UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-KSB





[xx]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JULY 31, 2003



[   ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____ TO ____



Commission file Number:  0-32523



LIONS GATE INVESTMENT LIMITED

(Name of small business issuer in its charter)



Nevada

(State or other jurisdiction of incorporation or organization)



98-0222710

(I.R.S. Employer Identification Number)



P.O. Box 86020, 2106 - 33rd Avenue, S.W.

Calgary, Alberta, T2T 1Z0     Canada

(Address of principal executive offices)



(403)606-7696

(Issuer's telephone number)



Securities registered under Section 12(b) of the Exchange Act:

None



Securities registered under Section 12(g) of the Exchange Act:

Common Shares



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



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of Issuer's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  [ X ]



The Issuer's revenues for its fiscal year ended July 31, 2003 were $0.00.



The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant was $415,000 as of the closing price of $0.05 per share on July 31, 2003 on the OTC Bulletin Board.



On July 31, 2003, the number of shares outstanding of the registrant's Common Stock was 10,600,000.



Transitional Small Business Disclosure Format (Check one):  Yes ____; No __X__



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2





PART I

BUSINESS



Item 1.  Description of Business



We are a junior oil and gas exploration company.  The acquisition of our royalty interest on February 14, 2001 constituted the start up of our operations.  We have a 2% overriding royalty on certain petroleum producing lands in the Province of Alberta, Canada known as Edgerton "27" and located at Township 42, Range 3 West 4 Meridian, Section 27.  We acquired our royalty in an arm's length negotiation with Mr. N. Desmond Smith of Calgary, Alberta in consideration for 100,000 of our common shares at a deemed price of $0.50 per share.  Following our acquisition of the royalty, we offered Mr. Smith the position of President of our company.  Mr. Smith will be overseeing our initial exploration in the Wainwright area and has been given the task of assembling our portfolio of oil and gas exploration properties in western Canada and the western United States.



Since acquiring our royalty interest, we have obtained a comprehensive library of geophysical data in the area of our initial property.  This geophysical data library is comprised of data which has been acquired by third parties and which is available for purchase through seismic data brokers.  We currently have funds available to acquire geophysical seismic data in the area of our royalty interests.  The geophysical seismic data which we obtain will be examined by management for anomalous characteristics.  This purchase of geophysical seismic data and evaluation by management constitutes our phase one exploration program in the Wainwright, Alberta area.  In the event anomalous characteristics are identified by management on the geophysical data which is examined, we will conduct a geophysical acquisition program of approximately 10 kilometers either exclusively or with a joint venture partner.  This program will involve permitting, seismic acquisition, processing and interpretation.  This will constitute our phase two exploration program in our area of interest.  We currently have funds on hand to finance this second phase of exploration.



Item 2.  Description of Property



Office Premises



We operate from our offices at 2106 - 33rd Avenue, S.W., Calgary, Alberta, T2T 1Z0, Canada.  Space is provided to us on a rent free basis by Mr. Smith, a director of the Issuer.  We are not a party to any lease.  It is anticipated that this arrangement will remain until we are able to generate revenue from operations and require additional office space for new employees.  Management believes that this space will meet our needs for the foreseeable future.



Oil and Gas Properties



Our 2% gross overriding royalty burdens the petroleum and natural gas lands described as Section 27, Township 42, Range 3, West 4 Meridian in the Province of Alberta, Canada.  There are currently 10 wells situated on the property of which five are producing oil wells and one is a formation water disposal well.  Harbour Petroleum Company Limited initially drilled the wells and operatorship has been transferred to Talisman Energy Inc.



The property is located approximately 120 miles east of Edmonton, Alberta.  The property has been on continuous production since 1994.  In 1994, Talisman Energy Inc. became the operator and placed the five producing wells on stream.  The wells cumulatively produce approximately 40 barrels of oil per day generating approximately CDN$850 per month as our royalty.  The producing wells are identified as:

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3



Harbour Talisman Chauvs 10-27-42-3W4M

Harbour Talisman Chauvs 11-27-42-3W4M



Harbour Talisman Chauvs 14b-27-42-3W4M

Harbour Talisman Chauvs 14d-27-42-3W4M

Harbour Talisman Chauvs 15-27-42-3W4M



Geology in the area of our royalty interest



The Sparky Formation is a shallow water deltaic to offshore bar sequence of clastic sediments deposited into a regressive Lower Cretaceous Boreal sea.  The Formation is one of seven distinct units of the Upper Mannville group that constitutes regressive and transgressive marine incursions into the mid continent from the northern Boreal sea of the Cretaceous Age.  The source of sediments for the Sparky Formation is the Canadian Shield and the Western Cordillera.  The Sparky is underlain by the coal sequence of the general petroleum formation and capped by the sparky coal unit.



In the area of our royalty interest the Sparky is 20-30 metres (65-100 feet) in thickness with reservoir net pay approaching 10 metres (35 feet).  The oil is deemed to be heavy with an API ranging from 20 to 26 degrees.  The main reservoir is a well-sorted quartzose siltstone/sandstone unit.



Hydrocarbons are entrapped by stratigraphic limitations pinching out to the structurally up dip (north east) direction.  Occasionally the reservoir sands are truncated by post depositional channel cuts of the next sequence of continental transgression into the seaway.



Item 3.  Legal Proceedings



We are not a party to any legal proceedings.



