   | 
|SABODALA
        HOLDING LIMITEDSigned:Chet IdziszekPer: Authorized Signatory          | 



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45831571.5



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SCHEDULE
  A

MEMORANDUM
  OF ASSOCIATION







































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SCHEDULE
  B

ARTICLES
  OF ASSOCIATION









































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SCHEDULE
  C

ACCOUNTING
  PROCEDURE

1.

INTERPRETATION

1.1

In
  this Schedule C the following words, phrases and expressions
  shall have the following meanings:

(a)

Agreement
  means the Agreement to which this Accounting Procedure is attached as Schedule C.

(b)

Assets
  means all tangible and intangible goods, chattels, improvements or other items
  including, without limiting the generality of the foregoing, land, buildings,
  and equipment, excluding the Property, acquired for or made to the Property
  under this Agreement.

(c)

Completion
  Date means the date on which the Property commences Commercial Production.

(d)

Count
  means a physical inventory count.

(e)

Employees
  means those employees of the Operator who are assigned to and directly engaged
  in the conduct of Operations, whether on a full-time or part-time basis.

(f)

Employee
  Benefits means the Operators cost of holiday, vacation, sickness,
  disability benefits, field bonuses, paid to and the Operators costs of
  established plans for employees group life insurance, hospitalisation,
  pension, retirement and other customary plans maintained for the benefit of
  Employees and Personnel, as the case may be, which costs may be charged as a
  percentage assessment on the salaries and wages of Employees or Personnel, as
  the case may be, on a basis consistent with the Operators cost experience.

(g)

Field
  Offices means the necessary sub-office or sub-offices in each place where
  Operations are being conducted.

(h)

Government
  Contributions means the cost or contributions made by the Operator pursuant
  to assessments imposed by governmental authority which are applicable to the
  salaries or wages of Employees or Personnel, as the case may be.



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(j)

Material
  means the personal property, equipment and supplies acquired or held, at the
  direction or with the approval of the Management Committee, for use in Operations
  and, without limiting the generality, more particularly Controllable Material
  means such Material which is ordinarily classified as Controllable Material,
  as that classification is determined or approved by the Management Committee,
  and controlled in Operations.

(k)

Personnel
  means that management, supervisory, administrative, clerical or other personnel
  of the Operator normally associated with the Supervision Offices whose salaries
  and wages are charged directly to the Supervision Office in question.

(l)

Operating
  Account means the books of account maintained by the Operator to record
  all costs, expenses, credits and other transactions arising out of or in connection
  with Operations.

(m)

Reasonable
  Expenses means the reasonable expenses of Employees or Personnel, as the
  case may be, for which those Employees or Personnel may be reimbursed under
  the Operators usual expense account practice; including without limiting
  generality, any relocation expenses necessarily incurred in order to properly
  staff Operations if the relocation is approved by the Management Committee.

(n)

Supervision
  Office means the Operators offices or department within the Operators
  offices from which Operations are generally supervised.

1.2

All
  other capitalised terms shall have the meaning ascribed to them in the Agreement.

2.

DIRECT
  CHARGES

2.1

The
  Operator shall charge the Operating Account with the following items:

2.1

(a)

Contractors
  Charges:

All
  proper Costs relative to Operations incurred under contracts entered into by
  the Operator with the third parties.

(b)

Labour
  Charges:

(i)

The
  salaries and wages of Employees in an amount calculated by taking the full salary
  or wage of each Employee multiplied by that fraction which has as its numerator
  the total time for the month that the Employees were directly engaged in the
  conduct of Operations and as its denominator the total normal working time for
  the month of the Employees;

(ii)

The
  Reasonable Expenses of the Employees; and

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(iii)

Employee
  Benefits and Government Contributions in respect of the Employees in an amount
  proportionate to the charge made to the Operating Account in respect to their
  salaries and wages.

(c)

Office
  Maintenance:

The
  cost or a pro rata portion of the costs, as the case may be, of maintaining
  and operating the Offices.  The basis for charging the Operating Account
  for Office maintenance costs shall be as follows:

(i)

the
  expense of maintaining and operating Field Offices, less any revenue therefrom;
  and

(ii)

that
  portion of the reasonable cost maintaining and operating the Supervision Offices
  which cannot be charged directly to the Operating Account and which are attributable
  to the support of Operations.

(d)

Material:

Material
  purchased or furnished by the Operator for use on the Property as provided under
  Article  3 of this Schedule C.

(e)

Transportation
  Charges:

The
  cost of transporting Employees and Material necessary for Operations.

(f)

Service
  Charges:

(i)

The
  cost of services and utilities procured from outside sources other than services
  covered by Section 2.1(h).  The cost of consultant services shall
  not be charged to the Operating Account unless the retaining of the consultant
  is approved in advance by the Management Committee but if not so charged the
  cost of such services shall be included as Costs of the Participant retaining
  such consultant; and

(ii)

Use
  and service of equipment and facilities furnished by the Operator as provided
  in Section 4.5 of this Schedule C.

(g)

Damage
  and Losses to Assets:

All
  costs necessary for the repair or replacement of Assets made necessary because
  of damages or losses by fire, flood, storms, theft, accident or other cause.
   The Operator shall furnish each Participant with written particulars of
  the damages or losses incurred as soon as practicable after the damage or loss
  has been discovered.  The proceeds, in any, received on claims against
  any policies of insurance in respect of those damages or losses shall be credited
  to the Operating Account.

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(h)

Legal
  Expense:

All
  costs of handling, investigating and settling litigation or recovering the Assets,
  including, without limiting generality, attorneys fees, court
  costs, costs of investigation or procuring evidence and amounts paid in settlement
  or satisfaction of any litigation or claims; provided, however, that, unless
  otherwise approved in advance by the Management Committee, no charge shall be
  made for the services of the Operators legal staff or the fees
  and expenses of outside solicitors.

(i)

Taxes:

All
  taxes, duties or assessments of every kind and nature (except income taxes)
  assessed or levied upon or in connection with the Property, Operations, or the
  production from the Property, which have been paid by the Operator for the benefit
  of the parties.

(j)

Insurance:

Net
  premiums paid for

(i)

such
  policies of insurance on or in connection with Operations as may be required
  to be carried by law; and

(ii)

such
  other policies of insurance as the Operator may carry in accordance with the
  Agreement; and

(iii)

the
  applicable deductibles in event of an insured loss.

(k)

Rentals:

Fees,
  rentals and other similar charges required to be paid for Operations and for
  acquiring, recording and maintaining permits, exploration licences and mining
  leases.

(l)

Permits:

Permit
  costs, fees and other similar charges which are assessed by various governmental
  agencies.

(m)

Overhead
  Charges:

An
  overhead charge equal to 10% of all Costs prior to the date on which an effective
  Production Notice is given and 5% of all Costs following such date.

(n)

Such
  other costs and expenses which are not covered or dealt with in the foregoing
  provisions of this Section 2.1 of this Schedule  C as
  are incurred with the approval of the Management Committee for Operations or
  as may be contemplated in the Agreement.

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3.

