**SECURITIES AND EXCHANGE COMMISSION****WASHINGTON, D.C. 20549**____________________________**FORM 10-KSB****____________________________

| [X] | ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|-----|--------------------------------------------------------------------------------|

**For the fiscal year ended May 31, 2007**

| [  ] | TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM							_______________ to _______________ |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

Commission File # 333-139683**GUINNESS EXPLORATION INC.**(Exact name of small business issuer as specified in its charter)**Nevada**(State or other jurisdiction of incorporation or organization)**98-0465540**(IRS Employer Identification Number)**844 Reddington Court						Coquitlam, British Columbia, Canada V4C 4P7**(Address of principal executive offices)**(604) 944-8133**(Issuer’s telephone number)

Securities registered under Section 12(b) of the Exchange Act:				Title of each class:                                             Name of each exchange on which registered:None                                                                The issuer’s shares are not yet listed for trading on an                                                                          exchange or stock market Securities registered under Section 12(g) of the Exchange Act:				Title of class:Not Applicable

****

----

----

ii

----

| ****         | ****

**TABLE OF CONTENTS**                                                                                            |          |
|--------------|------------------------------------------------------------------------------------------------------------------------|----------|
|    |                                                                                                                        | **Page** |
| **PART I**   |                                                                                                                        |          |
|    |                                                                                                                        |          |
| Item 1.      | Description of Business                                                                                                | 1        |
| Item 2.      | Description of Property                                                                                                | 6        |
| Item 3.      | Legal Proceedings                                                                                                      | 7        |
| Item 4.      | Submission of Matters to a Vote of Security Holders                                                                    | 7        |
|    |                                                                                                                        |          |
| **PART II**  |                                                                                                                        |          |
|    |                                                                                                                        |          |
| Item 5.      | Market for Common Equity and Related Stockholder Matters                                                               | 7        |
| Item 6.      | Management’s Discussion and Analysis                                                                             | 8        |
| Item 7.      | Financial Statements                                                                                                   | F-1(11)  |
| Item 8.      | Changes In and Disagreements With Accountants on Accounting and								Financial Disclosure                            | 24       |
| Item 8A.     | Controls and Procedures                                                                                                | 24       |
| Item 8B.     | Other Information                                                                                                      | 24       |
|    |                                                                                                                        |          |
| **PART III** |                                                                                                                        |          |
|    |                                                                                                                        |          |
| Item 9.      | Directors, Executive Officers, Promoters and Control Persons;								Compliance With Section 16(a) of the Exchange Act | 25       |
| Item 10.     | Executive Compensation                                                                                                 | 26       |
| Item 11.     | Security Ownership of Certain Beneficial Owners and Management and								Related Stockholder Matters                  | 27       |
| Item 12.     | Certain Relationships and Related Transactions                                                                         | 27       |
| Item 13.     | Exhibits                                                                                                               | 27       |
| Item 14.     | Principal Accountant Fees and Services                                                                                 | 28       |
|    |                                                                                                                        |          |
|              | Signatures                                                                                                             | 29       |

