UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 MAY 31, 2005
                                       or

[ ]      Transition  Report  Pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934
              For the transition period from _________ to _________
                                       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 _________

                         Commission file number: 0-30920

                             CENTRASIA MINING CORP.
             (Exact name of Registrant as Specified in its Charter)

                             CENTRASIA MINING CORP.
                 (Translation of Registrant's Name Into English)

                            BRITISH COLUMBIA, CANADA
                 (Jurisdiction of Incorporation or Organization)

 #1305 - 1090 WEST GEORGIA STREET, VANCOUVER, BRITISH COLUMBIA, CANADA, V6E 3V7
                    (Address of Principal Executive Offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.
                                      NONE

Securities registered or to be registered pursuant to Section 12(g) of the Act.
                           COMMON STOCK, NO PAR VALUE
                                (Title of Class)

Securities for which there is a reporting  obligation  pursuant to Section 15(d)
of the Act.
                                 NOT APPLICABLE
                                (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.

                   1,986,523 COMMON SHARES AS OF MAY 31, 2005

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
Yes   X          No
    -----            -----
Indicate by check mark which financial statement item the registrant has elected
to follow.
Item 17    X     Item 18
        ------            -----
If this is an annual report,  indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act) Yes      No   X
                                                                -----    -----

<PAGE>


GENERAL INFORMATION:

Unless otherwise indicated, all references herein are to Canadian dollars.

Unless otherwise  indicated  herein,  the term "Company" means  collectively the
Company and its subsidiaries.

The Company is required under Canadian law (National Instrument 43-101 Standards
Of Disclosure  For Mineral  Projects)  ("NI 43-101") to calculate and categorize
"mineral  reserve",  "proven  mineral  reserve",   "probable  mineral  reserve",
"mineral  resource",  "measured mineral resource",  "indicated mineral resource"
and  "inferred  mineral  resource"  under  the  Canadian   Institute  of  Mining
Metallurgy and Petroleum  ("CIM")  Standards on Mineral Resources and Reserves -
Definitions  and Guidelines  adopted by the CIM in August 2000.  These standards
establish   definitions   and   guidelines  for  the  reporting  of  exploration
information, mineral resources and mineral reserves in Canada. These definitions
have not been adopted for use in the United States of America by the  Securities
and Exchange Commission (the "SEC"). Under these guidelines, the CIM definitions
of proven and probable reserves equate to the definitions of proven and probable
reserves as set out in Guide 7 of the Securities Act Industry  Guides adopted by
the SEC ("Guide 7"). In addition,  Canadian law requires  disclosure  of mineral
resources that equate to measured, indicated and inferred resources.

                                    GLOSSARY

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

AG                                  silver

ANDESITE                            a dark colored, fine grained volcanic rock.

AU                                  gold

BRECCIA                             rock  comprised of large  angular  fragments
                                    suspended in a fine grained mineral.

CHLORITIZATION                      an  alteration  process  where  pre-existing
                                    minerals are replaced by chlorite.

CONTAINED SILVER OR GOLD            total measurable  silver or gold in grams or
                                    ounces  estimated to be  contained  within a
                                    mineral  deposit.  Makes  no  allowance  for
                                    economic   criteria,   mining   dilution  or
                                    recovery losses.

CU                                  copper

DEVONIAN                            a  period  of  time  in  the  Paleozoic  era
                                    covering a time  period  between 400 and 345
                                    million years ago.

DIAMOND DRILL                       a large  machine that  produces a continuous
                                    core  sample of the rock or  material  being
                                    drilled.

DIORITE                             an intrusive  igneous rock largely comprised
                                    of   feldspar,   hornblende,   pyroxene  and
                                    quartz.

EPITHERMAL                          used  to   describe   hydrothermal   mineral
                                    deposits,  typically  in  veins,  formed  at
                                    lower temperatures and pressures within 1 km
                                    of the earth surface.

FEASIBILITY STUDY                   a detailed report assessing the feasibility,
                                    economics  and   engineering  of  placing  a
                                    mineral deposit into commercial production.

FUCHSITE                            a bright green chromium rich mica mineral.

G                                   grams



                                      -2-
<PAGE>

GPT                                 grams per tonne

GRANODIORITE                        an intrusive  igneous rock comprised largely
                                    of quartz, feldspar, biotite and hornblende.

GREENSCHIST                         a general  descriptive term used to describe
                                    metamorphic   rocks  comprised   largely  of
                                    parallel aligned, green platy minerals.

GREENSTONE                          a  general  term used to  describe  any dark
                                    green color metamorphosed igneous rock.

IGNEOUS                             a rock that has  solidified  from  molten or
                                    partly molten rock material.

INDICATED RESOURCE                  (NI 43-101  definition) means that part of a
                                    mineral  resource for which quantity,  grade
                                    or quality,  densities,  shape and  physical
                                    characteristics  can  be  estimated  with  a
                                    level of confidence  sufficient to allow the
                                    appropriate  application  of  technical  and
                                    economic   parameters,   to   support   mine
                                    planning  and  evaluation  of  the  economic
                                    viability  of the  deposit.  The estimate is
                                    based on detailed and  reliable  exploration
                                    and  testing  information  gathered  through
                                    appropriate  techniques  from locations such
                                    as outcrops,  trenches,  pits,  workings and
                                    drill holes that are spaced  closely  enough
                                    for  geological  and grade  continuity to be
                                    reasonably assumed.

INFERRED RESOURCE                   (NI 43-101  definition) means that part of a
                                    mineral  resource  for  which  quantity  and
                                    grade or  quality  can be  estimated  on the
                                    basis of  geological  evidence  and  limited
                                    sampling  and  reasonably  assumed,  but not
                                    verified,  geological and grade  continuity.
                                    The estimate is based on limited information
                                    and sampling  gathered  through  appropriate
                                    techniques  from locations such as outcrops,
                                    trenches, pits, workings and drill holes.

INTRUSIVE ROCK                      a general  term used to  describe an igneous
                                    rock body  that has  intruded  pre  existing
                                    rock and  solidified  without  breaching the
                                    earth's surface.

KM                                  kilometer

M                                   metre

MAFIC                               a  term  used  to  describe   igneous  rocks
                                    comprised of dark colored iron and magnesium
                                    rich minerals.

MAGMA                               mobile, molten rock material.

MEASURED RESOURCE                   (NI 43-101  definition) means that part of a
                                    mineral  resource for which quantity,  grade
                                    or  quality,   densities,   shape,  physical
                                    characteristics are so well established that
                                    they  can  be  estimated   with   confidence
                                    sufficient   to   allow   the    appropriate
                                    application   of   technical   and  economic
                                    parameters,  to support production  planning
                                    and evaluation of the economic  viability of
                                    the  deposit.   The  estimate  is  based  on
                                    detailed and reliable exploration,  sampling
                                    and  testing  information  gathered  through
                                    appropriate  techniques  from locations such
                                    as outcrops,  trenches,  pits,  workings and
                                    drill holes that are spaced  closely  enough
                                    to  confirm   both   geological   and  grade
                                    continuity.

MINERAL RESERVE                     (NI    43-101    definition)    means    the
                                    economically  mineable part of a measured or
                                    indicated resource  demonstrated by at least
                                    a preliminary  feasibility study. This study


                                      -3-
<PAGE>

                                    must include adequate information on mining,
                                    processing,   metallurgical,   economic  and
                                    other relevant factors that demonstrate,  at
                                    the  time  of   reporting,   that   economic
                                    extraction  can  be  justified.   A  mineral
                                    reserve  includes  diluting   materials  and
                                    allowances  for  losses  that may occur when
                                    the material is mined.

MINERAL RESOURCE                    (NI 43-101 definition) a body of mineralized
                                    material  which has not yet been  determined
                                    to be ore, and the  potential  for mining of
                                    which   has   not   yet   been   determined;
                                    categorized   as   possible,   probable  and
                                    proven, according to the degree of certainty
                                    with  which  their  grade  and  tonnage  are
                                    known;    sometimes   referred   to   as   a
                                    "geological     resource"     or    "mineral
                                    inventory".

MONZODIORITE                        an igneous  intrusive rock largely comprised
                                    of quartz and feldspar and minor pyroxene.

ORDOVICIAN                          a  period  of  time  in  the  Paleozoic  era
                                    covering a time  period  between 500 and 440
                                    million years ago.

ORE                                 a naturally  occurring rock or material from
                                    which economic  minerals can be extracted at
                                    a profit.

OROGENIC                            a term  used to  describe  the  large  scale
                                    deformation  process often  resulting in the
                                    formation of mountains.

OUNCE OR OZ.                        a  troy  ounce  or 20  pennyweights  or  480
                                    grains or 31.103 grams.

PORPHYRY                            an igneous rock  comprised of larger mineral
                                    crystals  suspended  in a  matrix  of  finer
                                    grained crystals.

PROBABLE RESERVE                    (NI  43-101   definition)  the  economically
                                    mineable part of an  indicated,  and in some
                                    circumstances     a    measured     resource
                                    demonstrated   by  at  least  a  preliminary
                                    feasibility  study.  This study must include
                                    adequate information on mining,  processing,
                                    metallurgical,  economic, and other relevant
                                    factors  that  demonstrate,  at the  time of
                                    reporting,  that economic  extraction can be
                                    justified.

PROBABLE (INDICATED) RESERVES       (SEC Guide 7 definition)  reserves for which
                                    quantity  and  grade   and/or   quality  are
                                    computed  form  information  similar to that
                                    used for proven (measure) reserves,  but the
                                    sites   for   inspection,    sampling,   and
                                    measurement   are   farther   apart  or  are
                                    otherwise less adequately spaced. The degree
                                    of assurance,  although  lower than that for
                                    proven (measured)  reserves,  is high enough
                                    to  assume  continuity   between  points  of
                                    observation.

PROFESSIONAL ASSOCIATION            for  the  purposes  of the  definition  of a
                                    Qualified    Person    below,     means    a
                                    self-regulatory  organization  of engineers,
                                    geoscientists    or   both   engineers   and
                                    geoscientists   that  (a)  has  been   given
                                    authority  or  recognition  by statute;  (b)
                                    admits  members  primarily  on the  basis of
                                    their    academic     qualifications     and
                                    experience; (c) requires compliance with the
                                    professional  standards  of  competence  and
                                    ethics established by the organization;  and
                                    (d) has disciplinary  powers,  including the
                                    power to suspend or expel a member.

PROVEN RESERVE                      (NI    43-101    definition)    means    the
                                    economically  mineable  part  of a  measured
                                    resource   demonstrated   by  at   least   a
                                    preliminary  feasibility  study.  This study
                                    must include adequate information on mining,
                                    processing,  metallurgical,   economic,  and
                                    other relevant factors that demonstrate,  at
                                    the  time  of   reporting,   that   economic
                                    extraction is justified.


                                      -4-
<PAGE>


PROVEN (MEASURED) RESERVES          (SEC Guide 7 definition)  reserves for which
                                    (a)  quantity  is computed  from  dimensions
                                    revealed in outcrops,  trenches, workings or
                                    drill  holes;   grade  and/or   quality  are
                                    computed   from  the   results  of  detailed
                                    sampling  and (b) the sites for  inspection,
                                    sampling  and   measurement  are  spaced  so
                                    closely  and the  geologic  character  is so
                                    well  defined  that size,  shape,  depth and
                                    mineral     content    of    reserves    are
                                    well-established.

PYRITE                              an ore mineral of iron and sulphur.

QUALIFIED PERSON                    means an  individual  who (a) is an engineer
                                    or geoscientist  with at least five years of
                                    experience  in  mineral  exploration,   mine
                                    development or operation or mineral  project
                                    assessment, or any combination of these; (b)
                                    has  experience   relevant  to  the  subject
                                    matter  of  the  mineral   project  and  the
                                    technical  report;  and (c) is a  member  in
                                    good standing of a professional association.

QUARTZ                              a rock-forming mineral of silica and oxygen,
                                    often found in veins also.

RESERVE                             (SEC  Guide  7  definition)  that  part of a
                                    mineral  deposit which could be economically
                                    and  legally  extracted  or  produced at the
                                    time of the reserve determination.

REVERSE  CIRCULATION  DRILL         a large  machine that  produces a continuous
                                    chip  sample of the rock or  material  being
                                    drilled.

SILICIFICATION                      an  alteration  process of pre existing rock
                                    involving the introduction of or replacement
                                    by fine grained silica.

SILURIAN                            a  period  of  time  in  the  Paleozoic  era
                                    covering a time  period  between 440 and 400
                                    million years ago.

SULPHIDIZATION                      an ore forming  process where sulfur from an
                                    external   source  is  introduced  into  pre
                                    existing   rock  or  magma  and  bonds  with
                                    metallic  elements forming metallic sulphide
                                    minerals.

TECTONISM                           a  general  term  for all  movements  of the
                                    earth's crust.

TON                                 short ton (2,000 pounds).

TONNE                               metric tonne (2,204.6 pounds).

VEIN                                a tabular  body of rock  typically of narrow
                                    thickness and often mineralized  occupying a
                                    fault,    shear,    fissure   or    fracture
                                    crosscutting another pre-existing rock.

VOLCANOCLASTIC                      a volcanic rock created by the  accumulation
                                    and  solidification  of fragments of igneous
                                    rock issued during volcanic eruption.

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


BBL OR BARREL                       34.972 Imperial gallons or 42 U.S. gallons.

NET ACRES                           The gross acres multiplied by the percentage
                                    working  interest  therein  owned  or  to be
                                    owned by the Company.



                                      -5-
<PAGE>

NET REVENUE INTEREST                The percentage  interest in which the lessor
                                    has  the  right  to   receive  a   specified
                                    fractional  share  of the  mineral  produced
                                    from  the   property   or   value   thereof.

WORKING INTEREST                    The interest  held by a company in an oil or
                                    natural   gas   property,   which   interest
                                    normally  bears its  proportionate  share of
                                    the costs of exploration,  development,  and
                                    operation as well as any  royalties or other
                                    production  burdens.


FORWARD LOOKING STATEMENTS

The Company cautions readers regarding  forward looking  statements found in the
following  discussion  and  elsewhere  in this  annual  report  and in any other
statement  made by, or on the  behalf of the  Company,  whether or not in future
filings with the Securities  Exchange  Commission  (the "SEC").  Forward looking
statements are statements not based on historical  information  and which relate
to future  operations,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and contingencies,  many of which are beyond the Company's control
and many of which,  with respect to future  business  decisions,  are subject to
change.  See "Item 3. Key Information - Risk Factors".  These  uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking  statements made by or on
behalf of the Company.  The Company  disclaims any  obligation to update forward
looking statements.




                                      -6-
<PAGE>



                                     PART I


ITEM 1.  DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.
--------------------------------------------------------------------------------

Not applicable.


ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.
--------------------------------------------------------------------------------

Not applicable.


ITEM 3.  KEY INFORMATION.
--------------------------------------------------------------------------------

SELECTED FINANCIAL DATA

The  selected  financial  data of the Company for the years ended May 31,  2005,
2004,  and 2003 was derived from the  financial  statements of the Company which
have been  audited  by D&H Group  LLP,  independent  Chartered  Accountants,  as
indicated in their report which is included elsewhere in this annual report. The
selected  financial data set forth for the years ended May 31, 2002 and 2001 are
derived  from the  Company's  audited  consolidated  financial  statements,  not
included herein.

The  information  in the following  table was  extracted  from the more detailed
consolidated  financial  statements and related notes included herein and should
be read in conjunction  with such financial  statements and with the information
appearing  under  the  heading  "Item 5.  Operating  and  Financial  Review  and
Prospects."

Reference is made to Note 10 of the Company's  consolidated financial statements
included herein for a discussion of the material  differences  between  Canadian
generally accepted accounting  principles ("GAAP") and US GAAP, and their effect
on the Company's financial statements.

                               YEAR ENDED MAY 31,

<TABLE>
<CAPTION>

                                                     2005        2004(2)         2003        2002(1)       2001(1)
                                                     ----        ----            ----        ----          ----
<S>                                         <C>             <C>          <C>            <C>           <C>

Interest and Other Income                         $19,135        $4,099       $11,590      $113,663       $16,059

General and Administrative Expenses             $(128,638)     $(79,849)     $(99,139)    $(378,279)    $(164,702)
Loss From Continuing Operations                 $(108,742)     $(51,588)    $(306,587)    $(462,736)    $(189,291)

Net Earnings (Loss)                             $(108,742)     $179,158   $(1,072,481)    $(640,944)    $(375,893)

Total Assets                                      $86,194      $137,713      $135,533    $1,257,671    $1,440,756

Net Assets (Deficiency)                          $(21,836)      $(4,924)    $(184,082)     $877,399    $1,386,547

Capital Stock                                  $1,825,453    $1,751,878    $1,751,878    $1,740,878    $1,609,082

Weighted Average Number of Shares               1,931,044     1,911,521     1,910,919     1,627,355       808,439

Dividends per Share                                   Nil           Nil           Nil           Nil           Nil

Basic and Fully Diluted
     Earnings (Loss) Per Share from
     Continuing Operations                         $(0.06)       $(0.03)       $(0.16)       $(0.28)       $(0.23)
     Earnings (Loss) Per Share                     $(0.06)        $0.09        $(0.56)       $(0.39)       $(0.46)

</TABLE>


(1)  On September  27, 2001,  the Company  completed a  reorganization  with the
     shareholders of California Exploration Inc. ("CalEx").  This reorganization
     was treated for accounting purposes as a reverse takeover, whereby CalEx is
     deemed to be the purchaser  and parent  company.  Accordingly,  CalEx's net
     assets are included in the consolidated  balance sheets at their historical
     book  value and the net  assets  and  business  of the  Company,  the legal


                                      -7-
<PAGE>


     parent,  were  recorded  at their fair values on  September  27,  2001.  In
     addition,  the  consolidated  statements of operations and deficit and cash
     flow for the year ended May 31, 2002 include  CalEx's results of operations
     and cash flow for the year ended May 31, 2002 and the Company's  results of
     operations and cash flow from September 27, 2001. The  comparative  figures
     for the year ended May 31, 2001 are those of CalEx.

(2)  Effective  May 31,  2004,  the Company  determined  to abandon  CalEx.  The
     Company no longer accounts for the activities of CalEx.

ADJUSTMENT TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The  consolidated  financial  statements  of  the  Company  have  been  prepared
according to Canadian  GAAP which differ in certain  material  respects  from US
GAAP. Material  differences between Canadian and US GAAP and their effect on the
Company's consolidated financial statements are summarized in the tables below.
<TABLE>
<CAPTION>

                                                       2005            2004            2003
                                                         $               $               $
<S>                                               <C>             <C>             <C>

Consolidated Statements of Operations
    and Comprehensive Income

Earnings (loss) for the year
    Canadian GAAP                                      (108,742)        179,158      (1,072,481)

Other Comprehensive Income
    Unrealized holding gain (loss) on
      available-for-sale marketable securities (i)       (9,000)         38,400          48,000
                                                   ------------    ------------    ------------


Comprehensive earnings (loss) for the year             (117,742)        217,558      (1,024,481)
                                                   ============    ============    ============

Earnings (loss) per share basic and fully diluted
    - US GAAP                                            $(0.07)          $0.11          $(0.54)
                                                   ============    ============    ============

</TABLE>

                                                       2005            2004
                                                         $               $
Consolidated Balance Sheets

Total Assets
    Canadian GAAP                                        86,194         137,713
    Cumulative unrealized holding gains on
         available for sale securities (i)                6,352          89,161
                                                   ------------    ------------
    US GAAP                                              92,546         226,874
                                                   ============    ============

Total Liabilities
    Canadian GAAP                                       108,030         142,637
                                                   ------------    ------------
    US GAAP                                             108,030         142,637
                                                   ============   =============

Shareholders' Equity (Deficiency)
    Canadian GAAP                                       (21,836)         (4,924)
    Cumulative unrealized holding gains on
         available for sale securities (i)                6,352          89,161
                                                   ------------    ------------
    US GAAP                                             (15,484)         84,237
                                                   ============    ============




                                      -8-
<PAGE>



(i)      Marketable securities

         US  GAAP  requires  marketable   securities  which  are  classified  as
         available for sale to be carried at fair value, as determined by quoted
         published market prices,  with unrealized losses and gains on available
         for  sale  securities  to  be  included  as  a  separate  component  of
         shareholders'  equity.  In addition,  net realized  gains and losses on
         security   transactions   would   be   determined   on   the   specific
         identification cost basis and included in the determination of earnings
         for the year.

(ii)     Private Placements of Common Stock

         The Company conducts the majority of its equity financings  pursuant to
         private  placements.  US GAAP  does  not  permit  a  discount  from the
         estimated  fair value,  or the market price,  as  appropriate.  US GAAP
         requires the recognition of the estimated fair value or market value of
         the Company's common stock as a credit to share capital,  with a charge
         to  operations  for the  portion  of the  discount  relating  to equity
         financings  conducted  with officers and directors of the Company and a
         charge to  shareholders'  equity,  as a capital  distribution,  for the
         discount relating to the remaining portion of the equity financings.

         Under US GAAP,  share  capital,  as at May 31,  2005 would  increase by
         $315,721 (2004 - $315,721; 2003 - $315,721).  There is no net change to
         shareholders' equity.

(iii)    Income Tax

         Under  Canadian  GAAP,  deferred tax assets  relating to the  potential
         benefit  of income tax loss  carryforwards  are not  recognized  unless
         there is reasonable  assurance of realization  of the benefit.  US GAAP
         provides similar treatment,  but requires the benefit be recognized and
         a valuation  allowance be  recognized  to fully offset the deferred tax
         asset.

         Provision  for (benefit  from) income taxes for the 2005 fiscal year is
         as follows:

                                                         $             RATE
              Current
              Federal and provincial                     39,000           35.6%
              Net operating carryforward                (39,000)          35.6%
                                                   ------------    ------------
                                                              -              -
                                                   ============    ============

         As at May 31,  2005,  the Company has fully  reserved  the $158,000 tax
         benefit of operating loss  carryforwards,  by a valuation  allowance of
         the same  amount,  because the  likelihood  of  realization  of the tax
         benefit cannot be determined.

(iv)     Functional Currency

         The Company's functional currency is the Canadian dollar.

(v)      Development Stage Company

         As of May 31,  2005,  the Company is  considered  a  development  stage
         company as defined by SFAS No. 7.

(vi)     The Company's consolidated statements of cash flow comply with US GAAP.


                                      -9-
<PAGE>



NEW ACCOUNTING STANDARDS

The  Financial  Accounting  Standards  Board  ("FASB")  has issued  Statement of
Financial  Accounting Standards No. 123(R) Share Based Payments ("SFAS 123(R)").
SFAS 123(R)  amends SFAS 123 by requiring  share based  payments to be accounted
for at fair value. SFAS 123(R) is effective for fiscal periods ending after June
15, 2005. The adoption of SFAS 123(R) will eliminate a difference  with Canadian
GAAP as the Company accounts for share based payments at fair value for Canadian
GAAP purposes.

The FASB has also issued SFAS No. 153  Exchange of  Non-Monetary  Assets  ("SFAS
153") which is effective  for fiscal years ending after June 15, 2005.  SFAS 153
refines  the  circumstances  under  which  non-monetary  transactions  should be
accounted for at fair value. The adoption of SFAS 153 is not expected to have an
effect on the Company's financial position.

The FASB has also issued SFAS No. 154 Accounting Changes and Error Corrections -
A Replacement of APB Opinion No. 20 and FASB Statement No. 3 ("SFAS 154"), which
is effective for fiscal years ending after December 15, 2005.  SFAS 154 requires
that changes in accounting  policy be accounted for on a retroactive  basis. The
adoption  of  SFAS  154 is not  expected  to  have an  effect  on the  Company's
financial position.

EXCHANGE RATE HISTORY

The following table sets forth the average exchange rate for one Canadian dollar
expressed  in terms of one U.S.  dollar for the fiscal years ended May 31, 2005,
2004, 2003, 2002, and 2001.

         PERIOD                                      AVERAGE
         ---------------------------                 -------
         June 1, 2004 - May 31, 2005                  0.7984
         June 1, 2003 - May 31, 2004                  0.7443
         June 1, 2002 - May 31, 2003                  0.6574
         June 1, 2001 - May 31, 2002                  0.6377
         June 1, 2000 - May 31, 2001                  0.6596

The following  table sets forth the high and low exchange rates for one Canadian
dollar  expressed  in terms of one U.S.  dollar for the  six-month  period ended
September 30, 2005.

         MONTH                                         HIGH             LOW
         --------------                               ------          ------
         September 2005                               0.8615          0.8418
         August 2005                                  0.8412          0.8207
         July 2005                                    0.8300          0.8041
         June 2005                                    0.8159          0.7950
         May 2005                                     0.8082          0.7872
         April 2005                                   0.8233          0.7957

Exchange  rates are based upon the noon  buying  rate in New York City for cable
transfers in foreign currencies as certified for customs purposes by the Federal
Reserve Bank of New York.

The noon rate of  exchange on October 25,  2005,  reported by the United  States
Federal  Reserve Bank of New York for the  conversion  of Canadian  dollars into
United States dollars was CDN$1.1768 (US$0.8498 = CDN$1.00).

RISK FACTORS

The  Company's  initial  business  was  the  exploration  for,  development  and
exploitation  of oil and gas prospects  principally in the United States.  In an
attempt  to  diversify  the  Company's  operations,  management  reviewed  other


                                      -10-
<PAGE>


business opportunities.  In December 2001, the Company entered into an agreement
to acquire a private company in the software development industry. The agreement
was  ultimately  not proceeded with and was terminated in January 2003. In March
2004, the Company sold its remaining interests in oil and gas properties.

On September 14, 2005 the Company completed the acquisition of 0724000 B.C. Ltd.
(formerly  Magellan  Gold Corp.  and  Centrasia  Mining  Corp.)  ("724 BC") (the
"Centrasia Acquisition").

As a result of the Centrasia Acquisition,  as of the date of this annual report,
the Company's  principal  asset is an agreement (the "Marsa  Option") to acquire
all of the issued and outstanding share capital of Bulakashu Mining Company Ltd.
("BMC"),  a Kyrgyz limited liability company,  from Marsa Gold Corp.  ("Marsa"),
also a privately owned Kyrgyz company. See "Item 4. Information on the Company -
Business  Overview - Marsa  Option" and "Item 7.  Significant  Shareholders  and
Related Party Transactions - Related Party  Transactions." BMC's sole asset is a
license  permitting the  exploration of the Bulakashu Gold Property,  located in
the north  central  area of the Kyrgyz  Republic.  See "Item 4.  Description  of
Business."  Accordingly,  the risk factors set forth below relate to the Company
and the activities of BMC.

The  historical  results of the  Company's  activities  discussed in this annual
report are not necessarily  indicative of the future  activities of the Company.
In particular,  the Company's activities have changed  significantly as a result
of the Centrasia  Acquisition from those in which it has  historically  engaged.
Therefore,  the discussion of the Company's  historical  activities contained in
this annual report may not provide an adequate  representation  of the Company's
future performance and results of its activities.

RISKS RELATED TO THE COMPANY

THE  COMPANY  HAS LIMITED  FINANCIAL  RESOURCES  AND IF THE COMPANY IS UNABLE TO
SECURE ADDITIONAL FUNDING, THE COMPANY MAY FAIL.

The Company has limited financial resources,  no revenues,  and has no assurance
that additional funding will be available to it. As of May 31, 2005, the Company
had  working  capital of  $20,536.  As of the date of this  annual  report,  the
Company is not  generating  any cash flow from its  operations  to meet  ongoing
corporate overhead and to repay its outstanding  liabilities.  Subsequent to May
31, 2005, the Company  completed a private placement of units to raise $875,000,
of which $70,000 had been received as of May 31, 2005. In addition,  the Company
has  agreed to conduct a further  offering  (the  "Short  Form  Offering")  of a
minimum of 2,307,692 units to a maximum of 3,076,923  units,  for gross proceeds
between  $1,500,000 and $2,000,000.  Upon completion of the Short Form Offering,
the  Company  believes  it will  have  sufficient  working  capital  to fund its
commitments  under the Marsa  Option  during the 12 months from  November,  2005
through October, 2006. See "Item 5. Operating and Financial Review and Prospects
- Liquidity and Capital  Resources."  The Company plans to expend  approximately
US$860,000  on  inter-company  loans to BMC  pursuant  to the terms of the Marsa
Option  during the period from  September  14, 2005 to December  31,  2006.  The
Company  does not believe it will need to raise  additional  capital  within the
next 12 months; however, the Company may need to raise additional capital during
fiscal 2007. In addition,  the Company may need to raise  additional funds based
upon the results of the exploration programs on the Bulakashu Property or if the
Company acquires any additional properties.  At this time, the Company is unable
to  estimate  how much  capital  it will  need to raise or the terms of any such
financing. The Company may not be able to raise the necessary funds, if any, and
may not be able to raise  such  funds  on  terms  which  are  acceptable  to the
Company.  In the event the Company is unable to raise adequate  finances to fund
its  proposed  activities,  the Company may have to delay or abandon its funding
commitments  under the Marsa Option.  Any further  additional  equity  financing
undertaken by the Company may cause dilution to its  shareholders.  See "Item 4.
Information on the Company" and "Item 5.
Operating and Financial Review and Prospects."

The only significant  source of funds presently  available to the Company is the
sale of its equity  capital.  There can be no assurance that the Company will be
able to  obtain  adequate  financing  in the  future  or that the  terms of such
financing will be favourable.  Failure to obtain such additional financing could
result  in  delay  or  indefinite   postponement  of  further   exploration  and
development of its projects with the possible loss of such properties.



                                      -11-
<PAGE>


If the  Company  issues  additional  shares  to fund its  operations  or for the
acquisition  of  additional  businesses,  the  shareholders  of the Company will
experience dilution of their ownership interests.

The Company's consolidated financial statements were prepared on a going concern
basis  which  assumes  that the  Company  will be able to realize its assets and
discharge its liabilities in the normal course of business.

THE COMPANY HAS NO  OPERATIONS  OR REVENUES  AND WILL  CONTINUE TO INCUR  LOSSES
UNTIL IT CAN ACQUIRE A BUSINESS OR ASSETS WHICH GENERATE  SUFFICIENT REVENUES TO
COVER THE COMPANY'S OPERATING AND OVERHEAD EXPENSES.

The Company has no  operations  or revenues  and  essentially  has no  financial
resources.  The Company will,  in all  likelihood,  continue to incur  operating
expenses without corresponding revenues until the Company either (i) acquires an
interest  in BMC and  BMC is  able to  successfully  locate,  develop  and  mine
minerals from its interests or (ii) acquires a different  business  opportunity.
There is no assurance that the Company can identify such a business  opportunity
and  consummate  such a  combination.  As a result,  the Company may continue to
incur net operating losses that will increase continuously.

THE COMPANY HAS NO HISTORY OR  EXPERIENCE  IN THE MINERAL  EXPLORATION  BUSINESS
AND, AS A RESULT, ITS ACTIVITIES MAY BE UNSUCCESSFUL.

To date the Company  has limited  experience  in any  industry.  There can be no
assurance that the Company will generate profits in the future.  The Company has
experienced,  on a consolidated  basis,  losses in most years of its operations.
There is no  assurance  that the Company  will be able to achieve  and  maintain
profitable  operations.  The  likelihood  of  success  of the  Company  must  be
considered in light of the problems,  expenses,  difficulties,  complication and
delays  frequently  encountered in connection with the  establishment of any new
business. There is no assurance that the Company can generate revenues,  operate
profitably,  or  provide a return on  investment,  or that it will  successfully
implement its plans.

THE COMPANY MUST MAKE ITS REQUIRED  PAYMENTS  UNDER THE MARSA OPTION IN ORDER TO
ACQUIRE ALL OF THE OWNERSHIP INTERESTS OF BMC.

The Company  has  entered  into an  agreement  to acquire  all of the  ownership
interests of BMC. If the Company fails to make the loans, payments and issuances
of shares as required under the Marsa Option,  the Company may lose any interest
is has in BMC and any payments made under the Marsa Option.

THE  COMPANY  MAY  HAVE  TO  ENTER  INTO  JOINT  VENTURES  TO MEET  ITS  FUNDING
REQUIREMENTS UNDER THE MARSA OPTION.

If the  Company  is  unable to raise the  funds  necessary  to meet its  funding
requirements  under the Marsa  Option,  the Company may have to enter into joint
venture  agreements whereby another person or entity would provide the necessary
funding.  As a result,  the Company  may  experience  dilution of its  ownership
interest in BMC and/or may be unable to exert influence over strategic decisions
relating to BMC.

THE  BUSINESS OF  ACQUIRING  PROPERTIES  AND MINERAL  EXPLORATION  COMPANIES  IS
EXTREMELY  COMPETITIVE  AND IF THE  COMPANY IS UNABLE TO COMPETE  AGAINST  OTHER
COMPANIES,  THE COMPANY MAY BE UNABLE TO ACQUIRE OTHER PROPERTIES OR EXPLORATION
COMPANIES.

Significant  competition exists for mineral  opportunities.  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
interests or exploration companies on terms it considers acceptable.

TRADING OF THE COMPANY'S COMMON SHARES HAVE BEEN EXTREMELY LIMITED AND INVESTORS
MAY NOT BE ABLE TO RE-SELL THEIR SHARES.

To date,  there has been extremely  limited  trading of the Company's  shares of
common stock on the  Over-the-Counter  Bulletin Board system and the TSX Venture
Exchange (the "TSX-V").  Therefore,  persons  purchasing shares of the Company's
common  stock  may not be able to  resell  the  shares  and may have to hold the


                                      -12-
<PAGE>


shares indefinitely. In addition, purchasers may not be able to use their shares
for  collateral or loans and may not be able to liquidate at a suitable price in
the event of an emergency.

IF THE  COMPANY  ISSUES  SHARES OR OPTIONS  TO ITS  OFFICERS,  DIRECTORS  OR KEY
EMPLOYEES,  OR IF THE COMPANY  OBTAINS  FUNDING  THROUGH THE SALE OF  ADDITIONAL
COMMON SHARES, THE SHAREHOLDERS WILL EXPERIENCE DILUTION.

The Company has granted to some or all of its directors,  officers, insiders and
key  employees  options to  purchase  the  Company's  common  shares as non-cash
incentives to those employees.  In the future,  the Company may grant additional
options  and such  options  may be granted at  exercise  prices  equal to market
prices, or at prices as allowed under the policies of the TSX-V, when the public
market is depressed.  To the extent that significant numbers of such options may
be granted and  exercised,  the interests of then existing  shareholders  of the
Company will be subject to additional dilution.

THE PRICE OF THE COMPANY'S  COMMON SHARES IS SUBJECT TO MARKET  FLUCTUATIONS AND
VOLATILITY  WHICH  MAY NOT BE  RELATED  TO THE  COMPANY'S  ACTIVITIES  AND  SUCH
FLUCTUATIONS MAY IMPACT THE COMPANY'S ABILITY TO COMPLETE EQUITY FINANCINGS;  IF
THE COMPANY CANNOT COMPLETE ADDITIONAL EQUITY FINANCINGS,  IT MAY NOT BE ABLE TO
CONTINUE ITS ACTIVITIES.

In recent years, the securities  markets in Canada have experienced a high level
of price and volume  volatility,  and the  market  price of  securities  of many
companies,  particularly junior natural resources  exploration  companies,  have
experienced  wide  fluctuations in price 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 shares
fluctuated  from a high of $0.80 to a low of $0.26  during the  12-month  period
ending September 30, 2005.  Continued price fluctuations will have a significant
impact on the Company's ability to complete equity financings.

CONFLICTS  OF INTEREST  MAY ARISE AMONG THE  MEMBERS OF THE  COMPANY'S  BOARD OF
DIRECTORS AND SUCH CONFLICTS MAY CAUSE THE COMPANY TO ENTER INTO TRANSACTIONS ON
TERMS WHICH ARE NOT BENEFICIAL TO THE COMPANY.

The directors and officers of the Company will not be devoting all their time to
the  affairs of the  Company,  but will be  devoting  such time as  required  to
effectively  manage the  Company.  Some of the  directors  and  officers  of the
Company are engaged and will  continue to be engaged in the search for  property
or assets or business prospects on their own behalf or on behalf of others. Such
associations may give rise to conflicts of interest from time to time.

Certain of the  directors,  officers  and  shareholders  of the Company are also
directors,  officers  and  shareholders  of other  companies  and  conflicts  of
interest  may arise  between  their  duties as  directors  of the Company and as
directors of other  companies.  All such  possible  conflicts are required to be
disclosed in accordance with the requirements of the British  Columbia  BUSINESS
CORPORATIONS  ACT, as amended (the  "BCBCA"),  and the  directors  concerned are
required to govern themselves in accordance with the obligations imposed on them
by law.

The  directors  of the Company are  required by law to act  honestly and in good
faith with a view to the best  interests  of the  Company  and to  disclose  any
interest which they may have in any project or opportunity of the Company.  If a
conflict of interest arises at a meeting of the board of directors, any director
in a conflict will disclose his interest and abstain from voting on such matter.
The Company  does not  currently  have a right of first  refusal  pertaining  to
opportunities that come to management's  attention insofar as such opportunities
may relate to the  Company's  proposed  business  operations.  The  officers and
directors are, so long as they are officers or directors of the Company, subject
to the restriction that all opportunities  contemplated by the Company's plan of
operation  which come to their  attention,  either in the  performance  of their
duties or in any other manner, will be considered  opportunities of, and be made
available to the Company and the companies that they are  affiliated  with on an
equal basis. If the Company or the companies in which the officers and directors
are affiliated with both desire to take advantage of the opportunities, the said
officers  and  directors  would  abstain  from  negotiating  and voting upon the
opportunity.  However,  all directors may still  individually  take advantage of
opportunities  if the Company  declines to do so. Except as set forth above, the
Company  has not adopted any  conflict of interest  policy with  respect to such
transactions.  In determining whether or not the Company will participate in any
project or opportunity,  the director will primarily consider the degree of risk
which the Company may be exposed and its financial  position at the time. Except
for Mr.  Turnbull,  no members of management  have entered into  non-competition
agreements with Baradero.



                                      -13-
<PAGE>

See "Item 7. Major  Shareholders and Related Party  Transactions - Related Party
Transactions - Conflicts of Interest".

THE COMPANY DOES NOT PAY DIVIDENDS ON ITS COMMON  SHARES;  THEREFORE,  INVESTORS
SEEKING DIVIDEND INCOME SHOULD NOT PURCHASE THE COMMON SHARES.

The Company has never  declared or paid cash  dividends on its common shares and
does  not  anticipate  doing so in the  foreseeable  future.  Additionally,  the
determination as to the declaration of dividends is within the discretion of the
Company's  Board of  Directors,  which may never  declare cash  dividends on the
Company's  common  stock.  Investors  cannot expect to receive a dividend on the
Company's common shares in the foreseeable future, if at all.

THE  COMPANY'S  SHARES ARE  SUBJECT TO THE SEC'S PENNY  STOCK  RULES,  WHICH MAY
RESTRICT  THE  ABILITY  OF BROKERS TO SELL THE  COMPANY'S  COMMON  STOCK AND MAY
REDUCE THE SECONDARY MARKET FOR THE COMMON STOCK.

The SEC has adopted  rules that regulate  broker-dealer  practices in connection
with  transactions  in  "penny  stock".  Generally,   penny  stocks  are  equity
securities with a price of less than US $5.00 (other than securities  registered
on  certain  national  securities  exchanges  or  quoted  on  certain  automated
quotation  systems).  If the Company's  shares are traded for less than US $5.00
per share,  as they currently are, the shares will be subject to the SEC's penny
stock rules unless (1) the  Company's  net tangible  assets exceed US $5,000,000
during the Company's first three years of continuous operations or US $2,000,000
after the  Company's  first three  years of  continuous  operations;  or (2) the
Company has had  average  revenue of at least US  $6,000,000  for the last three
years. The penny stock rules require a broker-dealer,  prior to a transaction in
a penny stock not  otherwise  exempt from the rules,  to deliver a  standardized
risk disclosure document  prescribed by the SEC that provides  information about
penny  stocks and the nature and level of risks in the penny stock  market.  The
broker-dealer  also  must  provide  the  customer  with  current  bid and  offer
quotations for the penny stock,  the compensation of the  broker-dealer  and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account. In addition, the penny
stock rules require that prior to a  transaction  in a penny stock not otherwise
exempt  from  those  rules,  the  broker-dealer  must  make  a  special  written
determination  that the penny stock is a suitable  investment  for the purchaser
and  receive  the  purchaser's  written  agreement  to  the  transaction.  These
requirements  may have the effect of reducing  the level of trading  activity in
the secondary  market for a stock that becomes subject to the penny stock rules.
Since the  Company's  shares are  traded  for less than US $5.00 per share,  the
Company's  common  stock is subject to the penny  stock  rules.  Therefore,  the
holders of the common  stock may find it  difficult  to sell the common stock of
the Company.  These rules may restrict the ability of brokers to sell the common
stock and may  reduce the  secondary  market  for the  common  stock.  A limited
secondary  market may result in a decrease  in the value of the shares  and/or a
partial or total loss of an investor's investment.

THE COMPANY MAY BE DEEMED TO BE A "PASSIVE FOREIGN INVESTMENT  COMPANY" FOR U.S.
TAX PURPOSES WHICH COULD SUBJECT U.S. SHAREHOLDERS TO INCREASED TAX LIABILITY.

The Company may be deemed to be a "Passive Foreign Investment Company" ("PFIC").
See "Item 10. Additional Information - Taxation." If the Company is deemed to be
a PFIC, a United States holder of the Company's  common shares would be required
to pay an interest  charge  together with tax calculated at maximum tax rates on
certain "excess distributions" (defined to include certain dividends from a PFIC
and any gain on the sale of stock of a PFIC) unless such holder made an election
either to (1) include in his or her taxable  income his or her pro rata share of
the PFIC's ordinary earnings and net capital gains under the Qualified  Electing
Fund rules or (2) mark to market his or her Company  common shares at the end of
each taxable  year as set forth in Section 1296 of the Internal  Revenue Code of
1986, as amended. The elections require certain conditions be met such as filing
on or before the due date, as extended,  for filing the shareholder's income tax
return for the first taxable year to which the election will apply.

THIS ANNUAL REPORT CONTAINS STATEMENTS ABOUT FUTURE EVENTS AND RESULTS WHICH MAY
NOT BE ACCURATE.

Statements  contained in this annual  report that are not  historical  facts are
forward-looking statements that involve risks and uncertainties. Such statements
may not prove to be accurate as actual  results and future  events  could differ
materially from those anticipated in such statements.




                                      -14-
<PAGE>



THE COMPANY'S  OPERATIONS ARE NOT, AND MAY NOT BE, DIVERSIFIED AND, AS SUCH, THE
COMPANY MAY BE SUBJECT TO  FLUCTUATIONS IN THE BUSINESS OR INDUSTRY IN WHICH THE
COMPANY MAY OPERATE.

The Company's  inability to diversify its activities  into a number of areas may
subject it to economic  fluctuations  within a  particular  business or industry
and, therefore, increase the risks associated with its operations.

THE IMPACTS OF THE CENTRASIA ACQUISITION ARE UNCERTAIN.

The impact on the Company as a result of the Centrasia  Acquisition is uncertain
and there is no assurance that the Centrasia Acquisition will result in improved
financial performance by the Company.

THE  COMPANY  IS  DEPENDENT  UPON  ITS  MANAGEMENT  AND  THE  LOSS OF ANY OF ITS
MANAGEMENT AND/OR IF THE COMPANY IS UNABLE TO RECRUIT ADDITIONAL  MANAGERS COULD
NEGATIVELY IMPACT THE COMPANY'S ABILITY TO CONTINUE ITS ACTIVITIES.

The success of the  activities  of the  Company is  dependent  to a  significant
extent on the efforts and abilities of its  management.  The loss of services of
any of its  management  could have a  material  adverse  effect on the  Company.
Except  for the  employment  agreement  with  Mr.  Turnbull  and the  Management
Agreement with Chase Management Ltd. ("Chase"), the Company has not entered into
employment  agreements  with any of its officers and is not expected to do so in
the foreseeable future. See "Item 6. Directors,  Senior Management and Employees
-  Compensation - Executive  Compensation - Centrasia - Employment  Agreements."
The Company has not obtained  key-man  life  insurance on any of its officers or
directors.  Notwithstanding  the combined limited experience and time commitment
of management,  loss of the services of any of these individuals would adversely
affect  development  of the Company's  business and its likelihood of continuing
operations.

INVESTORS  IN THE  UNITED  STATES  MAY  NOT  BE  ABLE  TO  ENFORCE  THEIR  CIVIL
LIABILITIES AGAINST THE COMPANY OR ITS DIRECTORS AND OFFICERS.

Certain of the directors and officers of the Company  reside  outside of Canada.
Substantially  all of the assets of the Company  are located  outside of Canada.
Although the Company has appointed Chase  Management Ltd. as the Company's agent
for service of process in Canada, it may not be possible for investors to effect
service of process  within  Canada upon the  directors  and  officers who reside
outside of Canada. It may also not be possible to enforce against certain of the
directors  and  officers of the Company  judgments  obtained in Canadian  courts
predicated upon the civil liability provisions of applicable  securities laws in
Canada.

The Company is a corporation  domiciled in British Columbia.  Except for William
Tafuri,  none of the Company's officers or directors are residents of the United
States, and all or a substantial  portion of the non-U.S.  resident officers and
directors assets are located outside of the United States.  As a result,  it may
be difficult for U.S.  holders of the Company's  common shares to effect service
of process on the non-U.S.  resident  officers and  directors  within the United
States or to enforce judgments obtained in the U.S. based on the civil liability
provisions  of the U.S.  federal  securities  laws  against  the  Company or its
non-U.S.  resident officers and directors. In addition, a shareholder should not
assume  that the courts of Canada (i) would  enforce  judgments  of U.S.  courts
obtained in actions  against the Company,  its officers or directors  predicated
upon the civil liability provisions of the U.S. federal securities laws or other
laws  of the  United  States,  or  (ii)  would  enforce,  in  original  actions,
liabilities against the Company,  its officers or directors  predicated upon the
U.S. federal securities laws or other laws of the United States.

However, U.S. laws would generally be enforced by a Canadian court provided that
those laws are not contrary to Canadian  public  policy,  are not foreign  penal
laws or laws that deal with  taxation  or the  taking of  property  by a foreign
government  and provided that they are in compliance  with  applicable  Canadian
legislation regarding the limitation of actions.  Also, a judgment obtained in a
U.S.  court would  generally  be  recognized  by a Canadian  court  except,  for
example:

         a)       where the U.S.  court where the  judgment  was rendered had no
                  jurisdiction according to applicable Canadian law;



                                      -15-
<PAGE>



         b)       the judgment was subject to ordinary remedy (appeal,  judicial
                  review and any other  judicial  proceeding  which  renders the
                  judgment not final,  conclusive or enforceable  under the laws
                  of  the  applicable   state)  or  not  final,   conclusive  or
                  enforceable under the laws of the applicable state;

         c)       the judgment  was obtained by fraud or in any manner  contrary
                  to natural justice or rendered in contravention of fundamental
                  principles of procedure;

         d)       a dispute between the same parties,  based on the same subject
                  matter  has given rise to a  judgment  rendered  in a Canadian
                  court or has been decided in a third  country and the judgment
                  meets the necessary  conditions for  recognition in a Canadian
                  court;

         e)       the outcome of the judgment of the U.S. court was inconsistent
                  with Canadian public policy;

         f)       the judgment enforces  obligations  arising from foreign penal
                  laws or laws that deal with taxation or the taking of property
                  by a foreign government; or

         g)       there has not been  compliance  with  applicable  Canadian law
                  dealing with the limitation of actions.