PURCHASE
  OF MATERIAL

3.1

The
  Operator shall purchase or rent all Materials for Operations.

3.2

Materials
  purchased and services procured by the Operator directly for Operations shall
  be charged to the Operating Account at the price paid by the Operator less all
  discounts actually received.

3.3

So
  far as it is reasonably practical and consistent with efficient and economical
  operations, the Operator shall purchase, furnish or otherwise acquire only such
  Material and the Operator shall attempt to minimise the accumulation of surplus
  stocks of Material.

3.4

Any
  Participant may sell Material or services required in Operations to the Operator
  for such price and upon such terms and conditions as the Management Committee
  may approve.

3.5

Notwithstanding
  the foregoing provisions of this Article  3, the Operator shall be
  entitled to supply for use in connection with Operations equipment and facilities
  which are owned by the Operator and to charge the Operating Account with such
  reasonable costs as are commensurate with the ownership and use thereof.

4.

DISPOSAL
  OF MATERIAL

4.1

The
  Operator, with the approval of the Management Committee may, from time to time,
  sell any Material that has become surplus to the foreseeable needs of Operations
  for such price and upon such terms and conditions as are available.

4.2

Any
  Participant may purchase from the Operator any Material that may from time to
  time become surplus to the foreseeable need of Operations for such price and
  upon such terms and conditions as the Management Committee may approve.

4.3

Upon
  termination of the Agreement, the Management Committee may approve the division
  of any Material held by the Operator at that date and such Material may be taken
  by the Participants in kind or be taken by a Participant in lieu of a portion
  of its Proportionate Share of the net revenues received from the disposal of
  the Assets and Property.  If such a division to a Participant be in lieu
  of a portion of its Proportionate Share, it shall be for such price and on such
  terms and conditions as the Management Committee may approve.

4.4

The
  net revenues received from the sale of any Material to third parties or to a
  Participant shall be credited to the Operating Account.

5.

INVENTORIES

5.1

The
  Operator shall maintain records of Material in reasonable detail and records
  of Controllable Material in detail.

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5.2

The
  Operator shall perform Counts from time to time at reasonable intervals and
  in connection therewith shall give notice of its intention to perform a Count
  to each Participant at least five (5) Business Days in advance of the date set
  for performing of the Count and each Participant shall be entitled to be represented
  at the performing of a Count.  A Participant who is not represented at
  the performing of the Count shall be deemed to have approved the Count as taken.

5.3

Forthwith
  after performing a Count, the Operator shall reconcile the inventory with the
  Operating Account and provide each Participant with a statement listing the
  overages and shortages of inventory.

6.

ADJUSTMENTS

6.1

Payment
  of any invoice by a Participant shall not prejudice the right of that Participant
  to protest the correctness of the statement supporting the payment, provided
  however, that all invoices and statements presented to each Participant by the
  Operator during any Semi-Annual Period shall conclusively be presumed to be
  true and correct upon the expiration of six (6) months following the end of
  the Semi-Annual Period to which the invoice or statement relates, unless within
  that six (6) month period that Participant gives notice to the Operator making
  claim on the Operator for an adjustment to the invoice or statement.

6.2

The
  Operator shall not adjust any invoice or statement in favour of itself after
  the expiration of six (6) months following the end of the Semi-Annual Period
  to which the invoice or statement relates.

6.3

Notwithstanding
  Sections 6.1 and 6.2 of this Schedule C, the Operator
  may make adjustments to an invoice or statement that arise out of a physical
  inventory of Material or Assets.

6.4

Prior
  to the Completion Date, a Participant shall be entitled, upon notice to the
  Operator, to request that the independent external auditor of the Operator provide
  that Participant with its opinion that any invoice or statement delivered pursuant
  to the Agreement in respect of the period referred to in Section 6.1 of
  this Schedule C has been prepared in accordance with this Agreement.

6.5

The
  time for giving the audit opinion contemplated in Section 6.4 of this Schedule C
  shall not extend the time for the taking of exception to and making claims on
  the Operator for adjustment as provided in Section 6.1 of this Schedule C.

6.6

The
  cost of the auditors opinion referred to in Section 6.4 of this Schedule C
  shall be solely for the account of the Participant requesting the auditors
  opinion, unless the audit disclosed an error in excess of ten percent (10%)
  adverse to that Participant, in which case the cost shall be solely for the
  account of the Operator.

6.7

After
  the Completion Date, the Operator shall cause the books and records related
  to Operations to be audited by a national firm of chartered accountants designated
  by the Operator (which may be the auditor of the Operator) and:

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(a)

copies
  of the audited reports shall be delivered to the Parties by the chartered accounting
  firm;

(b)

either
  Participant shall have three (3) months after receipt of any audited report
  to object thereto in writing to the other Participant, and failing such objection,
  such report shall be deemed correct; and

(c)

if
  one Participant requests in writing to the other Participant within such three
  (3) month period a review and re-audit, the chartered accountants shall review
  and the re-audit shall be paid by:

(i)

the
  Participant requesting the re-audit if the original audit is found to be correct;
  or

(ii)

the
  other Participant if the original audit is found in error.

In
  addition, any Participant may, at its own cost, ask for and carry out an independent
  audit.  Any payments or repayments required by any final audit shall be
  made immediately by the Participant affected.



























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SCHEDULE
  D

FORM
  OF CROSS CHARGE

THIS
  DEEDis made the (*) day of (*), 200(*).

BETWEEN:

SABODALA
  HOLDING LIMITED,a company incorporated under the laws of the British
  Virgin Islands having its registered office at Craigmuir Chambers, P.O. Box
  71, Road Town, British Virgin Islands

(Sabodala)

OF
  THE FIRST PART

AND:

BENDON
  INTERNATIONALLTD., a company incorporated under the laws of
  the British Virgin Islands having its registered office at Craigmuir Chambers,
  P.O. Box 71, Road Town, British Virgin Islands

(Bendon)

OF
  THE SECOND PART

RECITALS:

R.1

Sabodala
  and Bendon are Parties under the Shareholders Agreement defined below.

R.2

Pursuant
  to the terms of the Shareholders Agreement, certain moneys will become payable
  by each Party to the Operator, on the terms set out therein.

R.3

Pursuant
  to the terms of the Shareholders Agreement, each of the Parties is required
  to enter into a cross charge in the terms of this Deed, to secure the performance
  of its obligations under the Shareholders Agreement with respect to its payment
  of Production Costs.

NOW
  THEREFORE THIS AGREEMENT WITNESSESthat in consideration of the premises,
  and of the mutual covenants and agreements herein contained, the Parties hereto
  have agreed and do hereby agree as follows:

1.

DEFINITIONS
  AND INTERPRETATION

1.1

In
  this Deed, unless the contrary intention appears:

(a)

Assets
  has the same meaning as in the Shareholders Agreement.

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(b)

Business
  Day has the same meaning as in the Shareholders Agreement.

(c)

Charge
  means, in relation to each Charger, the fixed and floating charge created by
  that Charger under this Deed; fixed Charge means the Charge to the
  extent that it is fixed and floating Charge means the Charge to
  the extent that it is floating.