----

**PART I**

**ITEM 1.       DESCRIPTION OF BUSINESS**This annual report on Form 10-KSB contains "forward-looking statements" relating to the registrant, Guinness Exploration Inc., which represent the registrant's current expectations or beliefs including, statements concerning registrant’s operations, performance, financial condition and growth.  For this purpose, any statement contained in this annual report on Form 10-KSB that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as "may", “expect”, "anticipation", "intend", "could", "estimate", or "continue" or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel and variability of quarterly results, ability of registrant to continue its growth strategy and competition, certain of which are beyond the registrant's control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements.**OVERVIEW OF COMPANY**Guinness Exploration, Inc. (“Guinness”, “We”, or the “Company”) was incorporated in the State of Nevada on July 15, 2005. Our Articles of Incorporation, filed with the Secretary of State of Nevada, provides among other things that the Board of Directors be composed of Donald Kello. Our authorized capital consists of 100,000,000 Common Shares. No Non-Voting Common or Preferred Shares have been authorized.  Upon incorporation, our Board of Directors appointed Donald Kello to the offices of President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Chair of the Board of Directors, Secretary, Treasurer and Chair of the Company’s Audit Committee. 				We are a mineral exploration company. Since inception we have purchased a uranium property in Saskatchewan, Canada and intend to pursue exploration of this property. We may also pursue other mineral exploration projects as opportunities arise.				Our financial statements are prepared in accordance with U.S. generally accepted accounting principles and we have expensed all development expenses related to the establishment of the company. Our fiscal year end is May 31st.				Since inception the Company has not been involved in any bankruptcy, receivership or similar proceedings.				On July 15, 2005, our board of directors authorized us to issue of 3,000,000 shares of common stock to our President and sole Director, Donald Kello. These shares were sold for $0.001 per common share for gross proceeds of $3,000.00 and were

1

----

2

----

3

****

----

4

----

5

----

6

****

****

----

**PART II**

**ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER****MATTERS****Market Information**The Company’s shares are not yet listed for trading on an exchange or stock market and therefore there is not a public market for its common equity. The Company has no senior securities outstanding.**Holders**As of August 23, 2007, the Company had 32 shareholders of its common shares.**Dividends**There are no restrictions that would limit the Company from paying dividends. The Company paid no dividends during the periods presented and has no intention of paying dividends in the foreseeable future.

7

****

****

****

****

****

****

****

****

----

8

****

****

****

****

****

****

****

----

9

****

****

****

****

****

****

****

----

10

****

----

**GUINNESS EXPLORATION INC.*****(an Exploration Stage Company)*****INDEX TO FINANCIAL STATEMENTS****Fiscal Year Ended May 31, 2007**

******

****

****

****

****

****

|                                                                                                             | Page        |
|-------------------------------------------------------------------------------------------------------------|-------------|
|                                                                                                   |             |
| Report of Independent Registered Public Accounting Firm                                                     | F-2         |
|                                                                                                   |             |
| Financial Statements:                                                                                       | F-3         |
|                                                                                                   |             |
|             Balance Sheet                            | F-3         |
|                                                                                                   |             |
|             Statements of Operations                 | F-4         |
|                                                                                                   |             |
|             Statements of Stockholders’ Equity | F-5         |
|                                                                                                   |             |
|             Statements of Cash Flows                 | F-6         |
|                                                                                                   |             |
|             Notes to Financial Statements            | F-7 to F-13 |

******

****

****

****

****

****

****

****

****

****

****

****

----

**GUINNESS EXPLORATION INC.*****(an Exploration Stage Company)******Report of Independent Registered Public Accounting Firm***

Board of Directors				Guinness Exploration Inc.				We have audited the accompanying balance sheet of Guinness Exploration Inc. (An Exploration Stage Company) as of May 31, 2007 and the related statements of operations, stockholders’ equity, and cash flows for the year ended May 31, 2007 and for the period from July 15, 2005 (date of inception) through May 31, 2006 and the period from July 15, 2005 ( date of inception) through  May 31, 2007. 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 the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.				In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Guinness Exploration Inc (An Exploration Stage Company) as of May 31, 2007 and the results of its operations, stockholders’ equity, and its cash flows for the year ended May 31, 2007 and for the  period from July 15, 2005 (date of inception) to May 31, 2006 and from July 15, 2005 (date of inception) through May 31,2007, in conformity with accounting principles generally accepted in the United States of America.				The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3, the Company has accumulated operating losses since its inception and has limited business operations, which raise substantial doubt about the Company’s ability to continue as a going concern. Management's plan in regard to this matter is also discussed in Note 3. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.				/s/ Schumacher & Associates, Inc.				Schumacher & Associates, Inc.				Certified Public Accountants				2525 Fifteenth Street, Suite 3H				Denver, Colorado 80211				August 22, 2007

