SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549


____________________________





FORM 10-K


____________________________





x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended May 31, 2010





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

_______________ to _______________





Commission File # 000-53375





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)





P.O. Box 1910 – Level 7 Anzac House


181 Willis Street, Wellington, New Zealand 6140


(Address of principal executive offices)





(509) 252-9157


(Issuer’s telephone number)





Securities registered pursuant to Section 12(b) of the Act: None





Securities registered pursuant to Section 12(g) of the Act:




Common Stock, $0.001 par value


(Title of class)




Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:   Yes o   No x





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act:   Yes x   No o








Table of Contents





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 o





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K:   Yes o   No x




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:




Large accelerated filer
o
Accelerated filer
oNon-accelerated filer
o
Smaller reporting company
x





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act):   Yes o   No x




State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter:





Based on the closing price on September 13, 2010 of $0.34, the aggregate market value of the 95,325,000 common shares held by non-affiliates was $32,410,500.





Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 134,325,000 Common shares were outstanding as of September 13, 2010.




Documents incorporated by reference:  None.

































ii
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Table ofContents




PART IITEM 1.
Description of Business
1ITEM 1A.
Risk Factors
2ITEM 1B.
Unresolved Staff Comments
9ITEM 2.
Properties
9ITEM 3.
Legal Proceedings
19ITEM 4.
Submission of Matters to Vote of Security Holders
19PART IIITEM 5.
Market for Company’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
20ITEM 6.
Selected Financial Data
23ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operation
24ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
32ITEM 8.
Financial Statements and  Supplementary Data:
32Report of Independent Registered Public Accounting Firm
33Balance Sheets at May 31, 2010 and May 31, 2009
34Statements of Operations for the years ended May 31, 2010 and May 31, 2009 and the Exploration Stage Period of July 15, 2005 to May 31, 2010
35Statement of Stockholders’ Equity
36Statements of Cash Flows for the years ended May 31, 2010 andMay 31, 2009 and the Exploration Stage Period of July 15, 2005 toMay 31, 2010
37Notes to Financial Statements
39ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
48ITEM 9A.
Controls and Procedures
48ITEM 9B.
Other Information
50PART IIIITEM 10.
Directors, Executive Officers and Corporate Governance
51ITEM 11.
Executive Compensation
54ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
55ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
56ITEM 14.
Principal Accounting Fees and Services
56PART IVITEM 15.
Exhibits, Financial Statements Schedules
57SIGNATURES
58














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PART I








ITEM 1.       DESCRIPTION OF BUSINESS





This current report on Form 10-K contains forward-looking statements as that term is defined in section 27A of the United States Securities Act of 1933, as amended, and section 21E of the United States Securities Exchange Act of 1934, as amended.  These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", ‘targets”, or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" included in this report, which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to mining operations, changes in the worldwide price of gold, silver, or certain other commodities; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; employee relations; contests over title to properties; and the risks involved in the exploration, development and mining business.





Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results and the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.





Unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.





OVERVIEW





Guinness Exploration, Inc. was incorporated in the State of Nevada on July 15, 2005 and incorporated its subsidiary, Nantawa Resources Inc., in Yukon, Canada on November 6, 2009. Guinness Exploration Inc. trades on the OTC-BB under the symbol GNXP. As used in this Report on Form 10-K and unless otherwise indicated, the terms "we", "us", "our", “Company”, and “Guinness” mean collectively Guinness Exploration, Inc., a Nevada corporation, and its wholly owned subsidiary, Nantawa Resources Inc., a Yukon corporation, unless otherwise indicated.





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. Since inception the Company has not been involved in any reclassification, consolidation, or merger arrangements.





Our current operational focus is to conduct exploration activities on the Nantawa Project and to complete the terms of the Nantawa Agreement as described in Item 2 - Properties in this Report.








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Reports to security holders





We are not currently required to deliver an annual report to our security holders and do not expect to do so for the foreseeable future.





We are a reporting company and file Forms 10-Q quarterly reports and Forms 10-K annual reports with the SEC. We also file other reports including reports on Form 8-K, proxy and information statements and other information regarding the Company. The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549 and/or obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, we are an electronic filer and as such, all items filed by us are available through an Internet site maintained by the SEC which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which site is available at http://www.sec.gov.




ITEM 1A.    RISK FACTORS





The following risk factors should be considered in connection with an evaluation of the business of our business:





In addition to other information in this current report, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition.  As a result of the risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements.  Additional risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, operating results, liquidity and financial condition.  If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, the trading price of our securities could decline, and you may lose all or part of your investment.





Risks Associated With Mining





Mineral exploration and development activities are speculative in nature





Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by our company may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in our company not receiving an adequate return of investment capital.





Substantial expenditures are required to establish ore 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. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis. Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting








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regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to 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 operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.





All of our properties are in the exploration stage. There is no assurance that we can establish the existence of any mineral resource on any of our properties in commercially exploitable quantities. Until we can do so, we cannot earn any revenues from operations and if we do not do so we will lose all of the funds that we expend on exploration. If we do not discover any mineral resource in a commercially exploitable quantity, our business could fail.





Despite exploration work on our mineral properties, we have not established that any of them contain any mineral reserve, nor can there be any assurance that we will be able to do so. If we do not, our business could fail.





A mineral reserve is defined by the Securities and Exchange Commission in its Industry Guide 7, which can be viewed at www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7, as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. The probability of an individual prospect ever having a "reserve" that meets the requirements of the Securities and Exchange Commission's Industry Guide 7 is extremely remote; in all probability our mineral resource property does not contain any 'reserve' and any funds that we spend on exploration will probably be lost.





Even if we do eventually discover a mineral reserve on one or more of our properties, there can be no assurance that we will be able to develop our properties into producing mines and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines.





The commercial viability of an established mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation and market prices. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral resource unprofitable.





Mineral operations are subject to applicable law and government regulation. Even if we discover a mineral resource in a commercially exploitable quantity, these laws and regulations could restrict or prohibit the exploitation of that mineral resource. If we cannot exploit any mineral resource that we might discover on our properties, our business may fail.





Both mineral exploration and extraction require permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to obtain or maintain any of the permits required for the continued exploration of our mineral properties or for the construction and operation of a mine on our properties at economically viable costs. If we cannot accomplish these objectives, our business could fail.











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We believe that we are in compliance with all material laws and regulations that currently apply to our activities but there can be no assurance that we can continue to remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further, there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration or development of our mineral properties.





If we establish the existence of a mineral resource on any of our properties in a commercially exploitable quantity, we will require additional capital in order to develop the property into a producing mine. If we cannot raise this additional capital, we will not be able to exploit the resource, and our business could fail.