(d)

Charged
  Property means in relation to each Charger, the Chargers present
  and future right, title and interest to and under the property charged by the
  Charger under Article  2.

(e)

Chargee
  means in relation to each Charger, the other Parties and the Operator.

(f)

Chargees
  Powers means all powers, authorities and discretions conferred upon the
  Chargee or any receiver under this Deed or otherwise by law.

(g)

Charger
  means severally each Party.

(h)

Collateral
  Security means any present or future agreement, document or other instrument
  which is expressed by supplemental or collateral to this Deed or an implementation
  of this Deed or entered into by way of further assurance in respect of this
  Deed.

(j)

Corporations
  Law means the BVI Business Companies Act, 2004, and includes any legislation
  amending or replacing the Corporations Law.

(k)

Deed
  means this deed (including the Schedules) as it may from time to time be amended,
  varied, supplemented or assigned, and includes any deed or variation hereof.

(l)

Default
  means any of the events specified in Article  7 of this Deed.

(m)

Defaulting
  Party has the same meaning as in Article  15 of the Shareholders
  Agreement.

(n)

Land
  means any interest in land or right in respect of land, including leases, licenses,
  easements and access rights.

(o)

Mining
  Convention has the same meaning as in the Shareholders Agreement.

(p)

Moneys
  Secured means, in relation to each Charger, all moneys that became due
  and payable by the Charger to the Chargee pursuant to the Shareholders Agreement
  or this Deed.

(q)

Notice
  has the same meaning as in the Shareholders Agreement.

(r)

Operator
  has the same meaning as in the Shareholders Agreement.

(s)

Parties
  has the same meaning as in the Shareholders Agreement.

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(t)

Percentage
  Interest shall have the meaning ascribed to it in the Shareholders Agreement
  and includes the benefit of all contracts and arrangements in respect of the
  Company.

(u)

Products
  has the same meaning as in the Shareholders Agreement.

(v)

Property
  has the same meaning as in the Shareholders Agreement.

(w)

Receiver
  includes a receiver and a receiver and manager and includes also the Chargee
  exercising the powers authorities and discretions of a receiver.

(x)

Security
  Interest means any bill of sale, mortgage, charge, lien, pledge, hypothecation,
  title retention arrangement, trust or power, as or in effect as security for
  the payment of a monetary obligation or the observance of any other obligation.

(y)

Shareholders
  has the same meaning as in the Shareholders Agreement.

(z)

Shareholders
  Agreement means the Shareholders Agreement dated December ___, 2006
  among the Parties and Badr Investment & Finance Company, as amended or supplemented
  from time to time.

1.2

In
  this Deed, unless the context otherwise requires:

(a)

headings
  shall not affect the construction of this Deed;

(b)

a
  reference to an Act of Parliament shall include any regulations, rules, by-laws
  and orders made under that Act, and shall include any amendment or re-enactment
  thereof;

(c)

references
  to any agreement, document or instrument shall be deemed to include references
  to the agreement, document, or instrument as amended, varied, supplemented or
  replaced from time to time;

(d)

words
  and expressions imparting the singular number shall include the plural number
  and vice versa;

(e)

the
  word including and similar expressions are not and must not be treated
  as words of limitation; and

(f)

words
  and expressions imparting natural persons shall include corporations, partnerships,
  joint ventures and other associations.



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2.

CHARGE

2.1

For
  the purpose of better securing the performance by each Party of its obligations
  under the Shareholders Agreement, each Party as the Charger hereby charges in
  favour of each other Party and the Operator as the Chargee with due and punctual
  performance of all of the Chargers obligations under the Shareholders
  Agreement, all of the Chargers present and future right, title and interest
  in to and under:

(a)

its
  Percentage Interest; and

(b)

the
  Shareholders Agreement.

2.2

This
  Deed creates a separate Charge by each Charger over the Chargers right,
  title and interest in and to the Charged Property.

2.3

This
  Charge shall not be executed and created until the commencement of Production
  Operations.

3.

RANKING
  OF CHARGE

3.1

The
  Charge created by each Party under this Deed shall rank as a first ranking charge
  over all of the Charged Property, subject, however, to full subordination behind
  any Third Party Development Debt (as defined in the Shareholders Agreement).

4.

FIXED
  AND FLOATING CHARGE

4.1

The
  Charge created by each Party under this Deed shall operate as a fixed Charge
  over that part of the Charged Property which comprises the present or future
  right, title and interest of the Charger in, to or under:

(a)

the
  Assets and Property, but only to the extent that the Assets and Property comprises:

(i)

the
  Mining Convention;

(ii)

Land;

(iii)

fixtures;

(iv)

licences,
  permits, consents and approvals;

(v)

the
  benefit of any contracts;

(b)

the
  Shareholders Agreement; and

(a)

(in
  the case of the Operator as the Charger) Products which may be required to repay
  any production financing obtained by that Party;

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and
  shall operate as the floating Charge over all of the remainder of the Charged
  Property.

4.2

After
  the occurrence of a Default the Chargee may at any time by Notice to the Charger
  determining the floating character of the Charge as regards any particular property
  specified in such Notice, and upon the giving of that Notice the Charge as regards
  such property shall become and operate as a fixed Charge and shall cease to
  be a floating Charge.

4.3

Where
  the Charge become fixed over property over which it was previously floating:

(a)

the
  Chargee may at any time by Notice to the Charger, release the property from
  the fixed Charge, whereupon that property will again be subject to the floating
  Charge;

(b)

if
  the Default is remedied, the Charge in respect of such property shall be released
  from the fixed Charge and shall again be subject to the floating Charge.

5.

DEALINGS
  WITH CHARGED PROPERTY

5.1

As
  regards that part of the Charged Property over which the Charge is floating,
  the Charger shall be free to dispose of or otherwise deal with that property
  in the ordinary course of business until such time as the Charge becomes fixed
  over that property.

5.2

As
  regards that part of the Charged Property over which the Charge is fixed, the
  Charger shall not deal with that property in any manner except in accordance
  with the Shareholders Agreement or as otherwise permitted by the Chargee.

6.

PROHIBITION
  ON FURTHER SECURITY INTERESTS

6.1

Except
  as otherwise permitted under the Shareholders Agreement, the Charger shall not
  create or suffer to exist anySecurity Interests over all or any of the
  Charged Property over which the Charge is fixed, without prior written consent
  of the Chargee.

7.

EVENTS
  OF DEFAULT

7.1

A
  Default shall occur if, for whatever reason the Charger fails to pay any contribution
  for Production Costs which are payable by the Charger under Article  15
  of the Shareholders Agreement and such failure continues for a period of thirty
  (30) Business Days following the delivery of a Notice from the Operator under
  Section 15.4 of the Shareholders Agreement.

8.

POWERS
  AND RIGHTS ON CHARGE BECOMING ENFORCEABLE

a.1

If
  a Default occurs, then the Charge shall become enforceable and the Chargee may
  take any action or proceeding necessary or desirable to exercise or enforce
  any right conferred by this Deed.