Item 4.  Submission of Matters to a Vote of Security Holders



The Issuer's 2003 annual general meeting is scheduled to be held on December 5, 2003 at Suite 1000, 409 Granville Street, Vancouver, British Columbia at 10:00 a.m.  The Issuer's security holders will be requested to elect new directors, to appoint the Issuer's auditors for the 2003/2004 fiscal year and to ratify all actions taken by the officers and directors of the Issuer the preceding year.  No other business is expected to be brought before the Issuer's shareholders at the 2003 annual general meeting.  The Issuer's notice of annual general meeting, Schedule 14A proxy statement and proxy are being filed separately and are incorporated herein by reference.



PART II



Item 5.  Market for Common Equity and Related Stockholder Matters



The Issuer's shares are quoted and listed for trading o the OTC.BB under symbol "LGIV".  The Issuer is fully reporting.



There are an undetermined number of shareholders holding our issued common shares.  The aggregate market value of the voting and non-voting stock held by non-affiliates of the Issuer was $415,000 as of the closing price of $0.05 per share on July 31, 2003 on the OTC.BB.  There are no options and warrants to purchase additional common shares of the Issuer.

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4





The Issuer does not expect to pay a dividend on its common stock in the foreseeable future.  Payment of dividends in the future will depend on the Issuer's earnings and its cash requirements at that time.



Item 6.  Plan of Operation



Geophysical Data Audit



We commenced the initial stage of our business plan in June, 2001.  We are examining suitable trade geophysical data available in the immediate vicinity of our current royalty interest.  Our examination of trade data brokers' inventory will determine the geographic location, age and parameters of existing data with a view to acquiring and re-processing suitable data.  The study is anticipated to take approximately 60 days and acquisition and processing will take an additional 30 days.  The activity of data acquisition involves our company reviewing currently available seismic data for quality and technical merit and purchasing that geophysical data in the geographic area of our proposed activity.  This data is recorded digitally and can be manipulated through the application of various filters and processes which clarify the data from extraneous seismic noise.  This constitutes reprocessing seismic data.  This activity is conducted by geophysicists with specialized training.



The estimated costs of this initial program are:



Data Acquisition - 20 kilometers (12.5 miles) @ $260 per kilometer:

$5,200

Re-processing - @ $194 per kilometer:

$3,880

Consultant - Identification and monitoring reprocessing

@ $325 per day for 10 days:

$  3,250



Total:

$12,330



Geophysical Acquisition Programme



The initial geophysical audit programme will identify selected areas that require specific data acquisition to define drilling targets.  The programme may be structured as a geophysical farm-in with a drilling option or we may elect to acquire the data on open Crown Lands.  In the first case we will contract with property owners or the owners of hydrocarbon rights to allow us to acquire data in exchange for an option to drill on the subject lands if our geophysical data defines a prospective drilling target.  In the second case, we would acquire the proprietary data with a view to requesting the Province of Alberta to post the lands for public auction.  In either case we would secure the optimum drilling locations.  If our company pursues a geophysical farm-in, it means that we have negotiated the rights to petroleum and natural gas lands by acquiring geophysical data over lands currently owned by a third party.  The negotiations involve offering the third party the acquired geophysical data at no cost in return for the exclusive right to drill a well on the petroleum and natural gas lands in order to earn a portion of the petroleum and natural gas rights.  If petroleum and natural gas rights over certain lands have not been leased by the government to oil and gas companies, those lands are considered to be open lands.  In this case, there are no parties to negotiate farm-ins with as the petroleum and natural gas rights over open lands are available only through government run auctions.



Management of the Issuer is working on our phase one exploration program having acquired a library of available geophysical data in our area of interest.  Management expects to identify which data it will acquire and re-process before the end of calendar 2003.  Our phase two geophysical acquisition program is currently scheduled for the spring of 2004.



The estimated costs of a geophysical exploration programme are:

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5





Permitting and Right of Way @ $970 per kilometer

-10 kilometers:

$9,700

Acquisition @ $1,290 per kilometer:

$12,900

Processing and Interpretation:

$ 4,500



Total:

$27,100



Drilling Option



We currently do not have the funds necessary to pursue a drilling program following our first two phases.  However, in the event drill targets are identified and we are able to raise funding independently or through industry partners, we would consider the following options.



We would use our geophysical audit and acquisition data as an enticement to lessors of mineral rights to trade our data for the right to drill an earning well on the petroleum and natural gas rights at no additional cost to the lessor.  We would seek to recover our drilling cost from the sale of the first hydrocarbons and after recovery of these costs share in future development and profits at the negotiated rates.



Alternatively, should our geophysical acquisition delineate a drilling target on open Crown lands, we would place a bid to acquire a lease to the lands at a regulated open auction.  Current land prices vary from $400 to $1500 dollars per acre and the size of the offered lands could be as high as 640 acres.  In this scenario the Issuer would not share the interest in the mineral rights with third parties.



Drilling option scenario costs are:



Drilling one well to a depth of 750 metres:

$162,000



Total:

$162,000



Land acquisition scenario costs are:



Acquiring 640 acres @ $645 per acre:

$412,800

Drilling costs per well @ eight wells:

$1,296,000



Total:

$1,708,800



Item 7.  Financial Statements



Our audited financial statements for the fiscal year ended July 31, 2003 are included as part of this Form 10KSB following the signature page of this Form 10KSB.



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



We have had no disagreements on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure with any of our accountants for the fiscal year ending July 31, 2003.



On July 15, 2003, our board of directors dismissed our current independent accountants, Dohan & Company, P.A. and engaged the firm of Moore Stephens Ellis Foster as our new independent accountants.

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6



PART III



Item 9.  Directors, Executive Officers, Promoters and Control Persons;

Compliance with Section 16(a) of the Exchange Act.