F-2

******

----

**GUINNESS EXPLORATION INC.*(an Exploration Stage Company)						Balance Sheet***

**

**

|                                                                                                                                |   | May 31, 2007   |
|--------------------------------------------------------------------------------------------------------------------------------|---|----------------|
|                                                                                                                                |   |                |
| ASSETS                                                                                                                         |   |                |
|                                                                                                                      |   |                |
| CURRENT ASSETS                                                                                                                 |   |                |
| Cash - Note 1                                                                                                                  | $ | 6,407          |
| Prepaid expenses                                                                                                               |   | 314            |
|                                                                                                                                |   |                |
| Total current assets                                                                                                           |   | 6,721          |
|                                                                                                                      |   |                |
| OTHER ASSETS                                                                                                                   |   |                |
| Mineral property – Notes 2, 3, 6, 7, 8 and 10                                                                             |   | 15,985         |
|                                                                                                                                |   |                |
| Total other assets                                                                                                             |   | 15,985         |
|                                                                                                                      |   |                |
| Total assets                                                                                                                   | $ | 22,706         |
|                                                                                                                                |   | ============== |
|                                                                                                                      |   |                |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                     |   |                |
|                                                                                                                           |   |                |
| CURRENT LIABILITIES                                                                                                            |   |                |
| Accounts payable                                                                                                               | $ | 635            |
| Accrued liabilities                                                                                                            |   | 19,600         |
| Shareholder loan – Note 10                                                                                                |   | 890            |
|                                                                                                                                |   |                |
| Total current liabilities                                                                                                      |   | 21,125         |
|                                                                                                                      |   |                |
| COMMITMENTS AND CONTINGENCIE – Note 6                                                                                     |   |                |
|                                                                                                                      |   |                |
| STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                           |   |                |
| Common shares, 75,000,000 shares with par value							$0.001 authorized, 5,525,000 shares issued and outstanding – Note 9 |   | 5,525          |
| Paid-in Capital – Note 9                                                                                                  |   | 47,975         |
| Accumulated deficit in the development stage                                                                                   |   | (51,919)       |
|                                                                                                                                |   |                |
| Total stockholders’ equity                                                                                               |   | 1,581          |
|                                                                                                                      |   |                |
| Total liabilities and stockholders’ equity                                                                               | $ | 22,706         |
|                                                                                                                                |   | ============== |

----

******

******

******

|                                           |   | Fiscal Year									ending									May 31, 2007 |   | July 15, 2005								(inception)								through								May 31, 2006 |   | July 15, 2005								(inception)								through								May 31, 2007 |
|-------------------------------------------|---|-------------------------------------------------|---|---------------------------------------------------------------------|---|---------------------------------------------------------------------|
|                                           |   |                                                 |   |                                                                     |   |                                                                     |
|                                 |   |                                                 |   |                                                                     |   |                                                                     |
| EXPENSES:                                 |   |                                                 |   |                                                                     |   |                                                                     |
| Professional fees                         | $ | 47,683                                          | $ | -                                                                   | $ | 47,683                                                              |
| Administrative expenses                   |   | 3,346                                           |   | 813                                                                 |   | 4,159                                                               |
|                                           |   |                                                 |   |                                                                     |   |                                                                     |
| Total expenses                            |   | 51,029                                          |   | 813                                                                 |   | 51,842                                                              |
|                                 |   |                                                 |   |                                                                     |   |                                                                     |
| Net (loss) from Operations                |   | (51,029)                                        |   | (813)                                                               |   | (51,842)                                                            |
|                                 |   |                                                 |   |                                                                     |   |                                                                     |
| Interest expense                          |   | (42)                                            |   | (35)                                                                |   | (77)                                                                |
|                                 |   |                                                 |   |                                                                     |   |                                                                     |
| Net (loss)                                | $ | (51,071)                                        | $ | (848)                                                               | $ | (51,919)                                                            |
|                                           |   | =============                                   |   | =============                                                       |   | =============                                                       |
|                                 |   |                                                 |   |                                                                     |   |                                                                     |
| Loss per common share                     | $ | (0.01)                                          | $ | Nil                                                                 | $ | (0.01)                                                              |
|                                           |   | =============                                   |   | =============                                                       |   | =============                                                       |
|                                 |   |                                                 |   |                                                                     |   |                                                                     |
| Weighted average shares  Outstanding |   | 5,525,000                                       |   | 924,164                                                             |   | 3,798,905                                                           |