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8.2

The
  Chargees Powers are cumulative and not exclusive of any rights or remedies
  provided at law or in equity.  The powers and remedies conferred on the
  Chargee by any statute or ordinance, the general law or otherwise shall be in
  augmentation of the powers conferred by this Deed.

8.3

No
  failure to exercise and no delay in exercising, on the part of the Chargee any
  of the Chargees Powers shall operate as a waiver of those Chargees
  Powers nor shall any single or partial exercise of any Chargees power
  preclude any other or further exercise of that or any other Chargees Power.

9.

APPOINTMENT
  OF RECEIVER

9.1

At
  any time after the Charge becomes unenforceable and from time to time thereafter
  until the Default has been remedied:

(a)

the
  Chargee may appoint in writing any person or persons jointly and each of them
  severally to be a receiver of the Charged Property or any part thereof;

(b)

the
  Chargee may remove any receiver;

(c)

in
  case of the removal, retirement or death of any receiver, the Chargee may appoint
  another in his place.

9.2

The
  Chargee may at any time:

(a)

withdraw
  any receiver appointed by it; or

(b)

if
  a receiver has gone into possession of the Charged Property or any part or parts
  thereof of, direct the receiver to give up possession of the Charged Property
  or any part or parts thereof.

10.

POWERS
  OF RECEIVER

10.1

The
  receiver from time to time appointed by the Chargee shall, without any consent
  on the part of the Charger have full power:

(a)

to
  take possession of, demand, collect and get in the Charged Property;

(b)

do
  all of the things necessary to procure that the Charger complies with all of
  its obligations under the Shareholders Agreement, including the obligation to
  sell and assign its interest under the Shareholders Agreement to one or more
  of the other Parties, if required to do so under the terms of the Shareholders
  Agreement;

(a)

to
  do all of the things necessary to protect and preserve the Charged Property;



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(d)

if
  Default continues for a period of forty (40) Business Days after the Charge
  become enforceable, to sell the whole of the Charged Property either by public
  auction or private treaty or by tender for a lump sum purchase price but otherwise
  upon such other terms and conditions as the receiver considers expedient and
  to do all other acts and things for completing or enforcing such sale which
  the receiver deems necessary.

10.2

For
  the purpose of giving full effect to the powers conferred on the receiver under
  this Part, the receiver shall also have power:

(a)

to
  exercise all or any of the rights,, powers, authorities and remedies conferred
  on the Charger by any document;

(b)

to
  exercise any and all of the Chargers powers, rights, privileges and remedies
  in relation to the Charged Property;

(c)

to
  make and effect repairs and maintenance;

(d)

to
  do all of the acts and things which the Charger might do in the ordinary conduct
  of is business or for the protection or improvement of the Charge Property or
  for obtaining income or returns therefore;

(e)

to
  settle, arrange, compromise or submit to arbitration any accounts, claims, questions
  or disputes whatsoever which may arise with the third parties in connection
  with the Charged Property, and to execute releases or other discharges in relation
  thereto;

(f)

to
  insure such part of the Charged Property as is of an insurable nature against
  loss or damage by fire or other risks in such sums as the receiver thinks fit;

(g)

to
  employ or engage manages, solicitors, professional consultants, agents, auctioneers,
  Officers, clerks, workmen, servants and others;

(h)

to
  give effectual receipts for all moneys and other assets which may come to the
  hands of the receiver in exercise of the Chargees Powers;

(i)

to
  carry out and enforce specific performance or otherwise obtain the benefit of,
  exercise or perform all or any of the Chargers rights and obligations
  under all contracts the subject of the Charged Property or entered into in exercise
  of the Chargees Powers; and

(j)

to
  take such action as the receiver considers appropriate against third parties
  for the recovery or protection of the Charged Property.

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11.

GENERAL
  PROVISIONS IN RELATION TO RECEIVER

11.1

The
  Chargee may from time to time fix a reasonable level of remuneration of any
  receiver appointed by the Chargee.

11.2

Every
  receiver shall be the agent of the Charger (unless the Chargee shall by notice
  in writing to the Charger and to such receiver require shall act as the agent
  of the Chargee).

11.3

The
  Charger shall alone be responsible for the receivers acts, defaults and
  remuneration.  The Chargee shall not by virtue of the appointment of any
  receiver be responsible for the acts or defaults of the receiver.

12.

CHARGEE
  MAY EXERCISE RECEIVER'S POWERS

12.1

At
  any time after the Charge becomes enforceable and from time to time thereafter
  and notwithstanding that a receiver may or many have been appointed, the Chargee,
  without giving any notice, shall have and shall be entitled to exercise the
  same powers, authorities and discretions as a receiver would have had and been
  entitled to exercise if a receiver had been appointed under this Deed.  A
  reference in this Deed to a receiver includes a reference to the Chargee exercising
  the powers, authorities and discretions of a receiver.

13.

COSTS,
  EXPENSES AND LIABILITIES INCURRED IN CHARGEES POWERS

13.1

All
  payments made by on behalf of the Chargee or any receiver and all costs, charges,
  expenses and liabilities (including costs as between solicitor and own client)
  incurred by or on account of the Chargee or any receiver in the exercise or
  attempted exercise of any of the Chargees Powers in respect of any Default
  by the Charger shall be payable by the Charger on demand by the Chargee and
  shall be deemed to form part of the Moneys Secured.

14.

APPLICATION
  OF MONEYS

14.1

All
  moneys received by or on behalf of any receiver or the Chargee under or by virtue
  of the Charge shall be applied as follows unless the Shareholders determine
  otherwise:

(a)

first,
  in payment or reimbursement of all costs and expenses incurred by the Operator
  in taking delivery of and selling the share of Products to which the Defaulting
  Party would, but for its default, have been entitled;

(b)

second,
  against any Interest which has accrued pursuant to Section 15.9 of the
  Shareholders Agreement;

(c)

third,
  against any unpaid contributions for Production Costs and Interest of the Defaulting
  Party which have not been paid by any other Party under Section 15.7 of
  the Shareholders Agreement;

(d)

fourth,
  in payment on a pro ratabasis without preference to the non-Defaulting
  Parties of any amounts owing to them under Section 15.7 of the Shareholders
  Agreement;

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(e)

fifth,
  towards discharge of any other of the Defaulting Partys obligations
  under Article  15 of the Shareholders Agreement; and

(f)

the
  balance must be paid to the Defaulting Party.

14.2

The
  money to be paid to the Chargee shall be distributed among the Parties comprising
  the Chargee pro rata the respective proportions in which they are entitled to
  receive payment of the Moneys Secured.

15.

COVENANTS
  OF CHARGEE IN RELATION TO CHARGEES POWERS

15.1

In
  exercise of the power of sale conferred under this Deed, the Chargee shall comply
  with the requirements of the Shareholders Agreement regarding assignment of
  Percentage Interests thereunder.

15.2

Any
  time the Chargee may act in exercise of the Chargees Powers consequent
  upon a Default by the Charger, it shall forthwith notify each other Party specifying
  the event of default and the action taken.

16.