Biographical Information on our Officers and Directors:



N. DESMOND SMITH was appointed to his positions on March 23, 2001.  Mr. Smith devotes his time to our company on an as needed basis which he expects to be approximately 20 hours per month initially.  Mr. Smith is a professional geologist, B.Sc. (Honors) Geology, University of British Columbia, 1975.  Mr. Smith has 26 years experience in oil and gas exploration development including positions as geologist with Hudson Bay Oil and Gas Company Limited and Canada City Services Ltd.  Mr. Smith was also a senior geologist with Harbour Petroleum Company Limited.  In 1981, Mr. Smith co-founded Tai Resources Ltd. for which he acted as director and president until 1994.  Under Mr. Smith's direction, Tai Energy completed equity financings totaling approximately $12 million and increased its portfolio of petroleum and natural gas assets to a point which qualified the company for a listing on the Toronto Stock Exchange in 1993.  Tai Energy was the subject of a friendly takeover bid by Maxx Petroleum in 1994.  Following the takeover, Mr. Smith accepted a consulting position as chief operating officer of Commonwealth Oil & Gas Company Limited.  Mr. Smith remained with Commonwealth Oil & Gas Company Limited from 1995 to 2000 during which time he co-negotiated the first onshore exploration, development and production sharing agreement in the Republic of Azerbaijan.  During this period of time, Commonwealth's parent company was successful in raising equity financing of over $17 million.  From 2000 to the present, Mr. Smith has worked with Texas T Resources Inc. and Nostra Terra (Overseas) Ltd. in the positions of director/president and manager respectively.  Mr. Smith's chief responsibilities with these companies has been to co-ordinate the exploration, development and production of hydrocarbons by consulting geologists and geophysicists.



KEITH EBERT was appointed to his positions on July 15, 2003.  Mr. Ebert is a qualified Mechanical Engineer BA Sc., MECH (UBC) (1987).  For the period from May, 1997 to the present, Mr. Ebert has been self employed managing his investment portfolio.  Mr. Ebert worked for Marleau, Lemire Securities Inc. from February, 1993 to July, 1995 as manager of North American West Coast institutional sales.  Mr. Ebert worked for C.M. Oliver & Co. Ltd. from July, 1995 to May, 1997 as manager of North American West Coast institutional sales.  Marleau, Lemire Securities Inc. and C.M. Oliver & Co. Ltd. were broker dealers registered by the Investment Dealers Association of Canada.  In addition to being a qualified mechanical engineer, Mr. Ebert has passed the Canadian Investment Dealers Association's branch manager's exam and partners, directors and officers' exam.  Mr. Ebert acted as branch manager of C.M. Oliver & Co. Ltd. in London, England from October, 1995 to January, 1997.



There are no family relationships among the directors or executive officers of the Issuer.



No director or executive officer of ours has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it.  No director or executive officer of ours has been convicted of a criminal offence or is the subject of a pending criminal proceeding.  No director or executive officer of ours has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities.



No director or officer of ours has been found by a court to have violated a federal or state securities or commodities law.

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7



Item 10.  Executive Compensation



Compensation received by officers, directors, and management personnel will be determined from time to time by our Board of Directors.  Officers, directors, and management personnel will be reimbursed for any out-of-pocket expenses incurred on our behalf.



Other than as described above, none of our directors or officers receive any other compensation for their services.  The salaries shown in the following table are for the fiscal year ending July 31, 2003.



|SUMMARY COMPENSATION TABLE          
|------------------------------------
|                                    
|                                    
|(a)                                 
|Name and Principle Position         
|N. Desmond Smith,
President/Director
|Keith Ebert,
Director               



Item 11.  Security Ownership of Certain Beneficial Owners and Management



The following table provides information regarding the beneficial ownership of our common stock as of July 31, 2003 by:



*

each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock,

*

each of our directors and named executive officers, and

*

all of our directors and executive officers as a group.



|Title of Class               | Name and Address
of Beneficial Owner                                       | Amount and Nature
of Beneficial Owner    | Percent
of Class
|---------------------------- | -------------------------------------------------------------------------- | ---------------------------------------- | ----------------
|$.001 Par Value
Common Stock | Keith A. Ebert
Suite 2901
1201 Marinaside Crescent
Vancouver, B.C.
V6Z 2V2 | 1,000,000 common shares
Direct Ownership | 9.43%           
|$.001 Par Value
Common Stock | N. Desmond Smith
2106 - 33rd Avenue S.W.
Calgary, Alberta   T2T 1Z0        | 400,000 common shares
Director Ownership | 3.77%           
|$.001 Par Value
Common Stock | Management as a Group
Two Directors and Officers                           | 1,400,000 common shares                  | 13.2%           



Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.  Shares of our

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8



common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees.  Subject to community property laws, the persons or entities named in the table above have sole voting and investment power with respect to all shares indicated as beneficially owned by them.



Changes in Control.  We are not aware of any arrangements which may result in "changes in control" as that term is defined by the provisions of Item 403(c) of Regulation S-B.



Item 12.  Certain Relationships and Related Transactions



We issued 2,250,000 common shares at a deemed price of $0.001 per share to Mr. Keith Ebert on November 1, 1999.  Mr. Ebert was issued these shares in consideration for his services in organizing our company, acting as a director and officer and building our business plan.  On June 1, 2002, Mr. Ebert returned the 2,250,000 common shares to the Issuer's treasury for cancellation.