----

******

******

******

|                                                                                                  |           |   |         |   |         |   | Deficit     |   |                     |
|--------------------------------------------------------------------------------------------------|-----------|---|---------|---|---------|---|-------------|---|---------------------|
|                                                                                                  |           |   |         |   |         |   | Accumulated |   |                     |
|                                                                                                  |           |   |         |   |         |   | During the  |   | Total               |
|                                                                                                  | Common    |   | Common  |   | Paid-in |   | Exploration |   | Stockholders’ |
|                                                                                                  | Shares    |   | Stock   |   | Capital |   | Stage       |   | Equity              |
|                                                                                                  |           |   |         |   |         |   |             |   |                     |
|                                                                                        |           |   |         |   |         |   |             |   |                     |
| Balance, July 15, 2005 (Inception)                                                               | —    | $ | —  | $ | —  | $ | —      | $ | —              |
|                                                                                                  |           |   |         |   |         |   |             |   |                     |
| Common shares issued for cash at $0.001   February 7, 2006                             | 3,000,000 | $ | 3,000   | $ | —  | $ | —      | $ | 3,000               |
| Common shares issued for cash at $0.02 during the   Period ended May 31, 2006          | 2,525,000 | $ | 2,525   | $ | 47,975  | $ | —      | $ | 50,500              |
| Net loss for the period from July 15, 2005 (inception)									   to May 31, 2006 | —    | $ | —  | $ | —  | $ | (848)       | $ | (848)               |
|                                                                                                  |           |   |         |   |         |   |             |   |                     |
| Balance, May 31, 2006                                                                            | 5,525,000 | $ | 5,525   | $ | 47,975  | $ | (848)       | $ | 52,652              |
| Net loss for year ended May 31, 2007                                                             | —    | $ | —  | $ | —  | $ | (51,071)    | $ | (51,071)            |
|                                                                                                  |           |   |         |   |         |   |             |   |                     |
| Balance, May 31, 2007                                                                            | 5,525,000 | $ | 5,525   | $ | 47,975  | $ | (51,919)    | $ | 1,581               |
|                                                                                                  | ========  |   | ======= |   | ======= |   | =========   |   | ========            |