RISKS RELATED TO BMC

NONE OF THE PROPERTIES OWNED OR OPTIONED BY BMC CONTAIN  "RESERVES" AND THERE IS
NO ASSURANCE THAT THE QUANTITIES OF PRECIOUS  METALS  IDENTIFIED BY BMC, IF ANY,
WILL BE SUFFICIENT FOR BMC TO RECOVER ITS INVESTMENT AND COSTS OF ITS ACTIVITIES
AND TO REPAY ANY LOANS TO THE COMPANY.

All of BMC's property  interests are in the exploration stage and do not contain
any  "reserves",  as that term is  defined  in  Industry  Guide 7 adopted by the
Securities and Exchange  Commission.  The term "reserves" is defined in Industry
Guide 7 as "[t]hat part of a mineral  deposit  which could be  economically  and
legally  extracted  or  produced  at the  time  of the  reserve  determination."
Industry    Guide   7   is    available    from    the    SEC's    website    at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7.

Mineral  exploration  involves  significant  risk  and few  properties  that are
explored are ultimately  developed into producing  mines.  The probability of an
individual  prospect ever having reserves that meet the requirements of Industry
Guide 7 is extremely remote.  BMC's property interests,  in all probability,  do
not contain any reserves and any funds spent on  exploration  of BMC's  property
interests  will  probably  be lost.  If any of BMC's  exploration  programs  are
successful, BMC will require additional funds to advance the property beyond the
exploration stage.  Substantial  expenditures are required to establish reserves
through drilling, to develop  metallurgical  processes to extract the metal from
the ore and, in the case of new properties, to develop the mining and processing
facilities and infrastructure at any site chosen for mining. If BMC is unable to
secure  additional  funding,  BMC may  lose its  interest  in one or more of its
mineral claims and/or may be required to cease all activities.  Most likely, the
Company will be required to provide any additional  funding  required by BMC and
if the  Company  is  unable  to  provide  such  funding,  BMC may not be able to
continue its activities on its properties.

BMC HAS LIMITED  FINANCIAL  RESOURCES AND HAS NOT GENERATED ANY REVENUE FROM ITS
ACTIVITIES,  AS A RESULT, BMC MAY NOT BE ABLE TO CONTINUE ITS ACTIVITIES AND THE
COMPANY'S ADVANCES TO, AND INVESTMENTS IN, BMC MAY BE WORTHLESS.

BMC has limited  financial  resources and has no source of operating  cash flow.
BMC has not  generated  any revenues  from its property  interests  and does not
anticipate any in the foreseeable future. Historically, the only source of funds
available  to BMC has been loans and advances  from 724 BC and the Company.  BMC
is,  essentially,  entirely  dependent  upon the Company for funds to pursue its
exploration  programs.  If the  Company is unable to provide  funds to BMC,  the
Company may lose any interest it has in BMC and may not recover any funds loaned
to BMC.

BMC  estimates  that  it will  need  approximately  $1,000,000  to  conduct  its
exploration  programs  during the period from October 2005 to December 2006. See
"Item 4. Information on the Company - Plan of Operation."




                                      -16-
<PAGE>



Pursuant to the terms of the Marsa  Option and the Loan  Agreement,  the Company
has  agreed to provide  inter-company  loans to BMC in the  principal  amount of
$1,200,000  by December  31,  2006,  of which  approximately  $300,000  has been
advanced as of the date of this annual report.  See "Item 4.  Information on the
Company - Business Overview - Marsa Option."

Provided that the Company  completes the Short Form  Offering,  the Company does
not believe it will need to raise  additional  capital within the next 12 months
to provide the necessary  inter-company  loans to BMC; however,  the Company may
decide to raise  additional  capital  during  fiscal 2006 for other  projects or
purposes.  See "Item 4.  Information on the Company - History and Development of
the  Company." At this time,  the Company is unable to estimate how much capital
it will need to raise or the terms of any such financing. The Company may not be
able to raise the  necessary  funds,  if any,  and may not be able to raise such
funds on terms which are acceptable to the Company.

In the  event the  Company  is unable  to raise  adequate  finances  to fund its
obligations  to BMC, the Company may lose any interests it has in BMC and/or may
not be able to recover  any funds  loaned to BMC.  Additionally,  if the Company
fails  to  provide  the  inter-company  loans  to BMC,  BMC may have to delay or
indefinitely  postpone  further  exploration of its property  interests with the
possible  loss  of  its  interests.  Any  further  additional  equity  financing
undertaken by the Company may cause dilution to its  shareholders.  See "Item 4.
Information  on the Company" and "Item 5.  Operating  and  Financial  Review and
Prospects."

EXPLORATION  ACTIVITIES  ARE SUBJECT TO MANY RISKS,  INCLUDING  ECONOMIC  RISKS,
WHICH  MAY  CAUSE  BMC'S  ACTIVITIES  TO BE  UNECONOMIC  AND BMC  MAY  NOT  HAVE
SUFFICIENT EXPERIENCE TO ADEQUATELY CONDUCT ITS PROPOSED ACTIVITIES.

Exploration and development risks for the business of exploring for minerals and
mining are high. Few properties that are explored are ultimately  developed into
producing mines. Major expenses may be required to advance a property beyond the
exploration  stage, to develop  metallurgical  processes and to construct mining
and processing  facilities at a particular site. It is impossible to ensure that
exploration programs planned by BMC will result in profitable activities.

Unusual or unexpected  formations,  formation  pressures,  fires, power outages,
labour  disruptions,   flooding,  explosions,  cave-ins,  land  slides  and  the
inability  to obtain  suitable or adequate  machinery,  equipment  or labour are
other  risks  involved  in mining  activities  and the  conduct  of  exploration
programs and the advancement of a property beyond the exploration stage. BMC has
limited  experience  in  the  conducting   exploration  programs  and  advancing
properties beyond the exploration stage. BMC has relied and may continue to rely
upon consultants for expertise.  The economics of developing  mineral properties
are affected by many factors including the cost of operations, variations of the
grade of ore mined and fluctuations in the price of minerals produced. Depending
on the price of minerals  produced,  BMC may determine that it is impractical to
commence or continue  commercial  production.  Although  precautions to minimize
risk will be  taken,  processing  operations  are  subject  to  hazards  such as
equipment  failure or failure of retaining dams around tailings  disposal areas,
which may result in environmental pollution and consequent liability.  There are
no assurances  that BMC's  exploration  activities will result in development or
mining operations.

BMC MAY NOT HAVE PROPER  TITLE TO ITS  PROPERTIES  AND,  AS A RESULT,  MAY INCUR
SIGNIFICANT  EXPENSES TO OBTAIN  PROPER  TITLE,  OR MAY HAVE TO ABANDON ANY SUCH
PROPERTY.

The Company  believes  that BMC has  diligently  investigated  all title matters
concerning  the  ownership of all mineral  claims and plans to do so for all new
claims and rights to be acquired. To the best of the Company's knowledge,  title
to all of BMC's  properties  is in good  standing;  however,  this should not be
construed as a guarantee of title.  The  properties in which BMC has an interest
may be affected by undetected defects in title, such as the reduction in size of
the mineral claims and other third party claims affecting BMC's priority rights.
BMC's  interests in mineral  tenures are  comprised  of mineral  claims and also
rights pursuant to option  agreements.  Maintenance of such interests is subject
to ongoing compliance with the terms governing such claims and agreements.

CONFLICTS OF INTEREST MAY ARISE AMONG THE MANAGERS OF BMC AND SUCH CONFLICTS MAY
CAUSE BMC TO ENTER INTO TRANSACTIONS ON TERMS WHICH ARE NOT BENEFICIAL TO BMC OR
THE COMPANY.

Marsa is a  private  company  controlled  by Mr.  Oleg  Kim who is the  managing
director  and a  participant  of Marsa and,  effective  September  14,  2005 was
elected as a director of the Company.  See "Item 4. Information on the Company -
Business Overview - Marsa Option" and "Item 6. Directors,  Senior Management and
Employees  - Directors  and Senior  Management."  Oleg Kim is also the  managing


                                      -17-
<PAGE>


director of BMC. In connection  with the Centrasia  Acquisition  and pursuant to
the terms of the Marsa  Option,  Douglas  Turnbull  (an  officer,  director  and
principal  shareholder  of the  Company)  and William  Tafuri (an officer of the
Company)  were  appointed  as managers of BMC. See "Item 4.  Information  on the
Company - Business  Overview - Marsa Option." As a result of Mr. Kim's positions
with the Company,  BMC and Marsa,  conflicts  of interest may arise  between Mr.
Kim's duties to BMC and the Company and his duties to other entities in which he
is  involved,  which may result in Mr. Kim taking  actions  which are not in the
best  interest  of the BMC,  the Company  and/or the holders of their  ownership
interests, including the Company's shareholders.

THE PRICES OF METALS FLUCTUATE IN THE MARKET AND SUCH  FLUCTUATIONS  COULD CAUSE
CERTAIN ACTIVITIES TO BECOME UNECONOMIC.

Metal  prices may be  unstable.  The  mining  industry  in general is  intensely
competitive and there is no assurance  that, even if commercial  quantities of a
mineral resource are discovered,  a profitable market will exist for the sale of
it.  Factors  beyond the  control of BMC may  affect  the  marketability  of any
substances discovered.  The price of various metals has experienced  significant
movements over short periods of time, and is affected by numerous factors beyond
the control of BMC,  including  international  economic  and  political  trends,
expectations of inflation,  currency exchange  fluctuations,  interest rates and
global or regional consumption  patterns,  speculative  activities and increased
production  due to improved  mining and  production  methods.  The supply of and
demand for metals are affected by various factors,  including  political events,
economic  conditions and production costs in major producing regions.  There can
be no assurance that the price of any metal will be such that the BMC properties
can be mined at a profit.

BMC'S ACTIVITIES ARE SUBJECT TO GOVERNMENTAL  REGULATIONS  WHICH MAY SUBJECT BMC
TO  PENALTIES  FOR  FAILURE  TO  COMPLY,  MAY LIMIT  BMC'S  ABILITY  TO  CONDUCT
EXPLORATION ACTIVITIES AND COULD CAUSE BMC TO DELAY OR ABANDON ITS PROJECTS.

Various regulatory requirements affect the current and future activities of BMC,
including  exploration  activities  on its  properties.  Exploration  activities
require permits from various federal,  state and local governmental  authorities
and  are  subject  to  laws  and  regulations  governing,  among  other  things,
prospecting,   exports,  taxes,  labor  standards,  occupational  health,  waste
disposal, toxic substances, land use, environmental protection, mine safety, and
others which currently or in the future may have a substantial adverse impact on
BMC. See "Item 4.  Information  on the Company - Business  Overview - Government
Regulations."  Exploration activities are also subject to substantial regulation
under  these  laws by  governmental  agencies  and may  require  that BMC obtain
permits from various governmental agencies.

Licensing  and  permitting  requirements  are  subject  to  changes  in laws and
regulations and in various  operating  circumstances.  There can be no assurance
that BMC will be able to  obtain  or  maintain  all  necessary  licenses  and/or
permits it may require for its  activities  or that such permits will be will be
obtainable  on  reasonable  terms or on a timely  basis  or that  such  laws and
regulations  will not have an  adverse  effect  on any  project  which BMC might
undertake.  If BMC is unable to obtain the necessary licenses or permits for its
exploration  activities,  BMC  might  have to  change  or  abandon  its  planned
exploration for such non-permitted properties and/or to seek other joint venture
arrangements. In such event, BMC might be forced to sell or abandon its property
interests,  in which case, the value of any ownership  interests the Company has
in BMC might  become  worthless  and the  Company may not be able to collect any
loans made to BMC.

BMC was issued  Licence  No:  AP48 by the State  Agency for  Geology and Mineral
Resources  under the Government of the Kyrgyz Republic dated March 28, 2005 (the
"BMC  Licence").  The BMC  Licence is an  exploration  licence  held by BMC that
permits BMC to explore for gold in the  Bulakashu  area of the Kyrgyz  Republic,
excluding the following gold alluvial placer licences:  Upper  Karabulak,  Lower
Karabulak, Upper Tokailu and Lower Tokailu. BMC concurrently negotiated the size
of the property to be explored and the terms of an exploration licence agreement
(the "Licence  Agreement") with the Geology Agency.  The Licence Agreement is an
integral part of the BMC Licence and determines the  exploration  expenditure to
be  incurred  by BMC on the  Bulakashu  Property  and  provides  details  of the
proposed work program.  Failure by BMC to meet the  requirements  of the License
Agreement or the BMC Licence or to otherwise fulfill its commitments under these
agreements could result in the loss of related property interests.

Failure to comply with applicable laws, regulations, and permitting requirements
may result in  enforcement  actions,  including  orders  issued by regulatory or
judicial  authorities causing  exploration  activities to cease or be curtailed,
and may include corrective measures requiring capital expenditures, installation


                                      -18-
<PAGE>


of  additional  equipment,  or  remedial  actions.  Parties  engaged  in  mining
activities  may be  required to  compensate  those  suffering  loss or damage by
reason  of the  mining  activities  and may  have  civil  or  criminal  fines or
penalties  imposed for  violations of  applicable  laws or  regulations  and, in
particular, environmental laws.

Any change in or amendments to current laws,  regulations and permits  governing
activities of mineral exploration  companies,  or more stringent  implementation
thereof, could require increases in exploration expenditures,  or require delays
in exploration or abandonment of new mineral properties.  The cost of compliance
with  changes in  governmental  regulations  has a potential  to increase  BMC's
expenses.

THE  TERM OF THE BMC  LICENCE  IS FOR A ONE  YEAR  PERIOD  AND  REQUIRES  BMC TO
RELINQUISH A PORTION OF THE LICENCE EACH YEAR, AS A RESULT,  BMC MAY NOT BE ABLE
TO RENEW THE BMC LICENCE AND MAY HAVE TO  RELINQUISH  A PORTION OF THE  PROPERTY
COVERED BY THE BMC LICNECE WHICH BMC WISHES TO RETAIN.

The BMC  Licence  was  issued  for a term  until  December  31,  2005 and can be
extended for up to ten years subject to the approval of the Geology Agency,  and
provided that BMC is in compliance with the terms of the Licence Agreement.  See
"Item 4.  Information  on the  Company - Business  Overview - Business  of BMC."
However,  the Law of the Kyrgyz  Republic on "Subsoil" dated July 2, 1997 No. 42
(as last  amended  on  February  4,  2002) does not  provide  for any  automatic
procedure for renewal or obtaining of an  exploration  licence after this period
has expired.  There can be no assurance that the BMC Licence will be renewed. If
the BMC Licence is not renewed,  the  Company's  investment in BMC (and loans to
BMC) may be worthless.

Each year,  BMC is required  to prepare and submit a report to the State  Agency
for Geology and Mineral  Resources  under the Government of the Kyrgyz  Republic
(the  "Geology  Agency") to confirm that BMC has complied  with the terms of the
licence  agreement.  Upon approval by the Geology Agency, one year extensions to
the BMC Licence and Licence  Agreement may be applied for an annual basis, up to
a maximum  of ten years.  Provided  BMC is in  compliance  with the terms of the
Licence  Agreement,  BMC is required to pay to the Geology Agency  approximately
US$7 in payment of the Geology Agency's services associated with the application
to extend the Licence  Agreement.  At the end of each annual licence period, 25%
of the licence area must be  relinquished  by BMC.  BMC, as the licence  holder,
determines  which  areas  are to be  relinquished;  however,  BMC  may  have  to
relinquish areas which BMC wishes to retain.

The Subsoil Laws  provide that a sub soil user who has  discovered a deposit has
the indisputable, exclusive right to its exploitation. Prior to any exploitation
on the  Bulakashu  Property,  BMC will be required to obtain  approval  from the
Geology  Agency to conduct such  exploitation  and  negotiate  the terms of such
exploitation,  to include royalties, bonuses and other payments with the Geology
Agency. There are no assurances that BMC will be able to obtain such approval.

THE ECONOMICS OF MINERAL  EXPLORATION  ACTIVITIES ARE SUBJECT TO VARIOUS FACTORS
WHICH COULD CAUSE SUCH ACTIVITIES TO BE UNECONOMIC.

Mineral  exploration  activities,  and if warranted  production  and  production
costs,  and the  economics  of mineral  products are affected by such factors as
environmental  permitting  regulations  and  requirements,  weather,  unforeseen
technical  difficulties,  unusual or unexpected  geological  formations and work
interruptions.  In addition,  the grade of any ore  ultimately  mined may differ
from that  indicated by drilling  results.  Short-term  factors  relating to ore
reserves,  such  as the  need  for  orderly  development  of ore  bodies  or the
processing of new or different  grades may also have an adverse effect on mining
activities and on financial results.  There can be no assurance that small-scale
laboratory  tests,  which  recovers any metals or minerals can be  duplicated in
large-scale tests under on-site conditions or in production-scale operations.

EXPLORATION  FOR  MINERALS ON BMC'S  PROJECTS ARE SUBJECT TO  SIGNIFICANT  RISKS
WHICH COULD  INCREASE THE COSTS OF  EXPLORATION  AND COULD CAUSE BMC TO DELAY OR
ABANDON ITS PROJECTS.

Mineral  exploration  activities  are  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  activities,
increase  costs or result in  liability.  Neither the Company nor BMC is insured
for environmental  liability or earthquake damage nor do they carry any accident
or liability insurance on the Bulakashu Property.



                                      -19-
<PAGE>




IF BMC IS UNABLE TO EFFECTIVELY  COMPETE  AGAINST OTHER COMPANIES BMC MAY NOT BE
ABLE TO ACQUIRE ADDITIONAL PROPERTIES.

Significant  competition exists for mineral  opportunities.  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 BMC
and the  Company,  BMC and the  Company  may be  unable  to  acquire  additional
attractive mining properties on terms it considers acceptable.

BMC'S  MINERAL  CLAIM  INTERESTS  ARE  LOCATED IN FOREIGN  COUNTRIES,  WHICH MAY
PREVENT OR DELAY BMC'S EXPLORATION ACTIVITIES AND COULD CAUSE BMC TO ABANDON ITS
PROJECTS.

The properties in which BMC has an interest are located in the Kyrgyz  Republic.
Mineral  exploration  activities may be affected in varying degrees by political
instability  and government  regulations  relating to the mining  industry.  Any
changes in regulations or shifts in political  conditions are beyond the control
of BMC and may adversely affect its business.  BMC's exploration  activities may
be  affected  in  varying  degrees by  government  regulations  with  respect to
restrictions on price controls, export controls, income taxes, expropriations of
property, environmental legislation and mine safety.

Any  changes in  government  policy  may  result in  changes  to laws  affecting
ownership of assets,  mining policies,  monetary  policies,  taxation,  rates of
exchange,  environmental regulations,  labour relations,  repatriation of income
and  return  of  capital.  This may  affect  both  BMC's  ability  to  undertake
exploration activities in respect of present and future properties in the manner
currently  contemplated,  as well as its  ability to  continue  to  explore  and
conduct other  activities on those  properties in which it has an interest or in
respect of which it has obtained exploration and development rights to date. The
possibility that future governments may adopt substantially  different policies,
which might extend to expropriation of assets, cannot be ruled out.

The status of the  Kyrgyz  Republic  as a  developing  country  may make it more
difficult for BMC to obtain any required exploration financing for its projects.
The effect of all of these factors cannot be accurately  predicted.  Neither BMC
nor the Company  maintains,  and neither  intends to  purchase,  political  risk
insurance.


ITEM 4.  INFORMATION ON THE COMPANY.
--------------------------------------------------------------------------------

HISTORY AND DEVELOPMENT OF THE COMPANY

The Company was incorporated under the British Columbia Company Act ("BC Company
Act") on December 10, 1999 under the name "Buck  Ventures Ltd." On May 10, 2000,
the Company  changed its name to "QDM Ventures  Ltd." On September 25, 2001, the
Company changed its name from QDM Ventures Ltd. to "California Exploration Ltd."
On June 3, 2004 the Company changed its name from California Exploration Ltd. to
"Baradero  Resources  Limited".  On September 14, 2005, the Company  changed its
name to "Centrasia Mining Corp."

With the introduction of the Capital Pool Company Policy in November,  1999 (the
"CPC  Policy"),  the TSX-V  created a new category of listing,  the capital pool
company,  pursuant to which a company  formed by  individuals  acceptable to the
TSX-V could complete an initial public offering  earlier in its development than
may be  possible  with a regular  initial  public  offering.  Proceeds  from the
initial  public  offering  must  be  used  primarily  to  investigate   business
opportunities  for  acquisition  by  the  capital  pool  company.  Only  certain
acquisitions  can be made by the capital pool company to satisfy the CPC Policy.
Such an acquisition is referred to as a qualifying  transaction (the "Qualifying
Transaction").

The  Company  was  initially  formed to operate as a capital  pool  company,  in
accordance  with the CPC  Policy.  During the  period  ended May 31,  2000,  the
Company  completed its initial  financing and sold 2,200,001  common shares at a
price of $0.10 per share for proceeds of $220,000.  During  December  2000,  the
Company  completed an initial  public  offering  (the "IPO") and sold  1,000,000
common shares at a price of $0.20 per share, for gross proceeds of $200,000. The
proceeds from these financings were used to investigate business opportunities.



                                      -20-
<PAGE>

Pursuant  to an  Agreement  and Plan of Merger  dated July 3, 2001,  between the
Company, CalEx and QDM Acquisition Corporation (a wholly-owned subsidiary of the
Company formed for the purpose of merging into CalEx), the shareholders of CalEx
acquired control of the Company in a reverse acquisition completed September 27,
2001. See "Item 5. Operating and Financial  Review and Prospects - Overview." In
conjunction   with  the  merger  the  Company   changed  its  domicile   through
continuation  from British  Columbia to the Yukon  Territory  under the BUSINESS
CORPORATIONS ACT (Yukon) (the "YBCA").

The acquisition  constituted a Qualifying  Transaction  under the CPC Policy and
qualified  the Company for a Tier 2 listing on the TSX-V.  Pursuant to the terms
of the  Agreement and Plan of Merger,  each  shareholder  of CalEx  received one
share of the  Company's  common stock (prior to  consolidation  of the Company's
capital on a  one-for-four  basis) for each share of CalEx  common  stock  held.
Additionally,  all of the  issued  and  outstanding  shares  of QDM  Acquisition
Corporation  (which  were held by the  Company)  were  converted  into shares of
CalEx. As a result, CalEx became a wholly-owned subsidiary of the Company.

As a result of the  reverse  acquisition,  the  Company's  activities  consisted
solely of the operations of CalEx which was a development  stage independent oil
and gas company CalEx had not earned any significant production revenue, nor had
it found any significant reserves on any of its properties at that time.

In conjunction with the Qualifying  Transaction,  the Company proceeded with the
first stage of the exploration and  development  program  prescribed for its oil
and gas  interests,  which  consisted the drilling of eight wells.  Of the eight
wells,  six were  initially  abandoned  as dry holes,  one, the Suisun #25 well,
required  side-tracking to reach the target zone and one well was completed as a
producing well although it was shut-in shortly after commencement of production.
This well was subsequently  abandoned.  In addition,  the joint venture partners
informed the Company that they  terminated  their joint venture  agreements  and
agreed to pay  maintenance  costs with respect to the prospect  they retained an
interest  in. It was  therefore  determined  by  management  of the  Company  to
consider other  opportunities in the oil and gas industry.  Throughout the first
half of calendar 2002, the Company worked towards finding  partners to drill the
side-track well to the Suisun #25 well.

In August 2002, the Company commenced the side-track of the Suisun #25 well. The
side-track was completed in September 2002. Case hole logs and perforations were
accomplished  to test several  zones within the shallow  objective of the Suisun
Sands.  Gas was flowed to the surface at very low  pressures.  It was determined
that there was  insignificant  pressure and volume to be economic.  The well was
then plugged and abandoned.

On January 14, 2002, the Company entered into a letter of intent to acquire 100%
of the issued and outstanding shares of Optimal Powers Systems Ltd. ("Optimal"),
a private company that developed  technology and turn-key  solutions to optimize
oil, gas and power energy  resources.  The Company  provided Optimal with bridge
loans that aggregate  $150,000.  Optimal  pledged its assets as security for the
bridge  loans,   and  in  addition   shareholders   of  Optimal   pledged  their
shareholdings in Optimal as security.  On January 7, 2003, the Company announced
that it had terminated the letter of intent, and had requested  repayment of the
bridge  loan which was  advanced  to  Optimal.  The  Company  has been unable to
collect under the bridge loan and the loan has been written off.

In  March  2004,  the  Company  sold  its  remaining  interests  in oil  and gas
properties.  The  Company  subsequently  participated  in  the  drilling  of  an
unsuccessful  well in Alberta.  On May 31, 2004, the Company abandoned CalEx and
no longer holds any oil and gas interests.  At the time of the abandonment,  (i)
all of the Company's  petroleum and natural gas  activities  had been  conducted
through CalEx, (ii) with impairments of the California wells and the sale of the
West Ranch Field,  CalEx had no assets remaining and had approximately  $205,000
of accounts  payable on account of unpaid  drilling  expenditures  to  unrelated
parties, and (iii) with the abandonment of CalEx, effective at May 31, 2004, the
Company was not obligated to honor (e.g.  repay) the accounts payable  liability
to unrelated parties,  resulting in a gain on the foregiveness of debt (for both
Canadian and U.S.  GAAP  purposes).  The Company was not  obligated to repay the
debts of CalEx upon abandonment since the Company had not guaranteed those debts
and CalEx,  although owned by the Company,  is treated under  corporate law as a
separate entity from the Company.


On June 3, 2004, the Company completed a consolidation of its share capital on a
one new share for four old shares basis.

On March 29,  2004,  the  British  Columbia  legislature  enacted  the BCBCA and
repealed  the BC Company  Act. At the  Company's  annual and special  meeting of
shareholders  held on  November  18,  2004,  the  Company  received  shareholder
approval to continue its corporate  jurisdiction  from the Yukon  Territory into
British  Columbia  under  the  BCBCA.  See "Item 10.  Additional  Information  -
Memorandum  and Articles of  Association."  Effective  November  23,  2004,  the
Company changed its domicile  through  continuation  from the Yukon Territory to
British Columbia under the BCBCA.

On September 14, 2005,  the Company  completed the  acquisition of 724 BC and in
connection  thereto:  (i) issued 3,700,100 common shares of its capital stock to
acquire 724 BC and 233,338  common  shares with respect of a finder's  fee; (ii)
issued  1,900,000 units and 100,000 common shares in  consideration  of $400,000
principal  of loans  which  have been made to 724 BC;  each unit  comprised  one


                                      -21-
<PAGE>


common share of the Company and one warrant, entitling the holder to purchase an
additional  common share at a price of $0.40 per share  expiring  September  14,
2007; and (iii)  completed a private  placement of 4,375,000 units at a price of
$0.20 per unit;  each unit  comprised  one common  share of the  Company and one
warrant having the same terms as the warrants described above.

724 BC is a  precious  and  base  metal  exploration  company  that  has been in
operation  since February 2004.  During 2004, 724 BC  concentrated on evaluating
joint venture  opportunities  with early to advanced  exploration stage gold and
base metal projects in Kazakhstan,  the Kyrgyz  Republic and  Uzbekistan.  These
countries cover the central portion of the Tien Shan Metallogenic Belt.

Pursuant  to  an  Agency   Agreement  dated  September  26,  2005  (the  "Agency
Agreement") between Company and Canaccord Capital Corporation ("Canaccord"), the
Company has agreed to conduct a Short Form  Offering  of a minimum of  2,307,692
units to a maximum of 3,076,923 units, for gross proceeds between $1,500,000 and
$2,000,000. Each unit consists of one common share of the Company and one common
share purchase  warrant (a  "Warrant").  Two Warrants will entitle the holder to
acquire one  additional  common share at a price of $0.78 per common share for a
period of eighteen  months  following  the date of closing of the  Offering.  In
connection  with  the  Short  Form  Offering,  Canaccord  will  receive  a  cash
commission of 7.5% of the gross proceeds of the Short Form Offering,  which,  at
the election of Canaccord  may be paid in units at a deemed price per unit equal
to the offering price of the units ($0.65),  a corporate  finance fee of 100,000
units (having the same terms as the units,  the "Corporate  Finance Fee Units"),
and $7,500 as an administration fee. In addition, the Company has also agreed to
grant to  Canaccord,  upon  closing of the  offering,  an option  (the  "Agent's
Option") to acquire  that number of units (the  "Agent's  Units") as is equal to
10% of the  number of units sold  pursuant  to the Short  Form  Offering,  at an
exercise  price of $0.72  per  Agent's  Unit for a  period  of  eighteen  months
following the closing of the Short Form Offering.  Each Agent's Unit consists of
one common share and one common share purchase warrant (the "Agent's Warrants").
Two Agent's  Warrants will entitle the holder to acquire one  additional  common
share at a price of $0.78  per  common  share for a period  of  eighteen  months
following the date of closing of the Short Form Offering.  The Agent's  Warrants
will have the same terms as the Warrants.

The Company's  registered and principal business office is located at Suite 1305
- 1090 West Georgia Street,  Vancouver,  British Columbia,  V6E 3V7. The contact
person is Nick DeMare.  The telephone number is (604) 685-9316 and the facsimile
number is (604)  683-1585.  The Company does not have a registered  agent in the
United States.

The  Company's  common  shares  were  listed on the TSX-V on October 1, 2001 and
currently trade under the symbol "CTM".

Effective  January 27, 2002, the Company's common stock was approved for trading
on the  Over-the-Counter  Bulletin Board (the "OTC Bulletin  Board") operated by
the National  Association  of Securities  Dealers.  The Company's  common shares
currently trade on the OTC Bulletin Board under the symbol "CTMHF".

BUSINESS OVERVIEW

The Company's  original goal was to identify,  acquire,  explore and develop oil
and natural gas reserves in the Western United States,  principally in the State
of  California.  The  Company's  business plan  contemplated  that joint venture
partners would reimburse the Company for 100% of its prospect costs to acquire a
100% capital  interest (75% working  interest) in the drilling of the first well
on each prospect  resulting in the Company retaining up to a 25% interest in the
prospect with the remaining 75% interest in the prospect  being divided  amongst
the joint venture partners. Upon completion of the first well on a prospect, the
Company  would be  required  to fund its pro rata share of  further  development
costs.

In conjunction with the Qualifying  Transaction,  the Company proceeded with the
first stage of the exploration and  development  program  prescribed for its oil
and gas interests,  which consisted of the drilling of eight wells. See "Item 4.
Information on the Company - History and Development of the Company."

In an attempt to diversify the Company's operations,  management began reviewing
other  business  opportunities  during late calendar 2001. In December 2001, the
Company  identified and began  negotiations with Optimal.  On December 21, 2001,
the Company requested a halt in the trading of its common shares. On January 14,
2002,  the  Company  signed a letter of intent  whereby  it  agreed,  subject to


                                      -22-
<PAGE>


shareholder  and  regulatory  approvals,  to  acquire  100%  of the  issued  and
outstanding  common shares of Optimal.  Under the terms of the letter of intent,
the Company provided Optimal bridge loans totaling $150,000.  Optimal was unable
to complete a  restructuring  of its business  plan which would have enabled the
Company to proceed  with the  acquisition.  On  January  7,  2003,  the  Company
announced  that it has  terminated  the  letter  of  intent,  and had  requested
repayment  of the bridge  loans which were  advanced to  Optimal.  Although  the
principals  of Optimal have pledged their  holdings in Optimal as security,  the
Company  has been unable to collect  under the bridge  loans.  Accordingly,  the
Company has written-off the full amount of the bridge loans.

On December 18,  2002,  the Company  entered into a purchase and sale  agreement
with PNP Petroleum Inc.  ("PNP"),  a private  corporation at arm's-length to the
Company,  whereby the Company acquired a 3% net working interest  (2.360825% net
revenue  interest)  in certain oil and gas leases known as the West Ranch Field.
To acquire its  interest  the Company  funded US $43,500 of initial  development
costs.  During the 2003 fiscal year the Company commenced  principal  operations
from the  Texas  interest  and was no  longer  considered  a  development  stage
company.

The West Ranch Field was located  approximately  25 miles southeast of Victoria,
in Jackson County,  Texas. The field was discovered in 1938 by Mobil Oil and has
produced in excess of 300 billion cubic feet gas and 300 million  barrels of oil
from hundreds of wells. The geology of the West Ranch Field consisted of typical
Gulf Coast sand  sequences  with numerous  stacked sand pays of both Miocene and
Frio age rocks. Over 25 main producing sands had been identified within the West
Ranch Field  production  limits with the Greta,  Glasscock,  41-A, 98-A and Ward
sands being the most prolific producers.

In the early 1980's the previous  operator of the West Ranch Field became active
in the region  through  acquisition  of a few old  producing  well bores.  After
reworking  geological  structure  and net sand maps,  the  operator  was able to
extend the southwest  production  limits of the field by the drilling of infield
wells targeting  structural  highs.  PNP purchased the West Ranch Field and took
over its operation on January 1, 2002. The property  included 35 wells with only
a small number producing on gas lift at the time.  After a detailed  engineering
analysis of the property,  the operator  developed a plan,  which focused on the
re-establishing  of shut-in wells to active status by adding  compression,  salt
water  handling and disposal.  Pursuant to a purchase and sale  agreement  dated
March 1, 2004,  the Company  sold its 3% net working  interest in the West Ranch
Field to  Westport  Petroleum,  Inc.  ("Westport"),  a  private  corporation  at
arms-length  to the Company,  for $89,814 (US $67,000)  cash.  As of the date of
this annual report the Company does not hold any interest in oil and gas leases.

CENTRASIA ACQUISITION

On March 17,  2005,  the Company  entered into a letter  agreement  (the "Letter
Agreement")  with 724 BC and its  shareholders  pursuant  to which  the  Company
agreed to purchase all of the issued and outstanding  common shares of 724 BC in
exchange for common shares of the Company on a one-for-one  basis.  The terms of
the Letter  Agreement were finalized by a share purchase  agreement (the "Formal
Agreement") dated July 25, 2005.

Pursuant to the Formal  Agreement,  the Company  acquired 724 BC through a share
for share exchange  between the Company and the  shareholders of 724 BC pursuant
to which  the  Company  issued to the  shareholders  of 724 BC an  aggregate  of
3,700,100  common  shares of the Company in exchange for all of the  outstanding
shares of 724 BC. As a result,  724 BC became a  wholly-owned  subsidiary of the
Company.  Completion  of the  Centrasia  Acquisition  resulted  in  the  Company
effectively  becoming  involved in the  acquisition  and  exploration of mineral
properties in the Kyrgyz Republic,  through BMC and the Company's  obligation to
provide  funds to BMC in exchange for  ownership  interests in BMC. See "Item 4.
Information  on the  Company  -  Business  Overview  - Marsa  Option",  "Item 4.
Information  on the Company - Business  Overview - Business of BMC" and "Item 4.
Information  on the  Company  -  Business  Overview  -  Principal  Properties  -
Bulakashu Property."

The  following  additional  matters  also  occurred  as  part  of the  Centrasia
Acquisition:

         (a)      The Company completed a financing to provide necessary ongoing
                  funding for the Company after the  acquisition  of 724 BC. See
                  "Item 4.  Information on the Company - History and Development
                  of the Company."



                                      -23-
<PAGE>


         (b)      As described below,  certain  outstanding  loans of 724 BC, in
                  the aggregate  principal  amount of $400,000,  were  converted
                  into shares of the Company's  common stock or units consisting
                  of shares of the Company's common stock and warrants.

         (c)      The Company changed its name to "Centrasia Mining Corp.".

         (d)      The board of directors of the Company was  reconstituted.  See
                  "Item  6.  Directors,   Senior   Management  and  Employees  -
                  Directors and Senior Management."

         (e)      The Company's previous stock option plan was replaced by a new
                  stock  option plan that  reserves a total of 20% of the issued
                  and outstanding  shares of Company as of the effective date of
                  the acquisition. See "Item 6. Directors, Senior Management and
                  Employees - Stock Option Plan."

         (f)      724 BC sold,  transferred  and  assigned  the Marsa  Option to
                  Magellan Gold (BVI) Inc., an indirect, wholly-owned subsidiary
                  of the  Company.  See "Item 4.  Information  on the  Company -
                  Organizational Structure."

724 BC's principal asset was an agreement (the "Marsa Option") to acquire all of
the issued and  outstanding  share  capital of  Bulakashu  Mining  Company  Ltd.
("BMC"),  a Kyrgyz limited liability company,  from Marsa Gold Corp.  ("Marsa"),
also a privately owned Kyrgyz company.  Effective  September 14, 2005, the Marsa
Option was assigned to the Company's  subsidiary  Magellan Gold (BVI) Inc. BMC's
sole  asset is a  license  permitting  the  exploration  of the  Bulakashu  Gold
Property,  located  in the  north  central  area  of the  Kyrgyz  Republic  (the
"Bulakashu  Property").  In order to  exercise  the Marsa  Option  in full,  the
Company,  as successor in interest to 724 BC, must make cash  payments  totaling
US$120,000  (US$80,000 paid) and issue 1,025,000 common shares to Marsa (200,000
common  shares  issued by the  Company),  as well as provide  advances to BMC or
incur  exploration  expenditures  on the  Bulakashu  Gold  Property  of $200,000
($14,500  advanced)  and  US$2,200,000  (US$220,000  advanced)(collectively  the
"Commitments"),  on or before  December 31, 2008. The Marsa Option  provides for
staged  conversions  of 724 BC's loans and  advances  to BMC into  participating
interests of BMC at the end of each calendar year,  beginning December 31, 2005.
In the event  the  Company  fails to meet any of its  commitments  or  commits a
material breach of the Marsa Option,  Marsa has the right to require the Company
to  return  any  participating   interests  of  BMC  received  and  forgive  the
Commitments.  The  Company  assumed  the  share  obligations  of  724  BC as its
successor in interest  under the Marsa Option upon  completion  of the Centrasia
Acquisition.

Pursuant to various debt purchase agreements, the Company purchased an aggregate
of  $400,000   principal  of  indebtedness  and  the  accrued  interest  on  the
indebtedness  owed by 724 BC to certain  investors  (collectively the "Centrasia
Loans"),  for which the Company issued 1,900,000 units (the "Baradero Units") to
holders of $380,000 of principal, 100,000 common shares to holders of $20,000 of
principal and repaid the accrued  interest in cash. Each Baradero Unit consisted
of one common  share of the Company and one warrant.  Each warrant  entitles the
holder to purchase an additional  common share at a price of $0.40 per share for
a period of two years from the date of issuance.

The Company also advanced  $25,000 to 724 BC (the "Baradero Loan") in connection
with the Centrasia  Acquisition  and issued  233,338 common shares as a finder's
fee in connection with the Centrasia Acquisition.

The Company granted, effective on completion of the Centrasia Acquisition, stock
options to purchase  2,335,000  common  shares of the Company for a term of five
years at an exercise price of $0.20 per share.

In connection with the  requirements of the TSX-V, and subject to the completion
of satisfactory  due diligence,  pursuant to a sponsorship  agreement dated July
20, 2005, Canaccord Capital Corporation of 2200-609 Granville Street, Vancouver,
British  Columbia,  V7Y 1H2,  agreed to act as the  sponsor  to the  Company  in
connection with the Centrasia Acquisition. The Company agreed to pay Canaccord a
sponsorship  fee of $35,000  plus GST for acting as sponsor.  The  Company  paid
Canaccord  the sum of $10,000 as an advance  with respect to  Canaccord's  legal
fees. In addition,  the Company has granted Canaccord the right of first refusal
to participate  in any equity  financing of the Company for a period of one year
from  the date  that  the  TSX-V  gives  notice  of  approval  of the  Centrasia
Acquisition.



                                      -24-
<PAGE>

MARSA OPTION

Pursuant  to an option  agreement  among BMC,  Marsa,  724 BC, the  Company  and
Magellan Gold (BVI) Inc. dated July 8, 2005,  Marsa granted to 724 BC the option
to purchase a 100% interest in BMC from Marsa.  In connection with the Centrasia
Acquisition, effective September 14, 2005, 724 BC sold, transferred and assigned
the Marsa  Option  to  Magellan  Gold  (BVI)  Inc.,  an  indirect,  wholly-owned
subsidiary of the Company.

In order to maintain and exercise its interest  under the Marsa  Option,  724 BC
agreed to make cash payments and issue shares to Marsa (collectively referred to
as the "Purchase  Price") and commit funds to BMC's  exploration  program of the
Bulakashu Property.  Pursuant to the Marsa Option and the subsequent  assignment
to  Magellan  Gold (BVI)  Inc.,  the  Company has agreed to assume the (i) share
obligations of 724 BC under the Marsa Option, (ii) payment obligations of 724 BC
under the Marsa Option to Marsa and (iii) the  intercompany  loan obligations to
BMC under the Marsa Option.

Pursuant to the Marsa Option,  the Company is required to make payments to Marsa
in the amount of US$120,000 in instalments as follows:

      DATE                                                     US$ TO BE PAID
      ---------------------------------------------------      ----------------
      January 2, 2005                                           US $40,000(paid)

      On or before  the  earlier  of: (i) five days after
      the  Effective  Date  of the  Acquisition; or (ii)        US $40,000(paid)
      September 1, 2005

      On or before January 2, 2006                              US $40,000
                                                               -----------
      TOTAL:                                                   US $120,000
                                                               ===========

Pursuant to the Marsa Option,  the Company has agreed to issue to Marsa, or to a
nominee of Marsa,  an aggregate of 1,025,000  common  shares of the Company (the
"Purchase Shares"), issuable in instalments as follows:

      DATE                                             NO. OF COMPANY SHARES
      ------------------                               ------------------------

      September 14, 2005                                 200,000 shares (issued)
      January 2, 2006                                    200,000 shares
      January 2, 2007                                    250,000 shares
      January 2, 2008                                    375,000 shares
                                                       ---------
      TOTAL:                                           1,025,000 SHARES
                                                       =========

The  consideration  to be paid under the Marsa  Option was  determined  by arm's
length negotiations.

Pursuant to a loan agreement (the "Loan  Agreement")  among Marsa,  Aitas Mining
Corp. ("Aitas"),  BMC and 724 BC dated September 24, 2004, as amended on January
18, 2005, 724 BC advanced the amount of US$110,000 (the  "Principal  Amount") to
BMC (the "BMC Loan") for the purpose of completing the  geological  appraisal of
the  Bulakashu  Property.  The BMC Loan is evidenced by a promissory  note dated
September 24, 2004 (the "BMC Note"), as amended January 18, 2005, and is secured
by a personal guarantee of Marsa and a pledge of Marsa's participating  interest
in BMC.  The BMC Note does not bear  interest,  unless  the BMC Note is not paid
when due,  in which case the BMC Note will bear  interest at the rate of 18% per
annum from the date when  payment was due.  The terms of the BMC Note state that
it is to be  paid no  later  than  September  24,  2005;  however,  the  Company
anticipates that the BMC Note will be converted into ownership  interests of BMC
pursuant to the terms of the Marsa  Option on December 31, 2005 and, as such has
not sought payment of the principal amount or interest on the BMC Note.

In accordance with the Loan Agreement, Marsa executed a guarantee agreement (the
"Guarantee")  dated  July 8,  2005 in  favour of 724 BC,  which  guarantees  the
repayment of the BMC Note and any further  amounts that the Company  advances to
BMC pursuant to the terms of the Marsa  Option.  In  addition,  Marsa and 724 BC
entered into a pledge  agreement  (the "Pledge  Agreement")  dated July 8, 2005,
pursuant to which Marsa pledged to 724 BC all of its participating interest held
by Marsa in BMC (the "Pledged Interest").

Pursuant to the Pledge Agreement,  Marsa assigned,  mortgaged,  charged, pledged
and  granted 724 BC a security  interest in the Pledged  Interest as general and
continuing  collateral security for the payment of all present and future debts,


                                      -25-
<PAGE>

liabilities  and  obligations  of BMC  and of  Marsa  to 724 BC or the  Company,
whether  pursuant to the Marsa Option or  otherwise  (the  "Liabilities")  until
repayment in full of the Liabilities.

In addition,  pursuant to the Marsa Option (and the subsequent  assignment  from
724 BC), the Company has agreed that for so long as BMC is not in default of the
BMC Loan, that the Company will commit to fund BMC's exploration  program at the
Bulakashu Property,  by way of intercompany loans (the "Intercompany  Loans") to
be advanced  pursuant to mutually  agreed upon budgets from time to time, in the
following total amounts during the following periods:

-        Calendar Year 2005:  Cdn$200,000  (deemed to be equal to U.S.  $160,000
         (at Cdn$1 = US$0.80), the "2005 Calendar Year Loan")
-        Calendar Year 2006: U.S.$690,000 (the "2006 Calendar Year Loan")
-        Calendar Year 2007: U.S.$650,000 (the "2007 Calendar Year Loan")
-        Calendar Year 2008: U.S.$750,000 (the "2008 Calendar Year Loan")

As of  September  30, 2005,  724 BC and the Company had  advanced  approximately
$300,000  to BMC  pursuant  to the  terms of the Loan  Agreement  and the  Marsa
Option.

Further,  the Company has also agreed to initiate a  pre-feasibility  study as a
possible  precursor to production,  at such time as BMC has defined an indicated
reserve (as defined by JORC or CIM reserve  standards) on the Bulakashu Property
of not less than 300,000 ounces of gold.

The BMC Loan and the Intercompany Loans will convert to participating  interests
in BMC in the following amounts at the following dates:

-        At the end of calendar  year 2005,  the BMC Loan and the 2005  Calendar
         Year Loan will  convert  to a  participating  interest  in BMC equal to
         10.5% of the total participating interest in BMC on December 31, 2005;
-        At the end of  calendar  year 2006,  the 2006  Calendar  Year Loan will
         convert to a  participating  interest  in BMC equal to 27% of the total
         participating interest in BMC on December 31, 2006, which will increase
         the Company's participating interest in BMC to 37.5%;
-        At the end of  calendar  year 2007,  the 2007  Calendar  Year Loan will
         convert to a total  participating  interest  in BMC equal to 30% of the
         participating interest in BMC on December 31, 2007, which will increase
         the Company's participating interest in BMC to 67.5%; and
-        At the end of  calendar  year 2008,  the 2008  Calendar  Year Loan will
         convert to a participating  interest in BMC as is equal to 32.5% of the
         total  participating  interest in BMC on December 31, 2008,  which will
         increase the Company's participating interest in BMC to 100%.