On February 14, 2001, we issued Mr. N. Desmond Smith 100,000 common shares at a deemed price of $0.50 per share in consideration for our 2% gross overriding royalty on Edgerton "27".  The deemed value of this acquisition was $50,000.  This acquisition was done at arm's length.  Mr. Smith was subsequently appointed President, C.F.O. and Secretary of our company on March 23, 2001.



We have no policy with respect to entering into transactions with members of management or affiliated companies.  Any non-arm's length transaction we consider will be reviewed and voted on by disinterested members of our board of directors.



Item 13.  Exhibits, List and Reports on Form 8-K.



(A)

Exhibits



|Exhibit
Number | Description                                                                                                                                                        
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            | Articles of Incorporation filed October 29, 1999, as filed with the Issuer's Form 10-SB (file no. 0-32523) filed on April 9, 2001 incorporated herein by reference.
|3.2            | Bylaws as filed with the Issuer's Form 10-SB (file no. 0-32523) on April 9, 2001, incorporated herein by reference.                                                
|13.1           | Form 10QSB for the three months ended October 31, 2002, filed on December 12, 2002, incorporated herein by reference.                                              
|13.2           | Form 10QSB for the six months ended January 31, 2003, filed on March 17, 2003, incorporated herein by reference.                                                   
|13.3           | Form 10QSB for the nine months ended April 30, 2003, filed on June 16, 2003, incorporated herein by reference.                                                     
|32.1           | Section 302 Certification by Chief Executive Officer                                                                                                               
|32.2           | Section 302 Certification by Chief Financial Officer                                                                                                               
|33             | Section 906 Certification                                                                                                                                          



(B)

Reports on Form 8-K

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9



We filed a Form 8K on March 17, 2003 changing our independent accountants from Davidson & Company to Dohan & Company.  On July 21, 2003, we filed a Form 8K changing our independent accountants from Dohan & Company to Moore Stephens Ellis Foster.  On September 11, 2003, we filed a Form 8K/A with respect to the change of our independent accountants.





SIGNATURES



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



LIONS GATE INVESTMENT LIMITED





Dated:  October 21, 2003

Per:

/s/Keith Ebert



Keith Ebert,

C.F.O., Secretary, Treasurer and Director



In accordance with the Exchange Act, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the dates indicated.





/s/Keith Ebert

Keith Ebert,

C.F.O., Secretary, Treasurer and Director



October 21, 2003

Date



---















LIONS GATE INVESTMENT LIMITED

(A Development Stage Company)





FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)





JULY 31, 2003















---



LIONS
GATE INVESTMENT LIMITED.

(A
development stage company)



Financial
Statements

(Expressed
in U.S. Dollars)



July
31, 2003 and 2002







Index



Report
of Independent Accountants

Balance
Sheets

Statements
of Stockholders' Equity

Statements
of Operations

Statements
of Cash Flows

Notes
to Financial Statements

















MOORE
STEPHENS ELLIS FOSTER LTD.

---

MOORE
STEPHENS ELLIS FOSTER LTD.

CHARTERED
ACCOUNTANTS



1650
West 1st Avenue

Vancouver,
BC  Canada   V6J 1G1

Telephone:
 (604) 734-1112  Facsimile: (604) 714-5916



Website:
 www.ellisfoster.com







REPORT
OF INDEPENDENT ACCOUNTANTS



To
the Board of Directors and Stockholders



LIONS
GATE INVESTMENT LIMITED.

(A
development stage company)



We
have audited the balance sheet of Lions Gate Investment Limited ("the Company")
(A development stage company) as at July 31, 2003, the related statements of
stockholders' equity, operations and cash flows for the year ended July 31,
2003 and for the period from inception (October 29, 1999) to July 31, 2003.
 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 audit.   We did not audit the Company's
financial statements as of and for the year ended July 31, 2002 and the
cumulated data from inception (October 29, 1999) to July 31, 2002 in the
statements of stockholders' equity, operations and cash flows, which were
audited by other auditors whose report, dated October 10, 2002, expressed an
unqualified opinion, has been furnished to us.  Our report, insofar, as it
relates to the amount included for such prior period, is based solely on the
report of the other auditors.



We
conducted our audit in accordance with auditing standards generally accepted in
the United States of America. 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.  We believe that our audit
provides a reasonable basis for our opinion.



In
our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at July 31, 2003 and the
results of its operations and its cash flows for the year ended July 31, 2003
and for the period from inception (October 29, 1999) to July 31, 2003, in
conformity with generally accepted accounting principles in the United States of
America.



The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 1 to the financial
statements, the Company has suffered losses from operations that raise
substantial doubt about its ability to continue as a going concern.
 Management's plans in regard to these matters are also described in Note
1.  The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.









Vancouver,
Canada

"MOORE
STEPHENS ELLIS FOSTER LTD."