******

******

******

******

******

******

******

******

******

******

******

******

******

----

**GUINNESS EXPLORATION INC.*****(an Exploration Stage Company)******Statement of Cash Flows***

******

******

******

******

|                                                                                                                        |   | Fiscal Year							ending								May 31, 2007 |   | July 15, 2005							(inception)							through							May 31, 2006 |   | July 15, 2005							(inception)							through							May 31, 2007 |
|------------------------------------------------------------------------------------------------------------------------|---|----------------------------------------------|---|------------------------------------------------------------------|---|------------------------------------------------------------------|
|                                                                                                                        |   |                                              |   |                                                                  |   |                                                                  |
|                                                                                                              |   |                                              |   |                                                                  |   |                                                                  |
| Cash flows from operating activities:                                                                                  |   |                                              |   |                                                                  |   |                                                                  |
|      Net loss for the period                                                                  | $ | (51,071)                                     | $ | (848)                                                            | $ | (51,919)                                                         |
|      Reconciling adjustments:                                                                 |   |                                              |   |                                                                  |   |                                                                  |
|      Adjustments to reconcile net loss                                                        |   |                                              |   |                                                                  |   |                                                                  |
|      to net cash used in operating activities                                                 |   |                                              |   |                                                                  |   |                                                                  |
|           Accrued interest on shareholder loans                      |   | 42                                           |   | 35                                                               |   | 77                                                               |
|      Net change in operating assets and liabilities                                           |   |                                              |   |                                                                  |   |                                                                  |
|           Prepaid expenses                                           |   | 4,686                                        |   | —                                                           |   | (314)                                                            |
|           Accounts payable and accrued liabilities    |   | 20,235                                       |   | —                                                           |   | 20,235                                                           |
|                                                                                                                        |   |                                              |   |                                                                  |   |                                                                  |
| Net cash (used) by operating activities                                                                                |   | (26,108)                                     |   | (813)                                                            |   | (31,921)                                                         |
|                                                                                                              |   |                                              |   |                                                                  |   |                                                                  |
| Cash flows from investing activities:                                                                                  |   |                                              |   |                                                                  |   |                                                                  |
|      Purchase of Mineral Property                                                             |   | —                                       |   | —                                                           |   | (15,985)                                                         |
|                                                                                                                        |   |                                              |   |                                                                  |   |                                                                  |
| Net cash (used) by investing activities                                                                                |   | —                                       |   | —                                                           |   | (15,985)                                                         |
|                                                                                                              |   |                                              |   |                                                                  |   |                                                                  |
| Cash flows from financing activities:                                                                                  |   |                                              |   |                                                                  |   |                                                                  |
|      Common stock issued for cash                                                             |   | —                                       |   | 53,500                                                           |   | 53,500                                                           |
|      Loans by stockholders                                                                    |   | —                                       |   | 813                                                              |   | 813                                                              |
|                                                                                                                        |   |                                              |   |                                                                  |   |                                                                  |
| Net cash provided by financing activities                                                                              |   | —                                       |   | 54,313                                                           |   | 54,313                                                           |
|                                                                                                              |   |                                              |   |                                                                  |   |                                                                  |
| Net increase (decrease) in cash                                                                                        |   | (26,108)                                     |   | 53,500                                                           |   | 6,407                                                            |
|                                                                                                              |   |                                              |   |                                                                  |   |                                                                  |
| Cash, beginning of period                                                                                              |   | 32,515                                       |   | —                                                           |   | —                                                           |
|                                                                                                                        |   |                                              |   |                                                                  |   |                                                                  |
|                                                                                                              |   |                                              |   |                                                                  |   |                                                                  |
| Cash, end of period                                                                                                    | $ | 6,407                                        | $ | 53,500                                                           | $ | 6,407                                                            |
|                                                                                                                        |   | =============                                |   | =============                                                    |   | =============                                                    |

----

**GUINNESS EXPLORATION INC**.***(an Exploration Stage Company)******Notes to Financial Statements***

***Note 1 – Operations*****Organization and Description of Business**Guinness Exploration Inc. (“Guinness”, “We”, or the “Company”) was incorporated in the State of Nevada on July 15, 2005.				We are a mineral exploration company. Since inception we have purchased a uranium property in Saskatchewan, Canada and intend to pursue exploration of this property. We may also pursue other mineral exploration projects as opportunities arise.				Our fiscal year end is May 31st.**Exploration Stage Activities**The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. The Company was formed for the purposes of acquiring exploration and development stage mineral properties. The Company has not commenced business operations.***Note 2 – Summary of Significant Accounting Policies***This summary of significant accounting policies is presented to assist in understanding Guinness Exploration Inc.’s financial statements. The financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements, which are stated in U.S. Dollars.				The financial statements reflect the following significant accounting policies:**Exploration Stage Company**The Company is an exploration stage company as defined in the Financial Accounting Standards Board (“FASB”) Statements of Financial Accounting Standards (“SFAS”) No. 7. The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced.  As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date.**Mineral Properties and Exploration Expenditures**The Company expenses all cost incurred on mineral properties to which it has secured exploration rights prior to the establishment of proven and probable reserves. If and when