If we do discover mineral resources in commercially exploitable quantities on any of our properties, we will be required to expend substantial sums of money to establish the extent of the resource, develop processes to extract it and develop extraction and processing facilities and infrastructure. Although we may derive substantial benefits from the discovery of a major deposit, there can be no assurance that such a resource will be large enough to justify commercial operations, nor can there be any assurance that we will be able to raise the funds required for development on a timely basis. If we cannot raise the necessary capital or complete the necessary facilities and infrastructure, our business may fail.





Mineral exploration and development is subject to extraordinary operating risks. We do not currently insure against these risks. In the event of a cave-in or similar occurrence, our liability may exceed our resources, which would have an adverse impact on our company.





Mineral exploration, development and production involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Our operations will be subject to all the hazards and risks inherent in the exploration for mineral resources and, if we discover a mineral resource in commercially exploitable quantity, our operations could be subject to all of the hazards and risks inherent in the development and production of resources, including liability for pollution, cave-ins or similar hazards against which we cannot insure or against which we may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the environment. We do not currently maintain any insurance coverage against these operating hazards. The payment of any liabilities that arise from any such occurrence would have a material adverse impact on our company.





Mineral prices are subject to dramatic and unpredictable fluctuations.





We expect to derive revenues, if any, either from the sale of our mineral resource properties or from the extraction and sale of precious and base metals such as gold, silver and copper. The price of those commodities has fluctuated widely in recent years, and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors on the price of precious and base metals, and therefore the economic viability of any of our exploration properties and projects, cannot accurately be predicted.











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The mining industry is highly competitive and there is no assurance that we will continue to be successful in acquiring mineral claims. If we cannot continue to acquire properties to explore for mineral resources, we may be required to reduce or cease operations.





The mineral exploration, development, and production industry is largely un-integrated. We compete with other exploration companies looking for mineral resource properties. While we compete with other exploration companies in the effort to locate and acquire mineral resource properties, we will not compete with them for the removal or sales of mineral products from our properties if we should eventually discover the presence of them in quantities sufficient to make production economically feasible. Readily available markets exist worldwide for the sale of mineral products. Therefore, we will likely be able to sell any mineral products that we identify and produce.





In identifying and acquiring mineral resource properties, we compete with many companies possessing greater financial resources and technical facilities. This competition could adversely affect our ability to acquire suitable prospects for exploration in the future. Accordingly, there can be no assurance that we will acquire any interest in additional mineral resource properties that might yield reserves or result in commercial mining operations.




Risks Related To Our Company




We have a limited operating history on which to base an evaluation of our business and prospects.




We have been in the business of exploring mineral resource properties since July 15, 2005 and we have not yet located any mineral reserve. As a result, we have never had any revenues from our operations. In addition, our operating history has been restricted to the acquisition and exploration of our mineral properties and this does not provide a meaningful basis for an evaluation of our prospects if we ever determine that we have a mineral reserve and commence the construction and operation of a mine. We have no way to evaluate the likelihood of whether our mineral properties contain any mineral reserve or, if they do that we will be able to build or operate a mine successfully. We anticipate that we will continue to incur operating costs without realizing any revenues during the period when we are exploring our properties. We therefore expect to continue to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from mining operations and any dispositions of our properties, we will not be able to earn profits or continue operations. At this early stage of our operation, we also expect to face the risks, uncertainties, expenses and difficulties frequently encountered by companies at the start up stage of their business development. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. There is no history upon which to base any assumption as to the likelihood that we will prove successful and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.














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Our activities will be subject to environmental and other industry regulations which could have an adverse effect on our financial condition





Our company's activities are subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation generally provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailing disposal areas, which would result in environmental pollution. A breach of such legislation may result in imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations could have an adverse effect on the financial condition of our company.





The operations of our company include exploration and development activities and commencement of production on our properties, which requires permits from various federal, state, provincial and local governmental authorities and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities generally experience increased costs and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits.





Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations 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.





The fact that we have not earned any operating revenues since our incorporation raises substantial doubt about our ability to continue to explore our mineral properties as a going concern.





We have not generated any revenue from operations since our incorporation and we anticipate that we will continue to incur operating expenses without revenues unless and until we are able to identify a mineral resource in a commercially exploitable quantity on one or more of our mineral properties and we build and operate a mine. At May 31, 2010, we had cash in the amount of $973,227 and net working capital of $605,692. We incurred a net loss of $(1,396,663) for the twelve month period ended May 31, 2010 and a net loss of $(1,509,607) since inception on July 15, 2005. We estimate our average monthly operating expenses to be approximately $130,000 to $175,000, including mineral property costs, management services and administrative costs. Should the results of our planned exploration require us to increase our current operating budget, we may have to raise additional funds to meet our currently budgeted operating requirements for the next 12 months. As we cannot assure a lender that we will be able to successfully explore and develop our mineral properties, we will probably find it difficult to raise debt financing from traditional lending sources. We have traditionally raised our operating capital from sales of equity securities and shareholder loans, but there can be no assurance that we will continue to be able to do so. If we cannot raise the money that we need to continue exploration of our mineral properties, we may be forced to delay, scale back, or eliminate our exploration activities. If any of these were to occur, there is a substantial risk that our business would fail.





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These circumstances have lead our independent registered public accounting firm, in their report included in this Form 10-K, to comment about our company’s ability to continue as a going concern. Management has plans to seek additional capital through private placements and/or public offerings of its capital stock. These conditions raise substantial doubt about our company’s ability to continue as a going concern. Although there are no assurances that management’s plans will be realized, management believes that our company will be able to continue operations in the future. Our consolidated financial statements do not include any adjustments relating to the recoverability and potential classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event our company cannot continue in existence. We continue to experience net operating losses.





We currently rely on certain key individuals and the loss of one of these key individuals could have an adverse effect on the Company





Our success depends to a certain degree upon certain key members of our management. These individuals are a significant factor in the our growth and success. The loss of the service of members of the management and advisory board could have a material adverse effect on our company. In particular, the success of our company is highly dependent upon the efforts of our either our President & CEO or our Chief Geologist, the loss of whose services would have a material adverse effect on the success and development of our company. Additionally, we do not anticipate having key man insurance in place in respect of our directors and senior officers in the foreseeable future.