If, during any of calendar years 2005,  2006, 2007 or 2008, the Company fails to
fund the  respective  Intercompany  Loan for that  year,  or issue the  Purchase
Shares as and when required  pursuant to the Marsa Option,  or commits any other
material  breach of the Marsa Option,  Marsa's sole remedy shall be the right to
"put" back to the Company all or a portion of the Purchase Shares that Marsa has
received  up to the date of the put (the total  number of such  Purchase  Shares
received  being  referred  to as the "Total  Purchase  Shares" and the number of
Purchase  Shares  actually  put to the  Company  being  referred  to as the "Put
Shares") in exchange for a pro-rata  portion of the  participating  interests in
BMC that the  Company has then  received  equal to the product of (X) divided by
(Y)  multiplied by 100 and expressed as a percentage,  where (X) is equal to the
number  of Put  Shares  and (Y) is equal to the  number  of the  Total  Purchase
Shares.  In  such  event,  (i)  the  then  outstanding  balance  of the  current
Intercompany  Loan shall be  forgiven,  (ii)  Marsa  shall be  entitled  to keep
whatever  amounts the  Company has already  then paid to Marsa on account of the
cash portion of the purchase  price and (iii) the parties  shall  thereafter  be
released from any further obligation thereunder.

The date when a loan made by the Company (or its  successor) is converted into a
participating  interest in BMC is referred to as an "Interim  Closing Date." The
date when the Company (or its  successor)  has  succeeded  to a 100%  membership
interest in BMC is referred to as the Closing Date. On each Interim Closing Date
and on the Closing  Date,  the Company will receive from Marsa all right,  title
and  interest  in its  participating  interest in BMC to which it is entitled on
each  such  respective   date,  free  and  clear  of  all  liens,   charges  and
encumbrances.



                                      -26-
<PAGE>

Pursuant to the Marsa  Option on September  14, 2005,  the board of directors of
BMC was revised to consist of three  managers,  two of whom are  nominees of the
Company  and the third is a  nominee  of  Marsa.  As of the date of this  annual
report the  directors of BMC are Douglas  Turnbull  (Company  nominee),  William
Tafuri (Company nominee) and Oleg Kim (Marsa nominee).

The Centrasia  Acquisition  was conducted on an arm's length basis.  Pursuant to
the Marsa Option and an Assignment  Agreement  dated  September 14, 2005, all of
724 BC's  right,  title and  interest  in the Marsa  Option,  the BMC Loan,  the
Guarantee  and the Pledge  Agreement  were  assigned to Magellan Gold (BVI) Inc.
effective on September 14, 2005. Upon such assignment,  Magellan Gold (BVI) Inc.
assumed all of the rights,  privileges,  obligations  and  liabilities of 724 BC
under the Marsa Option, the BMC Loan, the Guarantee and the Pledge Agreement.

Marsa is a  private  company  controlled  by Mr.  Oleg  Kim who is the  managing
director and a participant of Marsa and, effective  September 14, 2005, became a
director of the Company as a result of the Centrasia Acquisition.

BUSINESS OF BMC

As of the date of this annual  report,  the Company's main asset is an option to
acquire BMC. As a result of the Centrasia Acquisition,  the Company, through the
Marsa Option and the Company's ability to acquire ownership interests in BMC, is
indirectly  involved in the  acquisition  and  exploration  of mineral  projects
located in Kazakhstan, Kyrgyzstan and Uzbekistan.

BMC is in the  process  of  exploring  its  mineral  properties  and has not yet
determined  whether these properties  contain ore reserves that are economically
recoverable.  The  recoverability  of amounts expended by BMC in connection with
the  exploration  of its property  interests is dependent upon the discovery and
exploitation  of  economically  recoverable  reserves,   confirmation  of  BMC's
interest in the underlying  mineral claims, the ability of BMC (and the Company)
to obtain  necessary  financing to conduct  exploration  activities  and advance
properties beyond the exploration stage, and future profitable activities on the
properties or proceeds from the disposition thereof.

The sole asset of BMC is the BMC Licence  which permits the  exploration  of the
Bulakashu Property. Pursuant to the BMC Licence, BMC obtained a licence from the
State Agency for Geology and Mineral  Resources of the  Government of the Kyrgyz
Republic  that  provides  BMC with the right to conduct  geological  research of
basic and placer gold in the Bulakashu  area of the Kyrgyz  Republic,  excluding
the following gold alluvial placer licences:  Upper Karabulak,  Lower Karabulak,
Upper Tokailu and Lower  Tokailu.  BMC  concurrently  negotiated the size of the
property to be explored and the terms of an exploration  licence  agreement with
the Geology Agency. The Licence Agreement is an integral part of the BMC Licence
and  determines  the  exploration  expenditures  to be  incurred  by  BMC on the
Bulakashu Property and provides details of the proposed work program.

The BMC Licence was issued for a term until December 31, 2005. At the end of the
term of the BMC  Licence,  BMC is required to prepare and submit a report to the
Geology  Agency to confirm that BMC has  complied  with the terms of the Licence
Agreement.  Upon approval by the Geology Agency,  one year extensions to the BMC
Licence  and  Licence  Agreement  may be applied  for an annual  basis,  up to a
maximum  of ten  years.  Provided  BMC is in  compliance  with the  terms of the
Licence  Agreement,  BMC is required to pay to the Geology Agency  approximately
US$7 in payment of the Geology Agency's services associated with the application
to extend the Licence  Agreement.  At the end of each licence period, 25% of the
licence area must be relinquished by BMC. BMC, as the licence holder, determines
which areas are to be relinquished.  However,  the Law of the Kyrgyz Republic on
"Subsoil"  (the  "Subsoil  Laws")  dated July 2, 1997 No. 42 (as last amended on
February 4, 2002) does not provide for any  automatic  procedure  for renewal or
obtaining of an exploration licence after this period has expired.

The Subsoil Laws  provide that a sub soil user who has  discovered a deposit has
the indisputable, exclusive right to its exploitation. Prior to any exploitation
on the  Bulakashu  Property,  BMC will be required to obtain  approval  from the
Geology  Agency to conduct such  exploitation  and  negotiate  the terms of such
exploitation,  to include royalties, bonuses and other payments with the Geology
Agency.


                                      -27-
<PAGE>



GOVERNMENT REGULATION

DOING BUSINESS IN THE KYRGYZ REPUBLIC

OVERVIEW

The Kyrgyz  Republic is a  landlocked  and  mountainous  country  located in the
middle of the Asian continent.  It borders Kazakhstan in the north, the People's
Republic of China in the east,  Tajikistan in the  south-west  and Uzbekistan in
the west.  It is one of the  smallest  of the  Central  Asian  nations and has a
population  of  approximately   five  million  people.  The  Kyrgyz  economy  is
predominantly  agricultural,  with two thirds of the country's population living
in rural areas.  The Kyrgyz  Republic is a secular state and freedom of religion
is protected in its Constitution.  Approximately 75% of the population is Muslim
and 20% are Russian  Orthodox.  The  country  contains  deposits  of gold,  tin,
tungsten,   antimony,  mercury,  and  rare  earth  metals  as  well  as  locally
exploitable coal, oil and natural gas.

GOVERNMENT AND POLITICAL FACTORS

The Kyrgyz Republic is a former  constituent  republic of the Soviet Union.  The
country  declared  its  independence  from the Soviet Union in 1991 and became a
member of the  Commonwealth of Independent  States (the "CIS"),  and has overall
been a  politically-stable  constitutional  democracy.  Since independence,  the
nation has  undertaken  substantial  economic  and  political  reforms,  such as
introducing  an improved  regulatory  system and land  reforms,  and undergone a
transition to a  market-orientated  economy.  The Government  and  international
financial institutions have also engaged in a comprehensive  medium-term poverty
reduction and economic growth strategy.

In March 2005, the former 105 member two-chamber  parliament ceased to exist and
was replaced by a one chamber  parliament  approximately  half its current size.
The new one-chamber  parliament has broader  constitutional powers, with certain
powers  being  relinquished  to it by the  President.  These  changes  were made
pursuant to constitutional referendums which were conducted in 2003. On July 10,
2005 Kurmanbek  Bakiyev was elected as the country's new president.  Mr. Bakiyev
has been serving as the interim  President of Kyrgyzstan since protests in March
of 2005 forced the  departure and  subsequent  resignation  of former  president
Askar Bakiyev in March, 2005. The President was elected for a five-year term.

The Kyrgyz Republic has generally not experienced the ethnic,  civil or military
unrest that has befallen other former Soviet states,  with the exception of very
few  localized,   politically-motivated   conflicts  and  small-scale  terrorist
activity in the southern  Batken  region of the country  during  1999,  2000 and
early  2005.  The  Batken  region  is over 700  kilometres  from  the  Bulakashu
Property.  Since 2001, the Kyrgyz Republic has permitted military personnel from
the United States and other western countries to be stationed in the country. In
2002, construction of a large U.S. airbase began outside the nation's capital of
Bishkek,  which  is now  complete.  The  presence,  in the past  few  years,  of
international  military  coalition  forces and the recent  addition of a Russian
military  base in Kyrgyz  territory  have  brought  increased  stability  to the
country.

The  country's  legal  system,   both   legislative   and  judicial,   has  been
substantially  reformed since 1991. However, the legal system has not matured to
the level of  developed  economies.  These  factors  make it prudent for foreign
investors to seek additional protection through contractual  agreements with the
Government in order to stabilize the investment  environment  and provide for an
independent forum for conflict resolution.

ECONOMIC FACTORS, EXCHANGE CONTROLS AND REGULATION OF BUSINESS

The national  currency of the Kyrgyz  Republic,  the Som, is freely  convertible
into U.S. dollars within the Kyrgyz Republic at a floating exchange rate and has
remained  relatively  stable  over the last  four  years.  The  Kyrgyz  economy,
although  still  recovering  from the  post-Soviet  collapse  and  substantially
lagging  in  foreign  investment  when  compared  with  its  oil-rich  neighbors
Kazakhstan  and  Uzbekistan,  is exhibiting  positive  economic  signs,  with an
inflation rate of 2.8% in 2004 and gross domestic product ("GDP") growth of 7.1%
in the same year.  In  addition,  the Kyrgyz  Republic  was the first former CIS
state to be accepted as a member of the World Trade  Organization and one of the
first to receive financial support from the International Monetary Fund ("IMF").
Further  restructuring  of domestic  industry and success in attracting  foreign
investment  are seen as keys to future  growth.  The IMF has  forecast  real GDP
growth of 5% for 2005.



                                      -28-
<PAGE>


RELEVANT  KYRGYZ LAW AND THE  INVESTMENT  AGREEMENT  WITH THE  GOVERNMENT OF THE
KYRGYZ REPUBLIC

The laws of the Kyrgyz  Republic that are most relevant to BMC's  activities are
the law of  March  27,  2003,  "On  Investments  in the  Kyrgyz  Republic"  (the
"Investment  Law") and the law of March 6, 1992, "Law on Concessions and Foreign
Concession Enterprises in the Kyrgyz Republic" (the "Concessions Law").

The Investment Law  establishes  the basic  principles of the Kyrgyz  Republic's
policy toward foreign  investment as well as investor  protections.  It provides
that foreign  investors are entitled to freely use, possess and dispose of their
investments   and  to  freely  export  or  repatriate   the  proceeds  of  these
investments.  The  Investment Law prohibits all types of  discrimination  toward
foreign  investors or  investments,  including  that based on country of origin.
Investors are guaranteed  freedom from interference by governmental  bodies with
their economic  activities,  free conduct of monetary  operations,  the right to
hire both Kyrgyz citizens and  expatriates and the ability to submit  resolution
of disputes to international arbitration.

The Investment Law states that expropriation of investments must be conducted in
accordance with Kyrgyz law and, where effected,  must be in the public interest.
Expropriation  must not be  discriminatory  and must be  accompanied  by timely,
proper and real  compensation  of losses,  including lost profit.  The amount of
such  compensation  is to be determined in accordance with the fair market value
of the  expropriated  investment,  together  with  interest  from  the  date  of
expropriation.  Investors  who suffer  losses as a result of war or other  armed
conflict, upheaval or other similar circumstances will be granted the same legal
status and terms of operation as Kyrgyz nationals.

Under Kyrgyz law,  mining rights may be granted  either by way of exploration or
mining  licences,  both of which are issued by the State  Agency on Geology  and
Mineral  Resources,  or by a  concession  from  the  Government  of  the  Kyrgyz
Republic. Although concessions are typically much more difficult,  expensive and
time-consuming to obtain, they provide investors with greater protection.

While a license  may be  terminated  without the  licensee's  consent in certain
circumstances,  including  a  breach  of the  law,  a  concession  may  only  be
terminated in accordance with the terms and conditions of the agreement pursuant
to which it is granted.

The  Concessions  Law  establishes  the procedure by which the Government of the
Kyrgyz Republic may grant  concessions to foreign investors and provides for the
status and rights of such investors. The most important step is the execution of
an  agreement  between the  Government  of the Kyrgyz  Republic and the relevant
investor,  in which the Government of the Kyrgyz  Republic  gives  permission to
possess and use the property  granted under the  concession and to gain proceeds
from such concession.

INVESTMENT COMPANY ACT OF 1940

Although the Company is subject to regulation  under the Securities Act of 1933,
and the Securities  Exchange Act of 1934,  management  believes the Company will
not be subject to regulation  under the  Investment  Company Act of 1940. In the
event the Company holds passive investment interest in a number of entities, the
Company could be subject to regulation under the Investment Company Act. In such
event,  the Company would be required to register as an  investment  company and
could be expected to incur  significant  registration and compliance  costs. The
Company has obtained no formal  determination  from the  Securities and Exchange
Commission as to its status under the Investment  Company Act.  Consequently,  a
violation of the  Investment  Company Act could subject the Company to civil and
criminal penalties and could cause the Company to cease operations.

INVESTMENT ADVISERS ACT OF 1940

Under the  Investment  Advisers Act of 1940, an  "investment  adviser" means any
person who, for compensation, engages in the business of advising others, either
directly or through  publications or writings,  as to the value of securities or
as to the advisability of investing in, purchasing,  or selling  securities,  or
who, for compensation and as part of a regular  business,  issues or promulgates
analyses or reports concerning securities. The Company does not intend to engage
in the business of advising others in investment matters for a fee or otherwise.



                                      -29-
<PAGE>


EXPENDITURES AND DISPOSITIONS

As a prospect  generator,  the  Company's  business  was to acquire  oil and gas
prospects  and farm-out its  properties  with industry  joint venture  partners.
During fiscal 2003,  the Company  recorded an  impairment  charge of $574,508 to
reflect its unsuccessful  drilling  activities and related  acquisition costs of
the  abandonment  of  the  regional   California   prospects  and  the  Michigan
exploratory  well.  During fiscal 2003, the Company also  wrote-off  $169,322 in
connection  with the letter of intent and bridge  loan with OPS.  During  fiscal
2004,  the Company sold its 3% working  interest in the West Ranch Field.  There
were no  dispositions  or  write-offs  by the Company of any property  interests
during fiscal 2005.

Except for BMC's  interest in the Bulakashu  Property,  neither BMC, the Company
nor 724 BC own any interests in any other  properties.  See "Item 4. Information
on the Company - Business Overview - Principal Properties - Bulakashu Property."

The Company did not make any capital  expenditures  during  fiscal 2005.  During
fiscal 2004 and 2003 the Company incurred $60,908 and $246,094, respectively, on
the acquisition and  exploration of its petroleum  interests.  During the fiscal
year ended May 31, 2005, 724 BC advanced  US$110,000 and $10,000 to BMC and paid
$40,000 to Marsa pursuant to the terms of the Marsa Option.  724 BC did not make
any capital  expenditures  during fiscal  period ended May 31, 2004.  During the
fiscal period ended May 31, 2005, BMC spent US$80,392 on the Bulakashu  property
and US$6,802 to acquire  equipment.  Subsequent to May 31, 2005, the Company has
advanced US$110,000 and $4,500 to BMC pursuant to the terms of the Marsa Option.

SALES AND REVENUE DISTRIBUTION

Commencing in the 2003 fiscal year,  the Company's  share of petroleum,  natural
gas and  natural gas  liquids  produced  from its wells was sold to a variety of
purchasers at the wellhead in the United States. All of its sales were conducted
with unaffiliated customers. These purchasers provided a ready market for all of
the Company's production and paid the local market price, which fluctuated based
upon prevailing market conditions. Due to the number of purchasers in each area,
the loss of one or a number of purchasers did not pose a significant risk to the
continuity  of the  Company's  operations.  In March 2004,  the Company sold its
remaining oil and gas leases.

Total revenues,  interest and other income reported for fiscal 2005,  2004, 2003
and 2002, were as follows:

                                       2005            2004            2003

Petroleum and Natural Gas Sales
      - United States              $          -    $     98,904    $     22,064
                                   ------------    ------------    ------------

Interest and Other Income
      - United States                         -              91          10,902
      - Canada                               19           4,008             688
                                   ------------    ------------    ------------
                                             19           4,099          11,590
                                   ------------    ------------    ------------
Total Revenue,
     Interest and Other Income     $         19    $    103,003    $     33,654
                                   ============    ============    ============

PLAN OF OPERATION

The Company is currently  working with BMC on the proposed  Phase 1  exploration
program on the Bulakashu  property in  Kyrgyzstan.  BMC intends to complete this
program in the fall of 2005.

The Company's  management  and technical  staff  maintains an ongoing  review of
exploration projects and opportunities in Kyrgyzstan, Kazakhstan and Uzbekistan.
Pending the outcome of these property reviews and  evaluations,  the Company may
decide to pursue and acquire  additional  mineral properties that it feels would
add  significant  value  to the  existing  asset  base of the  Company.  Any new
property  evaluations that require  intensive  technical due diligence or future
property acquisitions would require the Company to seek additional financing.



                                      -30-
<PAGE>


Depending on the level of the Company's activities,  it may be necessary for the
Company to hire additional  administrative and/or technical staff on a part time
or temporary basis.

As at  September  15,  2005,  the Company had working  capital of  approximately
$313,000, which, when combined with the net proceeds of the Short Form Offering,
will result in the  following  funds  available on the closing of the Short Form
Offering (See "Item 4.  Information on the Company - History and  Development of
the Company"):

--------------------------------------------------------------------------------
                                                      MINIMUM         MAXIMUM
                                                     OFFERING        OFFERING

Working capital                                        $313,000        $313,000
Net Proceeds from the sale of Units(1)               $1,352,500      $1,815,000
                                                   ------------    ------------
                                                     $1,665,500      $2,128,000
                                                   ============    ============
--------------------------------------------------------------------------------
(1)      Net proceeds of the Short Form Offering are after deducting Canaccord's
         cash  commission  (assuming  Canaccord  does not elect to take units in
         lieu of cash), and after deduction of estimated  legal,  accounting and
         administrative  expenses  incurred  in  connection  with the Short Form
         Offering,  expected to be $35,000, including Canaccord's administration
         fee of $7,500.

Management  intends to use the funds for the following  purposes within the next
twelve months:

--------------------------------------------------------------------------------
                                                        MINIMUM          MAXIMUM
PRINCIPAL USE OF FUNDS                                 OFFERING         OFFERING
--------------------------------------------------------------------------------

To complete  Phase 1 of the  recommended               $173,500         $173,500
Work Program on the  Bulakashu  Property
as  set  out in  the  Technical  Report,
which have an estimated cost of $200,000
of which about $26,500 has been advanced
to date(1)(3)

Reserved for the  estimated  cost of the               $812,000         $812,000
Phase 2 recommended  Work Program on the
Bulakashu  Property  as  set  out in the
Technical  Report  and for the  Issuer's
funding  commitment  for 2006  under the
Marsa Option Agreement (US$690,000)(1)(2)
(3)

Marsa  Option  Payment  due on or before                $47,000          $47,000
January 2, 2006 (US$40,000)(1)(3)

General and Administrative  Expenses for               $145,560         $145,560
the Next 12 Months

Reserve   for   the    evaluation    and               $487,440         $949,940
acquisition  of new resource  properties
and for Working Capital
                                                      ---------        ---------

TOTAL FUNDS AVAILABLE:                               $1,665,500       $2,128,000
                                                      =========        =========
--------------------------------------------------------------------------------

(1)      See "Item 4.  Information  on the  Company  -  Principal  Properties  -
         Bulakashu Property."
(2)      See "Item 4.  Information  on the  Company - Business  Overview - Marsa
         Option."
(3)      Converted at Cdn$0.85 = US$1.00.

There may be circumstances  where, for sound business reasons, a reallocation of
funds  may be  necessary.  The  Company  will only  redirect  the funds to other
properties and will only do so on the basis of a written  recommendation from an
independent professional geologist or engineer.

PRINCIPAL PROPERTIES

BULAKASHU PROPERTY

The  Bulakashu  Property is without  known  reserves as defined by Guide 7 or NI
43-101 and BMC's programs are exploratory in nature.

Technical  information  provided herein for the Bulakashu Property is based upon
information  contained  in a  report  (the  "Technical  Report")  entitled  "The
Bulakashu  Property,  The Bulakashu  Mining District,  Chui Oblast,  Kyrgyzstan"
dated June 15, 2005,  prepared by APEX Geoscience Ltd.  ("APEX").  The Technical


                                      -31-
<PAGE>



Report was prepared for 724 BC in compliance with National  Instrument  43-101 -
Standards for Disclosure for Mineral  Projects ("NI 43-101) for submission as an
independent  technical report to the TSX-V, the British Columbia and the Alberta
Securities Commission in connection with the Company's Management Proxy Circular
and the Centrasia Acquisition.

The Technical  Report was prepared by Mr. Dean J. Besserer,  B.Sc.,  P.Geol.  of
APEX as the  responsible  "qualified  person"  under NI  43-101.  The  technical
information  contained  in this  annual  report  with  respect to the  Bulakashu
Property has been summarized from the Technical Report.

Data used in the compilation of the Technical  Report came from many sources and
time  periods  before the  author's  involvement.  Other than for the purpose of
conveying  the  history  of all  exploration  work  at the  Bulakashu  Property,
references to historical  data cannot be verified and therefore  were not relied
upon other than a general indication of the presence and style of mineralization
on the Bulakashu Property.  For example, many of the reports used to prepare the
Technical   Report,   were  prepared  under  the   supervision  of  and  to  the
specifications  of the  Department  of the  Kyrgyz  SSR,  prior to  Kyrgyzstan's
independence  or by the Kyrgyz  State  Agency on Geology and Mineral  Resources,
after independence.  Management  believes,  the manner in which most of the data
was  collected and  presented  was  reasonable  by today's  standards and unless
specified  should be  considered  reliable.  The format of more  recent  reports
compiled by the staff of BMC and Marsa do not comply  with NI 43-101  standards,
however,  Mr.  Besserer  had no  reason  to  believe  that the  information  and
observations contained within those reports were not accurate.

PROPERTY DESCRIPTION AND LOCATION

The Bulakashu  Property lies within the  Bulakashu  mining  district in the Chui
Oblast, Panfilov Region of the Republic of Kyrgyzstan,  and falls within a broad
band of mineral  deposits  which are locally  referred  to as the  Kyrgyz-Kungey
mineral belt which have historically  produced gold and copper.  The location of
the Bulakashu Property in the Kyrgyz Republic is shown on the following map:




                                      -32-
<PAGE>



              [Map prepared by APEX Geoscience Ltd. dated June 2005
         showing the location of the Bulakashu Property in Kyrgyzstan.]





                                      -33-
<PAGE>




The Bulakashu Property is defined by the BMC Licence,  (Licence No: AP 48 issued
by the State Agency on Geology and Mineral Resources of the Kyrgyz Republic) and
comprises  240 km2 in size.  The  boundary of the BMC Licence area is defined by
the following coordinates on the following map:

 Corner                          North Latitude               East Longitude

   1                                42022'53"                     73036'58"

   2                                42023'07"                     73054'24"

   3                                42017'40"                     73054'30"

   4                                42017'26"                     73037'04"


The exploration licence was issued on March 28, 2005. The exploration licence is
temporary  and  is  effective  until  December  31,  2005.  At  such  time,  the
exploration  licence can be extended for up to ten years subject to the approval
of the Geology  Agency and provided that BMC is in compliance  with the terms of
the Licence Agreement or any further licence agreements. Kyrgyz Subsoil Law does
not  provide  for  any  automatic  procedure  for  renewal  or  obtaining  of an
exploration licence after this current licence period has expired.  See "Item 4.
Information on the Company - Business Overview - Business of BMC."




                                      -34-
<PAGE>



       [Geologic Map prepared by APEX Geoscience Ltd. showing the for the
                   Bulakashu Mining District dated June 2005]






                                      -35-
<PAGE>



The BMC Licence is a contiguous licence and is the subject of the Marsa Option.

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

The  Bulakashu  Property is accessed  by driving on paved  roads  westerly  from
Bishkek to Kara  Balta on highway  M39 and then south from Kara Balta on highway
M41 (the  Bishkek to Osh  highway) for about 120 km. A 5 km dirt road of varying
quality leads westerly from Highway M41 to the center of the Bulakashu Property.

The region  experiences  long cold winters and cool summers.  Based on long-term
observations at the Tuya Ashu weather  station,  at an elevation of 3,586 m, the
average annual temperature is -3.2(degree)C, with lowest average temperatures in
January  (-12.8(degree)  C) and  highest  in July  (+8.5(degree)  C).  Sustained
subzero  temperatures  last from  November to March  inclusive.  Snowfall can be
expected  from  November to May.  There are no glaciers or permanent  snowfields
within  the  Bulakashu  Property.  Avalanches  are common  throughout  the area.
Average  annual  precipitation  is 855 mm, of which  approximately  613 mm falls
during the warm  period  from April to  October.  Highway  M39 is kept open year
round because it provides the main access to Osh from Bishkek.  Highway M41, the
Bishkek to Osh highway,  cuts the eastern edge of the BMC Licence  area. A power
line runs  through  the east edge of the  Bulakashu  Property  with the  closest
established sub-station at Tuya Ashu.

The elevation at the property ranges from 2,500m to 4,050m in rugged mountainous
topography  that  is  dominated  by  glacial  features.  Higher  elevations  are
dominated by steep walled  cirques and aretes while the major valleys are filled
with moraines.  Moderate to gentle slopes are often covered by talus and outcrop
exposure is poor.  Vegetation on the Bulakashu  Property consists of grasses and
sparse shrubs with very few trees. All the major drainages have flowing streams.

Any  necessary  local  labor  could come from  either  Kara  Balta or  Sosnovka.
Kyrgyzstan  has a 98 percent  literacy  rate and mining is a common  profession.
Kara Balta is 60 km to the north and is the closest large city and railhead.

Initially, the field season should be limited to the snow free months. There may
be some weather  caused delays if the project  progresses  past the  exploration
stage but any future  production  should not be effected  any more than  similar
mines in severe climates.

Access to the Bulakashu  Property is  excellent.  A paved,  year round,  highway
crosses  the  property  from which the main  exploration  camp at  Bulakashu  is
accessed by a five  kilometre  dirt road. A 35 kilovolt  power line runs through
the  east  edge  of the  Bulakashu  Property.  The  climate  is of  the  extreme
continental type with long cold winters and cool summers. Snow may come as early
as November and stay on the ground,  at the lower  elevations,  until May. There
are no  glaciers or  permanent  snowfields  within the  Bulakashu  Property  and
avalanches are common throughout the area in the winter and early spring.

Although conducting  exploration or drill programs in mountainous terrain during
winter  conditions can present  challenges,  successful winter drilling programs
have been conducted in similar terrain and climatic  conditions as those present
at the Bulakashu Property.

GEOLOGICAL SETTING

The Bulakashu  Mining District lies within the Northern Tien Shan terrane of the
Kyrgyz  Republic.  The Bulakashu  Property  falls within a broad band of mineral
deposits which are locally referred to as the  Kyrgyz-Kungey  mineral belt which
have historically produced gold and copper.

The geology of the  Bulakashu  Property is  extremely  complex due to the varied
nature of the  volcanic  stratigraphy,  several  stages of  intrusive  activity,
structural complexity consisting of several periods of folding and faulting, and
metamorphism.  The  stratigraphy  of the Bulakashu  district is  represented  by
volcanic and volcaniclastic  rocks of Lower Mid-Ordovician to Lower Mid-Devonian
age.  The  Silurian  strata  are  absent  and are  represented  by a  widespread
unconformity  throughout the Northern Tien Shan terrane.  The composition of the
rocks is varied  representing  the  multi-stages  of  volcanic  activity  in the
district.



                                      -36-
<PAGE>


DEPOSIT TYPES

Gold occurs in veins and vein/stockwork  combinations in mafic volcanic rocks in
complex   structural   settings.   Copper-gold   mineralization   occurs  within
granodiorite to diorite porphyry  intrusions similar to many other such deposits
throughout the world.

There are two identified types of mineral occurrences in the Bulakashu district:
greenstone/mafic   volcanic  hosted  gold  deposits  and  porphyry   copper/gold
deposits.  Gold occurs within small  discontinuous  quartz veins and quartz vein
stockworks in sheared greenstones in complex structural settings. These deposits
are  remarkably  devoid of other  metals and the gold often occurs as free gold.
The  genetic  relationship  of these  deposits  to  faulting  is obscured by the
complexity of the faulting and post mineralization  faulting.  These occurrences
may be the source of the placer gold.

Porphyry copper/gold  mineralization is mid-Ordovician in age and related to the
island  arc  stage  of  mineralization.  Mineralization  occurs  in  diorite  to
monzodiorite  porphyries  with  zoning  that  is  typical  for  porphyry  copper
deposits.  However,  the best grades of  mineralization  are found in late stage
breccia pipes within the  mineralized  porphyries.  The breccia pipes often have
tourmaline  and quartz  stockworks  associated  with the best gold and/or copper
grades.  Chalcopyrite  is the  dominant  ore  mineral  but  traces of galena are
common.

HISTORY

In  1935   prospectors   first  recorded  gold  placers  in  the  Susamir  basin
(Yarushevsky ET AL., 2003).

Extensive  uranium  exploration  and geological  mapping  (1:200,000  scale) was
conducted in the area in 1946 and 1957.  However,  the most  interesting find of
that period was a small gold-bearing quartz vein found in Korgantash creek and a
great  number of old placer  excavations,  found in the  Tokailu-Karabulak  area
(Yarushevsky ET AL., 2003).

In 1958, gold bearing outcrops were found at Karabulak,  Bulakashu,  Altyn-Masha
and the placer gold content of Tokailu creek and the Karabulak river valleys was
discovered (Yarushevsky ET AL., 2003; Maximov, ET AL., 1960).

During 1960-1961,  additional  sampling was completed at Karabulak.  At the same
time, the Severny  prospect was identified as being  promising in terms of gold,
copper, and lead (Yarushevsky ET AL., 2003; Krivtsov, ET AL., 1978).

The  Karabulak  placer mine is located  downstream  along the drainage  where it
coalesces with the stream that drains the Severny prospect.  Certainly Karabulak
and  perhaps  Severny,  along with other long since  eroded  deposits,  may have
yielded significant gold input specific to the Karabulak placer deposit (Tafuri,
2005).

Trenching and continuous chip sampling  completed by the Soviet era workers from
1960 to 1963 returned the following  significant  anomalous  intervals  from the
Karabulak  gold  prospect  (Doljenko,  ET AL.,  1963).  Over  twenty wide spaced
(40-60m apart) trenches were excavated across sections the apparent trend of the
Karabulak  prospect and  continuous  chip samples were collected over the entire
length of the trenches.

               TRENCH             INTERVAL           GOLD
                                    (M)              (G/T)

               K1                   8.2              35.4
               K9                   4.0               7.1
               K13                 22.2               2.2
               Including            6.0              46.0
               K14                  6.0               4.4
               K15                  4.45              5.1
               K16                 15.5              2.26
               K17                 17.5              2.37
               K18                 11.45             6.49

A number of the trenches ended in  mineralization  indicating that some parts of
the zone may extend further  north,  south and along strike to the northeast and
southwest.  Mineralization encountered in the southern end of trench K1 returned


                                      -37-
<PAGE>


the highest  gold values  (35.4 g/t gold across 8.2 metres) and remains  open to
the south.

Based on these  sample  results,  Soviet  geologists  drove two adits to further
investigate  the vertical  down dip extent of the  mineralization.  Adit one was
driven under the northeast  Karabulak prospect and adit two was driven under the
western Karabulak prospect.  Crosscuts were driven from each adit. Each adit was
sampled thoroughly and reported to be barren of gold  mineralization.  One drill
hole was drilled from the face of adit two and it was also reported to be barren
with  respect  to  gold.   The   Soviet's   interpretation   of  the   Karabulak
mineralization was that the vein/stockwork  system was vertical.  Both the adits
and the lone  drill  hole were  intended  to  intercept  the  downward  vertical
projection of the surface mineralization.

During  the  period  from  1967 to  1971,  extensive  work  was  done by  Soviet
geologists  on the  stratigraphy,  petrology,  and  structure  of the  Bulakashu
district.  A  structural  lithological  and  forecast  map of the  district  was
prepared at a scale of  1:100,000.  Lithogeochemical  mapping was completed at a
scale of 1:10,000. A distribution map of known mineralization was also compiled.

During  the  period  from 1981 to 1983  further  reconnaissance  studies  of the
Bulakashu  district  were  completed by Soviet  geologists,  with the purpose of
collecting  additional  information  in order to initiate  new  exploration  and
evaluation  work.  At the  Karabulak  prospect,  23  trenches  were dug and five
outcrops were cleared.  Like many researchers before, the Soviet geologists also
came to the  conclusion  that,  at deeper  levels,  Karabulak  had high economic
potential  (Yarushevsky ET AL., 2003;  Supambaev ET al., 1984). In 1984 and 1985
the same crew of Soviet geologists  continued to explore the Bulakashu  district
for porphyry copper  deposits.  This resulted in finding several large low-grade
porphyry copper/gold  occurrences with grades from surface sampling ranging from
..02 to 0.25 %Cu and locally 2.0 g/t gold. Work was  discontinued  due to the low
grade of the  deposits  and the steep  topography  that would  have made  mining
uneconomic  under Soviet  guidelines  (Yarushevsky  ET AL.,  2003;  Supamanbaev,
1986).

In 1996,  Karabalta GMK,  started  production at the Upper Karabulak and Tokailu
placers.  This operation lasted two years. Also during 1996, the  Kyrgyz-Russian
joint  venture  "Ordo," put  together an  exploration  plan for  Karabulak  gold
deposit,  however,  fieldwork  ceased  at  start-up  stage.  Subsequently,   the
Tien-Shan  Gold  Company,  a  joint  venture  between  Cameco  and  Kyrgyzaltyn,
performed  verification  exploration  work consisting of re-sampling of selected
existing  trenches and drilling four core holes  (Lopatko,  ET AL.,  1996).  The
Tien-Shan exploration was conducted at the Altyn Masha and Otradny prospects.

MINERALIZATION

KARABULAK GOLD PROSPECT

Host  rocks for the gold  mineralization  at the  Karabulak  Gold  Prospect  are
mid-Ordovician altered, sheared,  silicified and/or veined mafic volcanic rocks.
The mafic rocks form a prominent series of outcrops along the southern flanks of
a  west-southwest  trending  ridge.  The  ridges  are  cut  by a  narrow,  steep
north-south  trending  drainage that divides the prospect  into two halves:  the
Main and Western prospects  (cumulatively termed the Karabulak  Prospect).  Both
halves have been trenched on surface over a distance of 400 metres and up to 80m
across and have similar alteration,  silicification and veining characteristics.
Within the river valley,  immediately down drainage from the Karabulak zone is a
large  independent  placer operation (the Karabulak  Placer) which is mined on a
seasonal  basis.  BMC does not have any interest in the placer  operations.  The
ridge appears to be the expression of a northeast  striking,  shallow  northwest
dipping  truncated   thrusted  sequence  of  sheared,   variably  altered  mafic
volcanics.  Alteration  within the known mineralized zone at surface consists of
silicification,  chloritization,  localized  fuchsite  and, to a lesser  extent,
sulphidization.  It is unclear what controls gold  mineralization  at this time,
however, in general it appears that shearing and alteration along thrust planes,
tend to yield  higher  grade  gold.  The most  intensely  veined and  silicified
portion of the zone is well  exposed  and  resistant  to  weathering  giving the
surface exposure a very dark knobby  appearance.  Similar looking outcrop can be
observed for some distance along strike and adjacent to main trenched portion of
the  Karabulak  Gold  Prospect.  There is no  indication  that  any  significant
sampling has been conducted on these similar looking outcrops.



                                      -38-
<PAGE>


Localized  granitic  intrusions south of the Karabulak prospect provide a nearby
heat source for mineralizing fluids. Management believes the greenschist facies,
mafic volcanic rocks hosting the quartz stockwork at Karabulak are geochemically
favourable for the deposition of gold.

SEVERNY COPPER/GOLD PROSPECT

Mineralization  at  Severny  is hosted in a  granodiorite  with the best  grades
occurring in intrusive  breccias within the  granodiorite  body. The deposit has
been described as a porphyry copper but porphyritic  textures are not ubiquitous
and most of the observed rock was nearly equigranular.  Mineralization consisted
of very fine chalcopyrite with spotty  occurrences of galena.  Very fine grained
pyrite was ubiquitous.  Oxidation was almost absent and only traces of malachite
were seen.

The southern and southwestern  margins of the granodiorite had strong propylitic
alteration.  The host  rocks in the same  area  were  often  hornfelsed  and had
epidote veining. The more central parts of the granodiorite had phyllic and weak
potassic  alteration.  Breccia zones had potassic  alteration  and fine granular
tourmaline.  Chalcopyrite  in the breccia zones was coarser than the rest of the
deposit and often up to several millimeters in size.

The Central Zone, as designated by the earlier  workers,  is a zone less than 10
meters wide and over 400 meters  long.  Within this zone there is strong  quartz
flooding and stockworks and a wide range of sulfide minerals are observed.

EXPLORATION

During 2002,  Marsa obtained an exploration  licence within the Bulakashu Mining
District and an  exploitation  licence  which  included the  Karabulak  placers.
During  the  summer  of  2002,  Marsa  re-sampled  many of the  trenches  at the
Karabulak  prospect and re-evaluated the Karabulak placer deposit.  During 2003,
column  leach tests were  conducted  on the assay  sample  rejects from the 2002
sampling and production  started at the placer deposit (the placer  deposits and
mining rights are excluded from the BMC licence). In 2004, Marsa established BMC
as a separate  company and  transferred the Bulakashu  exploration  licence into
BMC. BMC drilled four core holes at the  Karabulak  gold prospect in the fall of
2004.  As  well,  during  2004,  Dr.  William  Tafuri  of 724 BC and,  effective
September  14,  2005,  the  Vice  President  of  Exploration   and  Director  of
Operations,  Asia of the Company,  visited the Bulakashu Property to monitor the
drill  program at  Karabulak  and  evaluate  the Otradny  gold  prospect and the
Severny  copper/gold  prospect.  In total, 10 rock samples were collected during
2004 by Dr. Tafuri.

KARABULAK GOLD PROSPECT

From 2002 up to the present all of the exploration on the Bulakashu Property has
been  focused  at the  Karabulak  prospect.  During  2004 and  2005,  more  than
US$110,000  was  spent on the  Bulakashu  Property,  entirely  on the  Karabulak
prospect by BMC.

The  author of the  Technical  Report Mr. D.  Besserer,  visited  the  Karabulak
prospect on May 19, 2005. In total, three core samples and two rock grab samples
were  collected.  The results are  summarized  in the table  below.  The samples
collected  from the core closely  replicate  those results  obtained by BMC. One
grab sample from one of the  historic  trenches,  trench K1 assayed 171 g/t gold
and contained  abundant visible gold in a silicified,  propylitic  altered mafic
volcanic.

                   APEX GEOSCIENCE LTD. - ROCK SAMPLE RESULTS
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
SAMPLE ID          LOCATION                            GOLD VALUE       DESCRIPTION
                   (UTM EASTING/NORTHING)               (G/T AU)
----------------------------------------------------------------------------------------------------------------------
<S>               <C>                                  <C>             <C>

05DBP050           Drill  hole 5.  Mr.  Besserer          8.7           Replicate  sample of halved  core from  drill
                   did  not   visit   the  drill                        hole  5;  29-30m   interval   sampled   which
                   collar.                                              contains 11.45 g/t Au from BMC work
----------------------------------------------------------------------------------------------------------------------

05DBP051           Drill hole 4.  Collar at:              8.88          Replicate  sample of halved  core from  drill
                   Zone43T 0399306E/ 4685009N                           hole  4;  30-31m   interval   sampled   which
                   (WGS 84)                                             contains 8.14 g/t Au from BMC work
----------------------------------------------------------------------------------------------------------------------



                                      -39-
<PAGE>

<CAPTION>

----------------------------------------------------------------------------------------------------------------------
SAMPLE ID          LOCATION                            GOLD VALUE       DESCRIPTION
                   (UTM EASTING/NORTHING)               (G/T AU)
----------------------------------------------------------------------------------------------------------------------
<S>               <C>                                  <C>             <C>

05DBP052           Drill hole 4.  Collar at:              1.74          Replicate  sample of halved  core from  drill
                   Zone43T 0399306E/ 4685009N                           hole  4;  31-32m   interval   sampled   which
                   (WGS 84)                                             contains 1.63 g/t Au from BMC work
----------------------------------------------------------------------------------------------------------------------

05DBP053           Zone43T 0399397E/ 4685103N             17            Composite  rock grab sample at adit  entrance
                   (WGS 84)                                             of  silicified,   propylitic   altered  mafic
                                                                        volcanic  with  moderate to weakly  developed
                                                                        quartz  stockwork.   3-5%  pyrite.  Thrusting
                                                                        is visible here.
----------------------------------------------------------------------------------------------------------------------

05DBP054           Zone43T 0399301E/ 4685025N             171           Composite  rock  grab  sample  at trench 1 to
                   (WGS 84)                                             test  mineralization and replicate results of
                                                                        Soviet   era  sampling  and  724 BC  sampling
                                                                        (sample   1).   Intensely    silicified   and
                                                                        chloritized mafic volcanic.  Abundant visible
                                                                        gold. In old trench.
----------------------------------------------------------------------------------------------------------------------
</TABLE>

*        Samples were  analyzed at Alex Stewart and  Environmental  Laboratories
         Ltd. in Kara-Balta. All samples are from the Karabulak Prospect

In September 2004, Dr. Tafuri  examined the Karabulak  prospect and compared the
Soviet era geologic  maps and notes to what was observed on the ground and found
the agreement to be very good. There were some differences in  interpretation of
the geology, especially specific to structure, but the trench and adit locations
were  confirmed.  No attempt was made to go  underground  because of the lack of
proper  safety  equipment.  Dr. Tafuri did limited  re-sampling  of a high-grade
interval  in trench K1. The exact  interval  sampled by the Soviet  workers  and
later by Marsa could not be  identified  because  weathering  had  destroyed the
identifying  marks.  However,  samples taken in the same trench at approximately
the same interval  yielded high gold values.  In Trench 1, three  one-meter chip
samples were taken over  approximately  the same  interval that a 1 meter Soviet
era sample  yielded 122 g/t gold assay.  Samples 1-3 yielded assays ranging from
3.62 g/t gold to 42.9 g/t gold  over 1 meter.  While not as  spectacular  as the
original  Soviet era sample,  management  believes the new samples  confirm that
there  is  significant  gold  mineralization  in the zone  that  was  originally
sampled.

No airborne and/or ground  geophysical  surveying has been conducted  within the
Bulakashu Property.

OTHER PROSPECTS

During 2004,  Dr. Tafuri  examined the Severny  prospect and found the agreement
between  the  geology  and the old  data to be very  good.  The  alteration  and
mineralization  was found to be as described and the trenches were in the proper
locale from historic results. No identifying marks could be found for either the
trench or sample  numbers  from the  historic  exploration.  Four  samples  were
collected from what appeared to be typically  mineralized  rocks from zones that
were described in the historic  reports.  The samples assay 3.78 g/t gold, 154.9
g/t silver and 0.78% copper and  management  believes they confirm that there is
significant  gold and  copper  mineralization  in the zone  that was  originally
sampled. No exploration has been conducted on the Severny prospect by BMC.

As well, Dr. Tafuri examined the Eastern extension of the Otradny  prospect.  No
historic  sample data from this prospect has been  discovered.  In total,  three
rock chip  samples  were  collected  which were not  considered  anomalous  with
respect to gold and/or copper.  The following  table provides the results of the
rock chip samples.

--------------------------------------------------------------------------------
SAMPLE       AU         AG         CU         PB
  NO.        G/T        G/T        PPM        PPM      PROSPECT         SAMPLE
--------------------------------------------------------------------------------

  1         42.9       <1.0        118         19      Karabulak        1m, chip
  2         41.9        1.2         11          7      Karabulak        1m, chip



                                      -40-
<PAGE>

--------------------------------------------------------------------------------
SAMPLE       AU         AG         CU         PB
  NO.        G/T        G/T        PPM        PPM      PROSPECT         SAMPLE
--------------------------------------------------------------------------------

  3         3.62       <1.0         23         <3.5    Karabulak        1m, chip
  4         4.08       30.1       2007      12200      Severny          1m, chip
  5         0.35        2          772       1891      Severny          1m, chip
  6         3.78      154.9       7831      66330      Severny          grab
  7         0.977      38.8       2349      23020      Severny          4m, chip
  8        <0.05       <1.0         17         55      Otradny          3m, chip
  9        <0.05       <1.0         13         21      Otradny          4m, chip
 10        <0.05       <1.0         18         91      Otradny         15m, chip
--------------------------------------------------------------------------------

*        Samples were  analyzed at Alex Stewart and  Environmental  Laboratories
         Ltd. In Kara-Balta. No GPS coordinates were recorded.

The  Otradny  prospect is a fault  controlled  sulfide  system of large  lateral
extent and widths of about 100  meters.  The system  strikes  under the  capping
andesites on the east so the true length of it is  concealed,  but appears to be
about 1 km long.  Samples  collected by Dr. Tafuri were collected from a heavily
limonite  stained outcrop exposed by a trench.  The host rocks in the fault zone
are  brecciated  andesite and basalt.  The fault zone is not evenly  altered and
there are blocks of relatively fresh rock within it.

Soviet era reports refer to three  mineralized  zones. Dr. Tafuri only witnessed
one  zone,   about  100  meters  wide,  with  pinching  and  swelling  areas  of
alteration/mineralization  within  it.  Also,  historic  geologic  maps show the
mineralization  to be cut off by a fault  which was not  evident  from the field
visit  conducted by Dr. Tafuri.  No exploration has been conducted at Otradny by
Marsa.

No airborne and/or ground  geophysical  surveying has been conducted  within the
property.

DRILLING

In 2004,  four core holes were drilled at the western  portion of the  Karabulak
Prospect, totaling 557.6 meters, under the direction of Dr. Oleg Kim of BMC, who
became a director of the Company effective  September 14, 2005. All drilling was
completed with NQ sized core. The table below summarizes the analytical  results
of the  drilling.  As with the adits one and two  completed  in the 1960's,  the
drilling  was  targeted to  intersect  the  vertical  downward  extension of the
western  Karabulak  zone, down dip of the surface  mineralization  but above the
workings  of adit 2. All four holes were  drilled  to the  northeast  at shallow
inclinations from the south face of the ridge immediately south of the Karabulak
zone  on  the  ridge  top.   Alteration   and   anomalous  to  economic   grades
mineralization were intersected in all four holes and over significant widths in
three of the four holes.