F-7

******

****

****

----

**GUINNESS EXPLORATION INC.*****(an Exploration Stage Company)******Notes to Financial Statements***

proven and probable reserves are determined for a property and a feasibility study prepared with respect to the property, then subsequent exploration and development costs of the property will be capitalized.				The Company regularly performs evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets.  All long-lived assets are reviewed for impairment annually or whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable.**Exploration Expenditures**The Company follows a policy of expensing exploration expenditures until a production decision in respect of the project and the Company is reasonably assured that it will receive regulatory approval to permit mining operations, which may include the receipt of a legally binding project approval certificate.				Management periodically reviews the carrying value of its investments in mineral leases and claims with internal and external mining related professionals.  A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a production mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that the Company will continue exploration on such project.  The Company does not set a predetermined holding period for properties with unproven deposits, however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate.				If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value.  The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values.				The Company’s exploration activities and proposed mine development are subject to various laws and regulations governing protection of the environment. These laws are continually changing, generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.				The accumulated costs of properties that are developed to the stage of commercial production will be amortized to operations through unit-of-production depletion.**Use of Estimates**The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

F-8

----

****

**GUINNESS EXPLORATION INC.*****(an Exploration Stage Company)******Notes to Financial Statements***

**Loss per Share**Loss per share is computed in accordance with SFAS No. 128, “Earnings per Share”. Basic loss per share is calculated by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding for the period.**Estimated Fair Value of Financial Instruments**The  carrying  value  of  accounts  payable,  and  other  financial  instruments reflected  in  the  financial  statements  approximates  fair  value  due  to the short-term maturity of the instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.**Comprehensive Income**The Company has adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS 130 requires that the components and total amounts of comprehensive income be displayed in the financial statements beginning in 1998. Comprehensive income includes net income and all changes in equity during a period that arises from non-owner sources, such as foreign currency items and unrealized gains and losses on certain investments in equity securities. Comprehensive loss for the periods shown equals the net loss for the period plus the effect of foreign currency translation.**Income Taxes**The Company has adopted SFAS No. 109, “Accounting for Income Taxes”, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted rates in effect in the years during which the differences are expected to reverse and upon the possible realization of net operating loss carry-forwards.**Valuation of Long-Lived Assets**The Company periodically analyzes its long-lived assets for potential impairment, assessing the appropriateness of lives and recoverability of un-depreciated balances through measurement of undiscounted operation cash flows on a basis consistent with accounting principles generally accepted in the United States of America.**Start-up Costs**The Company has adopted FASB Statement of Position No. 98-5 ("SOP 98-5"), "Reporting the Costs of Start-Up Activities." SOP 98-5 requires that all non-governmental entities expense the cost of start-up activities, including organizational costs as those costs are incurred.

F-9

****

****

****

****

****

----

**GUINNESS EXPLORATION INC.*****(an Exploration Stage Company)******Notes to Financial Statements***

**Currency**The majority of the Company's cash flows are in United States dollars. Accordingly, the US dollar is the Company’s functional currency. Transactions in foreign currency are translated into U.S. dollars on the following basis:

> 
Monetary items, at the rate of exchange prevailing as at the balance sheet date					Non-Monetary items including equity, at the historical rate of exchange					Revenues and expenses, at the period average in which the transaction occurred