THIRD
  PARTIES DEALING WITH CHARGEE

16.1

Upon
  the exercise of any of the Chargees Powers:

(a)

a
  person dealing with the Chargee or any receiver shall not be bound to inquire
  whether any Default has been made or as to the due appointment of any receiver
  or otherwise as to the propriety or regularity of the exercise of such power;

(b)

a
  person dealing with the Chargee or any receiver shall not be affected by notice,
  express or otherwise, that any such exercise is unnecessary or improper;

(c)

notwithstanding
  any irregularity or impropriety therein, such exercise shall as regards the
  protection of a person dealing with the Chargee or any receiver, be deemed authorized
  by the Chargees Powers and shall be valid and effectual accordingly.

17.

LIMITATION
  ON CHARGEE'S LIABILITIES AND RESPONSIBILITIES

17.1

Except
  in the case of negligence or wilful act or neglect, the Chargee and any receiver
  shall not be answerable or accountable for any losses of any kind whatsoever
  which may happen in or about the exercise or attempted exercise of any of the
  Chargees Powers.

a.2

The
  Chargee shall not, by reason of the Chargee or a receiver entering into and
  taking possession of the Charged Property or any part or parts thereof, be liable
  to account as Chargee in possession for anything except actual receipts or be
  liable for any loss on realisation or for any default or omission for which
  a Chargee in possession might otherwise be liable.

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17.3

Except
  as otherwise provided in this Deed, as between the Charger on the one hand and
  the Chargee or any receiver on the other hand, the Chargee or the receiver shall
  not be under any personal obligation to perform or observe any agreement, covenant,
  condition or obligation on the part of the Charger to be performed or observed
  under any contract or agreement forming part of the Charged Property.

18.

FURTHER
  ASSURANCE

18.1

At
  any time after the Charge becomes enforceable, the Charger shall from time to
  time and at all times (at the cost and expense of the Charger) execute, make
  and do all such assurances and things as the Chargee requires for more perfectly
  assuring or facilitating the realisation of the Charged Property and for exercising
  all the Chargees Powers and, in particular, the Charger:

(a)

shall
  execute all transfers, conveyances, assignments and assurances of the Charged
  Property as directed by the Chargee;

(b)

shall
  perform or cause to be performed all acts and things requisite or desirable
  according to the law in force in any place where any part of the Charged Property
  is situate for the purpose of giving effect to the exercise of any of the Chargees
  Powers; and

(c)

shall
  give all notices, orders and directions which the Chargee thinks expedient.

18.2

From
  time to time and at all times hereafter upon the request of the Chargee and
  at the cost of the Charger, the Charger shall do and execute or cause to be
  done and executed all such acts, deeds and assurances whatsoever to perfect,
  preserve or protect the rights of the Chargee under this Deed as the Chargee
  may direct.

18.3

The
  Charger hereby irrevocably appoints the Chargee and also any Officer of the
  Chargee, and every receiver for the time being its attorneys in its name and
  on its behalf or otherwise to execute, sign, seal, deliver, register, stamp
  and do all such deeds, instruments, documents, acts and things whatsoever which
  the Chargee thinks fit for the purpose of carrying out any agreement, covenant
  or obligation imposed upon the Charger by this Charge or any of the Chargees
  Powers including, without limitation:

(a)

executing,
  signing, sealing, delivering, registering and stamping any instrument of further
  assurance or for giving to the Chargee the full benefit of any of the provisions
  of this Charge;

(b)

acceptance
  of service of any writ, summons or other legal process and appearance and representation
  of the Charger in any court in connection with the proceedings in any way relating
  to the, the Charged Property;

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(c)

selling,
  transferring and disposing of all or any part of the Charged Property including
  the Chargers interests in or rights in respect of any such property;

(d)

leasing
  or letting all or any part of the Charged Property and surrendering or obtaining
  or accepting the surrender of any such leases;

(e)

releasing,
  discharging or redeeming whether wholly or partially all or any Security Interests
  to which the Charger may be entitled from time to time and, in connection therewith,
  executing all such instruments in the name and on behalf of the Charger as may
  be required to effect any such release, discharge or redemption and where applicable,
  in such registrable form as may be required or desirable for the time being;
  and

(f)

to
  do all such acts, matters and things and sign and execute all such deeds, agreements,
  documents, papers and instruments as may be necessary in order to exercise the
  powers hereby conferred as fully and effectually to all intents and purposes
  as the Charger could do on its own account,

and
  generally to use the Chargers name in the exercise of all or any of the
  Chargees Powers, and the Charger rectifies and confirms and agrees to
  ratify and confirm all acts, matters and things done in exercise of the powers
  conferred by this clause to preserve the rights of the Chargee, provided however,
  that the Chargee shall not exercise the powers conferred by this Section 18.3
  unless a Default has occurred.

19.

CHARGERS
  OBLIGATION UNCONDITIONAL AND NOT OTHERWISE AFFECTED

19.1

This
  Deed and the duties, obligations and liabilities of the Charger hereunder shall
  not be abrogated, prejudiced, affected or discharged:

(a)

by
  the granting to the Charger, or any other person of any time, credit, forbearance,
  concession or other indulgence or consideration;

(b)

by
  any other laches, acquiescence, delay, acts, omissions or mistakes on the part
  of the Chargee or any other person;

(c)

by
  any person or company now or hereafter becoming a guarantor;

(d)

by
  any alteration or addition to any Collateral Security with or without the concurrence
  of the Charger;

(e)

by
  any insolvency, bankruptcy, reorganisation or cessation of existence of any
  entity or person; or

(f)

by
  any other matter whatsoever.

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19.2

Nothing
  herein or in any further or other assurance or Collateral Security taken by
  the Chargee shall extinguish, merge, postpone, lessen or otherwise prejudice
  the Charge hereby created.

20.

REGISTRATION

20.1

Each
  corporate Charger shall within the time limits prescribed under any applicable
  laws, at the cost and expense of the Charger duly register, record or file this
  Deed or a copy thereof in each place where it is necessary so to do in order
  to perfect or preserve the Charge and the priority of the Charge and the enforceability
  of the Charge in accordance with its terms.

21.

ASSIGNMENT

21.1

This
  Deed shall be binding upon and inure to the benefit of the Charger, the Chargee
  and the respective successors, transferees and assigns of their respective rights
  and interests under the Shareholders Agreement.

21.2

In
  this Deed, references to the Charger and the Chargee, shall be deemed to be
  references to or include as appropriate, their respective successors, transferees
  and assigns of their respective rights and interests under the Shareholders
  Agreement.

22.

TERM
  AND DISCHARGE OF SECURITY

22.1

The
  Charge shall continue in force until such time as the Shareholders Agreement
  has been terminated in accordance with the provisions thereof, and full settlement
  has been made between the Parties to the Shareholders Agreement.  The continuance
  of the Charge shall not be affected by any settlement of account, intervening
  payment or other matter or thing whatsoever.

22.2

Upon
  termination of the Charge in accordance with the terms of this Deed, the Chargee
  shall at the request and expense of the Charger discharge, surrender or release
  the Charged Property from the Charge.