          SUMMARY OF RESULTS - 2004 DRILLING AT THE KARABULAK PROSPECT
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------
                                                                              INTERVAL
                                               ELEVATION, AZIMUTH,             SAMPLE          GOLD  IN
DRILL     LOCATION               INTERVAL         DIP AND TOTAL               LENGTH IN         G/T OR
HOLE                           FROM M to M        DEPTH OF HOLE                METERS             PPM
-------------------------------------------------------------------------------------------------------
<S>      <C>                  <C>             <C>                             <C>             <C>

02-04     63296.05 68917.13       57-58        3049.4m, 330, -10, 137.1m          1              1.30
                                  60-66        As above.                          6              1.07
          63223.23              100-101        As above.                          1
          68881.05                                                                               0.57
-------------------------------------------------------------------------------------------------------
03-04     63317.95                 9-13        3074.19m, 330, 5, 140.7            4
          68937.61                                                                               8.09
-------------------------------------------------------------------------------------------------------
04-04     63317.95                29-60        3050.23m, 330, -3, 136.3          31
          68937.61                                                                              *2.28
                                  63-64        As above.                          1              0.75
                                  66-67        As above.                          1              0.76
                                  69-70        As above.                          1              0.79
                                120-121        As above.                          1              0.88
                                133-134        As above.                          1              4.46
-------------------------------------------------------------------------------------------------------


                                      -41-
<PAGE>
<CAPTION>

-------------------------------------------------------------------------------------------------------
                                                                              INTERVAL
                                               ELEVATION, AZIMUTH,             SAMPLE          GOLD  IN
DRILL     LOCATION               INTERVAL         DIP AND TOTAL               LENGTH IN         G/T OR
HOLE                           FROM M to M        DEPTH OF HOLE                METERS             PPM
-------------------------------------------------------------------------------------------------------
<S>      <C>                  <C>             <C>                             <C>             <C>

05-04     63177.31                  4-5        3097.41m, 330, 8, 143.5m           1
          68861.39                                                                               0.84
                                    7-8        As above.                          1              0.52
                                  12-14        As above.                          2              1.28
                                  15-16        As above.                          1              0.56
                                  20-22        As above.                          2              0.70
                                  25-30        As above.                          5            **4.61
                                  32-33        As above.                          1              0.53
                                  72-73        As above.                          1              0.50
                                104-105        As above.                          1              0.75
-------------------------------------------------------------------------------------------------------
</TABLE>

Note - all drill core sample intervals are 1 metre in length.  Interval averages
were selected using a 0.5 gm/t Au cut-off.
*    Interval includes 8.14 g/t Au over 1 metre and 12.7 g/t Au over 1 metre
**   Interval includes 11.45 g/t Au over 1 meter

Correlation of the surface mineralization in the trenches and the mineralization
and alteration intersected in the drill holes suggests that the mineralized zone
had a shallower  dip to the  northwest  than  anticipated.  Due to the  apparent
shallow dip of the mineralized zone, the drill holes may not have intersected or
completely   penetrated   the   high-grade   zones  exposed  on  surface.   Post
mineralization  tectonism has complicated the structure and made it difficult to
discern the true distribution of the mineralization.

SAMPLING METHOD AND APPROACH

The entire core was logged and photographed on site by BMC staff,  before it was
split.  All of the core was  mechanically  split  with a Longyear  splitter  and
bagged on one meter  intervals  with one half sent for assay and one half  saved
for future reference.

During 2002 under the direction of Marsa,  selected  trenches were sampled after
first being cleaned out as best as possible.  Since the old reference marks were
destroyed by weathering,  new samples could not directly  correlate with the old
ones.  Continuous  chip  samples  were  collected  on 1 m  intervals  within the
trenches.

Rock chip and  'composite  rock grab' samples  collected by APEX were  generally
collected  perpendicular  to the strike of the mineralized  zones. The intervals
that were sampled were  selected on the basis of  lithology,  and existing  gold
anomalies in trenches from  historic  work with the maximum  sample length being
about 1.0 meter.  In places,  rock grab samples  were  collected  from  selected
sulphide bearing and/or silicified lithologies.

All of the samples that were  collected by Dr. Tafuri  weighed  approximately  5
kilograms  and were placed in cloth bags.  Chip samples  consisted of collecting
continuous  freshly broken rock chips over the described  length. No attempt was
made to take a perfect  equi-dimensional sample as would be done in collecting a
proper  channel  sample.  The  samples  were  taken to the Alex  Stewart  Lab in
Kara-Balta for analysis.

Sites with one or more gold  samples  that assay  greater than 2.00 g/t gold are
termed  `gold  occurrences'.  Sites that  produce  rock grab samples with a gold
content of or greater than 0.50 g/t gold are  'anomalous'.  Management  believes
such anomalous results warrant reconnaissance follow-up prospecting to determine
if better  gold-bearing zones exist. Rock sample sites that produce samples with
a gold content between 0.15 g/t gold and 0.50 g/t gold are 'possibly' anomalous.
Management   believes  such  possibly  anomalous  sites  may  warrant  follow-up
prospecting  depending on the geological  setting,  the number of other possibly
anomalous  or  anomalous   rock  samples  in  the   vicinity,   and   logistical
considerations.


                                      -42-
<PAGE>


            ASSAY RESULT                DESCRIPTION OF ASSAY RANGE
        ---------------------           --------------------------
        >0.15 - 0.5 g/t gold                possibly anomalous
           >0.5 g/t gold                         anomalous

SAMPLE PREPARATION, ANALYSES AND SECURITY

Rock samples collected by BMC, were analyzed for gold using a 30 gram fire-assay
for gold.  Samples  were  prepped  by coarse  crushing  the  entire  sample  and
pulverizing up to 1kg of material (using the ring and puck method).  Splits were
taken for analysis by riffle  splitting  pulverized rock. The coarse rejects and
sample pulps are no longer available.  All samples were analyzed at Alex Stewart
Assay and  Environmental  Laboratories  Ltd.  ("Alex  Stewart"),  in Kara-Balta,
Kyrgyzstan. Alex Stewart is an ISO 9001 certified laboratory.

Rock  samples  collected  by 724 BC,  were  analyzed  for  gold  using a 30 gram
fire-assay for gold and a 0.5 gram ICP (Inductively Coupled Plasma Spectroscopy)
analysis for  multi-element (31 element)  geochemistry.  Samples were prepped by
coarse  crushing the entire sample and  pulverizing up to 1kg of material (using
the ring and puck  method).  Splits were taken for analysis by riffle  splitting
pulverized rock. The coarse rejects and sample pulps are in temporary storage at
the  lab  facility.  All  samples  were  analyzed  at  Alex  Stewart  Assay  and
Environmental Laboratories Ltd., in Kara-Balta, Kyrgyzstan.

Bagged  samples were stored on site (in the field)  until a Marsa Gold  employee
delivered them to the Alex Stewart lab in  Kara-balta.  Marsa Gold employees had
no further  contact with the samples once they were delivered to the lab. Sample
preparation  and analyses were  completed at the Alex Stewart  facility by their
employees.  Samples  were  prepped  by coarse  crushing  the  entire  sample and
pulverizing up to 1kg of material (using the ring and puck method).  Splits were
taken for analysis by riffle  splitting  pulverized rock. The coarse rejects and
sample pulps are in  temporary  storage at the lab  facility.  The split core is
stored on site, at the placer camp, in Bulakashu.

Rock  samples  collected  by  APEX,  were  analyzed  for  gold  using  a 30 gram
fire-assay for gold and a 0.5 gram ICP (Inductively Coupled Plasma Spectroscopy)
analysis for  multi-element (31 element)  geochemistry.  Samples were prepped by
coarse  crushing the entire sample and  pulverizing the entire sample (using the
ring and puck  method).  Splits  were  taken for  analysis  by riffle  splitting
pulverized rock. The coarse rejects and sample pulps are in temporary storage at
the  lab  facility.  All  samples  were  analyzed  at  Alex  Stewart  Assay  and
Environmental Laboratories Ltd. in Kara-Balta, Kyrgyzstan.

DATA VERIFICATION AND QUALITY ASSURANCE AND QUALITY CONTROL PROGRAMS

All of the rock  samples  collected by APEX were  approximately  1-2 kg and were
bagged and sealed with zap straps or plastic ties.  The sample number was placed
on a tag inside the bag and the  sample  ID's were  written on both sides of the
bags.

The author of the Technical  Report was not involved with  exploration  prior to
2005, and therefore had no control over sample collection or reported results as
listed in the history and  exploration  sections of the  Technical  Report.  The
author of the  Technical  Report  has no reason to  believe,  however,  that the
results  presented  in prior  reports  were  not  verified  by their  respective
qualified persons.

With respect to samples  collected by the author of the Technical  Report and/or
APEX.  The author of the Technical  Report did not have control over the samples
at all times and therefore cannot personally verify what happened to the samples
from the time the they were  received at the Alex  Stewart  Labs.  However,  the
author of the Technical Report has no reason to believe that the security of the
samples was compromised.

Alex Stewart Labs performed  standard quality assurance/ quality control (QA/QC)
procedures  with respect to the rock samples that were sent for  analysis.  Alex
Stewart Labs routinely analyzes analytical blank and standard samples.  The data
for all of these standard  analyses were found to be within  acceptable  limits.
Due to the limited nature and budget of the property visit/ exploration  program
(i.e.  prospecting),  and the limited  number of samples  collected,  a rigorous
quality  assurance and quality  control  (QA/QC)  program was not warranted.  No
blank samples or standard  samples were sent to the  laboratory  for analysis by
APEX or 724 BC. As well, no field duplicate samples were submitted for assay.



                                      -43-
<PAGE>


MINERAL PROCESSING AND METALLURGICAL TESTING

A sample for preliminary  metallurgical testing was prepared from sample rejects
from the trench samples  collected in 2002 by BMC. It is too  preliminary to say
how  representative of the entire deposit these samples may be since the deposit
is still open in all  directions.  The  cyanidation  tests were conducted by the
Central Research  Laboratory of the AO "KGRK" and completed in April,  2003. The
tests  were  designed  to test the  amenability  of the  Karabulak  ore for heap
leaching. Testing of sample KBI in columns showed acceptable characteristics for
heap  leaching  with  recovery  increasing  as  the  fineness  of  the  crushing
increased.  In a brief summary: the sample crushed to <25 mm had a gold recovery
of 32.8 % after 50 days, when crushed to <12 mm the recovery increased to 50.5%,
and when crushed to <6 mm the recovery increased to 76.9%.

MINERAL RESOURCE ESTIMATES

There  are  no NI  43-101  compliant  resource  estimates  made  for  any of the
prospects in the license area which is the subject of the BMC Licence.

FUNDS EXPENDED ON THE BULAKASHU PROPERTY

As September 30, 2005, an aggregate of US$220,000  and $14,500 had been advanced
to BMC for completion of the initial work program on the Bulakashu  Property and
initiation  of the  Phase 1 work  program,  pursuant  to the  terms  of the Loan
Agreement and the Marsa Option.

FUTURE WORK - RECOMMENDATIONS FROM THE TECHNICAL REPORT

Based  on  all  of  the  known  gold  and  copper-gold  occurrences,  favourable
structural settings,  alteration and geology,  management believes the Bulakashu
Property has  potential to host large scale,  orogenic/structurally  hosted gold
deposits and possibly porphyry style copper-gold deposits. Therefore, management
believes an  aggressive  comprehensive  exploration  program is  warranted.  The
exploration  should  include  but not be  limited to the  following  recommended
phased exploration:

Phase 1. A regional data compilation with the known geology, geophysics,  sample
         data and all the prior  exploration  data being digitally  compiled and
         re-interpreted  using  ArcView(C).  This data should include but not be
         limited   to:   airborne   geophysical   survey   data   and   historic
         interpretations;  geochemical  soil survey data;  and known geology and
         gold  occurrences  from  surface,  drilling or from within  adits.  The
         approximate cost to complete the compilation is approximately $25,000.

         In addition,  management believes follow-up exploration at Karabulak in
         order to define drill  targets for Phase 2 and  evaluation of all other
         known gold and  copper/gold  occurrences  on the Bulakashu  Property is
         warranted.  Due to the  outcrop  exposure  of the  mineralized  zone at
         Karabulak, closely spaced, continuous channel sampling conducted with a
         rock saw and detailed  structural mapping would be an economic means of
         determining  the  continuity and tenor of the gold  mineralization.  In
         addition  to tighter  spaced,  continuous  sampling  over the  trenched
         portion of the main showing area,  sampling  should be conducted on the
         sheared mafic  volcanic  rocks adjacent to and along strike of the main
         stockwork zone. Also, based on the results of Mr.  Besserer's  sampling
         near the entrance to adit two, selected portions of the adits should be
         re-sampled  and mapped.  Given the relief in the immediate  vicinity of
         the Karabulak prospect,  extra care should be taken to collect accurate
         elevation data in order to generate accurate topography and topographic
         profiles  that  will  assist  with  the  interpretation  of  structure,
         mineralization and historic work. The approximate cost to complete this
         exploration is approximately $75,000.

         Evaluation  of the other gold and copper gold  showings on the property
         should include prospecting,  rock grab, continuous channel or rock chip
         sampling  to  determine  the  potential  size,  grade and  mineralizing
         controls at each occurrence is estimated to cost approximately $50,000.
         This will further determine which gold or copper-gold  occurrences will
         be recommended for Phase 2 follow-up exploration.  BMC should conduct a
         regional  geological  mapping  (at 1:5000  scale),  rock  sampling  and


                                      -44-
<PAGE>


         geochemical  sampling  throughout  the property to identify  favourable
         structures,  mineralization  and  alteration.  Rock  samples  should be
         analyzed to determine  multi-element  lithogeochemical  data as well as
         gold  mineralization.  This is expected to cost approximately  $50,000.
         The exploration should commence in 2005 for approximately six weeks and
         should be  completed  so the summer  field  season is not  missed.  The
         estimated  cost  to  complete  the  recommended  exploration  is  about
         $175,000.  Therefore  the  total  recommended  Phase 1  exploration  is
         approximately $200,000.

Phase2.  Follow-up  exploration at priority gold occurrences  discovered  and/or
         advanced during 2005.  Depending on prior work at a particular showing,
         the  follow-up  should  include  but will not be limited  to:  drilling
         (Karabulak);   rock  grab;   continuous   channel  and  chip  sampling;
         geophysical surveying;  prospecting;  gridding and mapping. The cost to
         complete  the Phase 2  exploration  is  contingent  on the results from
         Phase 1, and therefore cannot be determined at this time.

PROPOSED EXPLORATION AND DEVELOPMENT PROGRAM

The  recommended  Phase 1 program was  initiated at the end of August 2005.  The
regional data compilation is in progress and a high resolution, stereo satellite
image has been collected over a large portion of the property. This data will be
used to produced detailed accurate topography maps of the main showing areas. To
date,  geological  mapping and  approximately  500 prospecting rock grab samples
have been collected on the other gold and copper showings  outside of Karabulak.
Analyses are pending on the samples  collected and detailed  sampling has yet to
be completed at Karabulak.  Initial  results will not likely be available  until
mid to late October 2005.  Approximately US$50,000 has been spent to date on the
Phase 1 work program.

All  exploration  work on the property is conducted under the supervision of Dr.
William  Tafuri,  the company's Vice  President of  Exploration  and a Qualified
Person as defined by NI 43-101.  All exploration work on the Bulakashu  Property
is carried out staff employed by BMC. As per the agreement between Marsa and the
Company,  BMC's  board  is  comprised  of  three  directors,  two of  which  are
independent representatives of the Company, Douglas Turnbull and William Tafuri,
the third and managing director is Oleg Kim.

Contingent  on the success of the Phase 1 program,  the Company  intends to seek
additional  financing  to carry  out a Phase 2  exploration  program  that  will
consist  of, but not be limited  to:  drilling on the  Karabulak  prospect,  and
further rock grab; continuous channel and chip sampling;  geophysical surveying;
prospecting;  gridding and mapping on other prospects  evaluated during Phase 1.
The timing of Phase 2 will be  contingent on the results of the Phase 1 program.
During the Phase 1 exploration  program,  the Company's  field staff will assess
the  required  logistics  to conduct a winter  drill  program  on the  Karabulak
prospect as a precursor to planning the Phase 2 exploration program.

EMPLOYEES

As of the date of this annual report the Company has one full-time  employee and
four part-time employees, including its officers. See "Item 6. Directors, Senior
Management  and  Employees  -  Employees"  and "Item 7. Major  Shareholders  and
Related Party  Transactions  - Related  Party  Transactions."  In addition,  the
Company employs a number of consultants to perform specific functions,  on an as
needed basis.

As of the date of this annual  report,  BMC has three  full-time  employees  and
twenty temporary part-time  employees which assist with exploration  activities.
See "Item 6. Directors, Senior Management and Employees - Employees."

ORGANIZATIONAL STRUCTURE

As of the date of this annual report, the Company has three subsidiaries:

1.       Magellan  Holdings  (BVI)  Corp.,  a  wholly-owned  subsidiary  of  the
         Company,  incorporated  under the laws of the British Virgin Islands on
         May 9, 2005. Magellan Holding (BVI) Corp. indirectly owns Magellan Gold
         (BVI) Inc.

2.       Magellan Gold (BVI) Inc., a company  incorporated under the laws of the
         British  Virgin  Islands on May 9, 2005.  Magellan Gold (BVI) Inc. is a
         wholly-owned  subsidiary of Magellan Holdings (BVI) Corp. and holds the
         Marsa Option.



                                      -45-
<PAGE>

3.       0724000  B.C.  Ltd.,  a company  continued  under  the laws of  British
         Columbia, which is a wholly-owned subsidiary of the Company. 724 BC was
         incorporated  as Magellan  Gold Corp.  on  February 4, 2004,  under the
         Nevada Business Corporations Act under the name Magellan Gold Corp. 724
         BC  changed  its name to  Centrasia  Mining  Corp.  and  continued  its
         corporate  jurisdiction  from the State of Nevada  to the  Province  of
         British  Columbia on May 9, 2005. On September 14, 2005, 724 BC changed
         its  name  to  its  current  name  in  connection  with  the  Centrasia
         Acquisition.

                              ORGANIZATIONAL CHART

                           --------------------------
                          |  Centrasia Mining Corp.  |
                          |     (British Columbia)   |
                           --------------------------
                                       |
                                       |
               -----------------------------------------------------
               |   100%                                      100%  |
  -----------------------------                -------------------------------
 |     0724000 B.C. Ltd.       |              | Magellan Holdings (BVI) Corp. |
 |    (British Columbia)       |              |    (British Virgin Islands)   |
  -----------------------------                -------------------------------
                                                             100%  |
                                               -------------------------------
                                              |    Magellan Gold (BVI) Inc.   |
                                              |   (British Virgin Islands)    |
                                               -------------------------------

PRINCIPAL OFFICES

The  Company's  corporate  office is located at Suite  #1305,  1090 West Georgia
Street,  Vancouver,  British  Columbia,  Canada,  V6E 3V7. The corporate  office
facility  is  provided  on a  month-to-month  basis  by  Chase  Management  Ltd.
("Chase")  as part of its  agreement  with  the  Company.  See  "Item  7.  Major
Shareholders and Related Party  Transactions - Related Party  Transactions." The
Company also has an executive office at 300-1055 West Hasting Street, Vancouver,
British  Columbia V6E 2E9. The  executive  office is leased on a  month-to-month
basis and there is no written agreement relating to the lease. The lease for the
executive  office  is  in  the  name  of  Lakehead   Geological   Services  Inc.
("Lakehead"),  a company  controlled  by Mr.  Turnbull.  The total monthly lease
payment is $1,450.  Pursuant to an unwritten  agreement,  the Company reimburses
Lakehead  $725 per month for the office space.  See "Item 7. Major  Shareholders
and Related Party Transactions - Related Party Transactions."


ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS.
--------------------------------------------------------------------------------

The  following  discussion  of the results of  operations of the Company for the
fiscal years ended May 31, 2005,  2004,  and 2003 should be read in  conjunction
with the  consolidated  financial  statements  of the Company and related  notes
included therein.

The Company's  consolidated financial statements are prepared in accordance with
Canadian GAAP, the application of which, in the case of the Company, conforms in
all  material  respects  for the periods  presented  with US GAAP except for the
differences  referred to in Note 10 of the consolidated  financial statements of
the Company  included  herein.  The noon rate of  exchange on October 25,  2005,
reported  by the  United  States  Federal  Reserve  Bank  of New  York,  for the
conversion  of  Canadian  dollars  into  United  States  dollars was CDN $1.1768
(US$0.8498 = CDN$1.00).  The effects of inflation and price changes have not had
a material impact on the Company's  income or net sales revenues during the past
three years. Foreign currency fluctuations have not had a material impact on the
Company  during the last three  fiscal  years and the Company does not engage in
any foreign currency hedging activities.

OVERVIEW

On September 14, 2005,  the Company  completed the  Centrasia  Acquisition.  See
"Item 4.  Description of Business." The financial  statements and results of the
Company discussed herein and included herein (See "Item 8. Financial Information
- Description  of Financial  Statements")  are the  financial  statements of the


                                      -46-
<PAGE>


Company as of May 31, 2005 and do not include the activities of 724 BC or BMC or
reflect  the  results  of the  Centrasia  Acquisition.  As such,  the  following
discussion is not indicative of the Company's future  activities.  The following
financial statements are attached as Exhibits 15.2 to 15.4 hereto.

         1.       Financial   Statements  of  Bulakashu   Mining  Company  Ltd.,
                  including Balance Sheet,  Statement of Operations and Deficit,
                  Statement of Cash Flow and the notes  thereto,  for the period
                  from  June 9,  2004  (date  of  formation)  to May  31,  2005.
                  (Exhibit 15.2)
         2.       Financial  Statements  of  0724000  B.C.  Limited,   including
                  Balance Sheets, Statements of Loss and Deficit,  Statements of
                  Cash Flows and the notes  thereto,  for the year ended May 31,
                  2005  and  the  period   from   February   4,  2004  (date  of
                  incorporation) to May 31, 2004. (Exhibit 15.3)
         3.       Proforma Consolidated Financial Statements of Centrasia Mining
                  Corp., including Proforma Consolidated Balance Sheet, Proforma
                  Consolidated  Statements of Operations  and the notes thereto,
                  as at May 31, 2005. (Exhibit 15.4)

The Company derives  interest  income on its bank deposits and other  short-term
deposits,  which  depend  on the  Company's  ability  to  raise  funds.  Of most
significance  would be further  cash  received  from  issuance of shares to fund
ongoing activities. The Company may require significant additional financing and
there is no assurance  that funds will be available on terms  acceptable  to the
Company or at all.

The Company's consolidated financial statements were prepared on a going concern
basis  which  assumes  that the  Company  will be able to realize its assets and
discharge its liabilities in the normal course of business.

USE OF ESTIMATES

The  preparation  of financial  statements  in  conformity  with  Canadian  GAAP
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 period.  Significant areas requiring the use of
management  estimates relate to the  determination of environmental  obligations
and  impairment of mineral  properties  and deferred  costs.  Actual results may
differ from these estimates.

OIL AND GAS PROPERTIES

With  regard to oil and gas  properties  previously  owned by the  Company,  the
Company  follows the full cost method of accounting for oil and gas  operations.
Under this method all costs related to the  exploration  for and  development of
oil and gas  reserves  are  capitalized  on a  country-by-country  basis.  Costs
include lease acquisition costs,  geological and geophysical expenses,  overhead
directly related to exploration and development activities and costs of drilling
both productive and non-productive  wells.  Proceeds from the sale of properties
are  applied  against  capitalized  costs,   without  any  gain  or  loss  being
recognized,  unless such a sale would  significantly alter the rate of depletion
and depreciation.

Depletion of exploration  and development  costs and  depreciation of production
equipment is provided using the  unit-of-production  method based upon estimated
proven oil and gas reserves. The costs of significant unevaluated properties are
excluded  from costs  subject  to  depletion.  For  depletion  and  depreciation
purposes,  relative volumes of oil and gas production and reserves are converted
at the energy equivalent conversation rate of six thousand cubic feet of natural
gas to one barrel of crude oil.

In applying  the full cost method,  the Company  performs a ceiling test whereby
the  carrying  value of  petroleum  and natural gas  properties  and  production
equipment,  net of future  income taxes and the  accumulated  provision for site
restoration and abandonment  cost, is compared annually to an estimate of future
net cash flow from the production of proven reserves. Net cash flow is estimated
using  year  end  prices,  less  estimated  future  general  and  administrative
expenses,  financing costs and income taxes.  Should this comparison indicate an
excess carrying value, the excess is charged against earnings.

Subsequently  all of the  Company's  oil and  gas  exploration  activities  were
conducted  jointly  with others and,  accordingly,  the  Company's  consolidated
financial  statements  included in this  annual  report,  include the  Company's
proportionate interests in such activities.



                                      -47-
<PAGE>



RESULTS OF OPERATIONS

The following  discussion of the Company's  results of operations for the fiscal
years ended May 31, 2005,  2004 and 2003 should be read in conjunction  with the
consolidated  financial statements of the Company included in this annual report
and related notes included therein.

Certain of the 2004 and 2003  fiscal  year  figures  have been  reclassified  to
conform with the presentation used in the 2005 fiscal year.

YEAR ENDED MAY 31, 2005 COMPARED TO YEAR ENDED MAY 31, 2004

During the year ended May 31, 2005 ("Fiscal 2005"),  the Company reported a loss
of $108,742,  an increase in loss of $287,900  compared to an income of $179,158
for the year  ended May 31,  2004  ("Fiscal  2004").  The  increase  in loss was
attributed  primarily to the cessation of the Company's oil and gas  operations,
in Fiscal  2004,  resulting  in a gain of  $204,770  on the  abandonment  of the
Company's  subsidiary,  California  Exploration  Inc.  in Fiscal  2004,  and the
recognition in Fiscal 2005 of $30,180 of non-cash stock-based compensation.

Oil and gas sales for Fiscal 2004 was $98,904.  Revenues  from oil and gas sales
in Fiscal 2004 were generated from the West Ranch Field well.  Production  costs
of $28,741 were incurred and  depletion of $13,996 and an  impairment  charge of
$30,191 was recorded  for 2004.  Effective  March 1, 2004,  the Company sold its
interest in the West Ranch Field well.

General and  administration  costs increased by $48,789,  from $79,849 in Fiscal
2004 to $128,638 in Fiscal  2005.  The  increase in costs in 2005 was  partially
attributable  to  an  increase  in  accounting,  administration  and  management
services  provided by Chase,  a private  company  owned by Mr.  DeMare,  and the
services of Mr. DeMare as President of the Company. During Fiscal 2005 and until
September 14, 2005,  Chase was paid a base amount of $5,000 per month,  of which
$3,000  related  to  the  accounting,  administration  and  management  services
provided by Chase personnel,  exclusive of Mr. DeMare, and $2,000 related to Mr.
DeMare's  services  as  the  President  of  the  Company.  See  "Item  7.  Major
Shareholders and Related Party  Transactions - Related Party  Transactions."  In
Fiscal 2005,  the Company was charged  $69,325 by Chase,  compared to $38,800 in
2004. General legal costs also increased $30,889,  from $5,880 in Fiscal 2004 to
$36,769 in Fiscal 2005, due to costs associated with the acquisition of 724 BC.

During Fiscal 2005, the Company sold certain of its marketable  securities,  for
total  proceeds of $59,014,  recognizing  a gain of  $35,153.  The Company  also
received $14,250 from the exercise of stock options, $70,000 share subscriptions
on the  proposed  $875,000  private  placement of common  shares,  and a further
$47,400  from  the  repayment  of a loan  which  had been  provided  to a former
President of Baradero.

In April 2005, the Company advanced $25,000 to 724 BC.

YEAR ENDED MAY 31, 2004 COMPARED TO YEAR ENDED MAY 31, 2003

Effective  March 1, 2004,  the Company sold its 3% working  interest in the West
Ranch Field, Texas, at its net carrying cost of $89,814.

During May 2004,  the  Company  participated  in the  drilling  of an 1,800 foot
offset  well in Alberta,  at a cost of $30,191.  The well was drilled and logged
and the logs indicated that the drill hole came in low to the offset producer to
the south by eight meters. This resulted in the sands being poorly developed and
wet. At the recommendation of the operator, the well was plugged and abandoned.

Oil and gas sales for 2004 was  $98,904,  compared to $22,064 in 2003.  Revenues
from oil and gas sales during the year ended May 31, 2003  ("Fiscal  2003") were
for five  months,  from  January  2003 to May  2003,  and in  Fiscal  2004  were
generated  for a period  of seven  months,  from  June  2003 to  February  2004.
Effective March 1, 2004, the Company sold its West Ranch Field well.  Production
costs in Fiscal 2003 were $4,870 compared to $28,741 in Fiscal 2004.



                                      -48-
<PAGE>



During  Fiscal  2003 the  Company  recorded an  impairment  charge of  $574,508,
reflecting  its  share of  unsuccessful  drilling  activities  and  related  the
acquisition  costs on abandonment of the regional  California  prospects and the
Michigan  exploratory  well.  During Fiscal 2004, the Company recorded a $13,996
depletion  charge on the West Ranch  Field oil and gas leases and an  impairment
charge of $30,191 for the  Company's  share of  drilling  costs on the High Noon
Prospect.

General and  administration  costs decreased by $19,290,  from $99,139 in Fiscal
2003 to  $79,849  in Fiscal  2004.  The  decrease  in costs were a result of the
Company's reduced  operations.  The Bakersfield  office was closed and corporate
activities  were reduced during Fiscal 2003. The Company also wrote-off  $63,798
in Fiscal 2003 on the remaining capital assets as a result of the closure of the
Bakersfield office.

During Fiscal 2004 the Company  recorded a gain of $204,770 for  liabilities  of
CalEx which amounts were previously  recognized on the consolidation of CalEx in
Fiscal 2003.  With the  abandonment of CalEx,  the Company no longer  recognized
these liabilities. The Company also negotiated a recovery of old receivables due
from Halo Resources Ltd.  ("Halo") in which it received  15,000 common shares of
Halo and $12,912  cash,  for a total  recovery  of  $24,162.  In Fiscal 2003 the
Company wrote-off $138,319 of receivables from Halo.

During Fiscal 2003 the Company wrote off $162,322  relating to a $150,000 bridge
loan and related costs due from Optimal  Power  Systems Ltd., a private  company
which the Company  had  proposed to  acquire.  See "Item 4.  Information  on the
Company."

LIQUIDITY AND CAPITAL RESOURCES

The Company has limited financial resources,  no revenues,  and has no assurance
that additional funding will be available to it. As of May 31, 2005, the Company
had  working  capital of  $20,536.  As of the date of this  annual  report,  the
Company is not  generating  any cash flow from its  operations  to meet  ongoing
corporate  overhead and to repay its outstanding  liabilities.  The Company will
require  significant equity financing to fulfill its obligations under the Marsa
Option, including funds for the inter-company loans to BMC which will be used to
conduct exploration  activities on the Bulakashu  Property,  and to meet ongoing
corporate overhead.

Subsequent to May 31, 2005, the Company  completed a private  placement of units
to raise  $875,000,  of which  $70,000 had been  received as of May 31, 2005. In
addition,  the Company has agreed to conduct the Short Form Offering.  See "Item
4.  Information  on the Company - History and  Development of the Company." Upon
completion  of the  Short  Form  Offering,  the  Company  believes  it will have
sufficient working capital to fund its commitments under the Marsa Option during
the 12 months from  November  2005 through  October  2006.  The Company plans to
expend  approximately  US$860,000 on inter-company  loans to BMC pursuant to the
terms of the Marsa Option during the period from  September 14, 2005 to December
31, 2006. The Company does not believe it will need to raise additional  capital
within the next 12 months;  however,  the Company  may need to raise  additional
capital  during fiscal 2007. At this time, the Company is unable to estimate how
much  capital  it will  need to raise or the  terms of any such  financing.  The
Company may not be able to raise the  necessary  funds,  if any,  and may not be
able to raise such funds on terms which are  acceptable  to the Company.  In the
event the  Company is unable to raise  adequate  finances  to fund its  proposed
activities,  the Company  may have to delay or abandon  its funding  commitments
under the Marsa Option.  Any further  additional equity financing  undertaken by
the Company may cause dilution to its shareholders.  See "Item 4. Information on
the Company" and "Item 5.
Operating and Financial Review and Prospects."

The Company  does not have any loans or bank debt and there are no  restrictions
on the use of its cash resources.

Except  for the  Company's  commitments  under  the Marsa  Option,  there are no
material  commitments for capital  expenditures during fiscal 2006. See "Item 4.
Information  on the  Company - Business  Overview - Marsa  Option"  and "Item 4.
Information on the Company - Plan of Operation."

The Company holds its cash and cash equivalents mainly in Canadian funds.



                                      -49-
<PAGE>



TREND INFORMATION

Prior to the Centrasia  Acquisition,  the Company essentially had no operations.
With  the  Centrasia   Acquisition,   the  Company's   activities   will  change
significantly from those in which it has historically  engaged.  Therefore,  the
discussion  of the  Company's  historical  activities  contained  in this annual
report may not  provide  an  adequate  representation  of the  Company's  future
performance and results of its activities.

RESEARCH AND DEVELOPMENT

Except for $25,000 advanced to 724 BC during the fiscal year ended May 31, 2005,
the Company did not incur any research and development costs during Fiscal 2005.
During  fiscal 2004,  the Company  incurred  $30,717 on rework costs on the West
Ranch Field  Prospect  prior to its sale and $30,191  for  participation  in the
drilling of an  unsuccessful  well in Alberta,  Canada.  During  fiscal 2003 the
Company incurred $246,094 for participation in regional California.

OFF BALANCE SHEET ARRANGEMENTS

The Company does not have any material off balance sheet  arrangements that have
or are  reasonably  likely to have a current or future  effect on the  Company's
financial  condition,  changes in  financial  condition,  revenues or  expenses,
results of operations, liquidity, capital expenditures or capital resources.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

As of May 31, 2005,  the Company did not have any  contractual  obligations.  In
connection  with the  Centrasia  Acquisition,  the  Company has assumed 724 BC's
obligations  under the Marsa Option.  See "Item 4.  Information on the Company -
Business  Overview - Marsa  Option." As a result,  as of September 30, 2005, the
Company had the following contractual obligations:

<TABLE>
<CAPTION>

                                                           Payments Due by Period(2)
                                              ----------------------------------------------------------
                                               October 1,   June 1, 2006   June 1, 2008
                                              2005 to May    to May 31,     to May 31,     On or after
                                  Total        31, 2006         2008           2010       June 1, 2010
--------------------------------------------------------------------------------------------------------
<S>                           <C>            <C>            <C>            <C>               <C>

Contractual Obligations(1)     US$2,300,000   US$210,000     US1,340,000     US$750,000         -
--------------------------------------------------------------------------------------------------------
</TABLE>

   (1)   The payments shown reflect (1) the cash portion of the option  payments
         due under the Marsa  Option and (2) the  inter-company  loans to BMC as
         set forth in the Marsa Option. See "Item 4 - Information on the Company
         - Business  Overview - Marsa  Option." The amounts shown do not reflect
         the issuance of any shares to Marsa by the Company in  connection  with
         the Marsa Option. The Company may elect not to make these payments,  in
         which case Marsa may "put" back to the Company the Purchase  Shares and
         the Company may lose all or some of its ownership interest in BMC.

   (2)   Measured from May 31, 2005.

The Company  completed a private  placement  in  connection  with the  Centrasia
Acquisition and is in the process of conducting the Short Form Offering to raise
proceeds  to  fund  its  obligations  under  the  Marsa  Option.  See  "Item  4.
Information on the Company - Plan of Operation." The Company  believes the funds
from the private  placement and the Short Form Offering will provide  sufficient
funding  to allow the  Company  to make the  required  payments  under the Marsa
Option through  December 31, 2006.  See "Item 5. Operating and Financial  Review
and Prospects - Liquidity and Capital Resources."

GOVERNMENTAL POLICIES

Except  as  set  forth  in  "Item  10.  Additional  Information"  there  are  no
governmental  economic,  fiscal,  monetary or  political  policies  known to the
Company that have materially affected,  or could materially affect,  directly or
indirectly, the Company's operations or investments by U.S. shareholders.


                                      -50-
<PAGE>


ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.
--------------------------------------------------------------------------------

DIRECTORS AND SENIOR MANAGEMENT

In  connection  with the  Centrasia  Acquisition,  Andrew  Carter and Harvey Lim
resigned as  directors  of the  Company,  Mr.  Henstridge  resigned as Corporate
Secretary and Mr.  DeMare  resigned as President  and Chief  Executive  Officer.
Additionally, Douglas Turnbull, Gregory Crowe, Lindsay Bottomer, Cary Pinkowski,
and Oleg Kim were  appointed  to the  Board of  Directors  of the  Company,  Mr.
Turnbull was appointed as President and Chief Executive  Officer of the Company,
William  J.  Tafuri was  appointed  as the Vice  President  of  Exploration  and
Director of  Operations,  Asia,  and James  Harris was  appointed  as  Corporate
Secretary of the Company.

The following  table sets forth the names,  positions  held with the Company and
terms of office of each  director  and  officer of the Company as of the date of
this annual report:

                                                   TERM OF OFFICE
NAME                POSITION WITH THE COMPANY      (FOR EACH OFFICE HELD)
--------------------------------------------------------------------------------
Douglas Turnbull    President                      September 14, 2005 to present
                    Chief Executive Officer        September 14, 2005 to present
                    Director                       September 12, 2005 to present

Nick DeMare         Chief Financial Officer        September 24, 2003 to present
                    Director                       October 27, 2002 to present

Gregory Crowe       Director                       September 12, 2005 to present

Lindsay Bottomer    Director                       September 14, 2005 to present

Cary Pinkowski      Director                       September 14, 2005 to present

Oleg Kim            Director                       September 14, 2005 to present

William J. Tafuri   Vice-President of Exploration  September 14, 2005 to present
                    Director of Operations, Asia

James Harris        Corporate Secretary            September 14, 2005 to present

Directors are elected at each annual general meeting of the  shareholders of the
Company  and  serve  until  the next  annual  general  meeting  or  until  their
successors  are elected or  appointed.  The Company  does not have an  executive
committee  or  a  compensation  committee.  The  Company's  audit  committee  is
responsible  for reviewing the Company's  financial  statements  before they are
approved by the Company's directors.

There are no family relationships between any directors or executive officers of
the Company. To the best of the Company's  knowledge,  there are no arrangements
or understandings  with major  shareholders,  customers,  suppliers,  or others,
pursuant to which any of the Company's  officers or directors was selected as an
officer or director of the Company.

Set forth  below are  brief  descriptions  of  recent  employment  and  business
experience of the Company's officers and directors.

DOUGLAS S. TURNBULL (AGE 42), PRESIDENT, CHIEF EXECUTIVE OFFICER, AND DIRECTOR

Mr.  Turnbull is a consulting  geologist  and  president of Lakehead  Geological
Services Inc., a geological  consulting company based in Vancouver,  Canada. Mr.
Turnbull  has over 20 years  experience  in  diamond,  precious  and base  metal
exploration.  Mr. Turnbull holds a Honours Bachelor of Science degree in Geology
and is a Qualified  Professional  Geoscientist  recognized by the Association of
Professional  Engineers and  Geoscientists of British  Columbia.  Mr. Turnbull's
previous working and consulting  experience  includes Monopros Ltd., the Ontario


                                      -51-
<PAGE>



Geological Survey, Goldfields Mining Corporation, Prime Exploration Ltd., Adrian
Resources  Ltd., and Madison  Enterprises  Corp.  Mr.  Turnbull has been part of
exploration  teams  responsible for the exploration and development of the Eskay
Creek Gold  Deposit in British  Columbia,  Canada,  the  Petaquilla  Copper-Gold
Porphyry  Deposit in Panama and the Mt.  Kare Gold  Deposit in Papua New Guinea.
Currently Mr.  Turnbull  serves as a director on the board of Buffalo Gold Ltd.,
Oromin   Exploration   Ltd.  and  Grizzly  Diamonds  Ltd.  See  "Item  7.  Major
Shareholders  and Related  Party  Transactions  - Related Party  Transactions  -
Conflicts of Interest." Mr. Turnbull devotes  approximately  50% of his time (20
hours per week) to the business and affairs of the Company.

NICK DEMARE (AGE 50), CHIEF FINANCIAL OFFICER AND DIRECTOR

Mr.  DeMare holds a Bachelor of Commerce  degree from the  University of British
Columbia  and is a  member  in  good  standing  of the  Institute  of  Chartered
Accountants of British Columbia.  Mr. DeMare devotes approximately 10-15% of his
time  (approximately  4-6 hours per week) to the affairs of the  Company.  Since
May, 1991, Mr. DeMare has been the President of Chase Management Ltd., a private
company which provides a broad range of administrative, management and financial
services  to private and public  companies  engaged in mineral  exploration  and
development,  gold and silver production, oil and gas exploration and production
and venture  capital.  Mr.  DeMare  indirectly  owns 100% of Chase.  Mr.  DeMare
devotes approximately ten percent of his time to the affairs of the Company. Mr.
DeMare  currently  serves as an officer and director of other  public  reporting
companies.  See "Item 7. Major  Shareholders  and Related Party  Transactions  -
Related Party Transactions - Conflicts of Interest."

GREGORY CROWE (AGE 51), DIRECTOR

Mr. Crowe is a registered Professional Geologist in the provinces of Alberta and
British  Columbia.  Mr.  Crowe  has  20  years  of  exploration,   business  and
entrepreneurial  experience throughout North America, Latin America,  Africa and
Southeast Asia.  After leaving Anaconda Canada in 1984, Mr. Crowe co-founded and
was  President  of  Azimuth   Geological  Inc.  This  private  company  provided
exploration and management  services to companies in the junior and major mining
sectors, including Rio Algom, Westmin Mines, Lafarge Canada and the Prime Group.
In the 1990's,  Mr. Crowe  re-focused his exploration  efforts on Latin America.
From 1994 to 1998,  Mr. Crowe was  instrumental  transforming  Yuma Copper Corp.
from a junior  exploration  company into a copper producer with two active mines
in Chile.  Since July 2002, Mr. Crowe has been the President of Entree Gold Inc.
Between 1998 and 2003, Mr. Crowe has provided consulting services to a number of
mining companies,  world-wide. See "Item 7. Major Shareholders and Related Party
Transactions - Related Party Transactions - Conflicts of Interest."

Mr. Crowe is a director of Yuma Copper Corp. an inactive  company  listed on the
TSX-V.  On January 2, 1998,  the BCSC issued a cease trade  order  against  Yuma
Copper Corp. for failure to file financial statements.  The cease trade order is
still outstanding.

LINDSAY BOTTOMER (AGE 56), DIRECTOR

Mr.  Bottomer  is a  professional  geologist  with over 30 years  experience  in
mineral  exploration,  world-wide.  For the past 13 years Mr.  Bottomer has been
based in Vancouver working with Prime Equities International  Corporation,  Echo
Bay Mines, and as a consultant to a number of junior resource  companies.  Since
July 2001, Mr.  Bottomer has been the President of Southern Rio  Resources.  Mr.
Bottomer was President of the BC & Yukon (Canada)  Chamber of Mines from 1998 to
2000. See "Item 7. Major  Shareholders and Related Party  Transactions - Related
Party Transactions - Conflicts of Interest."

OLEG KIM (AGE 45), DIRECTOR

Mr. Kim is a Kyrgyz national. Mr. Kim has been the principal of Marsa Gold since
2003 and the General  Director of BMC since July 2004.  Mr. Kim has graduate and
post graduate  qualifications  in geology from Russia and Uzbekistan and further
qualifications  in economics from McGill  University.  From 1985 to 1992 Mr. Kim
worked for a number of state geology  organizations  in the Kyrgyz  Republic and
subsequently Kyrgyzaltyn, the principal mining state in the Kyrgyz Republic. Mr.
Kim was involved  from 1993 until 2000 with the  development  of the Kumtor gold
deposit joint  venture with Cameco  Corporation  and in 1998 became  exploration


                                      -52-
<PAGE>

manager at Kumtor in charge of the major continuing exploration program for this
gold mine.  Mr. Kim was also  generally  responsible  for  Cameco's  CIS (former
Soviet  Union)  exploration  programs.  Since 1992 Mr. Kim has developed his own
business interests in gold exploration and productions. Since June 2004, Mr. Kim
has been a General Director of Andash Mining Company in the Kyrgyz Republic. See
"Item 7. Major  Shareholders  and Related  Party  Transactions  - Related  Party
Transactions  - Conflicts  of  Interest."  As of May 31,  2005,  Mr. Kim devoted
approximately 30% of his time  (approximately 12 hours per week) to the business
and affairs of BMC.

CARY PINKOWSKI (AGE 35]), DIRECTOR

Mr. Pinkowski has fifteen years of experience in dealing with North American and
European capital markets. Mr. Pinkowski was an investment adviser with Canaccord
Capital  Corporation  from  June 1992 to  November  2004.  During  this time Mr.
Pinkowski  specialized in venture and resource company financings and maintained
a large retail and institutional  clientele.  Since December 2004, Mr. Pinkowski
has acted as a business and  corporate  development  advisor to Entree Gold Inc.
See "Item 7. Major  Shareholders and Related Party  Transactions - Related Party
Transactions - Conflicts of Interest."

WILLIAM  J.  TAFURI  (AGE  63),  VICE-PRESIDENT   EXPLORATION  AND  DIRECTOR  OF
OPERATIONS, ASIA.

Mr.  Tafuri has a Ph.D.  in geology and over 30 years of mining and  exploration
experience in precious and base metals.  In addition to Mr. Tafuri's  consulting
experience, he has worked for number of major international and mining companies
including Phelps Dodge Corporation,  Santa Fe Pacific Gold Corporation,  Kinross
Gold Corporation and Getty Mining. Prior to 1995, Mr. Tafuri worked primarily in
the western United States,  as an exploration  geologist early in his career and
ultimately as the Western U.S. Exploration Manager of Getty Mining. From 1995 to
1998,  Mr.  Tafuri  served  as  regional  geologist  for Santa Fe  Pacific  Gold
Corporation in Kazakhstan.  For the year following,  Mr. Tafuri served as senior
geologic advisor to Phelps Dodge  Corporation in Kazakhstan and Russia assisting
with  exploration,  negotiation  and  acquisition of new projects.  From 1999 to
2001, Mr. Tafuri worked for Kinross Gold Corporation  principally  involved with
the evaluation of projects in Russia,  North and South America.  Since 2001, Mr.
Tafuri has  focussed on his  consulting  business,  mainly  conducting  property
evaluations  in  Kazakhstan.  Mr.  Tafuri is a member of the Society of Economic
Geologists  and  the  Geological   Society  of  America.   See  "Item  7.  Major
Shareholders  and Related  Party  Transactions  - Related Party  Transactions  -
Conflicts of Interest."  Mr. Tafuri  devotes all of his time  (approximately  40
hours per week) to the affairs of the Company.