We require substantial funds merely to determine whether commercial precious metal deposits exist on our properties





Any potential development and production of our exploration properties depends upon the results of exploration programs and/or feasibility studies and the recommendations of duly qualified engineers and geologists. Such programs require substantial additional funds. Any decision to further expand our operations on these exploration properties is anticipated to involve consideration and evaluation of several significant factors including, but not limited to:





§
Costs of bringing each property into production, including exploration work, preparation of production feasibility studies, and construction of production facilities;


§
Availability and costs of financing;


§
Ongoing costs of production;


§
Market prices for the precious metals to be produced;


§
Environmental compliance regulations and restraints; and


§
Political climate and/or governmental regulation and control.





Risks Associated with Our Common Stock





Trading on the OTC Bulletin Board may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.





Our common stock is quoted on the Over-The-Counter Bulletin Board service of the Financial Industry Regulatory Authority. Trading in stock quoted on the Over-The-Counter Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the Over-The-Counter Bulletin Board is not a stock exchange, and trading of securities on the Over-The-Counter Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like NASDAQ, or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any of their shares.








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Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations and FINRA’s sales practice requirements, which may limit a stockholder’s ability to buy and sell our stock.





Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. 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 in a form prepared by the SEC which 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. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these 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 disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.





In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the Financial Industry Regulatory Authority believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The Financial Industry Regulatory Authority ’ requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.





Other Risks





Trends, Risks and Uncertainties





We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.








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ITEM 1B.    UNRESOLVED STAFF COMMENTS





None.




ITEM 2.       PROPERTIES





Executive Offices





Our executive, administrative, and operating offices is located at Level 7 Anzac House 181 Willis Street, Wellington, New Zealand 6140. We lease approximately 250 square feet at a cost of $500 per month. We believe these facilities are adequate for our current needs and that alternate facilities on similar terms would be readily available if needed.





Mineral Properties





We hold or have the rights to acquire the Nantawa Project.





Nantawa Project





The Nantawa Project is situated in the prolific Tintina Gold Belt, a 1,200 km long area extending from northern British Columbia, through the Yukon Territory and into southwest Alaska. The Tintina Gold Belt includes such world-class, multi-million ounce gold deposits as Pogo, Fort Knox, True North, and Donlin Creek. A detailed description of the region and properties is as follows:





Exploration properties description and location





The Mount Nansen property and the Tawa property (collectively the ‘Nantawa Project’) are located in the Whitehorse Mining District on NTS map sheet 105I-03 (Figures 1 and 3). The main claim block is highly irregular (Figure 3). The complete claim group includes 203 full or fractional quartz mineral claims (Table 1). Total size of the claim group is 3,136.43 square hectares. Most of the claims are contiguous except for the two medium size non-contiguous blocks that are called Tawa property (Figure 3). The central block of the contiguous claims, Mount Nansen Property (Figure 3), is some 185 km NNW of Whitehorse. The Mount Nansen claim group measure 8.7 km in the NS direction and 5.1 km in the EW direction. The approximate geographical location of the Mount Nansen claim block is shown in Table 2.





Tawa Claims Lapse





As reported on a current report on Form 8-K on May 11, 2010, in May, 2010 the Company was advised that the Tawa Claims portion of the Nantawa Project had lapsed. The Company has had discussions with the Yukon Department of Energy, Mines and Resources with respect to a potential reinstatement of the claims upon the filing of the assessment performed in 2009 on the property or other qualifying reports and is awaiting a determination in this matter. The Tawa Claims cover approximately 8.74 square kilometers and comprise approximately 28% of the total claims held by the Company. Discussions with the Yukon Department of Energy, Mines and Resources were ongoing at the time of filing of this report on Form 10-K.














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Figure 1:   Location of the Mount Nansen Property and the Tawa Property


(Modified from Denhom, et. al., 2000)







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Figure 2:   Road access in the Mount Nansen and Tawa properties


(Modified from Eaton and Archer, 1989 and Stroshein, 2007a)










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Figure 3:   Mount Nansen property and Tawa property on Claim Blocks


(Red lines represent claim boundaries - Cyan square represents the boundary of the geophysical survey area)














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Table 1:   Claim list for Mount Nansen property and Tawa property





Claim
Grant Number
Expiry Date
Area (Ha)
CommentsROSE
04241
09/10/2019
20.42
LeaseGOLDEN EAGLE
04278
09/10/2019
20.96
LeaseWAR EAGLE
04279
09/10/2019
20.77
LeaseSHAMROCK
04354
09/10/2019
20.73
LeaseSPOT
04361
09/10/2019
19.92
LeaseARLEP
04368
09/10/2019
14.48
LeasePHYLLIS
04369
09/10/2019
20.26
LeaseRUB
55633
09/10/2019
1.84
LeasePUB
55663
09/10/2019
1.93
LeaseSUN DOG
55665
09/10/2019
3.20
LeaseCUB
55666
09/10/2019
1.29
LeaseJAM
55890
09/10/2019
11.64
LeasePAM
55892
09/10/2019
2.64
LeaseDOME 1
73537
06/02/2014
15.10
-DOME 2
73538
06/02/2014
15.51
-DOME 3
73539
06/02/2014
17.29
-DOME 4
73540
06/02/2014
17.98
-DOME 6
73542
06/02/2014
17.32
-DOME 7
73543
06/02/2014
25.34
-DOME 8
73694
06/02/2014
12.47
-DOME 14
73700
06/02/2014
21.07
-DOME 16
73702
06/02/2014
20.61
-DOME 17
73703
06/02/2014
18.41
-DOME 18
73704
06/02/2014
18.56
-DOME 19
73705
06/02/2014
16.73
-DOME 20
73706
06/02/2014
13.42
-JOANNE 1
74283
06/02/2014
19.79
-JOANNE 2
74284
06/02/2014
19.51
-JOANNE 3
74285
06/02/2014
20.36
-JOANNE 4
74286
06/02/2014
14.78
-JOANNE 5
74287
06/02/2014
19.83
-JOANNE 6
74288
06/02/2014
19.69
-DOME 25
77746
06/02/2014
15.19
-DOME 26
77747
06/02/2014
22.54
-DOME 27
77748
06/02/2014
20.32
-DOME 28
77749
06/02/2014
21.74
-DOME 33
77754
06/02/2014
25.50
-DOME 34
77755
06/02/2014
23.29
-DOME 35
77756
06/02/2014
22.39
-DOME 36
77757
06/02/2014
23.97
-DOME 37
77758
06/02/2014
14.23
-DOME 38
77759
06/02/2014
18.48
-DOME 39
77760
06/02/2014
14.95
-DOME 40
77761
06/02/2014
20.51
-DOME 41
77762
06/02/2014
20.76
-