22.3

If
  any payment made under or pursuant to this Deed is avoided for any reason whatsoever
  by statute or otherwise, whether from the time of such payment or from any later
  date then, notwithstanding any discharge or release given in respect of the
  Charge, and notwithstanding that the Charger may otherwise have been entitled
  to be released from the Charge, the Charge shall operate as if no such payment
  had been made or discharge or release given.

22.4

The
  provisions of this Deed shall survive for so long as may be necessary or desirable
  to give full effect thereto.

23.

GENERAL

23.1

All
  Notices to be given by or pursuant to this Deed shall be given in accordance
  with the provisions of the Shareholders Agreement regarding the service of Notices.

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23.2

This
  Deed shall be governed by and construed in accordance with the laws in force
  in the British Virgin Islands and the parties hereby irrevocably attorn to the
  jurisdiction of the courts thereof.

23.3

This
  Deed is subject to any and all approvals as may be required under Le Code
  Miner of 1992 the République du Sénégal or any successor
  statute thereto and the parties covenant and agree to each use their best efforts
  to obtain any and all such approvals as may be necessary in order to give effect
  to the provisions of this Deed.

23.4

The
  provisions of this Deed may only be amended, varied, supplemented or waived
  by an instrument or instruments in writing signed by the Parties.  No amendment,
  variation, supplement or waiver shall be valid or enforceable unless it is contained
  in a document executed by the Parties.

23.5

This
  Deed shall take effect according to its tenor notwithstanding any other prior
  agreement in conflict or variation with it or any correspondence or documents
  which may have passed between the parties or may have been executed by all or
  any of them prior to the execution of this Deed.

Executed
  by the parties as a deed.

|                                                                                     | 
|------------------------------------------------------------------------------------ | 
|SABODALA
        HOLDING LIMITEDSigned:(Chet Idziszek)Per: Authorized Signatory    | 
|BENDON
        INTERNATIONAL LTD.Signed:(Gerald McDuffee)Per: Authorized Signatory | 



















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SCHEDULE
  E

MINING
  CONVENTION































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AMENDMENT

THIS
  AMENDMENT AGREEMENT (this Amendment), dated as of January 1, 2007,
  relating to the Shareholders Agreement, dated as of December 18, 2006.

BETWEEN:

OROMIN
  JOINT VENTURE GROUP LTD.,a company incorporated under the laws
  of the British Virgin Islands having its registered office at Craigmuir Chambers,
  P.O. Box 71, Road Town, British Virgin Islands

(the
  Company)

OF
  THE FIRST PART

AND:

BADR
  INVESTMENT & FINANCE COMPANY, a company incorporated under the laws
  of Panama having an office at P.O. Box 9966, Jeddah 21413, Kingdom of Saudi
  Arabia

(Badr)

OF
  THE SECOND PART

AND:

BENDON
  INTERNATIONAL LTD., a company incorporated under the laws of the British
  Virgin Islands having its registered office at Craigmuir Chambers, P.O. Box
  71, Road Town, British Virgin Islands

(Bendon)

OF
  THE THIRD PART

AND:

SABODALA
  HOLDING LIMITED, a company incorporated under the laws of the British
  Virgin Islands having its registered office at Craigmuir Chambers, P.O. Box
  71, Road Town, British Virgin Islands

(Sabodala)

OF
  THE FOURTH PART

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WHEREAS:

A.

The
  Company, Badr, Bendon and Sabodala entered into a Shareholders Agreement, dated
  as of December 18, 2006 (the Agreement);

B.

The
  aforesaid Parties now wish to amend certain provisions of the Agreement to reflect,
  among other items, the elimination of the Overhead Charge as of January 1, 2007;

C.

In
  consideration of the mutual promises contained herein and other good and valuable
  consideration, the Company, Badr, Bendon and Sabodala have agreed to enter into
  this Amendment.

NOW
  THEREFORE THIS AMENDMENT WITNESSESin consideration of the mutual promises
  contained in this agreement and for other good and valuable consideration (the
  receipt and sufficiency of which are hereby acknowledged), the Parties agree
  as follows:

1.

INTERPRETATION

1.1

Wherever
  used in this Amendment, unless the context requires otherwise:  (i) terms
  defined in the recitals shall have the meanings assigned to them in such recitals
  and (ii) terms not otherwise defined herein that are defined in the Agreement
  shall have the same meanings when used in this Amendment.

1.2

Except
  as set forth in clause 2 (Amendatory Provisions) below, Article 1
  (Interpretation) of the Agreement shall apply herein, mutatis mutandis,
  as if set out in this Amendment in full.

1.3

Reference
  to the word Section in this Amendment shall mean a Section in the Agreement.

1.4

Reference
  to the word Article in this Amendment shall mean an Article in the Agreement.

2.

AMENDATORY
  PROVISIONS

2.1

In
  Section 1.1 (Interpretation), the phrase in parentheses shall be
  deleted from the definition of the term Costs appearing in Section 1.1(t).

2.2

In
  Section 1.1 (Interpretation), subsection (i) shall be deleted from
  the definition of the term Development Costs appearing in Section 1.1(x).



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2.3

In
  Section 1.1 (Interpretation), the phrase, including the Overhead
  Charge, shall be deleted from the definition of the term Exploration Costs
  appearing in Section 1.1(cc).

2.4

In
  Section 1.1 (Interpretation), the definition of the term, Overhead
  Charge, which is located in Section 1.1(ss), shall be deleted in its entirety.
   However, the numbering for subsequent clauses in Section 1.1 shall
  not be changed on account of such deletion.

2.5

In
  Section 1.1 (Interpretation), the phrase, including the Overhead
  Charge, shall be deleted from the definition of the term Production Costs
  appearing in Section 1.1(yy).

2.6

Article 11
  (Overhead Charges) shall be deleted in its entirety.  However, the
  numbering for subsequent Articles shall not be changed on account of such deletion.

2.7

In
  Section 2.1 (Direct Charges) of Schedule C (Accounting Procedure)
  to the Agreement, subsection (m) (Overhead Charges) shall be deleted
  in its entirety.

2.8

Section 4.14
  (Directors and Shareholders) shall be amended by adding the following
  new second sentence:

Notwithstanding
  the foregoing, in the event that the Percentage Interest owned by the Operator
  (together with any Percentage Interest owned by its Affiliate, if applicable)
  falls below a twenty percent (20%) Percentage Interest, then the Operators
  Representative shall no longer be the chairman of Shareholders meetings,
  and the Shareholders who are present shall instead elect a chairman from amongst
  their number; provided, however, that in the event the reduction in Operators
  Percentage Interest below the twenty percent (20%) threshold is solely due to
  a sale by the Operator of part of its Percentage Interest as a Remaining Shareholder
  (defined below) who has elected to receive the benefits of its tag-along rights
  pursuant to Sections 24.14(c) and (d) below, then the twenty percent (20%)
  threshold shall be reduced to ten percent (10%) for purposes hereof.