October
7, 2003, except as to

Chartered
Accountants

Note
5 which is as of

October
21, 2003



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|LIONS
      GATE INVESTMENT LIMITED                                              |                                                           |          |        |         
|-------------------------------------------------------------------------------- | --------------------------------------------------------- | -------- | ------ | --------
|(A
      development stage company)                                              |                                                           |          |        |         
|                                                                                 |                                                           |          |        |         
|Balance
      Sheets                                                             |                                                           |          |        |         
|July
      31, 2003 and 2002                                                     |                                                           |          |        |         
|(Expressed
      in U.S. Dollars)                                                |                                                           |          |        |         
|                                                                                 |                                                           |          | 2003   |         
|                                                                                 |                                                           |          |        |         
|ASSETS                                                                           |                                                           |          |        |         
|                                                                                 |                                                           |          |        |         
|Current
      assets                                                             |                                                           |          |        |         
|Cash                                                                             |                                                           | $        | 22,329 | $       
|Royalty
      income receivable - related party                                  |                                                           | 7,409    |        | 2,667   
|                                                                                 |                                                           |          |        |         
|Total
      current assets                                                       |                                                           | 29,738   |        | 36,294  
|                                                                                 |                                                           |          |        |         
|Royalty
      interest                                                           |                                                           | 1        |        | 1       
|                                                                                 |                                                           |          |        |         
|Total
      assets                                                               |                                                           | $        | 29,739 | $       
|                                                                                 |                                                           |          |        |         
|                                                                                 |                                                           |          |        |         
|LIABILITIES
      AND STOCKHOLDERS' EQUITY                                       |                                                           |          |        |         
|                                                                                 |                                                           |          |        |         
|Current
      liabilities                                                        |                                                           |          |        |         
|Accounts
      payable and accrued liabilities                                   | $                                                         | 1,250    | $      | 1,850   
|                                                                                 |                                                           |          |        |         
|Total
      current liabilities                                                  |                                                           | 1,250    |        | 1,850   
|                                                                                 |                                                           |          |        |         
|Stockholders'
      equity                                                       |                                                           |          |        |         
|                                                                                 |                                                           |          |        |         
|Capital
      stock                                                              |                                                           |          |        |         
|Authorized:                                                                      |                                                           |          |        |         
|100,000,000                                                                      | common
      shares with a par value of $0.0001 per share |          |       
|Issued
      and outstanding:  10,600,000 common shares                          |                                                           | 1,060    |        | 1,060   
|(2002
      - 10,600,000 common shares)                                          |                                                           |          |        |         
|                                                                                 |                                                           |          |        |         
|Additional
      paid-in capital                                                 |                                                           | 103,640  |        | 103,640 
|                                                                                 |                                                           |          |        |         
|(Deficit)
      accumulated during the development stage                         |                                                           | (76,211) |        | (70,255)
|                                                                                 |                                                           |          |        |         
|Total
      stockholders' equity                                                 |                                                           | 28,489   |        | 34,445  
|                                                                                 |                                                           |          |        |         
|                                                                                 |                                                           |          |        |         
|Total
      liabilities and stockholders' equity                                 | $                                                         | 29,739   | $      | 36,295  
|                                                                                 |                                                           |          |        |         
|The
      accompanying notes are an integral part of these financial statements. |                                                           |         







MOORE
STEPHENS ELLIS FOSTER LTD.

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|LIONS
      GATE INVESTMENT LIMITED                                              |              |   |         |             |              
|-------------------------------------------------------------------------------- | ------------ | - | ------- | ----------- | -------------
|(A
      development stage company)                                              |              |   |         |             |              
|                                                                                 |              |   |         |             |              
|Statements
      of Stockholders' Equity                                         |              |   |         |             |              
|(Expressed
      in U.S. Dollars)                                                |              |   |         |             |              
|                                                                                 |              |   |         |             |              
|                                                                                 |              |   |         |             |              
|                                                                                 |              |   |         |             | Additional   
|                                                                                 | Common stock |   | paid-in | development | stockholders'
|                                                                                 | Shares       |   | Amount  |             | capital      
|                                                                                 |              |   |         |             |              
|Balance, October 29, 1999                                                        | -            | $ | -       | $           | -            
|Common
      stock issued for services                                           | 9,000,000    |   | 900     |             | 1,350        
|Common stock issued for cash                                                     | 9,800,000    |   | 980     |             | 1,470        
|Comprehensive income (loss)                                                      |              |   |         |             |              
|Loss for the period                                                              | -            |   | -       |             | -            
|Balance,
      July 31, 2000                                                     | 18,800,000   |   | 1,880   |             | 2,820        
|                                                                                 |              |   |         |             |              
|Private placement                                                                | 400,000      |   | 40      |             | 49,960       
|Common stock issued for royalty
      interest                                   | 400,000      |   | 40      |             | 49,960       
|Comprehensive income (loss)                                                      |              |   |         |             |              
|Loss for the year                                                                | -            |   | -       |             | -            
|Balance,
      July 31, 2001                                                     | 19,600,000   |   | 1,960   |             | 102,740      
|                                                                                 |              |   |         |             |              
|Return to treasury                                                               | (9,000,000)  |   | (900)   |             | 900          
|Comprehensive income (loss)                                                      |              |   |         |             |              
|Loss for the year                                                                | -            |   | -       |             | -            
|Balance,
      July 31, 2002                                                     | 10,600,000   |   | 1,060   |             | 103,640      
|                                                                                 |              |   |         |             |              
|Comprehensive income (loss)                                                      |              |   |         |             |              
|Loss for the year                                                                | -            |   | -       |             | -            
|Balance,
      July 31, 2003                                                     | 10,600,000   | $ | 1,060   | $           | 103,640      
|                                                                                 |              |   |         |             |              
|The accompanying notes are an
      integral part of these financial statements. |              |   |         |            



MOORE
STEPHENS ELLIS FOSTER LTD.