13
 Table of Contents






Claim
Grant Number
Expiry Date
Area (Ha)
CommentsDOME 42
77763
06/02/2014
19.93
-DOME 43
77764
06/02/2014
20.47
-DOME 49
77770
06/02/2014
8.18
-DOME 50
77771
06/02/2014
18.83
-DOME 51
77772
06/02/2014
19.05
-DOME 52
77773
06/02/2014
21.85
-DOME 53
77774
06/02/2014
22.80
-DOME 54
77775
06/02/2014
14.69
-DOME 55
77776
06/02/2014
13.09
-DOME 56
77777
06/02/2014
13.35
-DOME 57
77778
06/02/2014
20.47
-DOME 58
77779
06/02/2014
19.41
-DOME 60
77781
06/02/2014
20.06
-DOME 61
77782
06/02/2014
18.91
-DOME 63
77784
06/02/2014
22.51
-DOME 64
77785
06/02/2014
22.88
-DOME 65
77786
06/02/2014
20.66
-DOME 66
77787
06/02/2014
21.18
-DOME 78
81842
06/02/2014
25.41
-DOME 79
81843
06/02/2014
24.10
-DOME 80
81844
06/02/2014
24.20
-DOME 81
81845
06/02/2014
22.52
-DOME 82
81846
06/02/2014
23.26
-DOME 83
81847
06/02/2014
18.72
-DOME 84
81848
06/02/2014
19.37
-DOME 86
81850
06/02/2014
20.76
-HIW 9
YA23835
06/02/2014
19.44
-HIW 10
YA23836
06/02/2014
20.83
FractionsHIW 11
YA23837
06/02/2014
21.55
FractionsHIW 12
YA23838
06/02/2014
19.93
FractionsHIW 13
YA23839
06/02/2014
20.72
-HIW 14
YA23840
06/02/2014
19.55
-HIW 15
YA23841
06/02/2014
20.15
-HIW 16
YA23842
06/02/2014
19.86
-HIW 17
YA23843
06/02/2014
19.92
-HIW 1
YA24813
06/02/2014
4.74
FractionsHIW 2
YA24814
06/02/2014
5.15
FractionsHIW 7
YA24819
06/02/2014
3.01
FractionsDD 1
YA59596
06/02/2014
20.62
-DD 2
YA59597
06/02/2014
22.35
-DD 15
YA59610
06/02/2014
19.20
-DD 16
YA59611
06/02/2014
19.21
-DD 17
YA59612
06/02/2014
19.37
-DD 18
YA59613
06/02/2014
19.85
-DD 19
YA59614
06/02/2014
20.17
-DD 20
YA59615
06/02/2014
19.90
-DD 21
YA59616
06/02/2014
19.64
-








14
 Table of Contents






Claim
Grant Number
Expiry Date
Area (Ha)
CommentsDD 22
YA59617
06/02/2014
19.17
-DD 23
YA59618
06/02/2014
18.69
-DD 24
YA59619
06/02/2014
18.30
-DD 25
YA59620
06/02/2014
18.18
-DD 26
YA59621
06/02/2014
17.65
-DD 27
YA59622
06/02/2014
19.49
-DD 28
YA59623
06/02/2014
18.71
-TBR 1
YA86690
06/02/2014
8.92
-TBR 2
YA86691
06/02/2014
20.16
-TBR 3
YA86692
06/02/2014
20.03
-TBR 4
YA86693
06/02/2014
20.84
-TBR 5
YA86694
06/02/2014
18.34
-TBR 6
YA86695
06/02/2014
20.92
-TBR 7
YA86696
06/02/2014
15.96
-TBR 8
YA86697
06/02/2014
21.79
-ONT 38
YA87204
06/02/2014
20.26
-ONT 40
YA87206
06/02/2014
18.34
-ONT 42
YA87208
06/02/2014
5.73
-EEK 1
YA87210
06/02/2014
21.07
-EEK 2
YA87211
06/02/2014
20.08
-EEK 3
YA87212
06/02/2014
20.70
-EEK 4
YA87213
06/02/2014
20.68
-EEK 5
YA87214
06/02/2014
20.80
-EEK 6
YA87215
06/02/2014
19.58
-EEK 7
YA87216
06/02/2014
19.97
-EEK 8
YA87217
06/02/2014
21.91
-EEK 9
YA87218
06/02/2014
22.64
-EEK 14
YA87223
06/02/2014
21.36
-EEK 15
YA87224
06/02/2014
21.22
-EEK 16
YA87225
06/02/2014
21.76
-EEK 17
YA87226
06/02/2014
20.01
-EEK 18
YA87227
06/02/2014
20.74
-ONT 44
YA92655
06/02/2014
16.80
-ONT 45
YA92656
06/02/2014
12.91
-ONT 46
YA92657
06/02/2014
18.48
-ONT 47
YA92658
06/02/2014
14.41
-TAWA 25
YA95051
03/01/2010
4.33
FractionsTAWA 26
YA95052
03/01/2010
5.95
FractionsTAWA 27
YA95151
03/01/2010
17.11
-TAWA 28
YA95152
03/01/2010
22.34
-TAWA 29
YA95153
03/01/2010
16.14
-TAWA 30
YA95154
03/01/2010
20.77
-TAWA 31
YA95155
03/01/2010
23.90
-TAWA 32
YA95156
03/01/2010
21.36
-TAWA 33
YA95157
03/01/2010
12.16
-TAWA 34
YA95158
03/01/2010
18.45
-