****

**Cash and Cash Equivalents**The Company considers cash and cash equivalents to consist of cash on hand and demand deposits in banks with an initial maturity of 90 days or less.**Risks and Uncertainties**The Company is subject to substantial business risks and uncertainties inherent in starting a new business. There is no assurance that the Company will be able to generate sufficient revenues or obtain sufficient funds necessary for launching a new business venture.**New Accounting Standards**Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on these financial statements.**Other**No dividends have been paid during the periods presented.				The Company consists of one reportable business segment.				We did not have any off-balance sheet arrangements as of May 31, 2007.***Note 3– Basis of Presentation***Generally accepted accounting principles in the United States of America contemplate the continuation of the Company as a going concern. However, the Company has accumulated operation losses since its inception and has limited business operations, which raises substantial doubt about the Company’s ability to continue as a going concern. The continuation of the Company is dependent upon the continuing financial support of investors and stockholders of the Company. It is the belief of management that initiatives planned for the upcoming fiscal year will expand the Company’s investor base. The Company intends to acquire additional operating capital through

F-10

----

private equity offerings to the public to fund its business plan. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.***Note 4 – Recent Accounting Pronouncements***In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157 “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years and earlier application is encouraged. The Company has adopted this Statement and this adoption did not impact the Company's financial position, results of operations, or cash flows.				Various additional accounting pronouncements have been issued during 2006 and 2007, none of which are expected to have any material effect on the financial statements of the Company.***Note 5 - Mineral property***As of May 31, 2007, the Company’s mineral property asset**consisted of 100% ownership of a uranium mineral property staked as Claim number S-108991. This property comprises 741 hectares in the Athabasca Basin, Saskatchewan, Canada and was purchased for $15,985. To date no exploration costs have been incurred for this property.***Note 6 – Commitments and contingencies***The Company is not required to expend money on these Claims for a period of two years beginning April 6, 2006. However, if work has not been performed before the two-year milestone, the Company must pay the government of Saskatchewan the sum of Cdn $12 per hectare per year retroactive to April 6, 2006.

F-11

****

****

**

**

******

----

**GUINNESS EXPLORATION INC.*****(an Exploration Stage Company)******Notes to Financial Statements***

***Note 7 – Concentration risks***The Company is subject to concentration risk because its operations are solely focused on the uranium industry and its sole asset is its mineral property in Saskatchewan, Canada.***Note 8 – Income Taxes***The Company is subject to federal income taxes in the US. The Company has had no net income from its US operations and therefore has not paid nor has any income taxes owing in the US.				Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax purposes. The Company's deferred tax assets consist entirely of the benefit from net operating loss carry-forwards. The Company's deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the net operating loss carry-forwards.  Net operating loss carry-forwards may be further limited by a change in company ownership and other provisions of the tax laws.				The Company's deferred tax assets, valuation allowance, and change in valuation allowance are as follows (“NOL” denotes Net Operating Loss):

| Year Ending  |  | Estimated							NOLCarry-forward             |  | NOLExpires |  | Estimated							Tax							Benefitfrom NOL |  | ValuationAllowance   |  | Net TaxBenefit |
|--------------|--|----------------------------------------------|--|------------|--|-------------------------------------------|--|----------------------|--|----------------|
|    |  |                                              |  |            |  |                                           |  |                      |  |                |
| 2006         |  |    $     (848) |  | 2026       |  | $     127             |  | $    (127) |  | $  — |
| 2007         |  |    $ (51,071)                      |  | 2027       |  | $  7,661                             |  | $ (7,661)            |  | $  — |
|              |  |                                              |  |            |  |                                           |  |                      |  |                |
|              |  |    $ (51,919)                      |  |            |  | $ 7,788                                   |  | $ (7,788)            |  | $  — |
|              |  | ============                                 |  |            |  | ==========                                |  | =========            |  | ========       |

F-12

----

**GUINNESS EXPLORATION INC.*****(an Exploration Stage Company)******Notes to Financial Statements***

***Note 10 – Shareholder Loan***As at May 31, 2007, the Company had one related party shareholder loan outstanding of $890 which included $77 of accrued interest. This loan is uncollateralized and has no fixed repayment date.