---

|LIONS
      GATE INVESTMENT LIMITED                                              |                      |               |       |              
|-------------------------------------------------------------------------------- | -------------------- | ------------- | ----- | -------------
|(A
      development stage company)                                              |                      |               |       |              
|                                                                                 |                      |               |       |              
|Statements
      of Operations                                                   |                      |               |       |              
|(Expressed
      in U.S. Dollars)                                                |                      |               |       |              
|                                                                                 | Cumulative           |               |       |              
|                                                                                 | Amounts
      Since  |               |       |              
|                                                                                 | October
      29     |               |       |              
|                                                                                 |                      | 1999          |       | Year         
|                                                                                 | (inception)
      to |               | Ended |              
|                                                                                 |                      | July
      31 |       | July
      31
|                                                                                 |                      | 2003          |       | 2003         
|                                                                                 |                      |               |       |              
|General
      and administrative expenses                                        |                      |               |       |              
|Consulting                                                                       | $                    | 11,517        | $     | 4,600        
|Filing
      and transfer agent                                                  |                      | 5,606         |       | 1,926        
|Office
      and miscellaneous                                                   |                      | 2,971         |       | 106          
|Professional
      fee                                                           |                      | 19,744        |       | 6,912        
|Write-down
      of royalty interest                                             |                      | 49,999        |       | -            
|                                                                                 |                      |               |       |              
|Loss
      before other item                                                     |                      | 89,837        |       | 13,544       
|                                                                                 |                      |               |       |              
|Other
      item                                                                 |                      |               |       |              
|Royalty
      income                                                             |                      | 13,626        |       | 7,588        
|                                                                                 |                      |               |       |              
|Loss
      for the period                                                        | $                    | 76,211        | $     | 5,956        
|                                                                                 |                      |               |       |              
|Loss
      per share                                                             |                      |               |       |              
|-
      basic and diluted                                                        |                      |               | $     | 0.00         
|                                                                                 |                      |               |       |              
|Weighted
      average number of                                                 |                      |               |       |              
|common
      shares outstanding                                                  |                      |               |       |              
|-
      basic and diluted                                                        |                      |               |       | 10,600,000   
|                                                                                 |                      |               |       |              
|The
      accompanying notes are an integral part of these financial statements. |                      |              



















MOORE
STEPHENS ELLIS FOSTER LTD.

---

|LIONS
      GATE INVESTMENT LIMITED                                              |                      |               |       |               |       |              
|-------------------------------------------------------------------------------- | -------------------- | ------------- | ----- | ------------- | ----- | -------------
|(A
      development stage company)                                              |                      |               |       |               |       |              
|                                                                                 |                      |               |       |               |       |              
|Statements
      of Cash Flows                                                   |                      |               |       |               |       |              
|(Expressed
      in U.S. Dollars)                                                |                      |               |       |               |       |              
|                                                                                 | Cumulative           |               |       |               |      
|Amounts
      Since                                                              |                      |               |       |              
|                                                                                 | October
      29     |               |       |               |      
|                                                                                 |                      | 1999          |       | Year          |       | Year         
|                                                                                 | (inception)
      to |               | Ended |               | Ended
|                                                                                 |                      | July
      31 |       | July
      31 |       | July
      31
|                                                                                 |                      | 2003          |       | 2003          |       | 2002         
|                                                                                 |                      |               |       |               |       |              
|Cash
      flows from (used in) operating activities                             |                      |               |       |               |       |              
|Loss
      for the period                                                        | $                    | (76,211)      | $     | (5,956)       | $     | (61,052)     
|Common
      stock issued for services                                           |                      | 2,250         |       | -             |       | -            
|Write-down
      of royalty interest                                             |                      | 49,999        |       | -             |       | 49,999       
|Changes
      in assets and liabilities:                                         |                      |               |       |               |       |              
|-
      Increase in royalty income receivable                                    |                      | (7,409)       |       | (4,742)       |       | (1,102)      
|-
      Increase (decrease) in accounts                                          |                      |               |       |               |       |              
|payable
      and accrued liabilities                                            |                      | 1,250         |       | (600)         |       | 350          
|                                                                                 |                      |               |       |               |       |              
|Net
      cash used in operating activities                                      |                      | (30,121)      |       | (11,298)      |       | (11,805)     
|                                                                                 |                      |               |       |               |       |              
|Cash
      flows from financing activities                                       |                      |               |       |               |       |              
|Issuance
      of common stock for cash                                          |                      | 52,450        |       | -             |       | -            
|                                                                                 |                      |               |       |               |       |              
|Net
      cash from financing activities                                         |                      | 52,450        |       | -             |       | -            
|                                                                                 |                      |               |       |               |       |              
|Increase
      (decrease) in cash                                                |                      |               |       |               |       |              
|and
      cash equivalents                                                       |                      | 22,329        |       | (11,298)      |       | (11,805)     
|                                                                                 |                      |               |       |               |       |              
|Cash
      and cash equivalents,                                                 |                      |               |       |               |       |              
|beginning
      of period                                                        |                      | -             |       | 33,627        |       | 45,432       
|                                                                                 |                      |               |       |               |       |              
|Cash
      and cash equivalents,end of period                                    | $                    | 22,329        | $     | 22,329        | $     | 33,627       
|                                                                                 |                      |               |       |               |       |              
|Supplemental
      disclosure of non-cash                                        |                      |               |       |               |       |              
|investing
      and operating activities:                                        |                      |               |       |               |       |              
|Common
      shares issued for services                                          | $                    | 2,250         | $     | -             | $     | -            
|Common
      shares issued for royalty interest                                  | $                    | 50,000        | $     | -             | $     | -            
|                                                                                 |                      |               |       |               |       |              
|                                                                                 |                      |               |       |               |       |              
|The
      accompanying notes are an integral part of these financial statements. |                      |              







MOORE
STEPHENS ELLIS FOSTER LTD.

---

LIONS
GATE INVESTMENTS LIMITED.

(A
development stage company)



Notes
to Financial Statements

July
31, 2003 and 2002

(Expressed
in U.S. Dollars)





1.