15
 Table of Contents








Claim
Grant Number
Expiry Date
Area (Ha)
CommentsTAWA 47
YA95163
03/01/2010
7.01
-TAWA 48
YA95164
03/01/2010
8.00
-TAWA 49
YA95165
03/01/2010
21.93
-TAWA 50
YA95166
03/01/2010
23.59
-TAWA 51
YA95167
03/01/2010
23.22
-TAWA 52
YA95168
03/01/2010
23.93
-TAWA 53
YA95169
03/01/2010
15.03
-TAWA 54
YA95170
03/01/2010
22.93
-TAWA 55
YA95171
03/01/2010
5.90
-TAWA 56
YA95172
03/01/2010
13.37
-TAWA 57
YA95173
03/01/2010
14.12
-TAWA 58
YA95174
03/01/2010
16.15
-TAWA 59
YA95175
03/01/2010
13.35
-TAWA 60
YA95176
03/01/2010
16.19
-TAWA 61
YA95177
03/01/2010
12.44
-TAWA 62
YA95178
03/01/2010
11.28
-TAWA 63
YA95179
03/01/2010
8.41
-TAWA 64
YA95301
03/01/2010
18.96
-TAWA 65
YA95302
03/01/2010
15.20
-TAWA 66
YA95303
03/01/2010
21.82
-TAWA 67
YA95304
03/01/2010
22.03
-TAWA 68
YA95305
03/01/2010
20.61
-TAWA 69
YA95306
03/01/2010
19.68
-TAWA 70
YA95307
03/01/2010
19.61
-TAWA 71
YA95308
03/01/2010
18.94
-TAWA 72
YB06963
03/01/2010
19.15
-TAWA 73
YB06964
03/01/2010
18.69
-TAWA 74
YB06965
03/01/2010
19.02
-TAWA 75
YB06966
03/01/2010
18.61
-TAWA 83
YB06971
03/01/2010
19.28
-TAWA 84
YB06972
03/01/2010
6.48
-TAWA 85
YB06973
03/01/2010
20.10
-TAWA 86
YB06974
03/01/2010
21.08
-TAWA 87
YB06975
03/01/2010
19.83
-TAWA 88
YB06976
03/01/2010
20.96
-TAWA 89
YB06977
03/01/2010
19.91
-TAWA 90
YB06978
03/01/2010
20.97
-Total


3136.43








Table 2:   Coordinates of the corners of the Mount Nansen claim block





Corner
N-S
E-WNW
62o06.0’ N
137o12.0’ WNE
62o05.5’ N
137o05.8’ WSE
62o01.2’ N
137o05.3’ WSW
62o02.4’ N
137o11.7’ W











16
 Table of Contents








Accessibility, Climate, Local Resources, Infrastructure and Physiography




The Mount Nansen property and the Tawa property are located approximately 180 km northwest of Whitehorse and 60 km west of the Village of Carmacks in the Yukon Territory (Figure 1). These two properties are accessible from Whitehorse via the Klondike highway to the town of Carmacks and then via an all weather gravel road. Carmacks is 170 km north of Whitehorse. Whitehorse is connected to Vancouver, Edmonton, and Calgary by air service. The Mount Nansen property is facilitated with an extensive network of gravel and dirt roads (Figure 2).





The Mount Nansen and Tawa properties lie northwest of the maximum advance of the Wisconsin ice sheet, and, consequently, are not affected by the Pleistocene continental glaciations (Figure 4; Eaton and Archer, 1989). This resulted in deep weathering in the properties reaching to depths of over 70 m from the topographic surface (Denholm et al, 2000; Roder, 1996). In mineralized zones, sulphides are commonly altered into limonite and other oxides (Denholm et al, 2000; Melling, 1995; Roder, 1996). The topography in the two properties is hilly with rounded ridges and shallow valleys. Local elevation ranges from 1030 m to 1560 m (Melling, 1995; Rodger, 1996).




Permafrost is widespread in the area and varies according to the amount of vegetation and slope facing direction (Stroshein, 2007b). In the north-facing slopes, permafrost is frozen all year around and in the south-facing slopes permafrost thaw to a depth of 1-2 m in the summer (Eaton and Archer, 1989; Roder, 1996).





The average precipitation in the Mount Nansen property is approximately 25 cm, most of which falls as rain in the summer months (Stroshein, 2007b). Snow fall is normally 30-40 cm deep in late winter. The average monthly temperature ranges from -25oC in January to 15oC in July (Stroshein, 2007b).





The Mount Nansen property is situated in the traditional Territory of the Little Salmon/Carmacks First Nation (Stroshein, 2007b). At the mine site, there is no infrastructure other than the mine plant and buildings. The village of Carmacks has been established since 1893 and has provided fuel for river steamboats, a roadhouse on the Whitehorse to Dawson stage run, and an area service center (Campbell, 1994). In the Village of Carmacks, there reside approximately 500 people. The village is also the main and administrative center of the Little Salmon Traditional Lands.





Additional information:  Full text of a Report completed by Robert S. Middleton, P.Eng on November 27, 2009 regarding the Mount Nansen and Tawa properties can be found at our website: www.guinnessexploration.com.
























17
 Table of Contents


Figure 4:   Glaciation, Dawson Range, Yukon Territory












18
 Table of Contents





The Company does not have any investments or interests in real estate, nor real estate mortgages, nor in securities, nor interests in persons primarily engaged in real estate activities and therefore has no investment policies related to such matters. There is no limitation on the Company acquiring such interests and there is no limitation on the percentage of assets which the Company might invest in any one of such investments. Additionally, there is no requirement for the Board of Directors to seek approval through a vote of security holders for changes to any such policies if such investment policies were implemented in the future. It is not a policy of the Company to acquire assets neither primarily for possible capital gains nor primarily for income. At this time the Company has no intention of investing in any of the aforementioned investments.





ITEM 3.       LEGAL PROCEEDINGS





There are no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our officer and director, or any registered or beneficial shareholders are an adverse party or has a material interest adverse to us.





ITEM 4.       SUBMISSION OFMATTERS TO A VOTE OF SECURITY HOLDERS





During the year ended May 31, 2010, no matters were submitted to a vote of the Company's security holders, through the solicitation of proxies or otherwise.












































19
 Table of Contents








PART II




ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





Market Information





The Company’s shares were cleared for trading by the Financial Industry Regulatory Authority (‘FINRA’) on November 8, 2007 under the symbol “GNXP”. Our common shares are quoted on the Over-the-Counter Bulletin Board (‘OTC-BB’) and the following table sets forth the range of high and low bid quotations, obtained from www.finance.yahoo.com, for our common stock as reported each of the periods indicated. The market for our shares is limited, volatile and sporadic. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.





National Association of Securities Dealers

OTC Bulletin Board(1)QuotesQuarter Ended

High

Trade


Low

Trade


Closing

TradeNovember 30, 2007

$
n/a
(2)

$
n/a
(2)

$
n/a
(2)February 28, 2008


n/a
(2)


n/a
(2)


n/a
(2)May 31, 2008


n/a
(2)


n/a
(2)


n/a
(2)August 31, 2008

$
n/a
(2)

$
n/a
(2)

$
n/a
(2)November 30, 2008


n/a
(2)


n/a
(2)


n/a
(2)February 28, 2009


n/a
(2)


n/a
(2)


n/a
(2)May 31, 2009


n/a
(2)


n/a
(2)


n/a
(2)August 31, 2009

$
n/a
(2)

$
n/a
(2)

$
n/a
(2)November 30, 2009


0.70



0.50



0.65February 28, 2010


1.30



0.40



1.05May 31, 2010


1.25



0.46



0.59




Notes:(1)
Over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.(2)
No trades occurred during this period.