2.9

Section 5.3(a)
  (Operator) shall be modified by adding the following language at the
  end:

;
  provided, however, that with respect to the initial Operator which is Sabodala,
  in the event that Sabodalas Percentage Interest in the Company is reduced
  below twenty percent (20%) by sale or other transfer, then the remaining Shareholders
  other than Sabodala or any transferee or successor owner of Sabodalas
  shares may remove the initial Operator upon one (1) months notice and
  designate a new Operator; provided, further, that in the event the reduction
  in Operators Percentage Interest below the twenty percent (20%) threshold
  is solely due to a

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sale
  by the Operator of part of its Percentage Interest as a Remaining Shareholder
  (defined below) who has elected to receive the benefits of its tag-along rights
  pursuant to Sections 24.14(c) and (d) below, then the twenty percent (20%)
  threshold shall be reduced to ten percent (10%) for purposes hereof.  Additionally,
  if the transferee or successor owner of Sabodalas shares is a third-party
  recipient of such shares as a result of Sabodalas exercise of its tag-along
  rights, then the above-referenced voting restriction shall not be applicable
  to such third party.

2.10

Section 24.2
  (Partition and Restriction on Alienation) shall be modified by adding
  the following new sentence at the end:

If
  the ultimate owner(s) of a Party that is a Shareholder have/has established
  or own one or more controlled entities whose sole or primary business relates
  to the Property between themselves and the ownership of their/its Percentage
  Interest in the Company and they/it attempt(s) to transfer, convey, assign,
  mortgage, Charge, grant an option in respect of or grant a right to purchase
  all or any portion of their/its direct or indirect interest in such Shareholder
  rather than effect a direct transfer of such Shareholders Percentage Interest
  or rights under this Agreement, then such upper-tier direct or indirect transfer,
  conveyance, etc. shall be covered by the provisions and restrictions of this
  Article 24 in the same manner as a direct transfer of said Shareholders
  Percentage Interest in the Company; provided, however, that in the event the
  provisions of Section 24.4 or 24.5 are applicable to such upper-tier transfer,
  the other Shareholders may elect to receive the applicable corresponding amount
  of such Shareholders Percentage Interest in the Company.

2.11

Section 24.9
  (Partition and Restrictions on Alienation) shall be modified by adding
  the following new language at the end:

;
  provided, however, that Offerors right to complete any such sale of all
  or part of its Percentage Interest shall first be subject to satisfaction of
  the provisions relating to tag-along rights set forth in Section 24.14
  below.







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2.12

The
  following new Section 24.14 shall be inserted:

24.14

(a) Subject
  to the other provisions of this Agreement, if at any time or from time to time
  one or more third-party purchaser(s) (other than an Affiliate of the Selling
  Shareholder, as defined below) either directly or indirectly propose(s) to purchase
  or otherwise acquire for value from any Shareholder (a Selling Shareholder)
  all or any part of the Percentage Interest then held by such Selling Shareholder,
  whether in a single or a series of transactions, and the Offerees have not elected
  to accept the Offer to purchase the entire Percentage Interest offered for sale
  pursuant to Sections 24.5-24.9 above, then any such purchase or acquisition
  of the Selling Shareholders Percentage Interest (which Percentage Interest
  shall have been reduced to the extent applicable if Offerees have already elected
  to purchase directly a portion of said Percentage Interest initially offered
  to the third-party purchaser pursuant to Sections 24.5-24.9) shall be conditioned
  upon such third-party purchaser(s) agreeing to purchase or acquire from every
  other Shareholder which was not an Offeree that elected to purchase a Percentage
  Interest pursuant to Sections 24.5-24.9 (a Remaining Shareholder),
  on the same terms and conditions as would be received by such Selling Shareholder
  and otherwise as specified in this Section, at such Remaining Shareholders
  option as notified by such Remaining Shareholder to such Selling Shareholder
  and third-party purchaser(s) in writing, such Remaining Shareholders Pro
  Rata Share (as defined below) of the amount of the Percentage Interest proposed
  to be sold to the third-party purchaser.

(b)

For
  the purposes of this Section 24.14 the Remaining Shareholders Pro
  Rata Share shall mean the ratio of (i) the Percentage Interest
  to be purchased or otherwise acquired for value by such third-party purchaser(s)
  from such Selling Shareholder to (ii) the total Percentage Interest then
  owned by such Selling Shareholder, in both cases taking into account any adjustments
  resulting from the operation of Sections 24.5-24.9.  To the extent
  any third-party purchaser refuses to purchase additional Percentage Interests
  from the Remaining Shareholders pursuant to the preceding sentence, then the
  amount of the Percentage Interest sold by the Selling Shareholder shall be reduced
  in order to allow each electing Remaining Shareholder to sell its pro rata portion
  of the Percentage Interest to be sold to the third-party purchaser, which pro
  rata portion shall equal the same percentage as the Percentage Interest of such
  applicable Remaining Shareholder.

(c)

As
  soon as (i) one or more third-party purchaser(s) have made an offer to
  purchase or acquire for value any Percentage Interest held by a Selling Shareholder,
  and (ii) it has been determined the extent to which Offerees have elected
  to purchase a portion of the Percentage Interest pursuant to Sections 24.5-24.9,
  such Selling Shareholder shall give notice to each Remaining Shareholder (hereinafter
  in this Section, the Sale Notice) setting out at least the following
  particulars:

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(i)

the
  proposed price or other consideration for the Percentage Interest (after taking
  into account the effects described in (c)(ii) above) and the terms and conditions
  of their payment;

(ii)

the
  identity of and all other relevant material information concerning the third-party
  purchaser(s); and

(iii)

all
  other material terms and conditions for the proposed purchase or acquisition.

(d)

Each
  Remaining Shareholder shall exercise its right under subsection (a) above by
  giving notice in writing to the Selling Shareholder and to the third-party purchaser(s),
  within a period of fifteen (15) days from the date of such Remaining Shareholders
  receipt of such Selling Shareholders Sale Notice, of the amount of the
  Percentage Interest the Remaining Shareholder wishes to sell or otherwise transfer
  to the third-party purchaser(s), which amount cannot exceed its applicable Pro
  Rata Share.  Each such Selling Shareholder and/or the third-party purchaser(s)
  shall provide to the Remaining Shareholder, during this period, all information
  requested by such Remaining Shareholder pertaining to the proposed purchase
  or acquisition.  Upon the exercise by the Remaining Shareholder of its
  right under subsection (a) above by giving notice as aforesaid, such Selling
  Shareholder shall be obligated to cause the third-party purchaser(s) to purchase
  or otherwise acquire and pay for the Remaining Shareholders applicable
  Percentage Interest set forth in such notice; subject, however, to the provisions
  of the second sentence of Section 24.14(b) above.

(e)

Subject
  to subsections (c) and (d) above, the Selling Shareholder shall have a period
  of thirty (30) days from the expiration of the relevant period of analysis set
  forth in subsection (d) to sell to or otherwise dispose of the Percentage
  Interest to be purchased by the third-party purchaser(s) identified in such
  Selling Shareholders Sale Notice, upon terms and conditions (including
  the purchase price or other consideration) no more favorable to the third-party
  purchaser(s) than those specified in such Sale Notice.  If such Selling
  Shareholder does not consummate the sale or disposition of the Percentage Interest
  to be purchased within said thirty (30) day period from the expiration of the
  relevant period of analysis, the Remaining Shareholders tag-along rights
  shall be applicable to any subsequent proposed purchase or other acquisition
  for value of the Percentage Interest by such Selling Shareholder (whether to
  the same or different third-party purchaser(s)) in accordance with the terms
  of this Section.