JAMES HARRIS (AGE 53), SECRETARY

Mr. Harris is a corporate, securities, and business lawyer with over 20 years of
experience in British Columbia and  internationally.  Since 1993, Mr. Harris has
operated his own  independent  law practice,  which has been associated with the
law firm Thomas Rondeau since 2003.

Mr. Harris has extensive  experience  with the  acquisition  and  disposition of
assets;  corporate  structuring and restructuring;  regulatory  requirements and
corporate filing; and corporate governance. Mr. Harris has been an instructor at
the Professional  Legal Training course for articling  students sponsored by the
Law Society of British  Columbia on the subject of corporate and securities law.
Mr.  Harris was also a Founding  Member of the Legal  Advisory  Committee of the
former Vancouver Stock Exchange.  Apart from his legal education, Mr. Harris has
also completed a graduate  course in business at the London School of Economics.
See "Item 7. Major  Shareholders and Related Party  Transactions - Related Party
Transactions - Conflicts of Interest." Mr. Harris' duties as corporate Secretary
of the Company do not require substantial time. Mr. Harris does provide services
to the  Company  as  counsel  and bills  for his  services.  See "Item 7.  Major
Shareholders and Related Party Transactions - Related Party Transactions."

COMPENSATION

During the fiscal year ended May 31, 2005, Messrs.  DeMare or companies owned by
Mr. DeMare  (including Chase) received or charged the Company a total of $69,325
for services  rendered by Mr.  DeMare or companies  owned by him. Mr. Carter and
Mr.  Lim did not  receive  any  cash  compensation  from  the  Company  in their
capacities  as officers  and/or  directors of the Company nor did they  directly


                                      -53-
<PAGE>


charge the  Company  for such  services;  however,  Mr. Lim is  employed  as the
controller of Chase and was paid for his services to Chase. Additionally,  Chase
charged the  Company  for  services  provided  by Mr. Lim to the  Company.  Such
charges were included in the $69,325 received by Chase from the Company.

During fiscal 2005, Mr. Turnbull was compensated $60,000 (2004 - $18,000) by 724
BC, of which $45,500 has been recorded by 724 BC as management  fees and $14,500
as part of due diligence  costs on the option on BMC. During fiscal 2005, 724 BC
also issued 2,000,000 common shares in satisfaction of the common share issuance
obligation.   See  "Item  6.  Directors,   Senior  Management  and  Employees  -
Compensation - Executive  Compensation - Centrasia - Employment  Agreements." As
at May 31, 2005, $39,055 (2004 - $9,291) remained unpaid.

During the year ended May 31, 2005,  724 BC was billed  $58,027  (2004 - $6,608)
for  professional  services  provided  William Tafuri (an officer of 724 BC) and
Robin  Merrifield  (the former CFO of 724 BC),  and $25,818  (2004 - $3,437) for
legal  services  provided by James  Harris,  an officer of 724 BC. As at May 31,
2005, $49,700 (2004 - $4,173) remained  outstanding and was included in accounts
payable and accrued liabilities.

During the fiscal year ended May 31, 2005,  Oleg Kim (the  managing  director of
BMC and principal of Marsa), received US$3,411 in compensation from BMC.

The Company is required,  under applicable securities  legislation in Canada, to
disclose to its shareholders  details of compensation  paid to its directors and
officers.  The  following  fairly  reflects all material  information  regarding
compensation  paid by the  Company  to the  persons  where  were  serving as its
directors and officers as of May 31, 2005, which  information has been disclosed
to the Company's  shareholders in accordance with applicable Canadian law. Also,
set  forth  in this  section  is  information  on the  compensation  paid to the
officers and directors of 724 BC for the fiscal year ended May 31, 2005.

EXECUTIVE COMPENSATION - CENTRASIA

Set out below are particulars of compensation paid to the following persons (the
"Named Executive Officers"):

         (a)      the chief executive officer (the "Company CEO") of the Company
                  or any person that acted in a similar capacity during the most
                  recently completed fiscal year;
         (b)      the chief financial officer (the "Company CFO") of the Company
                  or any person that acted in a similar capacity during the most
                  recently completed fiscal year
         (c)      each of the Company's three most highly compensated  executive
                  officers,  other than the  Company CEO and the Company CFO who
                  were  serving  as  executive  officers  at the end of the most
                  recently  completed  fiscal  year and whose  total  salary and
                  bonus exceeds $150,000 per year; and
         (d)      any additional individuals for whom disclosure would have been
                  provided  under (c) except that the individual was not serving
                  as an officer of the  Company at the end of the most  recently
                  completed financial year.

As at May 31, 2005,  the end of the most recently  completed  fiscal year of the
Company,  the Company had one Named Executive Officer,  Mr. Nick DeMare, who was
the President, Chief Executive Officer and acting Chief Financial Officer.




                                      -54-
<PAGE>



SUMMARY OF COMPENSATION

The following  table is a summary of  compensation  paid to the Named  Executive
Officer, during the Company's fiscal years ended May 31, 2005, 2004 and 2003.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                       ANNUAL COMPENSATION                    LONG TERM COMPENSATION
                                  ----------------------------    ------------------------------------------
                                                                              AWARDS                 PAYOUTS
                                                                  -------------------------------    -------
                                                         OTHER                       SHARES OR
                          FISCAL                        ANNUAL    SECURITIES UNDER  UNITS SUBJECT                  ALL OTHER
NAMED EXECUTIVE OFFICER    YEAR                          COMPEN-       OPTIONS/       TO RESALE         LTIP         COMPEN-
AND PRINCIPAL POSITION    ENDING    SALARY    BONUS     SATION    SARS GRANTED(2)   RESTRICTIONS      PAYOUTS       SATION
                           (1)        ($)      ($)        ($)          (#)               (#)            ($)           ($)
----------------------------------------------------------------------------------------------------------------------------
<S>                      <C>        <C>       <C>      <C>         <C>                <C>            <C>            <C>

Nick DeMare(3)             2005       Nil       Nil     69,325(4)     75,000(5)          N/A            N/A           N/A
Former President, Former   2004       Nil       Nil     38,800(4)     Nil/Nil            N/A            N/A           Nil
CEO, CFO and Director      2003       N/A       N/A        N/A       N/A / N/A           N/A            N/A           N/A
----------------------------------------------------------------------------------------------------------------------------

Desmond O'Kell(3)          2005       N/A       N/A        N/A       N/A / N/A           N/A            N/A           N/A
Former President           2004       N/A       N/A        N/A       N/A / N/A           N/A            N/A           N/A
                           2003       Nil       Nil        Nil      250,000/ Nil         N/A            N/A           Nil
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Financial years ended May 31, 2005, 2004 and 2003.
(2)      Figures  represent  options  granted  during  a  particular  year.  See
         "Aggregate  Option Exercises During The Most Recently  Completed Fiscal
         Year-End and Fiscal  Year-End  Option  Values"  table for the aggregate
         number of options  outstanding  at year end.  The Company did not grant
         any SARs during the fiscal years ended May 31, 2005, 2004 and 2003.
(3)      On October 7, 2002,  Desmond  O'Kell was  appointed as the President of
         the Company.  On September 24, 2003, Mr. O'Kell  resigned as a director
         and the  President  of the Company  and Mr.  DeMare was  appointed  the
         President, CEO and acting CFO of the Company.
(4)      Paid to Chase Management Ltd., ("Chase") a private corporation owned by
         Nick  DeMare.   Chase   personnel   (excluding  Mr.  DeMare)   provides
         accounting, secretarial and administrativ e services to the Company.
(5)      Includes 35,000 stock options granted to Chase.

No officers or employees of the Company other than the Named Executive  Officers
received  individual  compensation  in excess of $40,000  for  services  in such
capacities during the most recently completed fiscal year ended May 31, 2005.

LONG-TERM INCENTIVE PLANS - AWARDS IN MOST RECENTLY COMPLETED FISCAL YEAR

The Company has no long-term  incentive  plans in place and therefore there were
no awards made under any long-term incentive plan to the Name Executive Officers
during the  Company's  most  recently  completed  financial  year.  A "Long-Term
Incentive Plan" is a plan under which awards are made based on performance  over
a period longer than one  financial  year,  other than a plan for options,  SARs
(stock appreciation rights) or restricted share compensation.

OPTIONS/SARS GRANTED DURING THE MOST RECENTLY COMPLETED FISCAL YEAR

The following stock options were granted to the Named  Executive  Officer of the
Company during the most recently completed fiscal year ended May 31, 2005.
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------
                                                                                 Market Value
                                                                                 of Securities
                                            % of Total                            Underlying
                      Securities Under    Options Granted   Exercise or Base      Options on
                       Options Granted    to Employees in         Price          Date of Grant
        Name                 (#)          Fiscal Year(1)     ($/Security)(2)     ($/Security)      Expiration Date
        (A)                  (B)                (C)                (D)                (E)                (F)
------------------------------------------------------------------------------------------------------------------
<S>                      <C>               <C>                 <C>                <C>            <C>

Nick DeMare               75,000(3)           39.47%              $0.19              $0.25          Nov. 26, 2011
------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Percentage of total options granted during the fiscal period.
(2)      The exercise  price of stock  options was set by the board of directors
         of the Company,  as provided for under the Company's  stock option plan
         in existence at the time.


                                      -55-
<PAGE>


(3)      These stock  options were granted on November 26, 2004. An aggregate of
         35,000  of these  stock  options  were  granted  to  Chase,  a  private
         corporation owned by Nick DeMare.

AGGREGATE OPTION  EXERCISES  DURING THE MOST RECENTLY  COMPLETED FISCAL YEAR-END
FISCAL YEAR-END OPTION VALUES

The following  table sets forth  details of all stock  options  exercised by the
Named Executive Officer of the Company during the fiscal year ended May 31, 2005
and the fiscal  year-end  value of  unexercised  stock  options on an aggregated
basis.
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------
                                                                                            Value of Unexercised
                           Securities         Aggregate         Unexercised Options at      In-the-Money Options
                          Acquired on           Value              Fiscal Year-End           at Fiscal Year-End
         Name               Exercise           Realized                (#) (1)                  (CDN$) (1)(2)
                              (#)               (CDN$)               Exercisable/               Exercisable/
                                                                    Unexercisable               Unexercisable
         (A)                  (B)                 (C)                    (D)                          (E)
----------------------------------------------------------------------------------------------------------------
<S>                     <C>                  <C>                     <C>                        <C>

Nick DeMare               75,000(1)(2)        $6,000(3)                Nil/Nil                    Nil /Nil
----------------------------------------------------------------------------------------------------------------

</TABLE>

(1)      The number of shares acquired upon the exercise of stock options.
(2)      An aggregate of 35,000 of these stock options were  exercised by Chase,
         a private corporation owned by Nick DeMare.
(3)      Calculated  using the  difference  between the  exercise  price and the
         closing price of the  Company's  common shares on the TSX-V on the date
         of exercise.

PENSION PLANS

The Company does not  generally  provide  retirement  benefits for  directors or
officers.

TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS

Pursuant to an unwritten  management  agreement between the Company and Chase, a
company owned by Mr. Nick DeMare, during the fiscal year ended May 31, 2005, and
through  September  14, 2005,  the Company  paid to Chase  $5,000 per month,  to
provide accounting, administrative,  professional and management services to the
Company.  An aggregate of $2,000 of this amount was paid to Mr. DeMare to act as
the President and Chief Executive Officer of the Company.

Effective  September 14, 2005, the Company  entered into a Management  Agreement
with  Chase  whereby  the  Company  pays  Chase  $3,000  per  month,  to provide
financial,  accounting, and management services to the Company. In addition, the
Company may request that Chase perform  extra  services in which case Chase will
charge the Company for its employees'  services at competitive rates. Such extra
services include preparation for annual audits,  non-routine  securities filings
and legal  assistance,  corporate  representations,  property  acquisitions  and
public relations.  The Company has agreed to reimburse Chase, at a cost equal to
the actual cost of the disbursements,  for all costs and disbursements  incurred
by Chase  for or on behalf  of the  Company  including  long  distance  charges,
courier  charges,  photocopier and telefax  charges,  mail services and any such
other charges normally  associated directly and indirectly with the operation of
the Company's business.

The  Company  does  not  have  any   compensatory   plan(s),   contract(s),   or
arrangement(s)  with  respect  to  the  resignation,  retirement  or  any  other
termination of the Named Executive Officer's employment,  a change of control of
the  Company  or a change  in the  Named  Executive  Officer's  responsibilities
following  a change in  control,  which  entitle a Named  Executive  Officer  to
receive  from  the  Company  an  amount,   including  all  period   payments  or
instalments, exceeding $100,000.

COMPENSATION OF DIRECTORS

CASH COMPENSATION

During  the  financial  year ended May 31,  2005,  the  Company  did not pay any
amounts to its directors who are not the Named Executive Officer.



                                      -56-
<PAGE>


NON CASH-COMPENSATION

The following  table sets forth stock options  granted by the Company during the
fiscal period ended May 31, 2005 to directors  who were not the Named  Executive
Officers of the Company:
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------
                                                                                 Market Value
                                                                                of Securities
                         Securities       % of Total                          Underlying Options
                       Under Options    Options Granted   Exercise or Base            on           Expiration
   Name                  Granted       to Employees in         Price           Date of Grant           Date
                            (#)         Fiscal Year(1)     ($/Security)(2)       ($/Security)
    (A)                     (B)               (C)               (D)                   (E)              (F)
---------------------------------------------------------------------------------------------------------------
<S>                     <C>                <C>                <C>               <C>               <C>

Harvey Lim               40,000(3)          21.05%              $0.19              $0.25(4)        Nov. 26, 2007
---------------------------------------------------------------------------------------------------------------
Andrew Carter            40,000(3)          21.05%              $0.19              $0.25(4)        Nov. 26, 2007
---------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Percentage of total options granted during the fiscal period.
(2)      The exercise  price of stock  options was set by the board of directors
         of the Company,  as provided  for under the  Company's  previous  stock
         option plan.
(3)      Stock options granted on November 26, 2004.
(4)      Market value of options at time of grant was $0.25.

Directors  of the  Company,  who are  not the  Named  Executive  Officer  of the
Company, did not exercise any stock options during the fiscal year ended May 31,
2005.

The following table sets forth the fiscal year-end value of unexercised  options
of  directors  of the  Company  on an  aggregated  basis,  who are not the Named
Executive Officer of the Company:
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------
                                                                    Unexercised            Value of Unexercised
                                Securities      Aggregate        Options at Fiscal         In-the-Money Options
                               Acquired on        Value              Year-End               at Fiscal Year-End
Name                             Exercise        Realized          Exercisable/                Exercisable/
                                   (#)             ($)             Unexercisable           Unexercisable ($)(1)
---------------------------------------------------------------------------------------------------------------
<S>                            <C>              <C>               <C>                       <C>

Harvey Lim                         Nil             $Nil             40,000/Nil                 $3,200/$N/A
---------------------------------------------------------------------------------------------------------------
Andrew Carter                      Nil             $Nil             40,000/Nil                 $3,200/$N/A
---------------------------------------------------------------------------------------------------------------
</TABLE>


(1)      Value  using the closing  price of common  shares of the Company on the
         TSX-V on February 25, 2005,  the last day before the  Company's  common
         shares were halted from trading,  of $0.27 per common  share,  less the
         exercise price per share.

INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS OF THE COMPANY

During  the fiscal  year  ended May 31,  2001,  the  Company  provided a loan of
US$35,000 to Ted Carlsen,  a former  President  and director of the Company,  to
acquire 87,500 common shares of the Company (the "Loan Shares"). The Company had
received a promissory  note for the loan. The promissory  note was  non-interest
bearing and was  repayable  either in part or in full as required by the Company
upon the  disposition of part or all of the Loan Shares.  During the 2002 fiscal
year the Company  received a partial  payment of $7,900.  During the 2005 fiscal
year the Company  received  $47,400 in full payment of the remaining  balance of
the loan.

Otherwise,  during the Company's  last  completed  financial  year ended May 31,
2005, no current or former director,  executive officer or senior officer of the
Company,  proposed  management  nominee  for  election  as a  director  or  each
associate  or  affiliate of any such  director,  executive or senior  officer or
proposed  nominee  is or  has  been  indebted  to  the  Company  or  any  of its
subsidiaries  or  is  and  has  been  indebted  to  another  entity  where  such
indebtedness  is or has been the  subject  of a  guarantee,  support  agreement,
letter of credit or other similar  arrangement or understanding  provided by the
Company or any of its subsidiaries, other than routine indebtedness.




                                      -57-
<PAGE>



EMPLOYMENT AGREEMENTS

The Company has entered into a Management  Agreement  dated  September 14, 2005,
with Chase,  a company  owned by Mr. Nick  DeMare,  whereby the Company  pays to
Chase  $3,000  per month,  to  provide  financial,  accounting,  and  management
services to the Company. In addition, the Company may request that Chase perform
extra  services in which case Chase will  charge the  Company for its  employees
services at competitive  rates.  Such extra  services  include  preparation  for
annual audits,  non-routine  securities filings and legal assistance,  corporate
representations,  property  acquisitions and public  relations.  The Company has
agreed  to  reimburse  Chase,  at a  cost  equal  to  the  actual  cost  of  the
disbursements,  for all  costs  and  disbursements  incurred  by Chase for or on
behalf  of  the  Company  including  long  distance  charges,  courier  charges,
photocopier  and  telefax  charges,  mail  services  and any such other  charges
normally  associated directly and indirectly with the operation of the Company's
business.

Pursuant to an employment contract (the "Turnbull Agreement") between 724 BC and
Douglas Turnbull dated April 1, 2004 as amended, 724 BC employed Mr. Turnbull to
act as President and Chief Executive  Officer of 724 BC effective as of April 1,
2004.  The term of the Turnbull  Agreement is for a period of two years expiring
on  April 1,  2006,  subject  to  earlier  termination  in  accordance  with the
agreement.  The Turnbull Agreement will be automatically  renewed for successive
one year periods at the end of the initial term of the agreement,  unless either
party  gives to the  other  written  notice of  non-renewal  at least 90 days in
advance of the expiration date of the then current term. The Turnbull  Agreement
was assigned to the Company in connection with the Centrasia Acquisition.

Pursuant  to  the  Turnbull   Agreement,   Mr.  Turnbull  has  agreed  to  spend
approximately  fifty percent of his working hours,  or up to 10 working days per
month,  working for the Company.  In consideration  for the services provided by
Mr.  Turnbull to the  Company,  the  Company  has agreed to pay to Mr.  Turnbull
during the period of April 1, 2004 to March 31,  2005 (the  "Initial  Term"),  a
base salary of $5,000 per month,  of which $4,000 was to be paid in cash and the
balance of $1,000 to be paid in common  shares,  in an amount equal to 2,000,000
common shares (of 724 BC) over the Initial Term of the Turnbull  Agreement.  724
BC issued to Mr.  Turnbull all of the  2,000,000  common shares of 724 BC due to
Mr. Turnbull under the Turnbull Agreement. After April 1, 2005, the cash portion
of Mr.  Turnbull's base salary was increased to $5,000 per month, and no further
common shares of 724 BC are issuable  thereunder.  The Company has agreed to pay
to Mr.  Turnbull  $500 for each  full day in  excess  of 10 days  worked  by Mr.
Turnbull during any calendar month during the term of the Turnbull Agreement, in
addition to the base salary payable to Mr. Turnbull.

Pursuant  to the  Turnbull  Agreement,  in  the  event  that  the  agreement  is
terminated by the Company  without cause,  the Company has agreed to provide Mr.
Turnbull with one week's notice, or at its election,  it may pay to Mr. Turnbull
an amount,  inclusive of all termination and severance amounts payable under the
agreement,  equal to one  week of base  salary  or such  greater  amount  as the
Company may be required to give to Mr.  Turnbull under the Employment  Standards
Act (British Columbia). The Employment Standards Act (British Columbia) provides
for  severance  payments or notice or a  combination  of both equal to two weeks
after 12 months employment and after three years  employment,  one week for each
completed year of employment to a maximum of eight weeks.

Except  for the  Turnbull  Agreement,  there are no service  contracts  with the
Company or any of its  subsidiaries  providing for benefits upon  termination of
employment of any director of the Company.

EXECUTIVE COMPENSATION - 724 BC

Set out below are particulars of compensation paid to the following persons (the
"724 Named Executive Officers"):

         (a)      the chief  executive  officer  (the "724 BC CEO") of 724 BC or
                  any person  that acted in a similar  capacity  during the most
                  recently completed fiscal year;
         (b)      the chief  financial  officer  (the "724 BC CFO") of 724 BC or
                  any person  that acted in a similar  capacity  during the most
                  recently completed fiscal year
         (c)      each of 724  BC's  three  most  highly  compensated  executive
                  officers,  other  than  the  724 BC CEO and the 724 BC CFO who
                  were  serving  as  executive  officers  at the end of the most
                  recently  completed  fiscal  year and whose  total  salary and
                  bonus exceeds $150,000 per year; and


                                      -58-
<PAGE>


         (d)      any additional individuals for whom disclosure would have been
                  provided  under (c) except that the individual was not serving
                  as an  officer  of  724 BC at the  end  of the  most  recently
                  completed financial year.

For the year ended May 31, 2005,  724 BC had two 724 Named  Executive  Officers,
Douglas Turnbull the President and Chief Executive Officer and Robin Merrifield,
the former CFO.

SUMMARY OF COMPENSATION

The following table is a summary of compensation paid to the 724 Named Executive
Officers, during 724 BC's most recently completed fiscal period from February 4,
2004 to May 31, 2004 and for the fiscal year ended May 31, 2005.


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                  ANNUAL COMPENSATION                LONG TERM COMPENSATION
                                              ---------------------------     ------------------------------------
                                                                                       AWARDS              PAYOUTS
                                                                              --------------------------   -------
                                                                              SECURITIES     SHARES OR
                                                                  OTHER          UNDER         UNITS
724 NAMED EXECUTIVE                                               ANNUAL       OPTIONS/      SUBJECT TO      LTIP     ALL OTHER
    OFFICER NAME                                                  COMPEN-        SARS         RESALE         PAY-      COMPEN-
AND PRINCIPAL POSITION    PERIOD ENDED         SALARY    BONUS    SATION        GRANTED     RESTRICTIONS     OUTS      SATION
--------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                    <C>        <C>      <C>           <C>           <C>          <C>        <C>

Douglas Turnbull         May 31, 2004(1)       18,000     Nil       Nil           Nil           Nil          Nil        Nil
President and
Chief(1) Executive       May 31, 2005          60,000     Nil       Nil           Nil           Nil          Nil        Nil
Officer
--------------------------------------------------------------------------------------------------------------------------------
Robin Merrifield         May 31, 2004(1)         N/A      Nil       Nil           Nil           Nil          Nil        Nil
Former Chief
Financial Officer(2)     May 31, 2005          14,560     Nil       Nil           Nil           Nil          Nil        Nil
--------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1)      For the four month period from the date of  incorporation  of 724 BC on
         February 4, 2004 to May 31, 2004.
(2)      Mr.  Merrifield was appointed as Chief  Financial  Officer of 724 BC on
         July 19, 2004 and resigned from this position on February 28, 2005. 724
         BC does not currently have a Chief Financial Officer.

No officers or employees of 724 BC,  including the 724 Named Executive  Officers
received  individual  compensation  in excess of $150,000  for  services in such
capacities during the fiscal year ended May 31, 2005.

LONG-TERM INCENTIVE PLANS - AWARDS IN MOST RECENTLY COMPLETED FISCAL YEAR

Long term incentive plan awards  ("LTIP") means any plan providing  compensation
intended to serve as an incentive for  performance to occur over a period longer
than one fiscal year whether  performance  is measured by reference to financial
performance of 724 BC or an affiliate,  or the price of 724 BC's shares but does
not include option or stock appreciation  rights plans or plans for compensation
through restricted shares or units. 724 BC has not granted any LTIP's during the
fiscal year ended May 31, 2005.

OPTIONS/SARS GRANTED DURING THE MOST RECENTLY COMPLETED FISCAL YEAR

Stock appreciation  rights ("SAR's") means a right,  granted by an issuer or any
of its subsidiaries as compensation for services  rendered or in connection with
office or  employment,  to receive a payment of cash or an issue or  transfer of
securities  based wholly or in part on changes in the trading  price of 724 BC's
shares.  No SAR's  were  granted  to or  exercised  by the 724  Named  Executive
Officers or directors of 724 BC during the fiscal year ended May 31, 2005.

PENSION PLANS

724 BC does not generally provide retirement benefits for directors or officers.

TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL

724 BC has no plans or arrangements in respect of remuneration  received or that
may be  received  by the 724 Named  Executive  Officers,  or other  officers  or
directors  of 724 BC,  in 724 BC's most  recently  completed  financial  year or
current  financial year in respect of compensating such officers in the event of



                                      -59-
<PAGE>

termination of employment  (as a result of  resignation,  retirement,  change of
control,  etc.) or a change in  responsibilities  following a change of control,
where the value of such compensation exceeds $100,000 per executive officer.

Pursuant  to the  Turnbull  Agreement  724 BC  employed  Mr.  Turnbull to act as
President and Chief  Executive  Officer of 724 BC effective as of April 1, 2004.
The term of the  Turnbull  Agreement  was for a period of two years  expiring on
April 1, 2006, subject to earlier  termination in accordance with the agreement.
The Turnbull  Agreement  will be  automatically  renewed for successive one year
periods at the end of the initial  term of the  agreement,  unless  either party
gives to the other written  notice of non-renewal at least 90 days in advance of
the expiration  date of the then current term. In connection  with the Centrasia
Acquisition,  the  Turnbull  Agreement  was  assigned to the  Company  effective
September 14, 2005.

Pursuant to the Turnbull  Agreement,  Mr. Turnbull agreed to spend approximately
fifty percent of his working hours, or up to 10 working days per month,  working
for 724 BC. In  consideration  for the services  provided by Mr. Turnbull to 724
BC, 724 BC agreed to pay to Mr.  Turnbull during the Initial Term, a base salary
of $5,000 per month,  of which  $4,000 was to be paid in cash and the balance of
$1,000  to be paid in common  shares,  in an amount  equal to  2,000,000  common
shares of 724 BC over the Initial Term of the Turnbull Agreement.  724 BC issued
to Mr. Turnbull all of the 2,000,000 common shares of 724 BC due to Mr. Turnbull
under the  Turnbull  Agreement.  After  April 1, 2005,  the cash  portion of Mr.
Turnbull's base salary was increased to $5,000 per month,  and no further common
shares of 724 BC are issuable  thereunder.  724 BC agreed to pay to Mr. Turnbull
$500 for each full day in excess of 10 days  worked by Mr.  Turnbull  during any
calendar  month  during the term of the Turnbull  Agreement,  in addition to the
base salary payable to Mr. Turnbull.

See "Item 6.  Directors,  Senior  Management  and  Employees  -  Compensation  -
Executive Compensation - Centrasia - Employment Agreements."

724 BC does not have any contracts with the directors of 724 BC (or any entities
controlled by the  directors of 724 BC) providing for benefits upon  termination
of employment.

DIRECTOR COMPENSATION

No cash compensation was paid to any director of 724 BC for services provided as
directors of 724 BC during the fiscal year ended May 31, 2005.

724 BC does not have any standard  arrangement  pursuant to which the  directors
are compensated by 724 BC for their services in their capacity as directors.

BOARD PRACTICES

AUDIT COMMITTEE

THE AUDIT COMMITTEE CHARTER

MANDATE

The primary  function of the audit committee (the  "Committee") is to assist the
board of directors in fulfilling  its financial  oversight  responsibilities  by
reviewing the financial reports and other financial  information provided by the
Company to regulatory  authorities and  shareholders,  the Company's  systems of
internal controls  regarding finance and accounting and the Company's  auditing,
accounting and financial reporting processes. The Committee's primary duties and
responsibilities are to:

   -     Serve as an  independent  and objective  party to monitor the Company's
         financial   reporting  and  internal  control  system  and  review  the
         Company's financial statements.
   -     Review and appraise the performance of the Company's external auditors.
   -     Provide an open avenue of communication  among the Company's  auditors,
         financial and senior management and the Board of Directors.



                                      -60-
<PAGE>

COMPOSITION

The Committee  shall be comprised of three  directors as determined by the Board
of Directors,  the majority of whom shall be free from any relationship that, in
the opinion of the Board of Directors,  would interfere with the exercise of his
independent  judgement as a member of the Committee.  At least one member of the
Committee shall have the accounting or related financial  management  expertise.
All members of the Committee that are not financially literate will work towards
becoming financially literate to obtain a working familiarity with basic finance
and accounting  practices.  For the purposes of the Audit Committee Charter, the
definition of "financially literate" is the ability to read and understand a set
of  financial  statements  that  present a breadth  and level of  complexity  of
accounting issues that are generally comparable to the breadth and complexity of
the  issues  that can  presumably  be  expected  and be raised by the  Company's
financial statements.

The members of the  Committee  shall be elected by the Board of Directors at its
first meeting  following  the annual  shareholders'  meeting.  Unless a Chair is
elected  by the full  Board of  Directors,  the  members  of the  Committee  may
designate a Chair by a majority vote of the full Committee membership.

MEETINGS

The  Committee  shall  meet at  least  twice  annually,  or more  frequently  as
circumstances  dictate.  As part of its job to foster  open  communication,  the
Committee will meet at least annually with the Chief  Financial  Officer and the
external auditors in separate sessions.

RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties, the Committee shall:

DOCUMENTS/REPORTS REVIEW

(a)      Review and update the Charter annually.
(b)      Review  the  Company's  financial  statements,  MD&A and any annual and
         interim earnings,  press releases before the Company publicly discloses
         this  information  and  any  reports  or  other  financial  information
         (including quarterly financial statements),  which are submitted to any
         governmental  body,  or to the  public,  including  any  certification,
         report, opinion, or review rendered by the external auditors).

EXTERNAL AUDITORS

(a)      Review annually,  the performance of the external auditors who shall be
         ultimately  accountable  to the Board of Directors and the Committee as
         representatives of the shareholders of the Company.
(b)      Recommend  to  the  Board  of  Directors  the  selection   and,   where
         applicable, the replacement of the external auditors nominated annually
         for shareholder approval.
(c)      Review with management and the external auditors the audit plan for the
         year-end   financial   statements   and  intended   template  for  such
         statements.
(d)      Review and  pre-approve  all audit and  audit-related  services and the
         fees  and  other  compensation   related  thereto,  and  any  non-audit
         services, provided by the Company's external auditors.

Provide  the  pre-approval  of  the  non-audit  services  is  presented  to  the
Committee's  first scheduled  meeting following such approval such authority may
be  delegated  by the  Committee  to  one or  more  independent  members  of the
Committee.

FINANCIAL REPORTING PROCESSES

(a)      In consultation with the external auditors,  review with management the
         integrity of the Company's financial  reporting process,  both internal
         and external.


                                      -61-
<PAGE>


(b)      Consider  the  external  auditors'  judgements  about the  quality  and
         appropriateness  of the Company's  accounting  principals as applied in
         its financial reporting.
(c)      Consider and approve, if appropriate, changes to the Company's auditing
         and  accounting  principles  and practices as suggested by the external
         auditors and management.
(d)      Following  completion  of the  annual  audit,  review  separately  with
         management  and the  external  auditors  any  significant  difficulties
         encountered during the course of the audit,  including any restrictions
         on the scope of work or access to required information.
(e)      Review any  significant  disagreement  among  management  and  external
         auditors  in  connection   with  the   preparation   of  the  financial
         statements.
(f)      Review with the external  auditors and  management  the extent to which
         changes and improvements in financial or accounting practices have been
         implemented.
(g)      Review any  complains or concerns  about any  questionable  accounting,
         internal accounting controls or auditing matters.
(h)      Review certification process.
(i)      Establish a procedure  for the  confidential,  anonymous  submission by
         employees of the Company of concerns regarding questionably  accounting
         or auditing matters.

OTHER

Review any related-party transactions.

COMPOSITION OF THE AUDIT COMMITTEE

The following are the members of the Committee(1):

-------------------------------------------------------------------------------
                                                    Independent(1)
-------------------------------------------------------------------------------

Nick DeMare                                                N
Gregory Crowe                                              Y
Lindsay Bottomer                                           Y
-------------------------------------------------------------------------------
(1)      As defined by Multilateral Instrument 52-110 ("MI 52-110"). The Company
         is relying on the  exemption  provided  under  Section 6.1 of MI 52-110
         with respect to the composition of the Committee.

AUDIT COMMITTEE OVERSIGHT

At no time since the  commencement  of the  Company's  most  recently  completed
financial year was a  recommendation  of the Committee to nominate or compensate
an external auditor not adopted by the Board of Directors.

RELIANCE ON CERTAIN EXEMPTIONS

At no time since the  commencement  of the  Company's  most  recently  completed
financial  year has the  Company  relied on the  exemption  in Section 2.4 of MI
52-110 (De Minimis Non-audit Services), or an exemption from MI 52-110, in whole
or in part, granted under Part 8 of MI 52-110.

PRE-APPROVAL POLICIES AND PROCEDURES

The Committee has adopted specific policies and procedures for the engagement of
non-audit services as described above under the heading "External Auditors".

REMUNERATION COMMITTEE

The Company does not have a separate Remuneration Committee.




                                      -62-
<PAGE>



EMPLOYEES

During the years ended May 31, 2005, 2004 and 2003, the Company had no full-time
and  employees  in the area of  management  and  administration.  Including  the
Company's officers,  the Company had one, two and two part-time employees in the
area of management and administration  during the years ended May 31, 2005, 2004
and 2003, respectively. Corporate accounting, management and administration were
provided,  in part, by Chase, a company owned by Mr. Nick DeMare. Chase provides
its services to a number of public and private  companies and currently  employs
six full-time  employees,  including Mr. Lim  (excluding Mr.  DeMare).  Prior to
September 14, 2005, Mr. DeMare  provided his services as the President,  CEO and
CFO of the Company and  subsequent  to the Centrasia  Acquisition,  continues to
serve as CFO. The Company also retains  consultants to handle specific  projects
on a case by case basis. As a result of the Centrasia  Acquisition,  the Company
has one full-time and four part-time  employees in the areas of exploration (one
employee) and management and administration  (four employees).  In the event the
Company needs to employ personnel,  it will need to recruit qualified  personnel
to staff its operations.  The Company believes that such personnel currently are
available at reasonable  salaries and wages in the geographic areas in which the
Company and its subsidiaries operate.  There can be no assurance,  however, that
such personnel will be available in the future.

During the year ended May 31, 2005 724 BC had five  part-time  and no  full-time
employees,  including its officers.  724 BC had three part-time employees during
the fiscal period ended May 31, 2004.

During the year ended May 31,  2005,  BMC had 2  full-time  employees  and eight
part-time  employees.  As of the  date  of this  annual  report,  BMC has  three
full-time  employees and twenty  temporary  part-time  employees who assist with
exploration activities. See "Item 6. Directors,  Senior Management and Employees
- Employees."

See "Item 4. Information on the Company - Employees."

SHARE OWNERSHIP

The following table sets forth certain  information  regarding  ownership of the
Company's  shares by the  Company's  officers and  directors as of September 30,
2005.

--------------------------------------------------------------------------------
                                                  SHARES AND
                                                     RIGHTS
                                                 BENEFICIALLY
                                                    OWNED OR         PERCENT OF
TITLE OF CLASS        NAME OF OWNER              CONTROLLED(1)        CLASS (1)
--------------        ---------------------      -------------       ----------

Common Stock          Douglas Turnbull            1,925,100(2)          14.91%
Common Stock          Nick DeMare                   650,631(3)           4.99%
Common Stock          Gregory Crowe                 350,000(4)           2.74%
Common Stock          Lindsay Bottomer              350,000(5)           2.74%
Common Stock          Cary Pinkowski              2,600,000(6)          19.10%
Common Stock          Oleg Kim                      475,000(7)           3.69%
Common Stock          William J. Tafuri             675,000(8)           5.24%
Common Stock          James Harris                  350,000(9)           2.74%
                                                 -------------       ----------
Common Stock          Officers and Directors,     7,375,731(10)          48.10%
                      as a group (8 persons)     =============       ==========
--------------------------------------------------------------------------------

NOTES:

(1)      Where persons listed on this table have the right to obtain  additional
         shares of common stock through the exercise of  outstanding  options or
         warrants  within 60 days from  September  30,  2005,  these  additional
         shares are deemed to be  outstanding  for the purpose of computing  the
         percentage of common stock owned by such persons, but are not deemed to
         be outstanding for the purpose of computing the percentage owned by any
         other person. Based on 12,609,961 shares of common stock outstanding as
         of September 30, 2005.

(2)      Includes the  following  shares and options  beneficially  owned by Mr.
         Turnbull:
               a.   1,625,100 shares held by Mr. Turnbull; and
               b.   Options held
         by Mr. Turnbull to acquire 300,000 shares of common stock.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."


                                      -63-
<PAGE>


(3)      Includes the following shares,  options and warrants beneficially owned
         by Mr. DeMare:
               a.   14,000 shares held directly by Mr. DeMare;
               b.   61,631 shares held by DNG Capital Corp.  ("DNG"),  a company
                    owned by Mr. DeMare;
               c.   150,000 shares held by Marbella Capital Corp. ("Marbella") a
                    company owned 30% by Mr. DeMare;
               d.   Options  held  directly  by Mr.  DeMare to  acquire  250,000
                    shares;
               e.   Options held by Chase,  a company  owned by Mr.  DeMare,  to
                    acquire 25,000 shares;
               f.   Warrants  held by  Marbella to acquire  150,000  shares at a
                    price of $0.40 per share,  exercisable  until  September 14,
                    2007.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(4)      Includes the  following  shares and options  beneficially  owned by Mr.
         Crowe:
               a.   200,000 shares held by Mr. Crowe; and
               b.   Options held by Mr. Crowe to acquire 150,000 shares.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(5)      Includes the  following  shares and options  beneficially  owned by Mr.
         Bottomer:
               a.   200,000 shares held by Mr. Bottomer; and
               b.   Options held by Mr. Bottomer to acquire 150,000 shares.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(6)      Includes the following shares,  options and warrants beneficially owned
         by Mr. Pinkowski:
               a.   1,600,000 shares held by Mr. Pinkowski;
               b.   Options held by Mr. Pinkowski to acquire 400,000 shares; and
               c.   Warrants held by Mr.  Pinkowski to acquire 600,000 shares at
                    a price of $0.40 per share,  exercisable until September 14,
                    2007.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(7)      Includes the  following  shares and options  beneficially  owned by Mr.
         Kim:
               a.   200,000  shares held by Marsa,  a company  controlled by Mr.
                    Kim; and
               b.   Options held by Mr. Kim to acquire 275,000 shares.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(8)      Includes the following shares,  options and warrants beneficially owned
         by Mr. Tafuri:
               a.   400,000 shares held by Mr. Tafuri; and
               b.   Options held by Mr. Tafuri to acquire 275,000 shares.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(9)      Includes the  following  shares and options  beneficially  owned by Mr.
         Harris:
               a.   200,000 shares held by Mr. Harris; and
               b.   Options held by Mr. Harris to acquire 150,000 shares.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(10)     See footnotes 2 through 9 above.

All of the Company's shareholders have the same voting rights.

OPTIONS, WARRANTS AND OTHER RIGHTS TO ACQUIRE SECURITIES

Pursuant to the terms of the Marsa  Option,  the  Company  must issue a total of
1,025,000 common shares (200,000 common shares issued) of the Company to acquire
all of the outstanding  ownership  interests of BMC. See "Item 4. Information on
the Company - Business Overview - Marsa Option." Mr. Oleg Kim, a director of the
Company controls Marsa.

Additionally,  as of  September  30,  2005,  the Company had granted a number of
stock options and issued a number of warrants  pursuant to which up to 2,335,000
common shares of the Company may be issued.  The following is a brief summary of
these stock options and warrants.

STOCK OPTION PLAN

The following information is intended to be a brief description of the Company's
Stock  Option  Plan  (the  "Plan")  adopted  by the  Company's  shareholders  on
September 12, 2005.

The Plan  provides  for equity  participation  in the Company by the  directors,
officers and employees of the Company and their affiliates, employees of persons
providing management services of the Company, and consultants to the Company and
its  affiliates,  through the acquisition of common shares pursuant to the grant
of options to purchase  common shares.  The Plan is be administered by the board


                                      -64-
<PAGE>


of directors,  in certain circumstances,  a committee of the board of directors.
Options  may be granted to purchase  common  shares of the Company on such terms
that the  administrator  of the Plan may determine within the limitations of the
Stock Option Plan and subject to the rules of applicable regulatory authorities.
The maximum of aggregate  number of common shares to be reserved and  authorized
to be issued  pursuant to options  granted  under the Plan is  2,500,000  common
shares.

The  exercise  price for options  grated under the Plan may not be less than the
closing  price of the common shares on the TSX-V on the trading day prior to the
date of grant (less up to the maximum  discount  permitted by  applicable  TSX-V
policies).  Options  granted  under the Plan are  subject  to a minimum 18 month
vesting  schedule whereby each option will vest equally on a quarterly basis, or
such other more restrictive  vesting  schedule as the  administrator of the Plan
may determine. Options are non-assignable and are exercisable for a period of up
to five  years  from  the  date  the  option  is  granted,  subject  to  earlier
termination after certain events such as the optionee's  cessation of service to
the Company or death. Under TSX-V rules all stock options granted under the Plan
and any common  shares of the  Company  issued  thereunder  will be subject to a
minimum four month hold period from the date of grant of the option.

Insiders of the Company will not be permitted to hold options  entitling them to
acquire greater than 10% of the Company's outstanding common shares. The Plan is
effective until ten years from its commencement,  unless the Plan is extended or
earlier terminated by the administrator of the Plan in accordance with the terms
thereof.

As of September 30, 2005, an aggregate of 2,335,000  incentive  stock options to
purchase  shares  of  the  Company's  common  stock  remain  outstanding  to the
following persons:
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------
                          NATURE                      NO. OF        EXERCISE
OPTIONEE                  OF OPTION                   OPTIONS      PRICE/SHARE      EXPIRY DATE
                                                                       $
----------------------------------------------------------------------------------------------------
<S>                     <C>                       <C>              <C>            <C>

Douglas Turnbull         President and Director       300,000         0.20        September 14, 2010
Nick DeMare              Director and Chief           275,000         0.20        September 14, 2010
                         Financial Officer
Oleg Kim                 Director                     275,000         0.20        September 14, 2010
Cary Pinkowski           Director                     400,000         0.20        September 14, 2010
Gregory Crowe            Director                     150,000         0.20        September 14, 2010
Lindsay Bottomer         Director                     150,000         0.20        September 14, 2010
William Tafuri           Vice-President               275,000         0.20        September 14, 2010
                         Exploration
James Harris             Secretary                    150,000         0.20        September 14, 2010
Harvey Lim               Consultant                    75,000         0.20        September 14, 2010
Robin Merrifield         Consultant                    50,000         0.20        September 14, 2010
Victoria Badiukova       Consultant                    50,000         0.20        September 14, 2010
Dmitriy Genrihovich
     Vedeshkin-Ryabov    Consultant                    50,000         0.20        September 14, 2010
Larry Aligizakis         Consultant                    50,000         0.20        September 14, 2010
Chase Management Ltd.    Consultant                    25,000         0.20        September 14, 2010
Eugene Antonov           Consultant                    25,000         0.20        September 14, 2010
Alexander Antonov        Consultant                    25,000         0.20        September 14, 2010
Julie Clain              Consultant                    10,000         0.20        September 14, 2010
                                                    ---------
TOTAL:                                              2,335,000
                                                    =========
----------------------------------------------------------------------------------------------------
</TABLE>

As of September 30, 2005, the directors and officers of the Company,  as a group
(8 persons),  held options to purchase  1,975,000 shares of the Company's common
stock.

WARRANTS

As of September  30, 2005,  there were  non-transferable  common share  purchase
warrants exercisable for the purchase of 6,275,000 common shares, exercisable at
$0.40 per share, expiring September 14, 2007.


                                      -65-
<PAGE>


As of September 30, 2005, the directors and officers of the Company,  as a group
(8 persons),  held warrants to purchase  750,000 shares of the Company's  common
stock.

There are no  assurances  that the option or  warrants  described  above will be
exercised in whole or in part.


ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.
--------------------------------------------------------------------------------

PRINCIPAL HOLDERS OF VOTING SECURITIES

To the best of the Company's  knowledge,  it is not directly or indirectly owned
or controlled by another corporation,  by any foreign government or by any other
person(s),  severally  or  jointly.  The  following  table  sets  forth  certain
information  regarding  ownership of the Company's shares by all persons who own
five percent (5%) or more of the Company's  outstanding  shares, as of September
30, 2005.

                                                     SHARES AND
                                                       RIGHTS
                                                    BENEFICIALLY
                                                      OWNED OR        PERCENT OF
TITLE OF CLASS     NAME AND ADDRESS OF OWNER        CONTROLLED(1)      CLASS (1)
--------------     -------------------------        -------------     ----------

Common Stock       Douglas Turnbull                  1,925,100(2)       14.91%
Common Stock       Cary Pinkowski                    2,600,000(3)       19.10%
Common Stock       William J. Tafuri                   675,000(4)        5.24%


(1)      Where persons listed on this table have the right to obtain  additional
         shares of common stock through the exercise of  outstanding  options or
         warrants  within 60 days from  September  30,  2005,  these  additional
         shares are deemed to be  outstanding  for the purpose of computing  the
         percentage of common stock owned by such persons, but are not deemed to
         be outstanding for the purpose of computing the percentage owned by any
         other person. Based on 12,609,961 shares of common stock outstanding as
         of September 30, 2005.

(2)      Includes the  following  shares and options  beneficially  owned by Mr.
         Turnbull:
               a.   1,625,100 shares held by Mr. Turnbull; and
               b.   Options held by Mr.  Turnbull to acquire  300,000  shares of
                    common stock.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(3)      Includes the following shares,  options and warrants beneficially owned
         by Mr. Pinkowski:
               a.   1,600,000 shares held by Mr. Pinkowski;
               b.   Options held by Mr. Pinkowski to acquire 400,000 shares; and
               c.   Warrants held by Mr.  Pinkowski to acquire 600,000 shares at
                    a price of $0.40 per share,  exercisable until September 14,
                    2007.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

(4)      Includes the following shares,  options and warrants beneficially owned
         by Mr. Tafuri:
               a.   400,000 shares held by Mr. Tafuri; and
               b.   Options held by Mr. Tafuri to acquire 275,000 shares.
         See "Item 6.  Directors,  Senior  Management  and  Employees - Options,
         Warrants and Other Rights to Acquire Securities."

None of the Company's  principal  shareholders have different voting rights than
any of the Company's other common shareholders.

ESCROWED SHARES

CALEX ESCROWED SHARES

As of September  30, 2005, a total of 290,439  common shares of the Company were
held in escrow as follows:

         NAME OF BENEFICIAL HOLDER          NO. OF COMMON SHARES HELD IN ESCROW
         ------------------------------     -----------------------------------

         Ted Carlsen                                        81,250
         Ted Carlsen and Monica Carlsen                      3,750
         Desmond O'Kell                                    205,439
                                                           -------
         TOTAL                                             290,439
                                                           =======


                                      -66-
<PAGE>

         (1) held by Greystoke  Investments Inc., a private company owned by Mr.
             O'Kell.