Our common shares are issued in registered form.  The registrar and transfer agent for our common shares is: Empire Stock Transfer Inc., 1859 Whitney Mesa Dr., Henderson, NV, USA 89014, Tel: 702.818.5898, Fax: 702.974.1444, email: www.empirestock.com













20
 Table of Contents








Shareholders





As of May 31, 2010, the Company had 3 shareholders of its common shares.





Dividend Policy





There are no restrictions that would limit the Company from paying dividends. We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.





Securities Authorized for Issuance Under Equity Compensation Plans




During the most recent fiscal year ended, the Company did not have any compensation plans nor individual compensation arrangements under which it might authorize the issuance of equity securities, options, or registration rights to employees or non-employees in exchange for consideration in the form of goods or services.





Purchases of Equity Securities by the Issuer and Affiliated Purchasers





We did not purchase any of our shares of common stock or other securities during the fiscal year ended May 31, 2010.





Section 15(g) of the Securities Exchange Act of 1934





The Company’s shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended, which imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by this Section 15(g), the broker/dealer must make a special suitability determination for the purchase and must have received the purchaser's written agreement to the transaction prior to the sale. Consequently, Section 15(g) may affect the ability of broker/dealers to sell the Company’s securities and also may affect your ability to sell your shares in the secondary market.





Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and the secondary market; terms important to an understanding of the function of the penny stock market, such as "bid" and "offer" quotes, a dealers "spread" and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customer’s rights and remedies in causes of fraud in penny stock transactions; and, the NASD's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.











21
 Table of Contents








Recent Sales of Unregistered Securities





During the year ended May 31, 2010, unregistered securities included:





On December 29, 2009 to fulfill a Nantawa Agreement payment term, the Company issued 60,000,000 restricted shares of its common stock valued at US$0.00103 per share to Eagle Trail Properties, Inc. representing aggregate proceeds of US$61,800. These shares were issued pursuant to Regulation S of the Securities Act of 1933, as amended. These shares were issued pursuant to Regulation S of the Securities Act of 1933, as amended and the Company did not engage in any general solicitation or advertising regarding these shares.





On February 10, 2010 the Company completed a Unit offering which raised aggregate proceeds of US$1,500,000 and was comprised a unit (‘Unit’) sale by Guinness of 1,875,000 Units priced at US$0.80 per Unit for one share of common stock in the capital of Guinness (each, a "Share"); and one common share purchase warrant (each a “Warrant”) subject to adjustment.  The US$0.80 per Unit value was allocated US$0.77 to the common stock (closing price of the Company’s stock on the date the agreement was executed, January 26, 2010) and US$0.03 to the share purchase warrant. Each whole Warrant is non-transferable and entitles the holder to purchase one common share of Guinness (each, a “Warrant Share”), as presently constituted, for a period of twenty four months beginning February 10, 2010 at a price per Warrant Share of US$2.00. These Units are being issued pursuant to Regulation S of the Securities Act of 1933, as amended (“Regulation S”) and Guinness did not engage in any general solicitation or advertising regarding this Unit offering.





On May 10, 2010 the Company completed a Unit offering which raised aggregate proceeds of US$500,000 and was comprised a unit (‘Unit’) sale by Guinness of 625,000 Units priced at US$0.80 per Unit for one share of common stock in the capital of Guinness (each, a "Share"); and one common share purchase warrant (each a “Warrant”) subject to adjustment.  The US$0.80 per Unit value was allocated US$0.75 to the common stock (closing price of the Company’s stock on the date the agreement was executed, April 22, 2010) and US$0.05 to the share purchase warrant. Each whole Warrant is non-transferable and entitles the holder to purchase one common share of Guinness (each, a “Warrant Share”), as presently constituted, for a period of twenty four months beginning May 10, 2010 at a price per Warrant Share of US$2.00. These Units are being issued pursuant to Regulation S of the Securities Act of 1933, as amended (“Regulation S”) and Guinness did not engage in any general solicitation or advertising regarding this Unit offering.

















22
 Table of Contents








ITEM 6.       SELECTED FINANCIAL DATA





Fiscal

2010


Fiscal

2009


Fiscal

2008


Fiscal

2007


Fiscal

2006$


$


$


$


$Operating Revenue:Quarter I - Three Months to August 31


-



-



-



-



-Quarter II - Three Months to November 30


-



-



-



-



-Quarter III- Three Months to February 28


-



-



-



-



-Full Year – Twelve Months to May 31


-



-



-



-



-Net Income/(Loss):Quarter I - Three Months to August 31


(7,553
)


(6,619
)


(8,011
)


(1,855
)


(692
)Quarter II - Three Months to November 30


(12,635
)


(8,604
)


(3,309
)


(5,025
)


(135
)Quarter III- Three Months to February 28


(1,096,370
)


(4,137
)


(2,517
)


(20,807
)


(10
)Full Year – Twelve Months to May 31


(1,396,663
)


(23,112
)


(37,913
)


(51,071
)


(848
)Net Earnings/(Loss) per share:Quarter I - Three Months to August 31

Nil


Nil


Nil


Nil


NilQuarter II - Three Months to November 30

Nil


Nil


Nil


Nil


NilQuarter III- Three Months to February 28


(0.01
)

Nil


Nil


Nil


NilFull Year – Twelve Months to May 31


(0.01
)

Nil


Nil


Nil


NilCash:Quarter I - Three Months to August 31


13,955



185



523



31,196



-Quarter II - Three Months to November 30


4093



32,652



3,360



17,656



-Quarter III- Three Months to February 28


833,427



23,400



2,263



6,670



53,500Full Year – Twelve Months to May 31


973,227



20,638



9,503



6,407



32,515Total assets:Quarter I - Three Months to August 31


20,375



1,964



16,508



52,181



-Quarter II - Three Months to November 30


10674



37,002



19,526



46,641



-Quarter III- Three Months to February 28


861,399



29,649



18,248



26,480



53,500Full Year – Twelve Months to May 31


1,164,953



26,841



10,618



22,706



53,500Total stockholders’ equity (deficit):Quarter I - Three Months to August 31


(66,998
)


(42,951
)


(6,430
)


50,798



(692
)Quarter II - Three Months to November 30


(79632
)


(51,555
)


(6,852
)


45,772



(827
)Quarter III- Three Months to February 28


385,798



(55,692
)


(9,369
)


24,966



52,602Full Year – Twelve Months to May 31


605,692



(59,444
)


(36,332
)


1,581



52,652Total liabilities and stockholders’ equity (deficit):Quarter I - Three Months to August 31


20,375



1,964



16,508



52,181



-Quarter II - Three Months to November 30


10,674



37,002



19,526



46,641



-Quarter III- Three Months to February 28


861,399



29,649



18,248



26,480



53,500Full Year – Twelve Months to May 31


1,164,953



26,841



10,618



22,706



53,500Cash dividends per share:Quarter I - Three Months to August 31


-



-



-



-



-Quarter II - Three Months to November 30


-



-



-



-



-Quarter III- Three Months to February 28


-



-



-



-



-Full Year – Twelve Months to May 31


-



-



-



-



-







23
 Table of Contents







ITEM 7.       MANAGEMENTS’ DISCUSSION AND ANALYSIS





Overview





This Annual Report on Form 10-K contains "forward-looking statements" relating to the registrant 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-K that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as "may", "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.