F-13

----

24

****

****

----

**PART III**

**ITEM 9.       DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND****CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)****OF THE EXCHANGE ACT****Directors and Executive Officers**The following table sets forth certain information regarding the executive officer and director of Guinness Exploration Inc. as of May 31, 2007.Name                       Age          Title                                                               Term				Donald Kello             41           President, Chief Executive Officer,                 1 year				                                                Chief Financial Officer, Principal				                                                Accounting Officer, Chair of the				                                                Board, Treasurer, and Secretary**Donald Kello**Mr. Kello has no experience in mineral explorations. Mr. Kello has been employed by Richmond Elevators in British Columbia, Canada as an elevator mechanic and installer from May 2004 to the present. From 1992 to 2004, Mr. Kello was employed by Protec Installation Group as an electrical journeyman foreman. Mr. Kello studied Industrial Drafting from 1983 to 1984 and attended the Electrical Apprentice Program at BCIT in British Columbia from 1986 to 1987 and completed his electrical apprenticeship at Cariboo College in British Columbia from 1988 to 1990.**Family Relationships**Because we only have a sole officer and director, there are no family relationships between any director or executive officer.**Significant Employees**Mr. Kello is the sole employee of the Company.**Involvement in Certain Legal Proceedings**No officer, director, or control person of the Company has had any involvement in legal proceedings during the past five years that are material to an evaluation of the ability or integrity of any director, officer, or control person of the Company.**Audit Committee Financial Expert**The duties of an audit committee were assigned to the full board via a resolution executed May 15, 2006. Due to the fact that the Company is in its exploration stage, it has not yet been able to recruit and compensate an expert for the Audit Committee.

25

----

****

****

****

****

****

****

****

****

| **Name								and								Principal								Position** | ****

****

**Year** | ****

****

**Salary								($)** | ****

****

**Bonus								($)** | ****

**Other Annual								Compensation****($)** |     
**** | **Restricted								Stock								Awards/SAR’s								($) (1)** | **Securities								Underlying								Options/SAR’s								(#)** |   						
****  | ****

**LTIP								Payouts****($) (2)** |   						
****  | ****

**All Other								Compensation****($)**(3) |
|------------------------------------------------------|----------------------|-----------------------------------|----------------------------------|---------------------------------------------------|-------------------------------|----------------------------------------------------------------------|------------------------------------------------------------------------|--------------------------|------------------------------------------|--------------------------|---------------------------------------------------|
|                                            |            |                         |                        |                                         |           |                                                            |                                                              |      |                                |      |                                         |
| Donald							Kello							President							& CEO   | Fiscal							2007    | Nil                               | Nil                              | Nil                                               |           | Nil                                                                  | Nil                                                                    |                | Nil                                      |                | Nil                                               |
|                                            |            |                         |                        |                                         |           |                                                            |                                                              |      |                                |      |                                         |
| Donald							Kello							President							& CEO   | Fiscal							2006    | Nil                               | Nil                              | Nil                                               |                     | Nil                                                                  | Nil                                                                    |                | Nil                                      |                | Nil                                               |

Notes:(1)     SAR’s are “Stock Appreciation Rights”(2)     LTIP’s are “Long-Term Incentive Plans”(3)     There are no standard arrangements for the compensation of our President and Director.

26

----

****

****

|             NAME                |      AMOUNT AND NATURE						     OF BENEFICIAL SHARES						     OWNED (1) |        PERCENT OF						       OUTSTANDING						       OWNERSHIP (2) |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                         |                                                                                                                                            |                                                                                                                                                               |
| Donald Kello                                                                                                                                                      | 3,000,000 common shares                                                                                                                              | 54.30%                                                                                                                                                                       |
|                                                                                                                                                         |                                                                                                                                            |                                                                                                                                                               |
| Officers, Directors and Control						Persons as a Group                                                                                                           | 3,000,000 common shares                                                                                                                              | 54.30%                                                                                                                                                                       |

27

----

****

28

----

29

----