The Company and the above-names  beneficial owners of common shares entered into
a  Surplus   Securities   Escrow   Agreement   dated  September  26,  2001  with
Computershare  Investor Services Inc. (the "CalEx Escrow Agreement") pursuant to
which 290,439  common shares (the "CalEx Escrow  Shares") are currently  held in
escrow.  Pursuant to the terms of the CalEx  Escrow  Agreement  the CalEx Escrow
Shares are subject to release from escrow at six month  intervals  over a period
ending on September 27, 2007. The CalEx Escrowed  Shares are being released from
escrow on an automatic six-year time release, at six-month  intervals,  in equal
tranches of 5% for the first four tranches  ending  September  27, 2003,  and in
equal tranches of 10% for the remaining  eight tranches  ending on September 27,
2007.

The CalEx Escrow Agreement  provides that the CalEx Escrow Shares held in escrow
pursuant  to its terms and the  beneficial  ownership  thereof  may not be sold,
assigned, hypothecated, transferred within escrow or otherwise dealt with in any
manner  without  the prior  written  consent of the  TSX-V.  In the event of the
bankruptcy  of an escrow  shareholder,  provided the TSX-V does not object,  the
escrowed  shares may be  transferred  to the trustees in the  bankruptcy or such
person  legally  entitled to the  escrowed  shares  which  shares will remain in
escrow  subject to the CalEx Escrow  Agreement.  In the event of the death of an
escrow shareholder, provided the TSX-V does not object, the escrowed shares held
by the escrow shareholder will be released from escrow.

SURPLUS ESCROWED SHARES

Upon completion of the Centrasia Acquisition, a total of 3,700,100 shares of the
Company's  common  stock held by  shareholders  of 724 BC  described  below were
escrowed in  accordance  with the policies of the TSX-V (the  "Surplus  Escrowed
Securities") in connection with the Centrasia Acquisition and are subject to the
terms of a Surplus  Security Escrow  Agreement  entered into between the Issuer,
each of the individuals named below and Computershare Investor Services Inc.

The Surplus Escrowed Securities will be released from escrow on an automatic six
year time release, at six month intervals, in equal tranches of 5% for the first
four  tranches  ending on the 24th month from  September  14,  2005 and in equal
tranches of 10% for the remaining  eight tranches  ending on the 72nd month from
September  14, 2005.  As of September 30, 2005,  the  following  Value  Escrowed
Securities were held in escrow:


         NAME OF BENEFICIAL HOLDER              NO. OF SHARES HELD IN ESCROW
         -------------------------              ----------------------------

         Douglas Turnbull                                1,600,100
         Cary Pinkowski                                  1,000,000
         Gregory Crowe                                     175,000
         Lindsay Bottomer                                  175,000
         James Harris                                      175,000
         William J. Tafuri                                 400,000
         Robin Merrifield                                  175,000
                                                         ---------
         TOTAL                                           3,700,100
                                                         =========

The escrow  agreement  provides  that the Surplus  Escrowed  Securities  held in
escrow  pursuant to its terms and the  beneficial  ownership  thereof may not be
sold, assigned, hypothecated,  transferred within escrow or otherwise dealt with
in any manner  without the prior written  consent of the TSX-V.  In the event of
the bankruptcy of an escrow shareholder, provided the TSX-V does not object, the
escrowed  shares may be  transferred  to the trustees in the  bankruptcy or such
person  legally  entitled to the  escrowed  shares  which  shares will remain in
escrow subject to the escrow  agreement.  In the event of the death of an escrow
shareholder, provided the TSX-V does not object, the escrowed shares held by the
escrow shareholder will be released from escrow.



                                      -67-
<PAGE>




VALUE ESCROWED SHARES

Upon completion of the Centrasia  Acquisition,  a total of 300,000 shares of the
Company's  common stock held by  shareholders  described  below were escrowed in
accordance with the policies of the TSX-V (the "Value  Escrowed  Securities") in
connection  with the  Centrasia  Acquisition  and are  subject to the terms of a
Value Security  Escrow  Agreement  entered into between the Issuer,  each of the
individuals named below and Computershare Investor Services Inc.

The Value Escrowed Securities will be released from escrow on an automatic three
year time release,  at six month  intervals,  with a first  tranche  released on
September  14,  2005 of  30,000  shares  and in  equal  tranches  of 15% for six
tranches  ending on the 36th month from  September 14, 2005. As of September 30,
2005, the following Value Escrowed Securities were held in escrow:

         NAME OF BENEFICIAL HOLDER              NO. OF SHARES HELD IN ESCROW
         -------------------------              ----------------------------
         Marsa Gold Corp.                                  180,000
         Douglas Turnbull                                   22,500
         Gregory Crowe                                      22,500
         Lindsay Bottomer                                   22,500
         James Harris                                       22,500
                                                           -------
         TOTAL                                             270,000
                                                           =======

The escrow agreement provides that the Value Escrowed  Securities held in escrow
pursuant  to its terms and the  beneficial  ownership  thereof  may not be sold,
assigned, hypothecated, transferred within escrow or otherwise dealt with in any
manner  without  the prior  written  consent of the  TSX-V.  In the event of the
bankruptcy  of an escrow  shareholder,  provided the TSX-V does not object,  the
escrowed  shares may be  transferred  to the trustees in the  bankruptcy or such
person  legally  entitled to the  escrowed  shares  which  shares will remain in
escrow subject to the escrow  agreement.  In the event of the death of an escrow
shareholder, provided the TSX-V does not object, the escrowed shares held by the
escrow shareholder will be released from escrow.

CHANGES IN SHAREHOLDINGS

The following tables lists the  shareholders,  each of whom  beneficially  owned
five percent or more of the Company's  outstanding common shares as of September
30, 2005,  who acquired  their shares as a result of the Centrasia  Acquisition.
See  "Item 4.  Information  on the  Company  -  Business  Overview  -  Centrasia
Acquisition."  None of the following  shareholders  held shares of the Company's
common stock prior to the Centrasia Acquisition.

         NAME OF SHAREHOLDER
         -------------------

         Douglas Turnbull
         Cary Pinkowski
         William Tafuri

CHANGE OF CONTROL

As of the date of this annual  report,  there are no  arrangements  known to the
Company  which may at a  subsequent  date  result in a change of  control of the
Company.

UNITED STATES SHAREHOLDERS

As of September 30, 2005, there were  approximately  five registered  holders of
the Company's  common  shares in the United  States,  with combined  holdings of
522,000  shares,  representing  4.14% of the issued  shares of the Company.  The
Company  does not know how many  beneficial  shareholders  it has in the  United
States, but management believes there are less than 300 such shareholders.



                                      -68-
<PAGE>




CONTROL BY FOREIGN GOVERNMENT OR OTHER PERSONS

To the  best  of the  Company's  knowledge,  the  Company  is  not  directly  or
indirectly owned or controlled by another  corporation,  any foreign government,
or any other natural or legal person, severally or jointly.

RELATED PARTY TRANSACTIONS

Other  than as  disclosed  below,  for the  period  from  June 1,  2003  through
September 30, 2005, the Company has not entered into any  transactions  or loans
between the Company and any (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
individuals'  family;  (d) key  management  personnel  and close members of such
individuals' families; or (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.

1.       The Company has entered into a Management Agreement dated September 14,
         2005,  with  Chase,  a  company  owned by Mr.  Nick  DeMare,  the Chief
         Financial  Officer of the  Company,  whereby the Company  pays to Chase
         $3,000 per month,  to provide  financial,  accounting,  and  management
         services to the Company. See "Item 6. Directors,  Senior Management and
         Employees - Directors and Senior  Management"  and "Item 6.  Directors,
         Senior Management and Employees - Compensation - Executive Compensation
         - Centrasia -  Employment  Agreements."  In  addition,  the Company may
         request  that Chase  perform  extra  services  in which case Chase will
         charge the Company for its  employees  services at  competitive  rates.
         Such extra services include preparation for annual audits,  non-routine
         securities  filings and legal  assistance,  corporate  representations,
         property  acquisitions and public relations.  The Company has agreed to
         reimburse   Chase,   at  a  cost  equal  to  the  actual  cost  of  the
         disbursements, for all costs and disbursements incurred by Chase for or
         on behalf of the  Company  including  long  distance  charges,  courier
         charges,  photocopier and telefax  charges,  mail services and any such
         other charges  normally  associated  directly and  indirectly  with the
         operation of the Company's business.

         Pursuant to an unwritten  agreement with Chase,  during the fiscal year
         ended May 31, 2005, and through September 14, 2005, the Company paid to
         Chase a base  amount  of  $5,000  per  month,  to  provide  accounting,
         administrative, professional and management services to the Company. An
         aggregate of $2,000 of this amount was paid to Mr. DeMare to act as the
         President and Chief Executive Officer of the Company.

         Management  believes the arrangement  with Chase is fair to the Company
         and  similar to terms  which could be  obtained  from  unrelated  third
         parties.  During the year ended May 31, 2005,  and the period from June
         1, 2005 to September 30, 2005,  the Company was billed by Chase $69,325
         and  $30,725,  respectively.  During  the year  ended May 31,  2004 the
         Company paid Chase $38,800.

2.       During the fiscal year ended May 31, 2001, the Company  provided a loan
         of  US$35,000 to Ted Carlsen,  a former  President  and director of the
         Company,  to acquire  87,500 common shares of the Company.  The Company
         had received a promissory  note for the loan. The  promissory  note was
         non-interest  bearing  and was  repayable  either in part or in full as
         required by the Company upon the disposition of part or all of the Loan
         Shares.  During the 2002  fiscal  year the  Company  received a partial
         payment of $7,900.  During the 2005 fiscal  year the  Company  received
         $47,400 in full payment of the remaining balance of the loan.

3.       James Harris, is associated with the law firm of Thomas Rondeau, a firm
         which  provides  legal  services  to the  Company  and  provides  legal
         services  to 724  BC.  Mr.  Harris  is the  corporate  secretary  and a
         shareholder of the Company.

         James  Harris  is also the  corporate  secretary  of 724 BC and,  until
         September 14, 2005,  was a shareholder  of 724 BC and had loaned 724 BC
         an aggregate of $5,000 as part of the Centrasia Loans.


                                      -69-
<PAGE>


         During the fiscal years ended May 31, 2005 and 2004, Thomas Rondeau was
         paid $25,818 and $3,437,  respectively,  by 724 BC. In addition, during
         the period from June 1, 2005 to  September  30,  2005,  Thomas  Rondeau
         billed $22,500 to 724 BC.

4.       During the fiscal years ended May 31, 2005 and 2004,  724 BC was billed
         $43,467 and $6,608, respectively,  by Mr. William Tafuri, an officer of
         724 BC, for review of potential mineral projects.  Effective  September
         14,  2005,  Mr.  Tafuri  became an officer of the  Company.  During the
         period from June 1, 2005 to September 30, 2005,  724 BC paid Mr. Tafuri
         $9,763 for review of mineral projects.

5.       Pursuant to an employment  agreement  with its  President,  Mr. Douglas
         Turnbull,  724 BC recorded  management fees totaling $60,000 during the
         fiscal year ended May 31, 2005,  of which  $14,500 was  capitalized  as
         part of due  diligence  costs  relating to the  acquisition  of BMC and
         $45,500 was been expensed as management fees.  Effective  September 12,
         2005,  Douglas  Turnbull became a director of the Company and effective
         September 14, 2005, Mr. Turnbull was appointed as the President and CEO
         of the Company.  Mr.  Turnbull is also a principal  shareholder  of the
         Company.

         During the fiscal year ended May 31, 2004, 724 BC was billed $18,000 by
         Mr.  Turnbull.  During the period  from June 1, 2005 to  September  30,
         2005, 724 BC paid Mr. Turnbull $20,000.  During the period from June 1,
         2005 to  September  30,  2005,  Mr.  Turnbull  was paid an aggregate of
         $20,000 by the Company and 724 BC pursuant to the terms of the Turnbull
         Agreement.

         See "Item 6. Directors,  Senior Management and Employees - Compensation
         - Executive Compensation - Centrasia - Employment Agreements."

6.       The Company  and/or 724 BC have entered into or been  assigned  various
         agreements relating to the Company's acquisition of an interest in BMC.
         See "Item 4.  Information  on the  Company - Business  Overview - Marsa
         Option." These agreements  include the Marsa Option, the Loan Agreement
         and the BMC Loan.

         In order to exercise the Marsa Option in full, the Company (as a result
         of  the  acquisition  of 724  BC)  must  make  cash  payments  totaling
         US$120,000  and  issue  1,025,000  common  shares  to  Marsa as well as
         provide  advances to BMC (including the BMC Loan) or incur  exploration
         expenditures   on  the  Bulakashu  Gold  Property   (collectively   the
         "Commitments") of $200,000 and US$2,200,000, as follows:

<TABLE>
<CAPTION>


                                            CASH
                                          PAYMENTS              SHARE                    COMMITMENTS(3)
                     DATE                  US$(1)            ISSUANCES(2)       ------------------------------
                                                                                       US$                 $
        <S>                          <C>                   <C>                  <C>                 <C>

         Signing of Loan Agreement                -                    -             110,000(paid)           -
         January 2, 2005                     40,000(paid)              -                   -                 -
         September 1, 2005                   40,000(paid)              -                   -                 -
         September 14, 2005                       -              200,000(issued)           -                 -
         December 31, 2005                        -                    -                   -            200,000(4)
         January 2, 2006                     40,000              200,000                   -                 -
         December 31, 2006                        -                    -             690,000                 -
         January 2, 2007                          -              250,000                   -                 -
         December 31, 2007                        -                    -             650,000                 -
         January 2, 2008                          -              375,000                   -                 -
         December 31, 2008                        -                    -             750,000                 -
                                       ------------         ------------        ------------      ------------
         TOTALS                             120,000            1,025,000           2,200,000           200,000
                                       ============         ============        ============      ============
</TABLE>

         (1)      Amounts  paid to Marsa  pursuant  to the  terms  of the  Marsa
                  Option.
         (2)      Shares  issued  to Marsa  pursuant  to the  terms of the Marsa
                  Option.
         (3)      Amounts  loaned  to BMC  pursuant  to the  terms of the  Marsa
                  Option, Loan Agreement and BMC Loan.
         (4)      As of October 22, 2005, US$110,000 (approximately $93,500) and
                  $14,500 of the $200,000 had been advanced.

         Further,  the Company  has also  agreed to  initiate a  pre-feasibility
         study as a possible  precursor to  production,  at such time as BMC has
         defined  an  indicated  reserve  (as  defined  by JORC  or CIM  reserve
         standards) on the Bulakashu Property of not less than 300,000 ounces of
         gold.


                                      -70-
<PAGE>


         The Marsa Option provides for staged conversions of the Company's loans
         and advances to BMC into ownership  interests of BMC at the end of each
         calendar year, beginning December 31, 2005. As such, as of May 31, 2005
         and September 30, 2005 none of the loans or advances had been repaid.

         In the  event  the  Company  fails  to meet any of its  commitments  or
         commits a material  breach of the Marsa Option,  Marsa has the right to
         require  the Company to return any shares of BMC  received  and forgive
         the Commitments.

         As at May 31, 2005,  724 BC had advanced  US$110,000 and $10,000 to BMC
         and paid US$40,000 to Marsa.  Under the terms of the Marsa Option,  the
         amounts  advanced to BMC are to be spent on exploration and development
         of the Bulakashu  Gold  Property.  As at May 31, 2005,  724 BC had also
         incurred  deferred  acquisition  costs of $110,142  for due  diligence,
         professional, travel and legal costs associated with the acquisition of
         BMC.  Subsequent  to May  31,  2005,  the  Company  and/or  724 BC have
         advanced a further  US$110,000 and $4,500 to BMC and paid an additional
         US$40,000  to  Marsa.  As at May  30,  2005  and  September  30,  2005,
         US$110,000  remained  outstanding under the terms of the Loan Agreement
         and the BMC Loan.

         On September 14, 2005, the Company assumed the share obligations of 724
         BC under the Marsa Option and issued 200,000 common shares of 724 BC to
         Marsa.

         Marsa  is a  private  company  controlled  by Mr.  Oleg  Kim who is the
         managing director and a participant of Marsa and,  effective  September
         14,  2005 was  elected  as a  director  of the  Company.  See  "Item 4.
         Information  on the  Company - Business  Overview - Marsa  Option"  and
         "Item 6.  Directors,  Senior  Management  and Employees - Directors and
         Senior  Management."  Oleg Kim is also the managing director of BMC. In
         connection with the Centrasia  Acquisition and pursuant to the terms of
         the Marsa Option, Douglas Turnbull (an officer,  director and principal
         shareholder  of the  Company)  and  William  Tafuri (an  officer of the
         Company) were appointed as managers of BMC. See "Item 4. Information on
         the Company - Business Overview - Marsa Option."

7.       Douglas Turnbull,  Lindsay Bottomer, James Harris and Gregory Crowe are
         all  directors  and/or  officers  of 724 BC and  advanced  to 724 BC an
         aggregate  of $20,000 as part of the  Centrasia  Loans.  The  following
         table  sets  forth the amount  advanced  by each of  Messrs.  Turnbull,
         Bottomer, Harris and Crowe.

                                               AMOUNT OF LOAN
                                               --------------

                  Douglas Turnbull                    $5,000
                  Lindsay Bottomer                    $5,000
                  James Harris                        $5,000
                  Gregory Crowe                       $5,000
                                                ------------
                  Total                              $20,000
                                                ============

         Messrs.  Turnbull,   Bottomer,  Harris  and  Crowe  are  also  officer,
         directors and/or principal  shareholders of the Company.  The Centrasia
         Loans  had an  interest  rate  of  10%  per  annum.  Pursuant  to  Debt
         Settlement Agreements between the Company, 724 BC and Messrs. Turnbull,
         Bottomer,  Harris and Crowe, all of which are dated March 30, 2005, the
         Centrasia  Loans were acquired by the Company on September 14, 2005, in
         exchange for an aggregate  of 100,000  common  shares of the Company in
         connection  with the Centrasia  Acquisition.  See "Item 10.  Additional
         Information  -  Material  Contracts."  The  interest  was  paid  to the
         respective individuals in cash by the Company on September 14, 2005.

         During the fiscal  years  ended May 31,  2005 and 2004,  724 BC did not
         make any principal or interest payment on the Centrasia Loans.

         During the period from June 1, 2005 to September 30, 2005,  the Company
         issued the following  shares and made the  following  cash payments for
         interest  on the  Centrasia  Loans in  connection  with  the  Centrasia
         Acquisition.


                                      -71-
<PAGE>


                                   ------------------------------------
                                        Period from June 1, 2005
                                          to September 30, 2005
                                   ------------------------------------
                                                         Cash payment
                                                        of outstanding
                                   Common Shares            interest
                                   -------------        ---------------

         Douglas Turnbull              25,000                 $538
         Lindsay Bottomer              25,000                 $538
         James Harris                  25,000                 $474
         Gregory Crowe                 25,000                 $451


8.       See  also  "Item  6.  Directors,  Senior  Management  and  Employees  -
         Compensation".

9.       See  also  "Item  7.   Significant   Shareholders   and  Related  Party
         Transactions - Escrowed Shares."

10.      See also "Item 4.  Information  on the  Company -  Business  Overview -
         Centrasia  Acquisition."  At the  time  of  entering  into  the  Formal
         Agreement,  the  transaction  was conducted on an  arms'-length  basis;
         however, on the effective date of the acquisition,  September 14, 2005,
         Messrs.  Turnbull and Crowe had been  appointed as members of the board
         of directors of the Company.

11.      The Company leases an executive office at 300-1055 West Hasting Street,
         Vancouver,  British Columbia V6E 2E9. The executive office is leased on
         a month-to-month  basis and there is no written  agreement  relating to
         the  lease.  The  lease  for the  executive  office  is in the  name of
         Lakehead, a company controlled by Mr. Turnbull. The total monthly lease
         payment is $1,450.  Pursuant  to an  unwritten  agreement,  the Company
         reimburses  Lakehead  $725 per month for the office  space.  During the
         fiscal year ended May 31, 2005, 724 BC reimbursed  Lakehead  $1,450 for
         rent  expenses.  During the period from June 1, 2005 through  September
         30, 2005, the Company (and/or 724 BC) reimbursed  Lakehead an aggregate
         of $2,900 for rent expenses.  See "Item 4. Information on the Company -
         Principal Offices."

12.      During  the  fiscal  year ended May 31,  2005,  Oleg Kim (the  managing
         director  of  BMC  and  principal  of  Marsa),   received  US$3,411  in
         compensation  from BMC.  During  the period  from June 1, 2005  through
         September 30, 2005, Mr. Kim received US$215 in  compensation  from BMC.
         "Item 6. Directors, Senior Management and Employees - Compensation".

INDEBTEDNESS OF DIRECTORS, OFFICERS, PROMOTERS AND OTHER MANAGEMENT

Except as described  below, no director,  officer or promoter or other member of
management of the Company,  or any associate or affiliate of any such person, is
or has been indebted to the Company.

During  the fiscal  year  ended May 31,  2001,  the  Company  provided a loan of
US$35,000 to Ted Carlsen,  a former  President  and director of the Company,  to
acquire 87,500 common shares of the Company (the "Loan Shares"). The Company had
received a promissory  note for the loan. The promissory  note was  non-interest
bearing and was  repayable  either in part or in full as required by the Company
upon the  disposition of part or all of the Loan Shares.  During the 2002 fiscal
year the Company  received a partial  payment of $7,900.  During the 2005 fiscal
year the Company  received  $47,400 in full payment of the remaining  balance of
the loan.

Otherwise,  during the Company's  last  completed  financial  year ended May 31,
2005, no current or former director,  executive officer or senior officer of the
Company,  proposed  management  nominee  for  election  as a  director  or  each
associate  or  affiliate of any such  director,  executive or senior  officer or
proposed  nominee  is or  has  been  indebted  to  the  Company  or  any  of its
subsidiaries  or  is  and  has  been  indebted  to  another  entity  where  such
indebtedness  is or has been the  subject  of a  guarantee,  support  agreement,
letter of credit or other similar  arrangement or understanding  provided by the
Company or any of its subsidiaries.



                                      -72-
<PAGE>

During the last  completed  fiscal year, no director or senior officer of 724 BC
or any of their  associates  was indebted to 724 BC or any of its  subsidiaries,
nor  has  any of  these  individuals  been  indebted  to  another  entity  which
indebtedness  is the subject of a  guarantee,  support in  agreement,  letter of
credit or other similar  arrangement or understanding  provided by 724 BC or any
of its subsidiaries.

CONFLICTS OF INTEREST

The table below shows that certain  directors of the Company are also directors,
officers or shareholders of other companies which are engaged in the business of
acquiring,  developing and exploiting natural resource properties. The directors
and  officers of the Company  will not be devoting all their time to the affairs
of the Company, but will be devoting such time as required to effectively manage
the Company.  Some of the  directors and officers of the Company are engaged and
will  continue  to be engaged in the search for  property  or assets or business
prospects on their own behalf or on behalf of others. Such associations may give
rise to conflicts of interest from time to time.

Certain of the  directors,  officers  and  shareholders  of the Company are also
directors,  officers  and  shareholders  of other  companies  and  conflicts  of
interest  may arise  between  their  duties as  directors  of the Company and as
directors of other  companies.  All such  possible  conflicts are required to be
disclosed in accordance with the requirements of the British  Columbia  BUSINESS
CORPORATIONS  ACT, as amended (the  "BCBCA"),  and the  directors  concerned are
required to govern themselves in accordance with the obligations imposed on them
by law.

The  directors  of the Company are  required by law to act  honestly and in good
faith with a view to the best  interests  of the  Company  and to  disclose  any
interest which they may have in any project or opportunity of the Company.  If a
conflict of interest arises at a meeting of the board of directors, any director
in a conflict will disclose his interest and abstain from voting on such matter.
The Company  does not  currently  have a right of first  refusal  pertaining  to
opportunities that come to management's  attention insofar as such opportunities
may relate to the  Company's  proposed  business  operations.  The  officers and
directors are, so long as they are officers or directors of the Company, subject
to the restriction that all opportunities  contemplated by the Company's plan of
operation  which come to their  attention,  either in the  performance  of their
duties or in any other manner, will be considered  opportunities of, and be made
available to the Company and the companies that they are  affiliated  with on an
equal basis. If the Company or the companies in which the officers and directors
are affiliated with both desire to take advantage of the opportunities, the said
officers  and  directors  would  abstain  from  negotiating  and voting upon the
opportunity.  However,  all directors may still  individually  take advantage of
opportunities  if the Company  declines to do so. Except as set forth above, the
Company  has not adopted any  conflict of interest  policy with  respect to such
transactions.  In determining whether or not the Company will participate in any
project or opportunity,  the director will primarily consider the degree of risk
which the Company may be exposed and its financial  position at the time. Except
for Mr.  Turnbull,  no members of management  have entered into  non-competition
agreements with Baradero.

The following table  identifies the name of each director of the Company and any
company,  other than the Company,  which is a reporting issuer in Canada and the
United  States,  and for which such director  currently  serves as an officer or
director:

<TABLE>
<CAPTION>

NAME OF
DIRECTOR/OFFICER         NAME OF REPORTING ISSUER          CAPACITY                     TERM
----------------         ------------------------          --------                     ---------------------------
<S>                     <C>                               <C>                         <C>

Douglas Turnbull         Oromin Explorations Ltd.          Director                     November 1999 to present
                         Buffalo Gold Ltd.                 Director and President       June 2001 to present
                         Grizzly Diamonds Ltd.             Director                     January 2004 to present

Nick DeMare              Aguila American Resources         Director                     January 2003 to present
                         Ltd.
                         Andean American Mining            Secretary                    December 1995 to present
                         Corp.                             Director                     August 2002 to present
                         Gold Point Energy Corp.           Director                     August 2003 to present
                         Golden Peaks Resources Ltd.       Director                     January 1992 to present


                                      -73-
<PAGE>


<CAPTION>

NAME OF
DIRECTOR/OFFICER         NAME OF REPORTING ISSUER          CAPACITY                     TERM
----------------         ------------------------          --------                     ---------------------------
<S>                     <C>                               <C>                         <C>

                         Goldmarca Limited                 Director                     September 2000 to present
                         Halo Resources Ltd.               Director                     January 1996 to present
                                                           Chairman of the Board        January 2005 to present
                         Rochester Resources Ltd.          Director                     October 1989 to present
                                                           President and Chief
                                                           Executive Officer            July 2003 to present
                         Kookaburra Resources Ltd.         Director                     June 1988 to present
                         Lara Exploration Ltd.             Director                     March 2004 to present
                         Lariat Energy Ltd.                Director                     April 2003 to present
                         Mawson Resources Limited          Director                     March 2004 to present
                         Mirasol Resources Limited         Director                     August 2005 to present
                         North American Oil and Gas        Director                     August 2001 to present
                         Tinka Resources Limited           Director                     October 2002 to present
                         Tumi Resources Limited            Director                     January 2001 to present

Gregory Crowe            Yuma Copper Corp.                 Director                     October 1994 to present
                                                                                        (inactive)
                         Acrex Ventures Ltd.               Director                     June 2001 to present
                         Entree Gold Inc.                  President and Chief          July 2002 to present
                                                           Executive Officer
                         Altima Resources Ltd.             Director                     November 2003 to present

Lindsay Bottomer         Southern Rio Resources Ltd.       President and Chief          July 2001 to present
                                                           Executive Officer, Director
                         Entree Gold Inc.                  Director                     June 2002 to present
                         Strategem Capital Corp.           Director                     June 2003 to present
                         Altima Resources Ltd.             Director                     November 2003 to present
                         Amera Resources Corp.             Director                     February 2004 to present
                         Ceduna Capital Corp.              Director                     February 2005 to present

James Harris             BDI Mining Corp.                  Secretary                    October 2001 to present
                         Cytiva Software Inc.              Secretary                    May 2003 to present
                         Entree Gold Inc.                  Director                     January 2003 to present
                         International Croesus             Secretary                    March 2004 to present
                         Ventures Corp.
                         Consolidated New Sage             Secretary                    September 2003 to present
                         Resources Ltd.

</TABLE>


There  are no known  existing  or  potential  conflicts  of  interest  among the
Company,  promoters,  directors,  officers,  principal holders of securities and
persons providing professional services to the Company which could reasonably be
expected to affect an investor's investment decision except as described in this
section.

Except for the Turnbull Agreement, the Company does not have any agreements with
its officers or directors,  including any officers or directors  with a conflict
of interest, with respect to the amount of time they must spend on the Company's
business. See "Item 6. Directors, Senior Management and Employees - Compensation
- Executive Compensation - Centrasia - Employment Agreements."




                                      -74-
<PAGE>




ITEM 8.  FINANCIAL INFORMATION.
--------------------------------------------------------------------------------

DESCRIPTION OF FINANCIAL STATEMENTS                                    PAGE

Audited Consolidated Financial Statements
for the Years Ended May 31, 2005, 2004 and 2003                      F-1 to F-19


SIGNIFICANT CHANGES

Subsequent to May 31, 2005, the Company has completed the Centrasia  Acquisition
and various  private  placement  financings.  The  completion  of the  Centrasia
Acquisition  results in the  shareholders  of 724 BC holding the majority of the
combined  company's  issued and  outstanding  common  shares.  Accordingly,  the
Centrasia  Acquisition  is  treated  as a  reverse  takeover  and the  financial
statements  will be treated for  accounting  purposes as a  continuation  of the
legal  subsidiary,  724 BC,  not the  Company,  the legal  parent.  See "Item 4.
Information on the Company."

DIVIDEND POLICY

The Company has not paid any  dividends on its common shares and does not intend
to pay dividends on its common shares in the immediate  future.  Any decision to
pay  dividends  on its common  shares in the future will be made by the board of
directors on the Company on the basis of earnings,  financial  requirements  and
other such conditions that may exist at that time.

LEGAL PROCEEDINGS

The  Company  knows of no  material,  active  or  pending  legal or  arbitration
proceedings  against  it; nor is the  Company  involved  as a  plaintiff  in any
material  proceeding or pending  litigation or  arbitration.  The Company is not
aware of any  governmental  proceedings  pending  or  known  to be  contemplated
against the Company.


ITEM 9.  THE OFFER AND LISTING.
--------------------------------------------------------------------------------

PRICE HISTORY

The  TSX-V  classifies  listed  companies  into  two  different  tiers  based on
standards, which include historical financial performance, stage of development,
and financial  resources of the listed  company.  Tier 1 is the TSX-V's  premier
tier  and is  reserved  for the  TSX-V's  most  advanced  issuers  with the most
significant  financial  resources.  Tier 1 issuers benefit from decreased filing
requirements  and improved  service  standards.  The  majority of the  companies
listed on the TSX-V are Tier 2 companies.  The Company trades on the TSX-V under
the symbol "CTM" and is classified as a Tier 2 company.

There  have  been no  trading  suspensions  imposed  by the  TSX-V or any  other
regulatory  authorities in the past three years. However, in connection with the
Centrasia Acquisition,  the Company's shares were halted for trading on February
26, 2005.  The Company's  common shares  resumed  trading on August 22, 2005. In
addition,  trading in the  Company's  shares was halted on December  21, 2001 to
allow for the  announcement  of the  proposed  acquisition  of OPS.  The  shares
resumed trading on January 13, 2003.

The following tables list the volume of trading and high and low sales prices on
the TSX-V for shares of the Company's common stock for the periods indicated, as
adjusted for the Company's  one new for four old reverse  stock split  effective
June 3, 2004:


                                      -75-
<PAGE>


                  TSX VENTURE EXCHANGE - STOCK TRADING ACTIVITY


                                                            SALES PRICE
                                                       ---------------------
YEAR ENDED                       VOLUME                HIGH             LOW

May 31, 2005 (1)                181,441                $0.35           $0.21
May 31, 2004                  1,057,971                $0.13           $0.03
May 31, 2003 (2)                 11,966                $0.16           $0.02
May 31, 2002 (2)(3)             114,384                $0.70           $0.17
May 31, 2001 (3)(4)             601,634                $0.63           $0.20


(1)  Trading in the  Company's  shares was halted on February  26, 2005 to allow
     for the  announcement  of the  proposed  acquisition  of 724 BC. The shares
     resumed trading on August 22, 2005.
(2)  Trading in the  Company's  shares was halted on December  21, 2001 to allow
     for the announcement of the proposed acquisition of OPS. The shares resumed
     trading on January 13, 2003.
(3)  Trading in the Company's  shares was halted on May 3, 2001 to allow for the
     announcement  of the  acquisition of CalEx.  The shares resumed  trading on
     July 12, 2001.
(4)  Trading in the  Company's  shares  commenced  on December  21,  2000,  upon
     completion of its initial public offering.

                                                            SALES PRICE
                                                       ---------------------
QUARTER ENDED                    VOLUME                HIGH             LOW

August 31, 2005(1)               73,750                $0.59           $0.50
May 31, 2005(1)                       -                    -               -
February 28, 2005(1)             86,150                $0.33           $0.23
November 30, 2004                31,750                $0.29           $0.21
August 31, 2004                  63,541                $0.35           $0.08
May 31, 2004                    631,600                $0.12           $0.08
February 29, 2004               410,500                $0.13           $0.05
November 30, 2003                13,621                $0.09           $0.04
August 31, 2003                   2,250                $0.04           $0.03


(1)  Trading in the  Company's  shares was halted on February  26, 2005 to allow
     for the  announcement  of the  proposed  acquisition  of 724 BC. The shares
     resumed trading on August 22, 2005.


                                                            SALES PRICE
                                                       ---------------------
MONTH ENDED                      VOLUME                HIGH             LOW

September 30, 2005              212,250                $0.80           $0.61
August 31, 2005(1)               73,750                $0.59           $0.50
July 31, 2005(1)                      -                    -               -
June 30, 2005(1)                      -                    -               -
May 31, 2005(1)                       -                    -               -
April 30, 2005(1)                     -                    -               -


(1)  Trading in the  Company's  shares was halted on February  26, 2005 to allow
     for the  announcement  of the  proposed  acquisition  of 724 BC. The shares
     resumed trading on August 22, 2005.

On January 22, 2002, the Company's  common shares were approved for quotation on
the  Over-the-Counter  Bulletin  Board  system  (the  "OTCBB")  operated  by the
National  Association of Securities Dealers. The Company currently trades on the
OTCBB under the symbol "CTMHF".  The following tables set forth the market price
ranges and the  aggregate  volume of trading of the common shares of the Company
on the OTCBB system for the periods indicated, as adjusted for the Company's one
new for four old reverse stock split effective June 3, 2004:


                                      -76-
<PAGE>


                   OTC BULLETIN BOARD - STOCK TRADING ACTIVITY

                                                           BID PRICE (US$)
                                                       ---------------------
YEAR ENDED                       VOLUME                HIGH             LOW

May 31, 2005                      6,000                $0.205          $0.06
May 31, 2004                     28,000                $0.10           $0.05
May 31, 2003                      3,263                $0.60           $0.04
May 31, 2002 (1)                632,700                $1.72           $0.04


(1)  The Company's  common stock commenced  trading on the OTC-BB on January 22,
     2002.

                                                           BID PRICE (US$)
                                                       ---------------------
QUARTER ENDED                    VOLUME                HIGH             LOW

August 31, 2005                   5,500                $0.20           $0.06
May 31, 2005                          -                $0.205          $0.17
February 29, 2005                     -                $0.17           $0.15
November 30, 2004                     -                $0.176          $0.15
August 31, 2004                   6,000                $0.20           $0.06
May 31, 2004                     23,000                $0.10           $0.06
February 29, 2004                 5,000                $0.10           $0.05
November 30, 2003                     -                    -               -
August 31, 2003                       -                    -               -

                                                           BID PRICE (US$)
                                                       ---------------------
MONTH ENDED                      VOLUME                HIGH             LOW

September 30, 2005                    -                $0.30           $0.15
August 31, 2005                       -                $0.15           $0.06
July 31, 2005                     4,500                $0.15           $0.15
June 30, 2005                     1,000                $0.20           $0.15
May 31, 2005                          -                $0.20           $0.20
April 30, 2005                        -                $0.205          $0.20


These above  quotations  reflect  inter-dealer  prices without  retail  mark-up,
markdown, or commissions and may not necessarily represent actual transactions.

The OTCBB is smaller and less liquid  than the major  securities  markets in the
United States.  The trading volume of the Company's shares on the OTCBB has been
volatile.  Consequently,  shareholders  in the United  States may not be able to
sell their shares at the time and at the price they desire.


ITEM 10. ADDITIONAL INFORMATION.
--------------------------------------------------------------------------------

ARTICLES OF CONTINUANCE AND BYLAWS

The  Company  was  incorporated  under the laws of British  Columbia,  Canada on
December 10, 1999 by  registration  of its Memorandum and Articles with the B.C.
Registrar of Companies under the  incorporation  number 597349. On September 25,
2001, the Company was continued under the YBCA to the Yukon Territory, Canada by
the  registration  of its Articles of  Continuance  with the Yukon  Registrar of
Corporations.



                                      -77-
<PAGE>


On March 29,  2004,  the  British  Columbia  legislature  enacted  the BCBCA and
repealed  the British  Columbia  COMPANY ACT (the "BC COMPANY  ACT").  The BCBCA
removes many of the  restrictions  contained  in the BC COMPANY  ACT,  including
restrictions  on the  residency of  directors,  the  location of annual  general
meetings and limits on authorized  share  capital,  as well,  the BCBCA uses new
forms and terminology and has replaced the Memorandum with a Notice of Articles.

On November 23, 2004, the Company was continued to British  Columbia,  Canada by
the  registration  of a  Continuation  Application  with  the  BC  Registrar  of
Companies.   The  Company's  registration  number  is  C0709249.  There  are  no
restrictions  in the Company's  Articles on the business which can be carried on
by the Company.

The  following  is a  summary  of  all  material  provisions  of  the  Company's
Continuation  Application  and  Articles  and certain  provisions  of the BCBCA,
applicable to the Company:

         A.       DIRECTOR'S  POWER  TO  VOTE  ON  A  PROPOSAL,  ARRANGEMENT  OR
                  CONTRACT IN WHICH THE DIRECTOR IS MATERIALLY INTERESTED.

                  Under the BCBCA, subject to certain exceptions,  a director or
                  senior  officer of the  Company  must  disclose  any  material
                  interest that he  personally  has, or that he as a director or
                  senior  officer of another  corporation  has in a contract  or
                  transaction  that is  material  to the  Company  and which the
                  Company has entered into or proposes to enter into.

                  A director or senior  officer of the  Company  does not hold a
                  disclosable interest in a contract or transaction if:

                  1.       the  situation  that  would  otherwise  constitute  a
                           disclosable  interest  arose  before the coming  into
                           force of the BCBCA,  and the interest  was  disclosed
                           and  approved  under,  or  was  not  required  to  be
                           disclosed  under  legislation  that  applied  to  the
                           Company before the coming into effect of the BCBCA;
                  2.       both the Company and the other party to the  contract
                           or transaction  are wholly owned  subsidiaries of the
                           same corporation;
                  3.       the Company is a wholly owned subsidiary of the other
                           party to the contract or transaction;
                  4.       the other party to the contract or  transaction  is a
                           wholly owned subsidiary of the Company; or
                  5.       the   director   or  senior   officer   is  the  sole
                           shareholder  of the  Company or of a  corporation  of
                           which the Company is a wholly owned subsidiary.

                  A director or senior  officer of the  Company  does not hold a
                  disclosable  interest  in a  contract  or  transaction  merely
                  because:

                  1.       the contract or  transaction is an arrangement by way
                           of a security granted by the Company for money loaned
                           to, or  obligations  undertaken  by, the  director or
                           senior  officer,  or a person in whom the director or
                           senior  officer  has a  material  interest,  for  the
                           benefit  of  the  Company  or  an  affiliate  of  the
                           Company;
                  2.       the contract or  transaction  relates to an indemnity
                           or insurance under the BCBCA;
                  3.       the   contract   or   transaction   relates   to  the
                           remuneration  of the director or senior  officer,  in
                           that person's capacity as director, officer, employee
                           or agent of the  Company  or of an  affiliate  of the
                           Company;
                  4.       the contract or transaction  relates to a loan to the
                           Company,  and the  director or senior  officer,  or a
                           person in whom the  director or senior  officer has a
                           material interest, is or is to be a guarantor of some
                           or all of the loan; or
                  5.       the contract or transaction  has been or will be made
                           with  or for the  benefit  of a  corporation  that is
                           affiliated  with  the  Company  and the  director  or
                           senior  officer is also a director or senior  officer
                           of  that   corporation   or  an   affiliate  of  that
                           corporation.

                  A  director  or  senior  officer  who  holds  such a  material
                  interest  must disclose the nature and extent of such interest
                  in writing.  The disclosure  must be evidenced in writing in a
                  consent  resolution,  the  minutes  of a meeting  or any other


                                      -78-
<PAGE>


                  record  deposited with the Company's record office. A director
                  who has a disclosable interest in a contract or transaction is
                  not entitled to vote on any  directors'  resolution to approve
                  that contract or transaction, but may be counted in the quorum
                  at the directors' meeting at which such vote is taken.

         B.       DIRECTORS' POWER, IN THE ABSENCE OF AN INDEPENDENT  QUORUM, TO
                  VOTE COMPENSATION TO THEMSELVES OR ANY MEMBERS OF THEIR BODY.

                  The  compensation of the directors is decided by the directors
                  unless the Board of Directors  specifically  requests approval
                  of the compensation from the shareholders.  If the issuance of
                  compensation  to the directors is decided by the directors,  a
                  quorum is the majority of the directors in office.

         C.       BORROWING  POWERS  EXERCISABLE  BY THE  DIRECTORS AND HOW SUCH
                  BORROWING POWERS MAY BE VARIED.

                  The Company, if authorized by the directors, may:

                  1.       borrow  money  in  the  manner  and  amount,  on  the
                           security,  from  the  sources  and on the  terms  and
                           conditions that they consider appropriate;
                  2.       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 at
                           such discounts or premiums and on such other terms as
                           they consider appropriate;
                  3.       guarantee  the repayment of money by any other person
                           or the  performance  of any  obligation  of any other
                           person; and
                  4.       mortgage,  charge,  whether  by  way of  specific  or
                           floating  charge,  grant a security  interest  in, or
                           give other  security on, the whole or any part of the
                           present  and  future  assets and  undertaking  of the
                           Company.

                  The  borrowing  powers  may  be  varied  by  amendment  to the
                  Articles  of  the  Company  which  requires  approval  of  the
                  shareholders of the Company by Special Resolution.

         D.       RETIREMENT AND  NON-RETIREMENT OF DIRECTORS UNDER AN AGE LIMIT
                  REQUIREMENT.

                  There are no such  provisions  applicable to the Company under
                  the Notice of Articles, Articles or the BCBCA.

         E.       NUMBER OF SHARES REQUIRED FOR A DIRECTOR'S QUALIFICATION.

                  A director of the  Company is not  required to hold a share in
                  the capital of the Company as qualification for his office.

DESCRIPTION OF COMMON SHARES

The authorized  capital of the Company consists of an unlimited number of common
shares without par value.  A complete  description is contained in the Company's
Notice of Articles.

Of the Company's  unlimited share capital,  a total of 12,609,961  common shares
were issued and outstanding as of September 30, 2005.

All of the common  shares are fully paid and not  subject to any future  call or
assessment.  All of the common  shares of the Company  rank equally as to voting
rights,  participation  in a  distribution  of the  assets of the  Company  on a
liquidation,  dissolution  or  winding-up  of the Company,  the  entitlement  to
dividends  and the right to share in the Company's  profits.  The holders of the
common shares are entitled to receive notice of all shareholder  meetings and to
attend and vote at such  meetings.  Shareholders  are not entitled to cumulative
voting.  Each common  share  carries  with it the right to one vote.  The common


                                      -79-
<PAGE>


shares do not have preemptive or conversion  rights.  In addition,  there are no
sinking fund or  redemption  provisions  applicable  to the common shares or any
provisions  discriminating  against any existing or prospective  holders of such
securities as a result of a shareholder  owning a substantial  number of shares.
The Company's  board of directors  does not stand for  re-election  at staggered
intervals.

DIVIDEND RECORD

The Company has not paid any  dividends  on its common  shares and has no policy
with respect to the payment of dividends.

OWNERSHIP OF SECURITIES AND CHANGE OF CONTROL

Except for the Investment Canada Act,  discussed below, 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
foreign law or by the constituent documents of the Company.

Any person who beneficially owns or controls,  directly or indirectly, more than
10% of the Company's  voting  shares is considered an insider,  and must file an
insider  report  with the  British  Columbia,  Alberta  and  Ontario  Securities
Commissions  within ten days of  becoming  an insider  disclosing  any direct or
indirect  beneficial  ownership of, or control over direction over securities of
the Company. In addition, if the Company itself holds any of its own securities,
the Company must disclose such ownership.

There are no  provisions in the Company's  Continuation  Application,  Notice of
Articles  and  Articles  that would  have an effect of  delaying,  deferring  or
preventing a change in control of the Company  operating  only with respect to a
merger,  acquisition  or corporate  restructuring  involving  the Company or its
subsidiaries.

CHANGES TO RIGHTS AND RESTRICTIONS OF SHARES

Under the BCBCA and the Company's Articles,  if the Company wishes to change the
rights  and  restrictions  of the  common  shares the  Company  must  obtain the
approval of the shareholders by Special Resolution.

SHAREHOLDER MEETINGS

ANNUAL AND EXTRAORDINARY GENERAL MEETINGS

Under the BCBCA and the Company's Articles, the Company's annual general meeting
is to be held once in each  calendar  year and not more than 15 months after the
previous  meeting.  No advance  notice  will be required  to be  published  at a
meeting where directors are to be elected.  The Company,  under the BCBCA,  must
give  shareholders  not less than 21 days' notice of any general  meeting of the
shareholders.

 An extraordinary  general meeting of shareholders may be called at any time for
 the transaction of any business the general nature of which is specified in the
 notice calling the meeting.

 The BCBCA  contemplates  three ways for a general meeting of shareholders to be
 called: (a) by the directors; (b) by requisition by the shareholders; or (c) by
 court order.

         (a)      By the Directors.  The Company must give shareholders not less
                  than 21 days notice of any general meeting of the shareholders
                  and not more than two months  before the date of the  meeting.
                  The  directors  may fix in  advance a date,  which is no fewer
                  than 35 days or no more than 60 days  prior to the date of the
                  meeting,  whereby all the holders of common  shares as at that
                  date are entitled to attend and vote at a general meeting.

         (b)      Requisition by  Shareholders.  The requisition must be made by
                  shareholders  holding  not les than 1/20 of the issued  shares
                  carrying  the right to vote at a general  meeting  at the time
                  the Company receives the requisition.  If a general meeting is
                  properly  requisitioned,  the  directors  must  call a general



                                      -80-
<PAGE>

                  meeting to transact the business specified in the requisition,
                  to  be  held  within  four  months   after  the  date  of  the
                  requisition  is  received  by the  Company.  The notice of the
                  meeting  must be sent at least 21 days and not more  than four
                  months before the date of the meeting.