We are a start-up, exploration stage company with a limited operating history. We intend to pursue exploration opportunities regarding 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.





Operational Developments





●
On October 19, 2009 Mr. Alastair Brown purchased a control position in Guinness Exploration and began a new strategic course for the Company. For the past five years, and presently, Mr. Brown has been the Sales Director of Conrad Properties Inc., a large scale residential property developer in New Zealand. From 1986 to 1990, Mr. Brown attended the University of Auckland, New Zealand where he received his Bachelor of Commerce degree in 1990. From 1990 to 2005, Mr. Brown had a successful business career in a variety of large property developments in New Zealand and Australia. In 2005, Mr. Brown moved operations to London, UK where he raised equity for mixed use property projects in the United States, and in 2009 moved back to New Zealand to focus on management of a 280 residential unit project for Conrad Properties in Wellington, New Zealand.



Mr. Brown has extensive professional experience in the field of large scale international property development and we believe Mr. Brown's considerable organizational, operational and financial skills provide the basis to implement our plans for mineral exploration and development. During the year ended May 31, 2010 and to current date, Mr. Brown has assembled and is managing a skilled team of mining industry professionals for exploration of the Nantawa Project in Yukon, Canada.




●
On November 19, 2010, and as amended on February 4, 2010, we entered into an agreement with ETPI to acquire certain mineral property interests known as the Nantawa Project.











24
 Table of Contents





To date, we have paid $471,934 and issued 60,000,000 restricted shares of our common stock to ETPI. A second payment of $471,934 is due to ETPI on, or before, November 30, 2010 and represents the final payment required in order for our company to earn a 65% interest in the Nantawa Project. The Nantawa Agreement also includes an Option for our company to increase its ownership in the Nantawa Project by 35%. To fulfill the terms of the Option and earn an additional 35% interest in the Nantawa Project from ETPI, we made a deposit to ETPI of  $951 on December 1, 2009 and have agreed to incur exploration expenditures of: $947,867 prior to October 31, 2010; and $947,867 prior to October 31, 2011; and, from November 19, 2009 keep the Nantawa Project claims in good standing by paying all taxes, assessments and other charges and by doing all other acts and things that may be necessary in that regard.





●
To comply with Yukon law which limits ownership of mineral claims to persons or companies resident in the Yukon, on November 6, 2009 we incorporated a wholly owned Yukon subsidiary named Nantawa Resources Inc. (the “Subsidiary”) and have assigned all interests in the Nantawa Agreement to this Subsidiary.





Business Subsequent to the Acquisition of the Mineral Property Interest





Our current operational focus is to conduct exploration activities on the Nantawa Project and to complete the terms of the Nantawa Agreement.





●
On December 10, 2009, Mr. John Hiner, B.Sc. (geology), M.Sc. (geology), was appointed as our Chief Geologist, Vice President, Secretary and Treasurer. John Hiner has over 35 years of experience in resource exploration and management worldwide. He has managed exploration, acquisition, and development programs for metals and industrial minerals on four continents. His range of experience includes mineral and petroleum exploration, energy minerals, and geothermal energy development. Over the past five years and previously, Mr. Hiner has provided contracted geological services and managed projects from a conceptual exploration stage to positive feasibility and finance level studies on proven deposits in South America, North America, and Africa. As both geologist and manager, Mr. Hiner has held positions of increasing responsibility with a variety of companies, ranging in size from multinational Phillips Petroleum Company to both Canadian and American junior companies and has several years experience in running publicly traded companies.



Mr. Hiner received his B.S., Geology in 1972 from San Diego State University and his M.S., Geology in 1978 from the University of Nevada-Reno, Mackay School of Mines. In addition to being President of Lynden, Washington based geological consulting firm Jehcorp Inc. from 1990 to present, Mr. Hiner’s employment and educational history includes the following: 1973-1974, Michael T. Halbouty Inc. and Occidental Petroleum, Windsor, England and Inverness, Scotland, Well Site Geologist North Sea; 1974-1976, graduate school, Reno Nevada; 1976-1982, Phillips Petroleum Co, Reno, Nevada, Geologist; 1982-1984, Queenstake Resources Inc., Reno, Nevada, Senior Geologist; 1985-1990, Nicor Mineral Ventures-Westmont Gold, Spokane Washington, District Manager; 1990-1992, Westmont Gold Inc., Denver Colorado, Vice President Exploration 1993-2000, Champion Resources Inc., Vancouver, BC, Vice President Exploration; 2003-2007, Geocom Resources Inc. Bellingham WA, President.



Mr. Hiner is also involved in both the mining industry and the community. He belongs to several industry trade organizations comprising a spectrum of energy and mining groups, and is involved in local volunteer activities through church and benevolent organizations. Mr. Hiner has published through the auspices of the Nevada Bureau of Mines and Geology, the Northwest Mining Association, and various trade journals.






25
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●
On December 29, 2009, in fulfillment of one of the payment terms of the Nantawa Agreement, we issued 60,000,000 restricted shares of our common stock at a deemed value of US$0.00103 per share to ETPI representing aggregate proceeds of US$61,800. These shares were issued pursuant to Regulation S of the Securities Act of 1933, as amended.





●
On January 13, 2010, Mr. Nigel Mattison was appointed as a director of our company. Nigel Mattison has a strong background in the governance of national and community based organizations. His breadth of skills includes company directorship, management, accounting and auditing, international sales and marketing, strategic planning, public relations and fund raising. Mr. Mattison’s employment background includes senior positions with: Conrad Properties (2005 to 2010); Kuranda Resort and Spa (2003 to 2005); Russley Hotel, Christchurch (1994 – 2000); Pan Pacific Hotels and Resorts, a subsidiary of the Tokyu Corporation, Japan (1998 to 1992); ITT Sheraton (1982 to 1988); Groote Eylandt Mining Company Australia (which is jointly owned by BHP Billiton and Anglo American Corporation) (1975); Lion Nathan Brewing (1970 to 1975); and property development projects, and communications and marketing consulting engagements (1975 to 2003). Mr. Mattison is a former Board Member of: the New Zealand Tourist Industry Federation (1991 to 1992); the New Zealand Convention Association (1986 to 1989); Tourism Auckland (1989 to 1992 ); New Zealand Football (1998 to 2005); Canterbury Football (1997 to 2000); and the Association of Consumers and Taxpayers New Zealand (1997 to 2001).