Incorporation
and Continuance of Operations

The
Company was incorporated on October 29, 2003 under the laws of the State of
Nevada.  The Company is in the business of earning royalty income from oil
and gas properties.  The Company has not derived significant royalty income
to date.  The Company is considered a development stage company as defined
in SFAS No. 7.  The Company has an office in Alberta, Canada.

These
financial statements have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and the satisfaction of liabilities and commitments in the
normal course of business. The Company has received minimal royalty income to
date. However, the Company is incurring operating losses and requires additional
funds to maintain its operations.  Management's plans in this regard are
advancing funds on an as needed basis and raising equity financing.

These
conditions raise substantial doubt about the Company's ability to continue as
a going concern.  These financial statements do not include any adjustments
that might result from this uncertainty.

2.

Significant
Accounting Policies

(a)

Accounting
Estimates

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

(b)

Advertising
Expenses

The
Company expenses advertising costs as incurred.  There was no advertising
expenses incurred by the Company for the years ended July 31, 2003 and 2002.

(c)

Royalty
Income

Royalty
income is recorded in the period earned.















MOORE
STEPHENS ELLIS FOSTER LTD.

---

LIONS
GATE INVESTMENTS LIMITED.

(A
development stage company)



Notes
to Financial Statements

July
31, 2003 and 2002

(Expressed
in U.S. Dollars)



2.

Significant
Accounting Policies (continued)

(d)

Loss
Per Share

Loss
per share is computed using the weighted average number of shares outstanding
during the period. The Company has adopted SFAS No. 128, "Earnings Per
Share".  Diluted loss per share is equivalent to basic loss per
share.

On
November 4, 2002, the Company split its common stocks on a four-for-one basis.
 Accordingly, the number of outstanding common stocks as shown in the
statement of stockholders'equity has been increased from 2,650,000 common
stocks to 10,600,000 common stocks. Per share amounts have been restated to give
retroactive effect to the stock split for all periods represented.

(e)

Foreign
Currency Transactions

The
Company is located and operating outside of the United States of America.
 It maintains its accounting records in U.S. Dollars, as follows:

At
the transaction date, each asset, liability, revenue and expense is translated
into U.S. dollars by the use of the exchange rate in effect at that date.
 At the period end, monetary assets and liabilities are remeasured by using
the exchange rate in effect at that date.  The resulting foreign exchange
gains and losses are included in operations.

(f)

Fair
Value of Financial Instruments

Fair
value of financial instruments are made at a specific point in time, based on
relevant information about financial markets and specific financial instruments.
 As these estimates are subjective in nature, involving uncertainties and
matters of significant judgement, they cannot be determined with precision.
 Changes in assumptions can significantly affect estimated fair values.

The
carrying value of cash, royalty receivable and accounts payable and accrued
liabilities approximate their fair value because of the short-term nature of
these instruments.  Management is of the opinion that the Company is not
exposed to significant interest or credit risks arising from these financial
instruments.  The Company is operating in outside the United States of
America and has exposure to foreign currency risk due to the fluctuation of
currency in which the Company operates and U.S. dollar.



MOORE
STEPHENS ELLIS FOSTER LTD.

---

LIONS
GATE INVESTMENTS LIMITED.

(A
development stage company)



Notes
to Financial Statements

July
31, 2003 and 2002

(Expressed
in U.S. Dollars)













2.

Significant
Accounting Policies   (continued)



(g)

Income
Taxes

The
Company has adopted Statement of Financial Accounting Standards No. 109 (SFAS
109), Accounting for Income Taxes,which requires the Company to
recognize deferred tax liabilities and assets for the expected future tax
consequences of events that have been recognized in the Company's financial
statements or tax returns using the liability method.  Under this method,
deferred tax liabilities and assets are determined based on the temporary
differences between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse.

(h)

Stock-Based
Compensation

The
Company has adopted the disclosure-only provisions of Statement of Financial
Accounting Standards No. 123 (SFAS 123), Accounting for Stock-based
Compensation. SFAS 123 encourages, but does not require, companies to adopt
a fair value based method for determining expense related to stock-based
compensation. The Company accounts for stock-based compensation issued to
employees and directors using the intrinsic value method as prescribed under
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees and related interpretations.

The
Company did not grant any stock options during the fiscal year 2003 and 2002.
 The adoption of the statement will not have an impact on the Company's
financial statements.

(i)

Comprehensive
Income

The
Company has adopted Statement of Financial Accounting Standards No. 130 (SFAS
130), Reporting Comprehensive Income, which establishes standards for
reporting and display of comprehensive income, its components and accumulated
balances.  The Company is disclosing this information on its Statement of
Stockholders' Equity.  Comprehensive income comprises equity except those
resulting from investments by owners and distributions to owners.  The
Company has no elements of "other comprehensive income"for the years ended
July 31, 2003 and 2002.





MOORE
STEPHENS ELLIS FOSTER LTD.

---

LIONS
GATE INVESTMENTS LIMITED.

(A
development stage company)



Notes
to Financial Statements

July
31, 2003 and 2002

(Expressed
in U.S. Dollars)





2.

Significant
Accounting Policies   (continued)



(j)

Accounting
for Derivative Instruments and Hedging Activities

The
Company has adopted the Statement of Financial Accounting Standards No. 133 (SFAS
133), Accounting for Derivative Instruments and Hedging Activities, which
requires companies to recognize all derivatives contracts as either assets or
liabilities in the balance sheet and to measure them at fair value.  If
certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging derivative with the recognition of (i) the changes in the fair
value of the hedged asset or liability that are attributable to the hedged risk
or (ii) the earnings effect of the hedged forecasted transaction.  For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change.