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(f)

Each
  Shareholder shall, if requested, represent and warrant to the third-party purchaser,
  in connection with any sale or other disposition by such Shareholder of its
  Percentage Interest under this Section, that (i) it has good and valid title
  to, and there are no material liens on, the Percentage Interest being sold or
  disposed of, (ii) it has the authority to enter into and comply with any agreement
  made by it in connection with such sale or other disposition, and (iii) any
  such agreement is valid and binding upon it, but (iv) it shall not be required
  to make any other representations and warranties.

2.13

Section 27.1
  (Notice) shall be modified to reflect the following:

Every
  Notice shall be in writing and shall be given by the delivery of same or by
  mailing same by prepaid registered or certified mail or by sending same by telegram,
  telex, telecommunication, e-mail, facsimile or other similar form of communication,
  in each case addressed of the respective Party set out in the first page hereof
  or, if by e-mail or facsimile, respectively, to the Company at jgoodman@fulbright.com
  or *(202) 662-4643; to Badr at badr.i.f.@hotmail.com
  and snbint@yahoo.fr or *9662-605-1116; to
  Bendon at geraldmcduffee@aol.com or *9662-694-3466;
  and to Sabodala at jstewart@mine-tech.com
  and soda@mine-tech.com or *(604) 331-8773.

3.

NO
  FURTHER CHANGES

3.1

Except
  as provided herein, all the remaining provisions of the Agreement shall remain
  unchanged, valid and binding on all the Parties.

4.

REPRESENTATIONS
  AND WARRANTIES

4.1

For
  the benefit of each Party, the representations and warranties made in Article 3
  (Representations and Warranties) of the Agreement shall be deemed repeated
  as of the date hereof.

5.

AMENDMENTS,
  WAIVERS AND CONSENTS

5.1

Any
  amendment, waiver or modification of any provision of this Amendment shall be
  in writing and signed by each of the Parties.



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6.

GOVERNING
  LAW

6.1

Any
  dispute, claim or controversy arising out of or relating to this Amendment,
  or the performance, breach, validity, interpretation, application or termination
  thereof (Dispute), shall be resolved in accordance with the procedures
  specified in Article 35 (Dispute Resolution) of the Shareholders
  Agreement, which shall be the sole and exclusive procedures for the resolution
  of any such Disputes.

7.

SUCCESSORS
  AND ASSIGNS

7.1

Section 34.1
  (Successors and Assigns) of the Agreement shall apply herein, mutatis
  mutandis, as if set out in this Amendment in full.

8.

COUNTERPARTS

8.1

This
  Amendment may be executed in any number of counterparts, each of which shall
  be an original, but all of which shall constitute one and the same Amendment.















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IN
  WITNESS WHEREOFthe Parties have executed this Amendment as of the
  day, month and year first above written.

|                                                                                          | 
|----------------------------------------------------------------------------------------- | 
|OROMIN
        JOINT VENTURE GROUP LTD.Signed(Mustafa Darwish)Per: Authorized Signatory | 
|BENDON
        INTERNATIONAL LTD.Signed:Gerald McDuffeePer: Authorized Signatory        | 
|BADR
        INVESTMENT & FINANCE COMPANYSigned:Ayman FadilPer: Authorized Signatory    | 
|SABODALA
        HOLDING LIMITEDSigned:Chet IdziszekPer: Authorized Signatory           | 







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|45869980.5 | 9 | 





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REPUBLIC OF SENEGAL

------------------

MINISTRY OF ENERGY
  AND MINES

------------------

DIRECTION OF MINES
  AND GEOLOGY





ANALYSIS:

Bearing
  transfer and extension of the mining exploration permit for gold and related
  substances to OROMIN Joint Venture Group Explorations Ltd.; (perimeter
  of Sabodala 230 km2)



---------------------------------------------------------------------



THE
  MINISTER OF ENERGY AND MINES



CONSIDERING

the
  Constitution, in particular in its Articles 43 and 76



CONSIDERING

the
  law No. 64-46 of 17 June 1964 relating to the National Domain and texts taken
  for its application



CONSIDERING

the
  law No. 2003-36 of 24 November 2003 bearing mining code



CONSIDERING

the
  decree No. 2004-561 of 21 April 2004 bearing appointment of the Prime Minister



CONSIDERING

the
  decree No. 2004-580 of 30 April 2004 relating to the attributions of the Minister
  of Energy and Mines



CONSIDERING

the
  decree No. 2004-647 of 17 May 2004 laying down the methods of application of
  the mining Code



CONSIDERING

the
  decree No. 2006-1315of 23 November 2006 bearing refitting of the Government



CONSIDERING

the
  decree No. 2006-1333 of 27 November 2006 bearing distribution of the services
  of the State and control of the Public-owned establishments, national companies
  and companies with public participation between the Presidency of the Republic,
  the Prime Ministers Services and the Ministries



CONSIDERING

the
  request for transfer of Oromin Explorations Ltd. No. DWM/OB/No.
  002/07 Dion in favour of Oromin Joint Venture Group Ltd dated January
  5, 2007



E-286



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CONSIDERING

the
  request for extension of Oromin Explorations Ltd No. DWM/OB/No.
  003/07 dated January 8, 2007



ON
  report of the Director of the Mines and Geology



DECREE



ARTICLE
  1:

The
  ministerial Decree no. 00918 of March 4th 2005 bearing attribution
  of the mining exploration permit for gold and related substances to Oromin
  Explorations Ltd; is transferred to OROMIN Joint Venture Group Ltd
  and extended



ARTICLE
  2

The
  exploration permit is extended for a period of 20 months



ARTICLE
  3

The
  minimum amount of the commitment of expenses during the period of extension
  is fixed at twelve million US dollars (12,000,000 US$)



ARTICLE
  4

All
  the provisions of articles 2, 5, 6 and 7 of the decree 00918 of 4 Mars 2005
  bearing attribution of the exploration permit remain unchanged



ARTICLE
  5

This
  decree takes effect as from April 22nd 2007, date of expiration of
  the decree 00918 of March 4th 2005



ARTICLE
  6

The
  Governor of Tambacounda, the Director of the Mines and Geology are charged,
  each one in what concerns him, of the execution of this decree which will be
  published everywhere where need will be.







The
  MINISTER OF ENERGY AND MINES



Madicke
  NIANG



CC:

-
      Secretary-General of the Presidency

-

Secretary
  General of the Government

-

Ministry
  of Energy and Mines

-

Ministry
  of Economy and Finances

-

Direction
  of Domains



E-287



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-

Governor
  of Tambacounda

-

Prefect
  of Kédougou

-

Sub-prefect
  of Saraya

-

Regional
  Service of Energy and Mines of Tambacounda

-

Concerned

-

Official
  Journal of the Republic of Congo





















*  To
  view the original French version, of the above English translation, complete
  with official governmental stamps please refer to the graphic attachment to
  this filing.





E-288



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