         (c)      By Court  Order.  The court may on its own  motion,  or on the
                  application  of  the  Company,  a  director  or a  shareholder
                  entitled  to vote at the  meeting,  order  that a  meeting  of
                  shareholders  be called,  held and conducted in the manner the
                  court considers appropriate, any may give instructions to that
                  effect.  The court may make this order of it is  impracticable
                  for the Company to call or conduct the meeting in the required
                  manner, if the Company fails to do so, or for any other reason
                  that the court considers appropriate.


On a show of hands,  every person who is present,  a shareholder or proxy holder
and entitled to vote shall have one vote. Whenever a vote by show of hands shall
have been taken upon a  question,  unless a ballot  thereon  is so  required  or
demanded,  a  declaration  by the Chairman of the meeting that the vote upon the
resolution has been carried or carried by the necessary  majority or is defeated
must be entered in the minutes of the meeting and shall be  conclusive  evidence
of the fact without proof of the number or  proportion of the votes  recorded in
favor of or against the  resolution and the result of the vote so taken shall be
the decision of the members upon the said question.

DIFFERENCES FROM REQUIREMENTS IN THE UNITED STATES

Except for the Company's quorum  requirements,  certain  requirements related to
related party transactions,  the requirement for notice of shareholder  meetings
and the approval of amendments to the  Company's  articles,  which are discussed
above,  there  are no  significant  differences  in the  law  applicable  to the
Company,  in the areas outlined  above,  in British  Columbia  versus the United
States. In most states in the United States, a quorum must consist of a majority
of the shares  entitled to vote. Some states allow for a reduction of the quorum
requirements  to less than a majority of the shares  entitled to vote.  Having a
lower  quorum  threshold  may  allow  a  minority  of the  shareholders  to make
decisions about the Company,  its management and operations.  In addition,  most
states  in the  United  States  require  that a notice of  meeting  be mailed to
shareholders  prior to the meeting date.  Additionally,  in the United States, a
director may not be able to vote on the approval of any transaction in which the
director has a interest.  Generally,  most states in the United  States  require
amendments  to a company's  articles of  incorporation  and certain  significant
transactions,  such as mergers and the sale or transfer of all or  substantially
all of a  company's  assets,  to be approved by at least a majority of the votes
cast by the holders of the issued and outstanding  shares.  Some states, or some
older  corporations,  may require approval of amendments and certain significant
transactions  by  2/3  of the  votes  cast  by the  holders  of the  issued  and
outstanding shares. In addition,  in the United States voting by separate voting
groups may be required on the  approval of any such  amendments  and/or  certain
significant corporate transactions.

MATERIAL CONTRACTS

The following is a listing of contracts material to the business of the Company,
which were not entered into in the ordinary  course of business,  during the two
years preceding the date of this annual report:

(1)      Purchase and Sale Agreement, dated December 18, 2003, between CalEx and
         PNP Petroleum  Inc.  relating to the  acquisition of an interest in the
         West Ranch Field, Texas. See "Item 4.
         Information on the Company - Business Overview."

(2)      Purchase and Sale  Agreement,  dated March 1, 2004,  between  CalEx and
         Westport Petroleum Inc. relating to the sale of an interest in the West
         Ranch Field,  Texas. See "Item 4. Information on the Company - Business
         Overview."

(3)      Letter  Agreement,  dated  March  17,  2005,  among  the  Company,  the
         shareholders  of 0724000 B.C. Ltd.  (formerly  Magellan Gold Corp.  and
         Centrasia Mining Corp.),  and 0724000 B.C. Ltd, regarding the Centrasia
         Acquisition,  which was replaced by the Share Purchase Agreement listed
         below.  See "Item 4.  Information on the Company - Business  Overview -
         Centrasia Acquisition."



                                      -81-
<PAGE>


(4)      Marsa  Option,  amended as of July 8, 2005,  between  0724000 B.C. Ltd.
         (formerly  Magellan  Gold  Corp.  and  Centrasia  Mining  Corp.),  BMC,
         Magellan Gold (BVI) Inc. and Marsa Gold Corp. See "Item 4.  Information
         on the Company - Business Overview - Marsa Option."

(5)      Sponsorship  Agreement,  dated July 20, 2005, between Canaccord Capital
         Corporation and the Company.  See "Item 4. Information on the Company -
         Business Overview - Centrasia Acquisition."

(6)      Share Purchase  Agreement,  dated July 25, 2005 among the Company,  the
         shareholders  of 0724000 B.C. Ltd.  (formerly  Magellan Gold Corp.  and
         Centrasia Mining Corp.), and 0724000 B.C. Ltd. See "Item 4. Information
         on the Company - Business Overview - Centrasia Acquisition."

(7)      Loan Agreement among Marsa,  Aitas, BMC and 0724000 B.C. Ltd. (formerly
         Magellan  Gold Corp.  and Centrasia  Mining Corp.) dated  September 24,
         2004,  as  amended,  on  January  18,  2005 by the  Amending  Agreement
         described below. See "Item 4. Information on the Company - Business
         Overview - Marsa Option."

(8)      Pledge Agreement among 0724000 B.C. Ltd.  (formerly Magellan Gold Corp.
         and  Centrasia  Mining  Corp.),  BMC and Marsa dated July 8, 2005.  See
         "Item 4. Information on the Company - Business
         Overview - Marsa Option."

(9)      Guarantee  Agreement  dated July 8, 2005  executed by Marsa in favor of
         0724000 B.C. Ltd.  (formerly  Magellan Gold Corp. and Centrasia  Mining
         Corp.). See "Item 4. Information on the
         Company - Business Overview - Marsa Option."

(10)     Demand Promissory Note from BMC to 0724000 B.C. Ltd. (formerly Magellan
         Gold Corp.  and Centrasia  Mining Corp.) dated  September 24, 2004. See
         "Item 4. Information on the Company -
         Business Overview - Marsa Option."

(11)     Assignment  Agreement  dated  September 14, 2005,  between 0724000 B.C.
         Ltd.  (formerly  Magellan Gold Corp.  and  Centrasia  Mining Corp.) and
         Magellan  Gold  (BVI) Inc.  assigning  724 BC's  interest  in the Marsa
         Option, the Loan Agreement,  the Promissory Note,  Guarantee  Agreement
         and the Pledge  Agreement to the Company.  See "Item 4.  Information on
         the Company - Business Overview -
         Marsa Option."

(12)     Amending Agreement dated January 18, 2005 among Marsa Gold Corp., Aitas
         Mining  Company,  Bulakashu  Mining  Company LLC, and 0724000 B.C. Ltd.
         (formerly Magellan Gold Corp. and Centrasia Mining Corp.), amending the
         terms of the Loan Agreement and the Demand  Promissory  Note. See "Item
         4. Information on the Company - Business Overview - Marsa Option."

(13)     Employment  Agreement dated April 1, 2004, between Douglas Turnbull and
         0724000 B.C. Ltd.  (formerly  Magellan Gold Corp. and Centrasia  Mining
         Corp.).  See "Item 6.  Directors,  Senior  Management  and  Employees -
         Compensation - Executive Compensation - Centrasia - Employment
         Agreements."

(14)     Assignment  Agreement  dated September 14, 2005 between the Company and
         0724000 B.C. Ltd., assigning the Turnbull Agreement to the Company. See
         "Item 6.  Directors,  Senior  Management and Employees - Compensation -
         Executive Compensation - Centrasia - Employment Agreements."

(15)     Surplus  Security  Escrow  Agreement  among the  Issuer,  Computershare
         Investor  Services Inc.,  Douglas  Turnbull,  Cary  Pinkowski,  Gregory
         Crowe,  Lindsay Bottomer,  James Harris,  William J. Tafuri,  and Robin
         Merrifield  dated  September 12, 2005. See "Item 7. Major  Shareholders
         and Related Party  Transactions  - Escrowed  Shares - Surplus  Escrowed
         Shares."

(16)     Value  Security  Escrow  Agreement  among  the  Issuer,   Computershare
         Investor  Services  Inc.,  Douglas  Turnbull,  Gregory  Crowe,  Lindsay
         Bottomer,  James Harris, and Marsa Gold Corp. dated September 12, 2005.
         See "Item 7.  Major  Shareholders  and  Related  Party  Transactions  -
         Escrowed Shares -
         Value Escrowed Shares."



                                      -82-
<PAGE>



(17)     Debt  Settlement  Agreements  between the Company,  0724000  B.C.  Ltd.
         (formerly  Magellan Gold Corp. and Centrasia  Mining Corp.) and each of
         the  following  persons,  dated  as  set  forth  below.  See  "Item  4.
         Information on the Company - Business Overview - Centrasia Acquisition"
         and "Item 7.  Major  Shareholders  and  Related  Party  Transactions  -
         Related Party Transactions."

                                              DATE OF DEBT              AMOUNT
                                              SETTLEMENT                OF DEBT
         NAME                                 AGREEMENT                 (CDN$)
         -------------------------            --------------         -----------
         Gregory Crowe                        March 30, 2005           $5,000.00
         James Harris                         March 30, 2005           $5,000.00
         Eric Feilden                         March 30, 2005          $75,000.00
         Lindsay Bottomer                     March 30, 2005           $5,000.00
         Douglas Turnbull                     March 30, 2005           $5,000.00
         Shapur Salem                         March 30, 2005          $55,992.50
         Shapur Salem                         March 30, 2005          $47,768.00
         Elias Alzin                          April 21, 2005           $7,500.00
         Rudi Pinkowski                        June 30, 2005           $8,317.50
         Abdolrahim
            Motalebpoor-Laylabadi             March 30, 2005         $127,922.00
         143 Investments Ltd.                 March 30, 2005          $50,000.00
         Saeedeh Motalebpoor                  May 31, 2005             $7,500.00

(18)     Promissory  Note  in  the  amount  of  $25,000  dated  April  26,  2005
         evidencing  the Baradero  Loan.  The  promissory  note is  non-interest
         bearing unless the note is not paid before the March 14, 2007, in which
         case the note will bear  interest from such date at the rate of 10% per
         annum.
         See "Item 4. Information on the Company - Centrasia Acquisition."

(19)     Management Agreement between Chase Management Ltd. and Centrasia Mining
         Corp.  dated  September  14,  2005.  See  "Item  6.  Directors,  Senior
         Management and Employees - Compensation - Executive
         Compensation - Centrasia - Employment Agreements."

(20)     Agency Agreement  between  Centrasia Mining Corp. and Canaccord Capital
         Corporation  dated September 26, 2005. See "Item 4.  Information on the
         Company - History and Development of the
         Company."

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  stock.  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 stock of the Company)
pursuant to Article X of the reciprocal tax treaty between Canada and the United
States. See "Item 10. Additional Information - Taxation".

Except as  provided  in the  Investment  Canada  Act (the  "Act"),  there are no
limitations  specific to the rights of  non-Canadians to hold or vote the common
stock 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 is
materially  complete and fairly  describes those provisions of the Act pertinent
to an investment by an American investor in the Company.

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

The notification  procedure  involves a brief statement of information about the
investment  in a prescribed  form which is required to be filed with  Investment
Canada by the investor at any time up to 30 days following implementation of the


                                      -83-
<PAGE>


investment.  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 application  for review in the
form prescribed is normally required to be filed with Investment Canada prior to
the investment  taking place and the investment may not be implemented until the
review has been completed and the Minister  responsible for Investment Canada 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,  may be  required  to divest  himself  of  control of the
business that is the subject of the investment.

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

(a)      an investment to establish a new Canadian business; and
(b)      an  investment  to acquire  control of a Canadian  business that is not
         reviewable pursuant to the Act.

An  investment  is  reviewable  under  the Act if there is an  acquisition  by a
non-Canadian of a Canadian business and the asset value of the Canadian business
being acquired equals or exceeds the following thresholds:

(a)      for  non-WTO  Investors,  the  threshold  is  $5,000,000  for a  direct
         acquisition  and over  $50,000,000  for an  indirect  acquisition.  The
         $5,000,000  threshold will apply however for an indirect acquisition if
         the asset value of the Canadian  business being acquired exceeds 50% of
         the asset value of the global transaction;
(b)      except as specified in paragraph  (c) below,  a threshold is calculated
         for  reviewable  direct  acquisitions  by or from  WTO  Investors.  The
         threshold for 2005 is $250,000,000.  Pursuant to Canada's international
         commitments,  indirect  acquisitions  by or from WTO  Investors are not
         reviewable; and
(c)      the  limits  set  out in  paragraph  (a)  apply  to all  investors  for
         acquisitions of a Canadian business that:

         (i)      engages in the production of uranium and owns an interest in a
                  producing uranium property in Canada;
         (ii)     provides   any   financial   services;   (iii)   provides  any
                  transportation service; or (iv) is a cultural business.

Notwithstanding   the  above  limits,  any  investment  which  is  usually  only
notifiable,  including the  establishment of a new Canadian  business engaged 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 may be  reviewed if an
Order-in-Council directing a review is made and a notice is sent to the investor
within 21 days following the receipt of a certified complete notification.

WTO Investor as defined in the Act means:

(a)      an individual, other than a Canadian, who is a national of a WTO Member
         or who has the right of  permanent  residence  in  relation to that WTO
         Member;
(b)      a government of a WTO Member,  whether  federal,  state or local, or an
         agency thereof; (c) an entity that is not a Canadian-controlled entity,
         and that is a WTO investor-controlled
         entity, as determined in accordance with the Act;
(d)      a corporation or limited partnership:

         (i)      that  is  not  a  Canadian-controlled  entity,  as  determined
                  pursuant to the Act;
         (ii)     that is not a WTO investor within the meaning of the Act;
         (iii)    of which less than a  majority  of its  voting  interests  are
                  owned by WTO investors;
         (iv)     that is not  controlled  in fact through the  ownership of its
                  voting interests; and
         (v)      of which two thirds of the members of its board of  directors,
                  or of which two thirds of its  general  partners,  as the case
                  may be, are any combination of Canadians and WTO investors;
(e)      a trust:

         (i)      that  is  not  a  Canadian-controlled  entity,  as  determined
                  pursuant to the Act;



                                      -84-
<PAGE>

         (ii)     that is not a WTO investor within the meaning of the Act;
         (iii)    that is not  controlled  in fact through the  ownership of its
                  voting interests, and
         (iv)     of which two thirds of its  trustees  are any  combination  of
                  Canadians and WTO investors, or

(f)      any other form of business  organization  specified by the  regulations
         that is controlled by a WTO investor.

WTO Member as defined in the Act means a member of the World Trade Organization.

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 or de jure
voting  control  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.

The Act specifically  exempts certain  transactions from either  notification or
review. Included among the 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.

TAXATION

MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES

Management of the Company considers that the following  discussion describes the
material  Canadian  federal  income tax  consequences  applicable to a holder of
Common  Stock 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 shares of Common Stock of the Company in connection  with carrying
on a business in Canada (a "non-resident shareholder").

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  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  description  is not exhaustive of all possible  Canadian  federal
income tax  consequences  and, except for the Tax Proposals,  does not take into
account or anticipate any changes in law,  whether by legislative,  governmental
or judicial action.

DIVIDENDS

Dividends  paid on the common  stock of the  Company to a  non-resident  will be
subject  to  withholding  tax.  The  Canada-U.S.  Income Tax  Convention  (1980)
provides that the normal 25% withholding tax rate is reduced to 15% on dividends
paid on shares of a  corporation  resident  in Canada  (such as the  Company) to
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
which is a resident of the United  States  which owns at least 10% of the voting
shares of the  corporation  paying  the  dividend.  In the event of the  Company
declaring and paying dividends it would withhold any applicable taxes.

CAPITAL GAINS

In general,  a  non-resident  of Canada is not subject to tax under the ITA with
respect  to a  capital  gain  realized  upon  the  disposition  of a share  of a
corporation  resident in Canada that is listed on a prescribed  stock  exchange.
For purposes of the ITA, the Company is listed on a prescribed  stock  exchange.
Non-residents  of Canada who dispose of shares of the Company will be subject to
income tax in Canada with respect to capital gains if:

         (a)      the non-resident holder;
         (b)      persons  with  whom the  non-resident  holder  did not deal at
                  arm's length; or
         (c)      the non-resident holder and persons with whom the non-resident
                  holder did not deal with at arm's length,



                                      -85-
<PAGE>


owned  not less  than 25% of the  issued  shares  of any  class or series of the
Company at any time during the five-year period preceding the disposition.

In the case of a  non-resident  holder to whom shares of the  Company  represent
taxable Canadian  property and who is resident in the United States, no Canadian
taxes will be payable on a capital gain realized on such shares by reason of the
Canada-U.S. Income Tax Convention (1980) (the "Treaty") unless:

         (a)      the value of such  shares  is  derived  principally  from real
                  property situated in Canada; or
         (b)      the non-resident holder is an individual who:
                  (i)      was a resident  of Canada  for 120 months  during any
                           period  of  20   consecutive   years   preceding  the
                           disposition of the shares; and
                  (ii)     was a  resident  of Canada at any time  during the 10
                           years  immediately  preceding the  disposition of the
                           property  and the  shares  (or  shares for which such
                           shares were  substituted in a disposition the gain on
                           which was not  recognized for purposes of taxation in
                           Canada) were owned by the  individual  at the time he
                           ceased to be a resident of Canada.

In such cases, certain transitional relief under the Treaty may be available.

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS


The following is a general  discussion of certain  possible U.S.  federal income
tax consequences,  under current law, generally  applicable to a U.S. Holder (as
hereinafter  defined) of common shares of the Company.  This  discussion is of a
general  nature  only and does not take into  account the  particular  facts and
circumstances, with respect to U.S. federal income tax issues, of any particular
U.S.  Holder.  In addition,  this discussion does not cover any state,  local or
foreign tax consequences.

The following discussion 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
and which are subject to differing  interpretations.  This  discussion  does not
consider the potential  effects,  both adverse and  beneficial,  of any proposed
legislation  which,  if  enacted,  could be applied,  possibly on a  retroactive
basis, at any time.

This  discussion is for general  information  only and it is not intended to be,
nor should it be  construed  to be,  legal or tax  advice to any U.S.  Holder or
prospective  U.S.  Holder of common  shares of the  Company,  and no  opinion or
representation  with respect to the U.S.  federal income tax consequences to any
such U.S. Holder or prospective U.S. Holder is made.  Accordingly,  U.S. Holders
and  prospective  U.S.  Holders of common shares of the Company  should  consult
their own financial  advisor,  legal  counsel or  accountant  regarding the U.S.
federal,  state,  local and foreign tax  consequences of purchasing,  owning and
disposing of common shares of the Company.

U.S. HOLDERS

As used herein,  a "U.S.  Holder" means a holder of common shares of the Company
who is (i) a citizen or  individual  resident  of the U.S.,  (ii) a  corporation
created  or  organized  in or under  the laws of the  U.S.  or of any  political
subdivision  thereof,  (iii) an  estate  whose  income  is  taxable  in the U.S.
irrespective  of source or (iv) a trust subject to the primary  supervision of a
court  within the U.S.  and control of a U.S.  fiduciary as described in Section
7701(a)(30) of the Code. If a partnership or other "pass-through" entity treated
as a partnership for U.S. federal income tax purposes holds common shares of the
Company, the U.S. federal income tax treatment of the partners or owners of such
partnership or other pass-through  entity generally will depend on the status of
such partners or owners and the activities of such  partnership or  pass-through
entity.


                                      -86-
<PAGE>


PERSONS NOT COVERED

This  summary  does not  address the U.S.  federal  income tax  consequences  to
persons  (including  persons who are U.S. Holders) subject to special provisions
of U.S. federal income tax law,  including,  but not limited to, (i) persons who
are tax-exempt organizations,  qualified retirement plans, individual retirement
accounts and other  tax-deferred  accounts,  financial  institutions,  insurance
companies,  real estate investment trusts,  regulated investment  companies,  or
brokers,  dealers or traders in securities,  (ii) persons who have a "functional
currency" other than the U.S.  dollar,  (iii) persons subject to the alternative
minimum tax,  (iv) persons who own their common shares of the Company as part of
a  straddle,  hedging,  conversion  transaction,   constructive  sale  or  other
arrangement  involving  more than one position,  (v) persons who acquired  their
common shares of the Company  through the exercise of employee  stock options or
otherwise as compensation for services,  (vi) persons that own an interest in an
entity that owns common shares of the Company (vii) persons who own, exercise or
dispose of any options, warrants or other rights to acquire common shares of the
Company,  (viii)  persons who are  partners or owners of  partnerships  or other
pass-through entities or (ix) persons who own their common shares of the Company
other than as a capital asset within the meaning of Section 1221 of the Code.

DISTRIBUTION ON COMMON SHARES OF THE COMPANY

U.S.  Holders   receiving   distributions   (including   constructive   indirect
distributions)  with  respect to common  shares of the Company  are  required to
include in gross income for U.S. federal income tax purposes the gross amount of
such distributions,  equal to the U.S. dollar value of such distributions on the
date of receipt  (based on the exchange  rate on such date),  to the extent that
the Company has current or accumulated  earnings and profits,  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 U.S. federal income tax liability or, alternatively, may be deducted in
computing the U.S.  Holder's U.S.  federal  taxable  income by those who itemize
deductions. (See more detailed discussion at "Foreign Tax Credit" below). To the
extent  that  distributions  from the  Company  exceed  current  or  accumulated
earnings and profits of the Company, such distributions will be treated first as
a return of capital,  to the extent of the U.S.  Holder's  adjusted basis in the
common  shares,  and  thereafter as gain from the sale or exchange of the common
shares of the Company.  (See more detailed  discussion at "Disposition of Common
Shares of the Company" below)

To the extent  that the  Company is a Passive  Foreign  Investment  Company,  as
defined below, in the current or prior year as discussed below, the Company will
not be a "qualified  foreign  corporation" as defined in Section  1(h)(11)(C) of
the Code. Accordingly,  distributions from the Company received by U.S. Holders,
who are subject to tax under  Section 1 of the Code and for which the Company is
a PFIC,  would not be eligible to be taxed at the  preferred  long-term  capital
gains tax rate.

In the case of foreign currency received as a distribution 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, an individual whose realized
gain does not exceed $200 will not recognize that gain, to the extent that there
are no expenses  associated with the transaction  that meet the requirements 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.

Dividends  paid on the  common  shares  of the  Company  generally  will  not be
eligible  for  the   "dividends   received   deduction"   allowed  to  corporate
shareholders receiving dividends from certain U.S.  corporations.  Under certain
circumstances,  a U.S.  Holder  that  is a  corporation  and  that  owns  shares
representing  at least 10% of the total  voting power and the total value of the
Company's  outstanding  shares may be entitled to a 70%  deduction  of the "U.S.
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).  The  availability  of the  dividends
received  deduction is subject to several complex  limitations  which are beyond
the scope of this  discussion,  and U.S. Holders of common shares of the Company
should  consult  their  own  financial  advisor,  legal  counsel  or  accountant
regarding the dividends received deduction.

Certain  information  reporting  and  backup  withholding  rules may apply  with
respect  to  certain  payments  related  to  the  Company's  common  shares.  In
particular,  a payor or middleman  within the U.S.,  or in certain cases outside
the U.S.,  will be required to withhold 28% of any payments to a U.S.  Holder of




                                      -87-
<PAGE>


the Company's  common shares of dividends on, or proceeds from the sale of, such
common  shares  within the U.S.,  if a U.S.  Holder fails to furnish its correct
taxpayer  identification  number or otherwise fails to comply with, or establish
an exemption from, the backup withholding tax requirements. Any amounts withheld
under the U.S.  backup  withholding  tax rules  will be allowed as a refund or a
credit against the U.S. Holder's U.S. federal income tax liability, provided the
required information is furnished to the IRS.

FOREIGN TAX CREDIT

A U.S.  Holder who pays (or has withheld from  distributions)  Canadian or other
foreign income tax with respect to the ownership of common shares of the Company
may be entitled, at the option of the U.S. Holder, to either receive a deduction
or a tax  credit  for U.S.  federal  income tax  purposes  with  respect to such
foreign tax paid or withheld. Generally, it will be more advantageous to claim a
credit because a credit reduces U.S. federal income taxes on a dollar-for-dollar
basis,  while a deduction  merely reduces the taxpayer's  income subject to U.S.
federal income tax. This election is made on a year-by-year basis and applies to
all foreign taxes paid by (or withheld from  distributions  to) the U.S.  Holder
during that year.

There are  significant  and  complex  limitations  that apply to the foreign tax
credit,  among which is the general limitation that the credit cannot exceed the
proportionate share of the U.S. Holder's U.S. income tax liability that the U.S.
Holder's  "foreign source" income bears to his or its worldwide  taxable income.
In applying this  limitation,  the various items of income and deduction must be
classified as either  "foreign  source" or "U.S.  source."  Complex rules govern
this  classification   process.  In  addition,  this  limitation  is  calculated
separately with respect to specific classes of income such as "passive  income,"
"high withholding tax interest," "financial services income," "shipping income,"
and  certain  other  classifications  of income.  Dividends  distributed  by the
Company  will  generally   constitute  "foreign  source"  income,  and  will  be
classified  as  "passive  income"  or,  in the  case of  certain  U.S.  Holders,
"financial services income" for these purposes.

In addition,  U.S. Holders that are corporations and that own 10% or more of the
voting stock of the Company may be entitled to an "indirect"  foreign tax credit
under  Section 902 of the Code with  respect to the payment of  dividends by the
Company   under  certain   circumstances   and  subject  to  complex  rules  and
limitations.  The  availability of the foreign tax credit and the application of
the  limitations  with respect to the foreign tax credit are fact specific,  and
each U.S.  Holder  of common  shares of the  Company  should  consult  their own
financial advisor,  legal counsel or accountant regarding the foreign tax credit
rules.

DISPOSITION OF COMMON SHARES OF THE COMPANY

A U.S.  Holder  will  recognize  gain or loss  upon the  sale or  other  taxable
disposition  of common  shares of the Company equal to the  difference,  if any,
between  (i) the  amount  of cash and the  fair  market  value  of any  property
received,  and (ii) the  shareholder's  tax  basis in the  common  shares of the
Company. This gain or loss will be capital gain or loss if the common shares are
a  capital  asset in the  hands  of the U.S.  Holder,  which  generally  will be
long-term  capital gain or loss if the common shares of the Company are held for
more than one year.

Preferential tax rates apply to long-term capital gains of U.S. Holders that are
individuals, estates or trusts. If the common shares of the Company are held for
more than five years, a lower long-term capital gains tax rate may apply.  There
are currently no preferential  tax rates for long-term  capital gains for a U.S.
Holder that is a corporation  (other than a corporation  subject to Subchapter S
of the Code).  Deductions  for net  capital  losses are  subject to  significant
limitations.  For U.S. Holders that are not corporations,  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  that  are
corporations  (other than corporations  subject to Subchapter S of the Code), an
unused net capital loss may be carried back three years and carried forward five
years  from the loss year to be offset  against  capital  gains  until  such net
capital loss is thereby exhausted.

OTHER CONSIDERATIONS FOR U.S. HOLDERS

In the following  circumstances,  the above sections of this  discussion may not
describe the U.S. federal income tax consequences to U.S. Holders resulting from
the ownership and disposition of common shares of the Company:



                                      -88-
<PAGE>



CONTROLLED FOREIGN CORPORATION

If more than 50% of the total voting  power or the total value of the  Company's
outstanding shares is owned, directly or indirectly, by citizens or residents of
the U.S.,  U.S.  partnerships  or  corporations,  or U.S.  estates or trusts (as
defined  by the Code  Section  7701(a)(30)),  each of  which  own,  directly  or
indirectly,  10% or more of the total voting power of the Company's  outstanding
shares (each a "10% Shareholder"), the Company could be treated as a "Controlled
Foreign Corporation" ("CFC") under Section 957 of the Code.

The classification of the Company as a CFC would have many complex implications,
including that 10% Shareholders of the Company would generally (i) be treated as
having received a current  distribution of the Company's  "Subpart F income" and
(ii) would also be subject to current U.S.  federal income tax on their pro rata
shares of the Company's  earnings  invested in "U.S.  property." The foreign tax
credit may  reduce the U.S.  federal  income tax on these  amounts  for such 10%
Shareholders  (See more detailed  discussion at "Foreign Tax Credit" above).  In
addition,  under  Section 1248 of the Code,  gain from the sale or other taxable
disposition  of common  shares of the Company by a U.S.  Holder that is or was a
10% Shareholder at any time during the five-year  period ending with the date of
sale is treated as ordinary  income to the extent of earnings and profits of the
Company attributable to the common shares sold or exchanged.

If the Company is classified  as both a Passive  Foreign  Investment  Company as
described  below and a CFC,  the  Company  generally  will not be  treated  as a
Passive Foreign Investment  Company with respect to 10% Shareholders.  This rule
generally  will be effective  for taxable  years of 10%  Shareholders  beginning
after 1997 and for  taxable  years of the  Company  ending  with or within  such
taxable years of 10% Shareholders.

PASSIVE FOREIGN INVESTMENT COMPANY

Certain U.S. income tax legislation  contains rules governing  "Passive  Foreign
Investment  Companies"  ("PFIC") which can have  significant tax effects on U.S.
Holders of foreign  corporations.  Section  1297 of the Code defines a PFIC as a
corporation that is not formed in the U.S. and, for any taxable year, either (i)
75% or more of its  gross  income  is  "passive  income"  or  (ii)  the  average
percentage,  by fair market value (or, if the corporation is not publicly traded
and either is a controlled foreign corporation or makes an election, by adjusted
tax  basis),  of its  assets  that  produce  or are held for the  production  of
"passive  income"  is 50% or  more.  "Passive  income"  includes,  for  example,
dividends, interest, certain rents and royalties, certain gains from the sale of
stock and securities, and certain gains from commodities transactions.  However,
gains resulting from commodities  transactions  are generally  excluded from the
definition of passive income if "substantially all" of a merchant's,  producer's
or  handler's  business  is as an active  merchant,  producer or handler of such
commodities.

For  purposes  of the  PFIC  income  test  and the  assets  test,  if a  foreign
corporation  owns (directly or indirectly) at least 25% by value of the stock of
another corporation, such foreign corporation shall be treated as if it (a) held
a proportionate share of the assets of such other corporation,  and (b) received
directly its proportionate share of the income of such other corporation.  Also,
for purposes of such PFIC tests,  passive  income does not include any interest,
dividends,  rents or  royalties  that are  received or accrued  from a "related"
person to the extent  such amount is  properly  allocable  to the income of such
related  person which is not passive  income.  For these  purposes,  a person is
related  with respect to a foreign  corporation  if such person  "controls"  the
foreign  corporation or is controlled by the foreign  corporation or by the same
persons  that control the foreign  corporation.  For these  purposes,  "control"
means  ownership,  directly or indirectly,  of stock possessing more than 50% of
the total voting power of all classes of stock  entitled to vote or of the total
value of stock of a corporation.

While the Company has not  determined  whether it is a PFIC, if the Company were
to be a PFIC, a U.S.  Holder who holds stock in the Company  would be subject to
U.S.  federal income taxation under one of three  alternative  tax regimes.  The
following is a discussion of such three alternative tax regimes.

QEF ELECTION

A U.S.  Holder who elects in a timely  manner to treat the  Company as a QEF (an
"Electing  U.S.  Holder")  will be subject,  under  Section 1293 of the Code, to
current  U.S.  federal  income  tax for any  taxable  year in which the  Company
qualifies  as a PFIC on his pro rata  share of the  Company's  (i) "net  capital
gain" (the excess of net  long-term  capital  gain over net  short-term  capital


                                      -89-
<PAGE>


loss), which will be taxed as long-term capital gain to the Electing U.S. Holder
and (ii)  "ordinary  earnings"  (the  excess of earnings  and  profits  over net
capital  gain),  which will be taxed as  ordinary  income to the  Electing  U.S.
Holder,  in each  case,  for the  shareholder's  taxable  year in which (or with
which) the Company's  taxable year ends,  regardless of whether such amounts are
actually distributed.

The effective QEF election also allows the Electing U.S. Holder to (i) generally
treat any gain realized on the  disposition  of the Company's  common shares (or
deemed to be realized on the pledge of his shares) as capital  gain;  (ii) treat
his share of the Company's  net capital gain, if any, as long-term  capital gain
instead of ordinary income;  and (iii) either avoid interest  charges  resulting
from PFIC  status  altogether,  or make an annual  election,  subject to certain
limitations,  to defer  payment of current  taxes on his share of the  Company's
annual realized net capital gain and ordinary earnings subject,  however,  to an
interest  charge.  If the Electing  U.S.  Holder is not a  corporation,  such an
interest  charge would  generally be treated as "personal  interest" that is not
deductible.

SECTION 1291 RULES

If a U.S.  Holder does not make a timely QEF election  during a year in which it
holds (or is deemed to have held) the common  shares in question and the Company
is a PFIC (a  "Non-Electing  U.S.  Holder"),  then special  taxation rules under
Section 1291 of the Code will apply to (i) gains realized on the disposition (or
deemed to be realized by reasons of a pledge) of the Company's common shares and
(ii) certain "excess  distributions"  (generally,  distributions received in the
current  taxable  year that are in excess of 125% of the  average  distributions
received  during the three  preceding  years or, if shorter,  the U.S.  Holder's
holding period) by the Company.

A Non-Electing  U.S.  Holder  generally  would be required to pro rate all gains
realized  on the  disposition  of the  Company's  common  shares  and all excess
distributions  on the Company's common shares over the entire holding period for
the common shares. All gains or excess distributions allocated to prior years of
the U.S. Holder (other than years prior to the first taxable year of the Company
during such U.S. Holder's holding period and beginning after January 1, 1987 for
which it was a PFIC)  would be taxed at the highest tax rate for each such prior
year applicable to ordinary income.  The Non-Electing  U.S. Holder also would be
liable for  interest on the  foregoing  tax  liability  for each such prior year
calculated  as if such  liability  had been due with  respect to each such prior
year. A Non-Electing  U.S. Holder that is not a corporation must generally treat
this interest charge as "personal interest" which, as discussed above, is wholly
nondeductible.  The  balance  of the  gain or the  excess  distribution  will be
treated as ordinary income in the year of the disposition or  distribution,  and
no interest charge will be incurred with respect to such balance.

If the Company is a PFIC for any taxable year during which a  Non-Electing  U.S.
Holder holds Company common shares, then the Company will continue to be treated
as a PFIC with respect to such Company  common  shares,  even if it is no longer
definitionally a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC
status by  electing  to  recognize  gain  (which  will be taxed  under the rules
discussed above for Non-Electing  U.S. Holders) as if such Company common shares
had been sold on the last day of the last taxable year for which it was a PFIC.

MARK-TO-MARKET ELECTION

Effective for tax years of U.S. Holders  beginning after December 31, 1997, U.S.
Holders who hold, actually or constructively,  marketable stock (as specifically
defined in the Treasury  Regulations) of a foreign corporation that qualifies as
a PFIC may  annually  elect to mark such stock to the market (a  "mark-to-market
election").  If such an election is made, such U.S. Holder will generally not be
subject to the special  taxation rules of Section 1291  discussed  above. A U.S.
Holder  who makes the  mark-to-market  election  will  include in income for the
taxable year for which the  election was made an amount equal to the excess,  if
any,  of the fair  market  value of the common  shares of the  Company as of the
close of such tax year over such U.S.  Holder's  adjusted  basis in such  common
shares.  In addition,  the U.S. Holder may be allowed a deduction for the lesser
of (i) the  excess,  if any,  of such U.S.  Holder's  adjusted  tax basis in the
common  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
common 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 tax year but
for the Section 1291 interest on tax deferral rules discussed above with respect
to Non-Electing U.S. Holders, over (B) the mark-to-market losses for shares that


                                      -90-
<PAGE>

were allowed as deductions  for prior tax years.  A U.S.  Holder's  adjusted tax
basis in the common shares of the Company will be adjusted to reflect the amount
included in or deducted from income as a result of a mark-to-market  election. A
mark-to-market  election  applies to the taxable  year in which the  election is
made and to each  subsequent  taxable year,  unless the Company's  common shares
cease  to be  marketable,  as  specifically  defined,  or the  IRS  consents  to
revocation  of the  election.  U.S.  Holders  should  consult  their tax advisor
regarding the manner of making such an election.

INSPECTION OF DOCUMENTS

Copies of the  documents  referred to in this annual  report may be inspected at
the  Company's  corporate  office  at Suite  1305 - 1090  West  Georgia  Street,
Vancouver, British Columbia V6E 3V7, during normal business hours.


ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
--------------------------------------------------------------------------------

Not applicable.


ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.
--------------------------------------------------------------------------------

Not applicable.


                                     PART II


ITEM 13.  ITEM DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.
--------------------------------------------------------------------------------

Not applicable.


ITEM 14.  MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
          PROCEEDS.
--------------------------------------------------------------------------------

Not applicable.


ITEM 15.  CONTROLS AND PROCEDURES.
--------------------------------------------------------------------------------

An evaluation was performed under the supervision and with the  participation of
the Company's  management,  including Mr. Turnbull,  the Company's President and
Chief Executive Officer,  and Mr. DeMare, the Company's Chief Financial Officer,
of the  effectiveness  of the design and operation of the  Company's  disclosure
controls  and  procedures  pursuant  to Rules  13a-15(b)  and  15d-15(b)  of the
Securities  Exchange Act of 1934 (the "Exchange Act") as of May 31, 2005.  Based
upon that evaluation,  Messrs. Turnbull and DeMare, concluded that 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 recorded,  processed,  summarized and reported  within
the time periods  specified in  Securities  and  Exchange  Commission  rules and
forms.

During  the  fiscal  year  ended May 31,  2005,  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]
--------------------------------------------------------------------------------

Not applicable.



                                      -91-
<PAGE>


ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT.
--------------------------------------------------------------------------------
The Board of Directors  has  determined  that the Company has at least one audit
committee  financial expert,  Mr. Nick DeMare, who serves on the Company's audit
committee.  Mr. DeMare is not considered to be an "independent director" as that
term is defined in Rule  4200(a)(15)  of the National  Association of Securities
Dealers.


ITEM 16B.   CODE OF ETHICS.
--------------------------------------------------------------------------------

The Company has not yet adopted a code of ethics that  applies to the  Company's
principal executive officer,  principal financial officer,  principal accounting
officer,  or controller,  or persons  performing  similar  functions.  Given the
Company's  current  operations,  management does not believe a code of ethics is
necessary at this stage of the Company's development.


ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.
--------------------------------------------------------------------------------

AUDIT FEES

For the  fiscal  years  ended May 31,  2005 and 2004,  the  Company's  principal
accountant billed the Company $11,606 and $9,989, respectively, for the audit of
the Company's annual financial statements or services that are normally provided
by the  accountant  in  connection  with  statutory  and  regulatory  filings or
engagements.

AUDIT-RELATED FEES

For the  fiscal  years  ended May 31,  2005 and 2004,  the  Company's  principal
accountant billed $nil and billed $nil  respectively,  for assurance and related
services that were reasonably  related to the performance of the audit or review
of the Company's  financial  statements  outside of those fees  disclosed  above
under "Audit Fees".

TAX FEES

For the  fiscal  years  ended May 31,  2005 and 2004,  the  Company's  principal
accountant billed $nil and billed $nil,  respectively,  for tax compliance,  tax
advice, and tax planning services.

ALL OTHER FEES

For the  fiscal  years  ended May 31,  2005 and 2004,  the  Company's  principal
accountant  billed  $1,766 and  billed  $nil,  respectively,  for  products  and
services  other than  those set forth  above,  which  included  discussions  and
consultations on the accounting and audit implications of the proposed Centrasia
Acquisition.

PRE-APPROVAL POLICIES AND PROCEDURES

Prior to engaging the Company's accountants to perform a particular service, the
Company's audit  committee  obtains an estimate for the service to be performed.
The  Company's  audit  committee   reviews  and   pre-approves   all  audit  and
audit-related  services and the fees and other compensation related thereto, and
any non-audit  services,  provided by the Company's external auditors.  Provided
the pre-approval of the non-audit services is presented to the audit committee's
first scheduled  meeting following such approval such authority may be delegated
by  the  audit  committee  to one  or  more  independent  members  of the  audit
committee.  The audit  committee in accordance  with  procedures for the Company
approved all of the services described above.

At no time since the  commencement  of the  Company's  most  recently  completed
financial year has the Company relied on the waiver in paragraph (c)(7)(i)(C) of
Rule 2-01 of Regulation S-X.



                                      -92-
<PAGE>


To the best of the Company's knowledge,  no more than fifty percent of the hours
expended on the auditors' engagement to audit the Company's financial statements
for the fiscal  year ended May 31, 2005 were  attributed  to work  performed  by
persons other than the auditor's full-time, permanent employees.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.
--------------------------------------------------------------------------------

Not applicable.


ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
--------------------------------------------------------------------------------

During the fiscal year ended May 31, 2005, there were no purchases made by or on
behalf  of  the  Company  or an  "affiliated  purchaser"  (as  defined  in  Rule
10b-18(a)(3)  adopted under the Securities Exchange Act of 1934),  including any
officer or director of the  Company,  of shares or other units of the  Company's
common shares


                                    PART III


ITEM 17.  FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------

See attached pages F-1 through F-19.


ITEM 18.  FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------

Not applicable.


ITEM 19.  EXHIBITS.
--------------------------------------------------------------------------------

      EXHIBIT
       NUMBER     DESCRIPTION

         1.1      Certificate of Continuation and Notice of Articles (5)

         1.2      Articles (5)

         1.3      Notice of Alteration - Form 11

         2.1      Option  Agreement,   amended  as  of  July  8,  2005,  between
                  Bulakashu  Mining Company Ltd,  Marsa Gold Corp.  0724000 B.C.
                  Ltd.  (formerly  Magellan  Gold  Corp.  and  Centrasia  Mining
                  Corp.),  Baradero  Resources  Limited and Magellan  Gold (BVI)
                  Inc. (Incorporated by Reference to Exhibit 4.13)

         2.2      Loan Agreement  dated  September 24, 2004,  among 0724000 B.C.
                  Ltd. (formerly Magellan Gold Corp. and Centrasia Mining Corp.)
                  Marsa Gold Corp.,  Aitas Mining Company,  and Bulakashu Mining
                  Company,  as  amended,   January  18,  2005  (Incorporated  by
                  Reference to Exhibit 4.17).

         2.3      Demand Promissory Note dated September 24, 2004  (Incorporated
                  by Reference to Exhibit 4.23)

         2.4      Amending  Agreement  dated  January  18, 2005 among Marsa Gold
                  Corp., Aitas Mining Company,  Bulakashu Mining Company LLC and
                  0724000 B.C. Ltd.  (formerly Magellan Gold Corp. and Centrasia
                  Mining Corp.) (Incorporated by Reference to Exhibit 4.22)



                                      -93-
<PAGE>


         2.5      Promissory Note from 0724000 B.C. Ltd. (formerly Magellan Gold
                  Corp.  and  Centrasia  Mining  Corp.) in the amount of $25,000
                  dated April 26,  2005.  (Incorporated  by Reference to Exhibit
                  4.21)

         4.2      Escrow  Agreement  dated June 28,  2000 among the  Company and
                  each  of  Donald  W.  Busby  1999  Irrevocable   Trust,  Chase
                  Management Ltd., Nick DeMare and William Lee. (1)

         4.3      Stock Option Plan 2004 (2)

         4.8      Escrow  Agreement  dated September 26, 2001 among the Company,
                  Computershare  Trust  Company of Canada and each of  Greystoke
                  Investments Inc., Ted Carlsen and Monica Carlsen (3)

         4.10     Purchase and Sale  Agreement  dated  December 18, 2003 between
                  CalEx and PNP Petroleum Inc. (4)

         4.11     Purchase and Sale  Agreement  effective  March 1, 2004 between
                  CalEx and Westport Petroleum, Inc. (5)

         4.12     Letter  Agreement,   dated  March  17,  2005,  among  Baradero
                  Resources  Limited,  the  shareholders  of 0724000  B.C.  Ltd.
                  (formerly Magellan Gold Corp. and Centrasia Mining Corp.), and
                  0724000 B.C. Ltd.

         4.13     Option  Agreement,   amended  as  of  July  8,  2005,  between
                  Bulakashu  Mining Company Ltd,  Marsa Gold Corp.  0724000 B.C.
                  Ltd.  (formerly  Magellan  Gold  Corp.  and  Centrasia  Mining
                  Corp.),  Baradero  Resources  Limited and Magellan  Gold (BVI)
                  Inc.

         4.14     Sponsorship Agreement,  dated July 20, 2005, between Canaccord
                  Capital Corporation and Baradero Resources Limited.

         4.15     Form of Share  Purchase  Agreement,  dated July 25, 2005 among
                  Baradero Resources  Limited,  the shareholders of 0724000 B.C.
                  Ltd.  (formerly  Magellan  Gold  Corp.  and  Centrasia  Mining
                  Corp.), and 0724000 B.C. Ltd.

         4.16     Debt Settlement  Agreements between the Company,  0724000 B.C.
                  Ltd. (formerly Magellan Gold Corp. and Centrasia Mining Corp.)
                  and each of certain  debtholders  of 0724000 B.C.  Ltd.  dated
                  various dates between March 30, 2005 and June 30, 2005.

         4.17     Loan Agreement  dated  September 24, 2004,  among 0724000 B.C.
                  Ltd.  (formerly  Magellan  Gold  Corp.  and  Centrasia  Mining
                  Corp.),  Marsa Gold Corp., Aitas Mining Company, and Bulakashu
                  Mining Company, as amended, January 18, 2005.

         4.18     Guarantee  Agreement dated July 8, 2005 executed by Marsa Gold
                  Corp.  in favor of 0724000 B.C. Ltd.  (formerly  Magellan Gold
                  Corp. and Centrasia Mining Corp.)

         4.19     Pledge  Agreement  dated July 8, 2005 among  0724000 B.C. Ltd.
                  (formerly  Magellan Gold Corp.  and Centrasia  Mining  Corp.),
                  Bulakashu Mining Company Ltd., and Marsa Gold Corp.

         4.20     Employment  Agreement  dated  April 1,  2004  between  Douglas
                  Turnbull and 0724000 B.C. Ltd.  (formerly  Magellan Gold Corp.
                  and Centrasia  Mining Corp.) and  Assignment  Agreement  dated
                  September 14, 2005 between  Centrasia  Mining Corp.  (formerly
                  Baradero Resources Limited).

         4.21     Promissory Note from 0724000 B.C. Ltd. (formerly Magellan Gold
                  Corp.  and  Centrasia  Mining  Corp.) in the amount of $25,000
                  dated April 26, 2005.



                                      -94-
<PAGE>


         4.22     Amending  Agreement  dated  January  18, 2005 among Marsa Gold
                  Corp., Aitas Mining Company,  Bulakashu Mining Company LLC and
                  0724000 B.C. Ltd.  (formerly Magellan Gold Corp. and Centrasia
                  Mining Corp.)

         4.23     Demand Promissory Note dated September 24, 2004

         4.24     Assignment Agreement dated September 14, 2005, between 0724000
                  B.C. Ltd.  (formerly  Magellan Gold Corp. and Centrasia Mining
                  Corp.) and Magellan Gold (BVI) Inc.