The
Company has not entered into derivative contracts either to hedge existing risks
or for speculative purposes. The adoption of the statement will not have an
impact on the Company's financial statements.

(k)

New
Accounting Pronouncements

In
November 2002, the Financial Accounting Standard Board issued FASB
Interpretation No. 45 (FIN 45), Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of indebtedness of
Others-An Interpretation of FASB Statements of No. 5, 57 and 107 and
rescission of FASB Interpretation No. 34.  This interpretation
clarifies the requirements for a guarantor's accounting for and disclosures of
certain guarantees issued and outstanding.  FIN 45 also clarifies the
requirements related to the recognition of a liability by a guarantor at the
inception of a guarantee.  FIN 45 is effective for guarantees entered into
or modified after December 31, 2002.  The adoption of FIN 45 will not have
impact on the Company's financial statements.

In
December 2002, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standard No. 148 (SFAS 148), Accounting for Stock-based
Compensation -Transition and Disclosure.SFAS 148 amends SFAS 123, Accounting
for Stock-based Compensation,to provide alternative methods for voluntary
transition to SFAS 123's fair value method of accounting for stock-based
employee compensation.  SFAS 148 also requires disclosure of the effects of
an entity's accounting policy with respect to stock-based employee
compensation on reported net income (loss) and earnings (loss) per share in
annual and interim financial statements.  SFAS 148 is effective for fiscal
years beginning after December 15, 2002. The adoption of SFAS 148 will not have
an impact on the Company's financial statements.



MOORE
STEPHENS ELLIS FOSTER LTD.

---

LIONS
GATE INVESTMENTS LIMITED.

(A
development stage company)



Notes
to Financial Statements

July
31, 2003 and 2002

(Expressed
in U.S. Dollars)





2.

Significant
Accounting Policies   (continued)

(k)

New
Accounting Pronouncements (continued)

In
January 2003, the Financial Accounting Standard Board issued FASB Interpretation
No. 46 (FIN 46), Consolidation of Variable Interest Entities -An
Interpretation of Accounting Research Bulletin (ARB) No. 51.  This
interpretation addressed the requirements for business enterprises to
consolidate related entities in which they are determined to be the primary
economic beneficiary as a result of their variable economic interest.  The
interpretation is intended to provide guidance in judging multiple economic
interests in an entity and in determining the primary beneficiary.  The
interpretation outlines disclosure requirements for VIEs in existence prior to
January 31, 2003, outlines consolidation requirements for VIEs created after
January 31, 2003.  The company has reviewed its major commercial
relationship and its overall economic interests with other companies consisting
of related parties, royalty customers and other suppliers to determine the
extent of its variable economic interest in these parties.  The review has
not resulted in a determination that the Company would be judged to be the
primary economic beneficiary in any material relationships, or that any material
entities would be judged to be Variable Interest Entities of the Company.

In
May 2003, the Financial Accounting Standard Board issued Statement of Financial
Accounting Standard No. 149 (SFAS 149), Amendment of Statement 133 on
Derivative Instruments and Hedging Activities.  This Statement amends
and clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under SFAS
No. 133, Accounting for Derivative Instruments and hedging Activities.
 This Statement is effective for contracts entered into or modified after
June 30, 2003.  The implementation of SFAS No. 149 dose not have any impact
on the Company's  financial statements.

In
May 2003, the Financial Accounting Standards Board (FASB) approved SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity.  SFAS No. 150 establishes standards for how to
classify and measure financial instruments with characteristics of both
liabilities and equity. It requires financial instruments that fall within its
scope to be classified as liabilities. SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003 and, for pre-existing
financial instruments, as of July 1, 2003. The Company does not have any
financial instruments that fall under the guidance of SFAS No. 150 and,
therefore, the adoption does not have any effect on its financial statements.

3.



MOORE
STEPHENS ELLIS FOSTER LTD.

---

LIONS
GATE INVESTMENTS LIMITED.

(A
development stage company)



Notes
to Financial Statements

July
31, 2003 and 2002

(Expressed
in U.S. Dollars)





3.

Royalty
Interest

2003
      2002Royalty
        interest
      $
         50,000
      $
          50,000Less:
        impairment provision
      (49,000)
      (49,000)$
                  1
      $
                   1




In
2001, the Company acquired a 2% gross overriding royalty interest over certain
petroleum producing lands in the province of Alberta, Canada, known as Edgerton "27", located at TWP 42, RGE 3, W4M, Section 27, from an individual, who was
subsequently appointed as the president of the Company, at a cost of $50,000.
 In 2002, management of the Company determined there to be an impairment of
the royalty interest and, as a result, reduced the carrying value to $1.
 The royalty income receivable as at July 31, 2003 and 2002 was due from
this related party.

4.

Income
Taxes

As
at July 31, 2003, the Company has estimated net operating losses carryforward
for tax purposes of $76,000.  This amount may be applied against future
federal taxable income. The Company evaluates its valuation allowance
requirements on an annual basis based on projected future operations.  When
circumstances change and this causes a change in management's judgement about
the realizability of deferred tax assets, the impact of the change on the
valuation allowance is generally reflected in current income.

The
tax effects of temporary differences that give rise to the Company's deferred
tax asset (liability) are as follows:

2003
      2002Tax
        loss carry forwards
      $
         26,000
      $
         24,000Valuation
        allowance
      (26,000)
      (24,000)$
                  -
      $
                 -


5.

Subsequent
Event

Subsequent
to the year-end, the Company paid $20,000 in consulting fees to one of the
directors of the Company.