         4.25     Stock Option Plan 2005

         4.26     Surplus  Security Escrow  Agreement  among Baradero  Resources
                  Limited,   Computershare   Investor  Services  Inc.,   Douglas
                  Turnbull,  Cary Pinkowski,  Gregory Crowe,  Lindsay  Bottomer,
                  James Harris,  William J. Tafuri,  and Robin  Merrifield dated
                  September 12, 2005

         4.27     Value  Security  Escrow  Agreement  among  Baradero  Resources
                  Limited,   Computershare   Investor  Services  Inc.,   Douglas
                  Turnbull,  Gregory Crowe, Lindsay Bottomer,  James Harris, and
                  Marsa Gold Corp. dated September 12, 2005.

         4.28     Management   Agreement   between  Chase  Management  Ltd.  and
                  Centrasia Mining Corp. dated September 14, 2005

         4.29     Agency Agreement  between  Centrasia Mining Corp and Canaccord
                  Capital Corporation dated September 26, 2005.

         8.1      List of Subsidiaries

        12.1      Certification of Douglas Turnbull Pursuant to Rule 13a-14(a)

        12.2      Certification of Nick DeMare Pursuant to Rule 13a-14(a)

        13.1      Certification  of  Douglas  Turnbull  Pursuant  to  18  U.S.C.
                  Section 1350

        13.2      Certification  of Nick DeMare  Pursuant  to 18 U.S.C.  Section
                  1350

        15.1      Consent of Mr. D. Besserer of APEX Geoscience Ltd.

        15.2      Financial   Statements  of  Bulakashu   Mining  Company  Ltd.,
                  including Balance Sheet,  Statement of Operations and Deficit,
                  Statement of Cash Flow and the notes  thereto,  for the period
                  from June 9, 2004 (date of formation) to May 31, 2005.

        15.3      Financial  Statements  of  0724000  B.C.  Limited,   including
                  Balance Sheets, Statements of Loss and Deficit,  Statements of
                  Cash Flows and the notes  thereto,  for the year ended May 31,
                  2005  and  the  period   from   February   4,  2004  (date  of
                  incorporation) to May 31, 2004.

        15.4      Proforma Consolidated Financial Statements of Centrasia Mining
                  Corp., including Proforma Consolidated Balance Sheet, Proforma
                  Consolidated  Statements of Operations  and the notes thereto,
                  as at May 31, 2005.

         (1)      Previously  filed as an exhibit to the Company's  registration
                  statement on Form 20-F, filed with the Securities and Exchange
                  Commission on August 31, 2000. File Number 0-30920.
         (2)      Previously  filed as an exhibit to the Company's annual report
                  on  Form  20-F,   filed  with  the   Securities  and  Exchange
                  Commission on December 3, 2004. File Number 0-30920.
         (3)      Previously  filed as an exhibit to the Company's annual report
                  on  Form  20-F,   filed  with  the   Securities  and  Exchange
                  Commission on November 29, 2001. File Number 0-30920.
         (4)      Previously  filed as an exhibit to the Company's annual report
                  on  Form  20-F,   filed  with  the   Securities  and  Exchange
                  Commission on January 16, 2004. File Number 0-30920.


                                      -95-
<PAGE>


         (5)      Previously  filed as an exhibit to the Company's annual report
                  on  Form  20-F,   filed  with  the   Securities  and  Exchange
                  Commission on December 3, 2004. File Number 0-30920.



                                      -96-
<PAGE>




                                   SIGNATURES


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


                                            CENTRASIA MINING CORP.
                                           (formerly Baradero Resources limited)



Dated:   OCTOBER 27, 2005                   /s/  Douglas Turnbull
                                                 -------------------------------
                                                 Douglas Turnbull, President
                                                 Chief Executive Officer and
                                                 Director


                                      -97-
<PAGE>


















--------------------------------------------------------------------------------



                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)


                        CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)


--------------------------------------------------------------------------------











                                      F-1
<PAGE>

                                                                        D & H
                                                                        group
                                                                      Chartered
AUDITORS' REPORT                                                     Accountants




To the Shareholders of
Centrasia Mining Corp.


We have  audited the  consolidated  balance  sheets of  Centrasia  Mining  Corp.
(formerly  Baradero  Resources  Limited)  as at May 31,  2005  and  2004 and the
consolidated statements of operations, deficit and cash flow for the years ended
May 31, 2005, 2004 and 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 audits.

We conducted our audits in accordance with Canadian  generally accepted auditing
standards and 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  statements
presentation.

In our opinion,  these consolidated  financial statements present fairly, in all
material respects,  the financial position of the Company as at May 31, 2005 and
2004 and the results of its operations and cash flow for the years ended May 31,
2005, 2004 and 2003 in accordance with Canadian  generally  accepted  accounting
principles.

Canadian generally accepted  accounting  principles vary in certain  significant
respects from  accounting  principles  generally  accepted in the United States.
Application  of accounting  principles  generally  accepted in the United States
would have affected assets,  liabilities and shareholders'  equity as at May 31,
2005 and 2004 and results of operations  for the years ended May 31, 2005,  2004
and  2003 to the  extent  summarized  in Note 10 to the  consolidated  financial
statements.

On July 29, 2005 we reported  separately to the shareholders of Centrasia Mining
Corp. on consolidated  financial  statements as at, and for the years ended, May
31, 2005, 2004 and 2003 audited in accordance with Canadian  generally  accepted
auditing standards.


                                                           /s/ D&H Group LLP

Vancouver, B.C.
July 29, 2005, except as to Note 11
which is as of September 27, 2005                         Chartered Accountants


                                  D&H Group LLP
               a BC Limited Liability Partnership of Corporations
               member of BHD Association with affiliated offices
                       across Canada and Internationally
            10th Floor, 1333 West Broadway, Vancouver, B.C. V6H 4C1
                www.dhgroup.ca F (604) 731-9923 T (604) 731-5881


                                      F-2
<PAGE>

                                                                        D & H
                                                                        group
                                                                      Chartered
                                                                     Accountants







COMMENTS BY AUDITORS FOR U.S. READERS
ON CANADA - U.S. REPORTING DIFFERENCES




In the United States,  reporting  standards for auditors require the addition of
an explanatory  paragraph  (following the opinion  paragraph) when the financial
statements are affected by conditions and events that cast substantial  doubt on
the Company's ability to continue as a going concern, such as those described in
Note 1 to the consolidated financial statements.  Our report to the shareholders
dated July 29, 2005,  except as to Note 11 which is as of September 27, 2005, is
expressed in accordance with Canadian reporting  standards which do not permit a
reference to such events and  conditions in the auditor's  report when these are
adequately disclosed in the financial statements.


                                                          /s/ D&H Group LLP

Vancouver, B.C.
July 29, 2005, except as to Note 11
which is as of September 27, 2005                        Chartered Accountants



                                  D&H Group LLP
               a BC Limited Liability Partnership of Corporations
               member of BHD Association with affiliated offices
                       across Canada and Internationally
            10th Floor, 1333 West Broadway, Vancouver, B.C. V6H 4C1
                www.dhgroup.ca F (604) 731-9923 T (604) 731-5881



                                      F-3
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                           CONSOLIDATED BALANCE SHEETS
                                  AS AT MAY 31
            (Expressed in Canadian dollars, unless otherwise stated)


                                                      2005             2004
                                                        $                $

                                   A S S E T S

CURRENT ASSETS

Cash                                                    32,417          100,921
Amounts receivable and prepaids                         26,149           10,303
                                                  ------------     ------------
                                                        58,566          111,224
ADVANCE TO 724 BC (Note 1)                              25,000                -

MARKETABLE SECURITIES (Note 4)                           2,628           26,489
                                                  ------------     ------------
                                                        86,194          137,713
                                                  ============     ============


                              L I A B I L I T I E S

CURRENT LIABILITIES

Accounts payable and accrued liabilities (Note 6)       21,675           15,089
Current portion of advances                             16,355                -
                                                  ------------     ------------
                                                        38,030           15,089
ADVANCES (Note 6(b))                                         -          127,548

SHARE SUBSCRIPTIONS RECEIVED (Note 5(b))                70,000                -
                                                  ------------     ------------
                                                       108,030          142,637
                                                  ------------     ------------


          S H A R E H O L D E R S ' E Q U I T Y ( D E F I C I E N C Y )

SHARE CAPITAL (Note 5)                               1,825,453        1,751,878

CONTRIBUTED SURPLUS (Note 5(e))                         18,255                -

DEFICIT                                             (1,865,544)      (1,756,802)
                                                  ------------     ------------
                                                       (21,836)          (4,924)
                                                  ------------     ------------
                                                        86,194          137,713
                                                  ============     ============

NATURE OF OPERATIONS (Note 1)
SUBSEQUENT EVENTS (Note 11)

APPROVED BY THE DIRECTORS

/s/ Nick DeMare          , Director
-------------------------
/s/ Harvey Lim           , Director
-------------------------


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

                                      F-4

<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
                           FOR THE YEARS ENDED MAY 31
            (Expressed in Canadian dollars, unless otherwise stated)



<TABLE>
<CAPTION>

                                                      2005             2004             2003
                                                        $                $                $
<S>                                              <C>              <C>              <C>

EXPENSES

General and administration                             128,638           79,849           99,139
Stock-based compensation                                30,180                -                -
                                                  ------------     ------------     ------------
LOSS BEFORE OTHER ITEMS                               (158,818)         (79,849)         (99,139)
                                                  ------------     ------------     ------------
OTHER ITEMS

Interest and other income                               19,135            4,099           11,590
Gain on sale of other assets                            35,153                -                -
Recoveries (write-off) of marketable
      securities (Note 6(d))                                 -           24,162          (33,926)
Impairment of amounts receivable and bridge loan             -                -         (169,322)
Unrealized foreign exchange loss                        (4,212)               -          (15,790)
                                                  ------------     ------------     ------------
                                                        50,076           28,261         (207,448)
                                                  ------------     ------------     ------------
LOSS FROM CONTINUING OPERATIONS                       (108,742)         (51,588)        (306,587)

DISCONTINUED OPERATION (Note 3)                              -          230,746         (765,894)
                                                  ------------     ------------     ------------
INCOME (LOSS) FOR THE YEAR                            (108,742)         179,158       (1,072,481)

DEFICIT - BEGINNING OF YEAR                         (1,756,802)      (1,935,960)        (863,479)
                                                  ------------     ------------     ------------
DEFICIT - END OF YEAR                               (1,865,544)      (1,756,802)      (1,935,960)
                                                  ============     ============     ============


BASIC AND DILUTED LOSS PER SHARE
      FROM CONTINUING OPERATIONS                        $(0.06)          $(0.03)          $(0.16)
                                                  ============     ============     ============
BASIC AND DILUTED EARNINGS (LOSS) PER
      SHARE FROM DISCONTINUED OPERATION                      -            $0.12           $(0.40)
                                                  ============     ============     ============
BASIC AND DILUTED
      EARNINGS (LOSS) PER SHARE                         $(0.06)           $0.09           $(0.56)
                                                  ============     ============     ============
WEIGHTED AVERAGE NUMBER OF
      COMMON SHARES OUTSTANDING                      1,931,044        1,911,521        1,910,919
                                                  ============     ============     ============
</TABLE>


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


                                      F-5
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           FOR THE YEARS ENDED MAY 31
            (Expressed in Canadian dollars, unless otherwise stated)


<TABLE>
<CAPTION>

                                                      2005             2004             2003
                                                        $                $                $
<S>                                              <C>              <C>              <C>

CASH PROVIDED FROM (USED FOR)

OPERATING ACTIVITIES

Loss for the year from continuing operations          (108,742)         (51,588)        (306,587)
Adjustments for items not involving cash
      Accrued interest                                     603                -                -
      Impairment of amounts receivable and
           bridge loan                                       -                -          169,322
      Unrealized foreign exchange loss                       -                -           13,257
      Write-off (recoveries) of other assets                 -          (11,250)          33,926
      Stock-based compensation                          30,180                -                -
      Gain on sale of marketable securities            (35,153)          (3,785)               -
      Other                                                  -                -           13,527
                                                  ------------     ------------     ------------
                                                      (113,112)         (66,623)         (76,555)
Increase in amounts receivable and prepaids            (15,846)          (2,391)         (12,846)
Decrease in accounts payable and accrued
      liabilities                                        6,586          214,467            5,892
                                                  ------------     ------------     ------------
                                                      (122,372)         145,453          (83,509)
Cash provided from(used for) operating activities
      of discontinued operation (Note 3)                     -           70,163           17,194
Net change in non-cash working capital items of
      discontinued operation (Note 3)                        -         (212,118)         (43,606)
                                                  ------------     ------------     ------------
                                                      (122,372)           3,498         (109,921)
                                                  ------------     ------------     ------------
INVESTING ACTIVITIES

Advance to 724 BC                                      (25,000)               -                -
Proceeds from sale of other assets                      59,014            4,310                -
Other assets                                                 -                -           20,756
                                                  ------------     ------------     ------------
                                                        34,014            4,310           20,756
Net change in investing activities of
      discontinued operation                                 -           28,906          (32,819)
                                                  ------------     ------------     ------------
                                                        34,014           33,216          (12,063)
                                                  ------------     ------------     ------------
FINANCING ACTIVITIES

Issuance of common shares                               14,250                -           11,000
Share subscriptions received                            70,000                -                -
Repayment of advances and loan                        (188,548)         (99,548)               -
Advances received                                      124,152          127,548            9,548
Deferred acquisition costs                                   -                -          (12,675)
                                                  ------------     ------------     ------------
                                                        19,854           28,000            7,873
                                                  ------------     ------------     ------------
INCREASE (DECREASE) IN CASH FOR THE YEAR               (68,504)          64,714         (114,111)
CASH - BEGINNING OF YEAR                               100,921           36,207          150,318
                                                  ------------     ------------     ------------
CASH - END OF YEAR                                      32,417          100,921           36,207
                                                  ============     ============     ============

</TABLE>

SUPPLEMENTARY CASH FLOW INFORMATION (Note 9)


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


                                      F-6
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



1.       CHANGE OF NAME AND NATURE OF OPERATIONS

         On September 14, 2005,  Baradero  Resources Limited changed its name to
         Centrasia Mining Corp. (the "Company").

         The Company was previously  involved in the  acquisition,  exploration,
         development  and  production of crude oil and natural gas reserves.  In
         March 2004,  the Company  sold its  remaining  interests in oil and gas
         properties. The Company subsequently participated in the drilling of an
         unsuccessful  well in Alberta,  Canada.  On May 31,  2004,  the Company
         formally  abandoned its oil and gas  subsidiary and no longer holds any
         oil and gas interests. Results of the discontinued oil and gas business
         operation  are  presented  in Note 3.  During the 2005  fiscal year the
         Company  focused its efforts on identifying  and assessing new business
         opportunities in the resource industry.

         On March 17, 2005,  the Company  entered into a letter  agreement  (the
         "Letter  Agreement") with 0724000 B.C. Ltd. (formerly  Centrasia Mining
         Corp.)  ("724 BC") and its  shareholders  (the "724 BC  Shareholders"),
         pursuant to which the Company  agreed to purchase all of the issued and
         outstanding  common  shares of 724 BC in exchange for common  shares of
         the Company on a one-for-one basis (the "Acquisition").  724 BC's share
         capital comprises  3,700,100 common shares issued and outstanding.  The
         terms  of the  Letter  Agreement  were  finalized  by a share  purchase
         agreement (the "Formal Agreement") dated July 25, 2005.

         724 BC is a private British Columbia company.  724 BC's principal asset
         is an agreement  (the "Marsa  Option") to acquire all of the issued and
         outstanding share capital of Bulakashu Mining Company Ltd.  ("BMC"),  a
         Kyrgyz limited liability company, from Marsa Gold Corp. ("Marsa"), also
         a privately  owned Kyrgyz  company.  The sole asset of BMC is a license
         permitting the  exploration of the Bulakashu Gold Property,  located in
         the north central area of the Kyrgyz Republic. In order to exercise the
         Marsa  Option  in  full  724  BC  must  make  cash  payments  totalling
         US$120,000 (US$40,000 paid) and issue 1,025,000 common shares to Marsa,
         as well as provide advances to BMC or incur exploration expenditures on
         the  Bulakashu  Gold  Property  of  $200,000  ($10,000   advanced)  and
         US$2,200,000 (US$110,000 advanced) (collectively the "Commitments"), on
         or before  December  31,  2008.  The Marsa  Option  provides for staged
         conversions of 724 BC's loans and advances to BMC into common shares of
         BMC at the end of each calendar year,  beginning  December 31, 2005. In
         the  event  724 BC fails to meet any of its  commitments  or  commits a
         material breach of the Marsa Option, Marsa has the right to require 724
         BC to return any shares of BMC  received  and forgive the  Commitments.
         The Company has agreed to assume the share  obligations of 724 BC under
         the Marsa Option upon completion of the Acquisition.

         The  Company  has also  agreed to  purchase  an  aggregate  of $400,000
         principal of indebtedness  and the accrued interest on the indebtedness
         owed  by  724  BC  to  its   creditors   (collectively   the   "724  BC
         Indebtedness"),  in which the Company will issue  1,900,000  units (the
         "Centrasia Units") to holders of $380,000 of principal,  100,000 common
         shares to  holders  of  $20,000  of  principal  and  repay the  accrued
         interest in cash.  Each Centrasia Unit will consist of one common share
         of the Company and one warrant. Each warrant will entitle the holder to
         purchase an additional common share at a price of $0.40 per share for a
         period  of  two  years  from  the  date  of  issuance.   The  Company's
         requirement to complete the purchase of the 724 BC Indebtedness will be
         subject to the concurrent completion of the Acquisition.

         The  Company  has  advanced  $25,000  to 724 BC.  724 BC has  issued  a
         promissory  note to the Company.  In the event the  Acquisition  is not
         completed, the advance will bear interest at the rate of 10% per annum,
         commencing from the date of termination of the Formal Agreement.

         The Company has agreed to issue 233,338 common shares as a finder's fee
         in connection with the Acquisition.



                                      F-7
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



1.       NATURE OF OPERATIONS (continued)

         The  Company   intends  to  grant,   effective  on  completion  of  the
         Acquisition,  stock options to purchase  2,335,000 common shares of the
         Company  for a term of five  years at an  exercise  price of $0.20  per
         share.

         Completion of the  Acquisition  is subject to the Company  completing a
         financing to raise $875,000 in equity, preparation of a geologic report
         on the Bulakashu Gold Property,  formal  documentation  and shareholder
         and  regulatory  approvals.  The  completion  of  the  Acquisition  and
         issuance of Company shares on purchase of the 724 BC Indebtedness  will
         result  in the  shareholders  of 724 BC  holding  the  majority  of the
         combined Company's issued and outstanding  common shares.  Accordingly,
         the Acquisition will be treated as a reverse takeover and the financial
         statements will be treated for accounting purposes as a continuation of
         the legal subsidiary, 724 BC, not the Company, the legal parent.

         These   consolidated   financial   statements  have  been  prepared  in
         accordance  with  Canadian  generally  accepted  accounting  principles
         ("Canadian  GAAP") applicable to a going concern which assumes that the
         Company will realize its assets and  discharge its  liabilities  in the
         normal  course of  business.  Realization  values may be  substantially
         different from the carrying values shown in the consolidated  financial
         statements should the Company be unable to continue as a going concern.
         The ability of the Company to settle its  liabilities  as they come due
         and to fund ongoing  operations  is  dependent  upon the ability of the
         Company to obtain additional funding from equity financing.  Failure to
         continue as a going  concern would  require  restatement  of assets and
         liabilities on a liquidation  basis, which could differ materially from
         the going concern basis.

         See also Notes 5(b) and 11.


2.       SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation

         These   consolidated   financial   statements  have  been  prepared  in
         accordance  with Canadian GAAP.  The  significant  differences  between
         these  principles  and those that would be applied  under United States
         generally accepted  accounting  principles ("US GAAP") are disclosed in
         Note 10.

         These consolidated  financial statements have, in management's opinion,
         been properly  prepared  within  reasonable  limits of materiality  and
         within the framework of the significant  accounting policies summarized
         below.

         These consolidated  financial  statements  includes the accounts of the
         Company  and the  activities  of its  former  wholly-owned  subsidiary,
         California  Exploration Inc. ("CalEx"),  to May 31, 2004. Effective May
         31, 2004,  the Board of Directors of the Company  determined to abandon
         CalEx,  resulting  in a gain  of  $204,770  for  liabilities  of  CalEx
         previously  recognized by the Company.  The Company no longer  accounts
         for the activities of CalEx.


                                      F-8
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



2.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         Use of Estimates

         The  preparation  of financial  statements in conformity  with Canadian
         GAAP requires  management to make estimates and assumptions that affect
         the  reported  amount of  assets  and  liabilities  and  disclosure  of
         contingent liabilities at the date of the financial statements, and the
         reported amounts of revenues and expenditures during the period. Actual
         results may differ from those estimates.

         Cash Equivalents

         Cash includes cash and short-term  deposits  maturing within 90 days of
         the original date of acquisition.

         Oil and Gas Properties

         Capitalized Costs

         The Company  follows the full cost method of accounting for oil and gas
         operations.  Under this method all costs related to the exploration for
         and   development  of  oil  and  gas  reserves  are  capitalized  on  a
         country-by-  country  basis.  Costs  include lease  acquisition  costs,
         geological  and  geophysical  expenses,  overhead  directly  related to
         exploration  and  development  activities  and costs of  drilling  both
         productive  and  non-productive   wells.  Proceeds  from  the  sale  of
         properties are applied against  capitalized costs,  without any gain or
         loss being recognized, unless such a sale would significantly alter the
         rate of depletion and depreciation.

         Depletion and Depreciation

         Depletion of exploration  and  development  costs and  depreciation  of
         production  equipment is provided using the  unit-of-production  method
         based  upon  estimated  proven  oil  and gas  reserves.  The  costs  of
         significant  unevaluated  properties are excluded from costs subject to
         depletion. For depletion and depreciation purposes, relative volumes of
         oil and  gas  production  and  reserves  are  converted  at the  energy
         equivalent conversion rate of six thousand cubic feet of natural gas to
         one barrel of crude oil.

         Ceiling Test

         In applying the full cost method,  the Company  performs a ceiling test
         whereby the carrying  value of petroleum and natural gas properties and
         production  equipment,  net of future income taxes and the  accumulated
         provision  for site  restoration  and  abandonment  costs,  is compared
         annually to an estimate of future net cash flow from the  production of
         proven reserves. Net cash flow is estimated using year end prices, less
         estimated future general and administrative  expenses,  financing costs
         and income taxes.  Should this  comparison  indicate an excess carrying
         value, the excess is charged against earnings.

         Joint Operations

         Substantially  all of the Company's oil and gas exploration  activities
         were conducted jointly with others and, accordingly, these consolidated
         financial  statements reflect the Company's  proportionate  interest in
         such activities.





                                      F-9
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



2.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         Long-term Investments

         Long-term investments are accounted for using the cost method.

         Revenue Recognition

         The Company  recognizes  oil and gas  revenues  from its  interests  in
         producing wells as oil and gas is produced and sold from these wells.

         Income Taxes

         Income tax  liabilities and assets are recognized for the estimated tax
         consequences  attributable to differences  between the amounts reported
         in the  consolidated  financial  statements  and their  respective  tax
         bases, using enacted income tax rates. The effect of a change in income
         tax rates on future income tax  liabilities and assets is recognized in
         income in the period that the change  occurs.  Future income tax assets
         are recognized to the extent that they are considered  more likely than
         not to be realized.

         Earnings (Loss) Per Share

         Basic  earnings per share is computed by dividing  income  available to
         common  shareholders  by the weighted  average  number of common shares
         outstanding  during the period. The computation of diluted earnings per
         share  assumes  the  conversion,  exercise  or  contingent  issuance of
         securities only when such conversion, exercise or issuance would have a
         dilutive  effect  on  earnings  per  share.   The  dilutive  effect  of
         convertible  securities  is reflected in diluted  earnings per share by
         application  of the "if  converted"  method.  The  dilutive  effect  of
         outstanding  options and warrants and their equivalents is reflected in
         diluted earnings per share by application of the treasury stock method.

         Concentration of Credit Risk

         Financial  instruments,   which  potentially  subject  the  Company  to
         concentrations   of  credit   risk,   consist  of  cash.   The  Company
         periodically evaluates the credit worthiness of financial institutions,
         and  maintains  cash  accounts  only in large  high  quality  financial
         institutions.

         Fair Value of Financial Instruments

         The Company's  financial  instruments  are  comprised of cash,  amounts
         receivable,  advances,  marketable  securities,  accounts  payable  and
         accrued liabilities and share subscriptions received.  Unless otherwise
         noted, the fair value of these financial instruments approximates their
         carrying values.

         Comparative Figures

         Certain of the 2004 and 2003 fiscal year figures have been reclassified
         to conform with the presentation used in the 2005 fiscal year.



                                      F-10
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



3.       DISCONTINUED OPERATION

         On May  31,  2004,  the  Company  formally  abandoned  its  oil and gas
         subsidiary  and no longer holds any gas and oil  interests.  Results of
         this  business  have  been   classified  as  results  of   discontinued
         operation.

         The following  table provides  additional  information  with respect to
         amounts included in the results of discontinued operation:
<TABLE>
<CAPTION>

                                                                        2005            2004             2003
                                                                          $               $                $
        <S>                                                       <C>              <C>              <C>

         Revenue
             Oil and gas sales                                                -           98,904           22,064

         Expenses
             Production                                                       -          (28,741)          (4,870)
             Depreciation, depletion and impairment                           -          (44,187)        (580,101)
                                                                   ------------     ------------     ------------
         Income (loss) from discontinued operation
             before the following                                             -           25,976         (562,907)
         Write-off of other assets                                            -                -         (139,189)
         Write-off of capital assets                                          -                -          (63,798)
         Gain on abandonment (Note 2)                                         -          204,770                -
                                                                   ------------     ------------     ------------
         Income (loss) from discontinued operation                            -          230,746         (765,894)
                                                                   ============     ============     ============
</TABLE>

         The following  table provides  additional  information  with respect to
         amounts  included in the  statement of cash flows  provided  from (used
         for) assets classified as discontinued operation:
<TABLE>
<CAPTION>

                                                                        2005            2004             2003
                                                                          $               $                $
        <S>                                                       <C>              <C>              <C>

         Income (loss) from discontinued operation                            -          230,746         (765,894)
         Items not affecting cash
             Depreciation, depletion and impairment                           -           44,187          580,101
             Write-off of other assets                                        -                -          139,189
             Write-off of capital assets                                      -                -           63,798
             Gain on abandonment                                              -         (204,770)               -
                                                                   ------------     ------------     ------------
         Cash flows from (used for) operating activities of
             discontinued operation                                           -           70,163           17,194
                                                                   ============     ============     ============
</TABLE>

         Components of change in non-cash  working capital  balances  related to
         discontinued operation:
<TABLE>
<CAPTION>

                                                                        2005            2004             2003
                                                                          $               $                $
        <S>                                                       <C>              <C>              <C>

         Accounts receivable and prepaid                                      -            2,557            8,883
         Accounts payable and accrued liabilities                             -         (214,675)         (52,489)
                                                                   ------------     ------------     ------------
                                                                              -         (212,218)         (43,606)
                                                                   ============     ============     ============
</TABLE>



                                      F-11
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



4.       MARKETABLE SECURITIES
<TABLE>
<CAPTION>

                                                              2005                              2004
                                                  -----------------------------     -----------------------------
                                                    Number of          Amount         Number of          Amount
                                                     Shares              $             Shares              $
        <S>                                      <C>              <C>              <C>              <C>

         Secure One Inc. (a)                           100,000            2,648          580,000           15,239
         Halo Resources Ltd. (b)                             -                -           15,000           11,250
                                                                   ------------                      ------------
                                                                          2,648                            26,489
                                                                   ============                      ============
</TABLE>

         (a)      During the 2005 fiscal year the Company  sold  480,000  common
                  shares  (2004  -  20,000;  2003  - nil)  of  Secure  One  Inc.
                  ("Secure"), for net proceeds of $40,867 (2004 - $4,310; 2003 -
                  $nil),  realizing  a gain of  $28,256  (2004 - $3,785;  2003 -
                  $nil). The quoted market value of the remaining 100,000 common
                  shares of Secure at May 31, 2005, was $9,000.

         (b)      During the 2004 fiscal year the Company received 15,000 common
                  shares of Halo Resources Ltd. ("Halo"),  a public company with
                  common  officers  and  directors,  as part of its  recovery of
                  accounts  receivable,  as described  in Note 6(d).  During the
                  2005  fiscal  year the  Company  sold the Halo  shares for net
                  proceeds of $18,147, realizing a gain of $6,897.


5.       SHARE CAPITAL


         Authorized - unlimited common shares without par value
<TABLE>
<CAPTION>

         Issued:                                    2005                     2004                      2003
                                         -----------------------   -----------------------    ----------------------
                                          Number        Amount       Number       Amount       Number       Amount
                                         of Shares        $        of Shares         $        of Shares        $
        <S>                             <C>          <C>          <C>          <C>          <C>         <C>

         Balance, beginning of year       1,911,523    1,751,878    1,911,523    1,751,878    1,897,771    1,740,878
                                         ----------   ----------   ----------   ----------   ----------   ----------
         Issued during the year
         For cash
             Exercise of options             75,000       14,250            -            -            -            -
             Exercise of warrants                 -            -            -            -       13,750       11,000
         Reallocation from contributed
         surplus on exercise of options           -       11,925            -            -            -            -
         Repayment of loan (Note 6(c))            -       47,400            -            -            -            -
                                         ----------   ----------   ----------   ----------   ----------   ----------
                                             75,000       73,575            -            -       13,750       11,000
                                         ----------   ----------   ----------   ----------   ----------   ----------
         Balance, end of year             1,986,523    1,825,453    1,911,523    1,751,878    1,911,521    1,751,878
                                         ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

         (a)      On June 3, 2004, the Company  completed a consolidation of its
                  share capital on a 1 new for 4 old basis.  All share  balances
                  have been adjusted accordingly.

         (b)      The  Company  has  agreed to  conduct a  non-brokered  private
                  placement  of  4,375,000  units at $0.20 per unit for $875,000
                  cash.  Each  unit will  consist  of one  common  share and one
                  warrant.  Each  warrant will entitle the holder to purchase an
                  additional  common  share at a price of $0.40  per share for a
                  period of two  years.  As at May 31,  2005,  the  Company  has
                  received $70,000 on account of the private  placement.  In the
                  event  that  the  private  placement  was not  completed,  the
                  subscribers  have the right to the  refund  of the  subscribed
                  amounts. See also Note 11.


                                      F-12
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



5.       SHARE CAPITAL (continued)

         (c)      A summary of the Company's  options at May 31, 2005,  2004 and
                  2003 and the  changes  for the years  ending on those dates is
                  presented below:


<TABLE>
<CAPTION>
                                                      2005                     2004                    2003
                                             ---------------------    ---------------------    -----------------------
                                                          Weighted                 Weighted                   Weighted
                                                           Average                 Average                    Average
                                               Number     Exercise      Number     Exercise       Number      Exercise
                                             of Options     Price     of Options    Price       of Options     Price
                                                              $                       $                          $
                 <S>                        <C>           <C>         <C>         <C>         <C>            <C>

                  Balance, beginning of year           -      -          158,750     1.68           271,250     1.96
                  Granted                        190,000     0.19              -      -                   -      -
                  Exercised                      (75,000)    0.19              -      -                   -      -
                  Expired / cancelled                  -                (158,750)    1.68          (112,500)    2.40
                                             -----------              ----------                -----------
                  Balance, end of year           115,000     0.19              -      -             158,750     1.68
                                             ===========              ==========                ===========
</TABLE>

                  The following  table  summarizes  information  about the stock
                  options outstanding and exercisable at May 31, 2005:

                  Exercise                  Options
                    Price                 Outstanding          Expiry Date
                      $

                    0.19                     115,000           November 26, 2007
                                             =======

                  The  fair  value  of  stock  options   granted  to  employees,
                  officers,  directors and consultants is estimated on the dates
                  of grants using the  Black-Scholes  option  pricing model with
                  the following  assumptions used for the grants made during the
                  2005 fiscal year:

                                                              2005
                                                            --------
                  Risk-free interest rate                     2.91%
                  Estimated volatility                      122.98%
                  Expected life                            1.5 year
                  Expected dividend yield                        0%

                  No options were granted during the 2004 and 2003 fiscal years.

                  The weighted  average  fair value per share of stock  options,
                  calculated  using  the  Black-Scholes  option  pricing  model,
                  granted during the year to the Company's employees, directors,
                  officers  and  consultants  was $0.16 per share.  The  Company
                  charged $30,180 of stock-based compensation to operations.

                  Option-pricing   models  require  the  use  of  estimates  and
                  assumptions including the expected volatility.  Changes in the
                  underlying  assumptions  can materially  affect the fair value
                  estimates and,  therefore,  existing models do not necessarily
                  provide  reliable  measure of the fair value of the  Company's
                  stock options.

                  See also Note 11.



                                      F-13
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



5.       SHARE CAPITAL (continued)

         (d)      As at May 31, 2005,  290,439 shares are held in escrow and are
                  being  released at six months  intervals  over a period ending
                  September 27, 2007.

         (e)      Contributed surplus is comprised of the following:
<TABLE>
<CAPTION>

                                                                       2005             2004             2003
                                                                         $                $                $
                 <S>                                              <C>              <C>              <C>

                  Balance, beginning of year                                  -                -                -
                  Stock-based compensation for the year                  30,180                -                -
                  Amount reclassified to share capital
                      on exercise of stock options                      (11,925)               -                -
                                                                   ------------     ------------     ------------
                  Balance, end of year                                        -                -                -
                                                                   ============     ============     ============
</TABLE>

         (f)      See also Note 1.


6.       RELATED PARTY TRANSACTIONS

         (a)      During the 2005 fiscal year the Company was charged a total of
                  $69,325  (2004 -  $38,800;  2003 -  $43,914)  for  accounting,
                  administration, management and consulting services provided by
                  the  former   President  of  the  Company  and  by  a  company
                  controlled by the current President of the Company.  As at May
                  31, 2005, $2,654 (2004 - $2,235;  2003 - $nil) remained unpaid
                  and is included in accounts payable and accrued liabilities.

         (b)      The  Company  has  received  ongoing  advances  from a private
                  corporation  owned by the current  President  of the  Company.
                  Commencing  December  31,  2004,  the  Company  agreed  to pay
                  interest on the  advances at an annual  interest  rate of Bank
                  Montreal  prime rate less 1%.  Prior to December  1, 2004,  no
                  interest was charged on the  advances.  During the 2005 fiscal
                  year the Company  recorded  $603 interest  expense,  which has
                  been included as part of advances. Subsequent to May 31, 2005,
                  the  Company  repaid the  $15,752  advances  and $670  accrued
                  interest.

         (c)      During the 2002  fiscal  year the  Company  provided a loan of
                  $55,300 to a former President of the Company to acquire 87,500
                  common shares of the Company (the "Loan Shares").  The Company
                  received a promissory  note for the loan. The promissory  note
                  was  non-interest  bearing and was repayable either in part or
                  in full as  required by the Company  upon the  disposition  of
                  part or all of the Loan  Shares.  During the 2002  fiscal year
                  the Company  received a partial payment of $7,900.  During the
                  2005 fiscal year the Company  received $47,400 in full payment
                  of the remaining balance of the loan.

         (d)      During the 2003  fiscal year the  Company  wrote-off  $138,319
                  accounts  receivable  for unpaid  joint  interest  billings to
                  Halo.  During the 2004 fiscal year,  the Company  negotiated a
                  settlement  with Halo and third  parties in which it  received
                  15,000 Halo shares and $12,912 cash, recognizing a recovery of
                  $24,162.




                                      F-14
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



7.       INCOME TAXES

         There are no significant  reconciling items between losses reported for
         accounting purposes and losses for tax purposes.

         As at May 31, 2005, the Company has accumulated  non-capital  losses of
         approximately   $444,000  and   cumulative   exploration   expenses  of
         approximately  $30,000 carried forward for Canadian income tax purposes
         and are  available  to  reduce  taxable  income of  future  years.  The
         non-capital   losses  expire  commencing  in  2009  through  2015.  The
         cumulative exploration expenses can be carried forward indefinitely.

         Future income tax benefits  which may arise as a result of these losses
         have  not  been  recognized  in  these  financial  statements  as their
         realization is unlikely.


8.       SEGMENTED INFORMATION

         During the 2004 and 2003  fiscal  years,  the  Company  operated in one
         industry segment,  the exploration for and the development of petroleum
         and natural gas. As at May 31, 2005,  the Company only holds  corporate
         assets in Canada. Identifiable assets, revenues and net loss in each of
         these geographic areas are as follows:

<TABLE>
<CAPTION>

                                                                       2005
                                                  ----------------------------------------------
                                                  Identifiable                         Income
                                                     Assets          Revenues          (Loss)
                                                        $                $                $
        <S>                                      <C>              <C>              <C>

         Continuing operations - Canada                 86,194                -         (108,742)
                                                  ============     ============     ============


                                                                       2004
                                                  ----------------------------------------------
                                                  Identifiable                         Income
                                                     Assets          Revenues          (Loss)
                                                        $                $                $

         Continuing operations - Canada                137,713                -          (51,588)
         Discontinued operation - United States              -           98,904          260,937
         Discontinued operation - Canada                     -                -          (30,191)
                                                  ------------     ------------     ------------
                                                       137,713           98,904          179,158
                                                  ============     ============     ============


                                                                       2003
                                                  ----------------------------------------------
                                                  Identifiable                         Income
                                                     Assets          Revenues          (Loss)
                                                        $                $                $
         Continuing operation - Canada                  59,768                -         (306,587)
         Discontinued operation - United States         75,650           22,064         (765,894)
                                                  ------------     ------------     ------------
                                                       135,533           22,064       (1,072,481)
                                                  ============     ============     ============

</TABLE>


                                      F-15
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



9.       SUPPLEMENTARY CASH FLOW INFORMATION

         Non-cash  operating  and  investing  activities  were  conducted by the
         Company as follows:

<TABLE>
<CAPTION>

                                                      2005             2004             2003
                                                        $                $                $
        <S>                                      <C>              <C>              <C>

         Operating activity
              Recoveries of other assets                     -           11,250                -
                                                  ============     ============     ============
         Investing activity
              Additions to marketable securities             -          (11,250)               -
                                                  ============     ============     ============
</TABLE>

         Other supplementary cash flow information:

<TABLE>
<CAPTION>

                                                      2005             2004             2003
                                                        $                $                $
        <S>                                      <C>              <C>              <C>

         Interest paid in cash                               -                -                -
                                                  ============     ============     ============
         Income taxes paid in cash                           -                -                -
                                                  ============     ============     ============
</TABLE>


10.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES

         (a)      The consolidated financial statements of the Company have been
                  prepared  according  to Canadian  GAAP which differ in certain
                  material respects from US GAAP.  Material  differences between
                  Canadian  and US  GAAP  and  their  effect  on  the  Company's
                  consolidated financial statements are summarized in the tables
                  below.
<TABLE>
<CAPTION>

                                                                       2005             2004             2003
                                                                         $                $                $
                 <S>                                              <C>              <C>              <C>

                  Consolidated Statements of Operations
                     and Comprehensive Income

                  Earnings (loss) for the year
                     Canadian GAAP                                     (108,742)         179,158       (1,072,481)

                  Other Comprehensive Income
                     Unrealized holding gain (loss) on
                       available-for-sale marketable securities (i)      (9,000)          38,400           48,000
                                                                   ------------     ------------     ------------
                  Comprehensive earnings (loss) for the year           (117,742)         217,558       (1,024,481)
                                                                   ============     ============     ============
                  Earnings (loss) per share basic and fully diluted
                      - US GAAP                                          $(0.07)           $0.11           $(0.54)
                                                                   ============     ============     ============
</TABLE>



                                      F-16
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



10.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

                                                      2005             2004
                                                        $                $
         Consolidated Balance Sheets

         Total Assets
            Canadian GAAP                               86,194          137,713
            Cumulative unrealized holding gains on
               available for sale securities (i)         6,352           89,161
                                                  ------------     ------------
            US GAAP                                     92,546          226,874
                                                  ============     ============

         Total Liabilities
            Canadian GAAP                              108,030          142,637
                                                  ------------     ------------
            US GAAP                                    108,030          142,637
                                                  ============     ============
         Shareholders' Equity (Deficiency)
            Canadian GAAP                              (21,836)          (4,924)
            Cumulative unrealized holding gains on
               available for sale securities (i)         6,352           89,161
                                                  ------------     ------------
            US GAAP                                    (15,484)          84,237
                                                  ============     ============

                  (i)      Marketable securities

                           US GAAP  requires  marketable  securities  which  are
                           classified  as  available  for sale to be  carried at
                           fair value, as determined by quoted  published market
                           prices, with unrealized losses and gains on available
                           for sale  securities  to be  included  as a  separate
                           component of

                           shareholders' equity. In addition, net realized gains
                           and  losses  on   security   transactions   would  be
                           determined on the specific  identification cost basis
                           and included in the determination of earnings for the
                           year.

                  (ii)     Private Placements of Common Stock

                           The  Company  conducts  the  majority  of its  equity
                           financings  pursuant to Private  placements.  US GAAP
                           does not permit a discount  from the  estimated  fair
                           value, or the market price,  as appropriate.  US GAAP
                           requires the  recognition of the estimated fair value
                           or market  value of the  Company's  common stock as a
                           credit to share capital,  with a charge to operations
                           for the  portion of the  discount  relating to equity
                           financings  conducted  with officers and directors of
                           the Company and a charge to shareholders'  equity, as
                           a capital distribution,  for the discount relating to
                           the remaining portion of the equity financings.

                           Under  US GAAP,  share  capital,  as at May 31,  2005
                           would increase by $315,721  (2004 - $315,721;  2003 -
                           $315,721).  There is no net  change to  shareholders'
                           equity.


                                      F-17
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)



10.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

                  (iii)    Income Tax

                           Under Canadian GAAP,  deferred tax assets relating to
                           the   potential    benefit   of   income   tax   loss
                           carryforwards  are not  recognized  unless  there  is
                           reasonable  assurance of  realization of the benefit.
                           US GAAP provides similar treatment,  but requires the
                           benefit be  recognized  and a valuation  allowance be
                           recognized to fully offset the deferred tax asset.

                           Provision  for  (benefit  from)  income taxes for the
                           2005 fiscal year is as follows:

                                                           $              Rate
                           Current
                           Federal and provincial         39,000           35.6%
                           Net operating carryforward    (39,000)          35.6%
                                                        --------       --------
                                                               -              -
                                                        ========       ========

                           As at May 31,  2005,  the Company has fully  reserved
                           the   $158,000   tax   benefit  of   operating   loss
                           carryforwards,  by a valuation  allowance of the same
                           amount,  because the likelihood of realization of the
                           tax benefit cannot be determined.

                  (iv)     Functional Currency

                           The  Company's  functional  currency is the  Canadian
                           dollar.

                  (v)      Development Stage Company

                           As of May 31,  2005,  the  Company  is  considered  a
                           development stage company as defined by SFAS No. 7.

         (b)      The Company's consolidated statements of cash flow comply with
                  US GAAP.

         (c)      New Technical Pronouncements

                  The Financial  Accounting  Standards Board ("FASB") has issued
                  Statement of Financial  Accounting  Standards No. 123(R) Share
                  Based Payments ("SFAS 123(R)"). SFAS 123(R) amends SFAS 123 by
                  requiring  share based  payments to be  accounted  for at fair
                  value.  SFAS 123(R) is  effective  for fiscal  periods  ending
                  after  June  15,  2005.  The  adoption  of  SFAS  123(R)  will
                  eliminate  a  difference  with  Canadian  GAAP as the  Company
                  accounts  for share based  payments at fair value for Canadian
                  GAAP purposes.

                  The FASB has also issued SFAS No. 153 Exchange of Non-Monetary
                  Assets ("SFAS 153") which is effective for fiscal years ending
                  after June 15, 2005. SFAS 153 refines the circumstances  under
                  which  non-monetary  transactions  should be accounted  for at
                  fair value.  The  adoption of SFAS 153 is not expected to have
                  an effect on the Company's financial position.



                                      F-18
<PAGE>


                             CENTRASIA MINING CORP.
                      (formerly Baradero Resources Limited)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED MAY 31, 2005, 2004 AND 2003
            (Expressed in Canadian dollars, unless otherwise stated)


10.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

                  The FASB has also issued SFAS No. 154  Accounting  Changes and
                  Error  Corrections - A  Replacement  of APB Opinion No. 20 and
                  FASB  Statement  No. 3 ("SFAS  154"),  which is effective  for
                  fiscal years ending after December 15, 2005. SFAS 154 requires
                  that  changes  in  accounting  policy  be  accounted  for on a
                  retroactive basis. The adoption of SFAS 154 is not expected to
                  have an effect on the Company's financial position.


11.      SUBSEQUENT EVENTS

         (a)      In July 2005, the Company  received  $21,850 from the exercise
                  of existing stock options to purchase 115,000 common shares of
                  the Company.

         (b)      By  agreement  dated July 20,  2005,  the  Company has engaged
                  Canaccord Capital Corporation  ("Canaccord") as the sponsor of
                  the  Company in  connection  with the  Acquisition.  Under the
                  arrangement  the Company paid  Canaccord a sponsorship  fee of
                  $35,000.

         (c)      See also Note 6(b).

         (d)      On  September  14,  2005,  the  Company  completed  all of the
                  transactions  contemplated  in  Notes 1 and  5(b)  and  issued
                  200,000  common  shares of the Company under the Marsa Option.
                  The Company also replaced its existing  stock option plan with
                  a new plan which allows the Company to grant a maximum  number
                  of 2,500,000  stock  options.  The Company then granted  stock
                  options to its employees,  directors, officers and consultants
                  to purchase  2,335,000 common shares of its capital stock at a
                  price of $0.20 per share, expiring September 14, 2010.

         (e)      On September 27, 2005, the Company filed a short form offering
                  document to conduct an offering (the  "Offering") of a minimum
                  of 2,307,692 units to a maximum of 3,076,923 units, at a price
                  of $0.65 per unit.  Each unit will  comprise  one common share
                  and one  transferable  warrant.  Two warrants will entitle the
                  holder to acquire  an  additional  common  share at a price of
                  $0.78 per share for a period of 18  months.  The  Company  has
                  agreed to an agent's  commission of 7.5% of the gross proceeds
                  raised.  The agent can  elect to have the  commission  paid in
                  cash or in units, having the same terms as the units under the
                  Offering.  The agent will also receive a $7,500 administration
                  fee and a corporate  finance fee of 100,000 units,  having the
                  same as the units  under the  offering.  The  Company has also
                  agreed  an  option  (the  "Agent's   Options")  to  the  agent
                  entitling it to acquire,  in total,  that number of units that
                  is equal to 10% of the total  number of units  sold  under the
                  Offering.  The Agent's  Options  will have a term of 18 months
                  and an exercise price of $0.72 per unit. The units  underlying
                  the Agent's Options will have the same term as the units under
                  the Offering.





                                      F-19
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