●
In January, 2010, we engaged Coast Mountain Geological Alaska LLC (‘Coast Mountain’), a well known geological consulting firm, to assist us in the orderly advancement of the Nantawa Project. The mandate of Coast Mountain is to review the drilling data from 80 previously drilled holes so as to establish near-term exploration targets. During the summer of 2010, Coast Mountain conducted and managed the on-site exploration work at the Nantawa Project.





●
On February 8, 2010, we received a report from Coast Mountain personnel, which was based on pre-existing geological data, which provided several surface geochemistry maps. Based on this data we believe that we have identified gold anomalies and a large copper anomaly near and over the intrusive to the north end of the Nansen block. Mr. Hiner, our Chief Geologist, Vice President, Secretary and Treasurer, reported that these anomalies may be worthy of follow-up and may have established potential gold and a porphyry copper target.





●
On February 10, 2010, we completed a private placement financing which raised aggregate proceeds of US$1,500,000. This offering included 1,875,000 units at a price of US$0.80 per unit, with each unit being comprised of one share of our common stock and one non-transferable common share purchase warrant. Each whole warrant entitles the holder to purchase one additional share of our company’s common stock for a period of twenty four months at a price of US$2.00 per share.





●
On May 10, 2010, we completed a private placement financing which raised aggregate proceeds of US$500,000. This offering included 625,000 units at a price of US$0.80 per unit, with each unit being comprised of one share of our common stock and one non-transferable common share purchase warrant. Each whole warrant entitles the holder to purchase one additional share of our company’s common stock for a period of twenty four months at a price of US$2.00 per share.











26
 Table of Contents






●
As reported on a current report on Form 8-K on May 11, 2010, in May, 2010 the Company was advised that the Tawa Claims portion of the Nantawa Project had lapsed. The Company has had discussions with the Yukon Department of Energy, Mines and Resources with respect to a potential reinstatement of the claims upon the filing of the assessment performed in 2009 on the property or other qualifying reports and is awaiting a determination in this matter. The Tawa Claims cover approximately 8.74 square kilometers and comprise approximately 28% of the total claims held by the Company. Discussions with the Yukon Department of Energy, Mines and Resources were ongoing at the time of filing of this report on Form 10-K.





●
During May, 2010, we established facilities at the Nantawa Project in preparation for the summer drilling program with a work team complement of six members . Initial work also included locating old drill holes, trenches and other features which allowed an accurate plan for the summer drill program. Mr. Hiner reported, “We were able to obtain excellent quality air photo coverage flown in 2003, from which a scale stable photo base map (called an ‘Orthophoto’) has been constructed. This Orthophoto is being used for our mapping, trenching, and location of drill sites. This is a highly positive and cost-effective find for us, as the existing topographic maps are not fully updated with some new roads, previous mining work disturbance, and other field changes. Our work is progressing well and we expect to report on the start date of our drilling program soon.”





●
On July 20, 2010 the Company has received its Class 3 permit  for trenching and drilling activities at the Nantawa Project from the Yukon Energy, Mines and Resources licensing authority. Construction of drill pads and mobilization of our drilling crew was undertaken immediately. At this time an accurate differential GPS survey was also completed which our geological team utilized with other survey and previous data to locate all known previous trenches, historic drill holes, and other data pertinent to mineralization on the property. The data was compiled and assembled in a Geological Information System (‘GIS’) database and this provided an accurate definition of the location of previously delineated mineralized zones. Mr. Hiner commented, “Based on our work to date, we have established several gold and silver drill targets and have mapped the exact coordinates for additional trenching and our initial drill program. Trenching is planned to confirm and extend mineralized zones. Confirmation and step out drill holes have also been planned and staked and we’ll initiate drilling once our crew is deployed onsite.”





●
On July 27, 2010 trenching and drilling operations at the Nantawa Project were up and running. President Alastair Brown commented, “The start of drilling and trenching this week mark a major milestone we’ve been working hard to achieve for the last few months. We now have a full drill crew complement working two shifts per day and three geologists are on-site to manage the trenching and drilling program. So far we’ve constructed all the drill pads for the Flex zone, and have completed a substantial amount of reclamation of prior disturbance. We’re also pleased to report we received a positive report from the Yukon Mining Inspector, based on his two visits to the site. Additionally, we’re engaged in a program of site environmental remediation and have done substantial reclamation in the Flex zone, one of our principal mineral targets, during the preparation of our drill pads. The lead time prior to receipt of our permits was not wasted. We worked hard during this time to identify several potentially attractive gold








27
 Table of Contents








and silver drilling and trenching targets and have mapped out our objectives. This has now allowed us to move quickly to pursue the goals of our summer exploration program.”





●
During August 4th to 7th, 2010, CEO Alastair Brown and Chief Geologist John Hiner conducted a site inspection of the Nantawa Project and Mr. Brown reported, “The purpose of our visit was to conduct an on-site operations inspection, consult with our geological and technical team, and meet with Yukon regulatory officials to ensure we are meeting all Yukon exploration compliance standards. I’m pleased to report positive results in all these three areas. On the operations side, our drilling and trenching operations are working at full capacity and we’re on schedule to meet our aggressive summer exploration goals. I’m also very pleased with the favorable interaction, feedback and advice received during an extensive meeting with several senior officials from the Yukon government agencies responsible or involved in the regulatory aspects of mineral exploration and development in the Territory. Our operations are in full compliance with the Territory’s rigorous environmental standards and our exploration plans have received positive regulatory feedback. In general, we strongly believe that the Nantawa Project is on track to achieve or exceed our exploration objectives this year.”



Chief Geologist John Hiner also commented, “With respect to geological progress, our team anticipates receipt of sampling results as early as mid-September. Visual inspection of drill core retrieved to date has led us to expand our drill targets. So far we’ve drilled 1,238 meters in thirteen core holes. Additionally, we have completed 2,340 meters of trenching, comprising 15 trenches in known targets and newly defined mineral targets.”




●
At the end of August, 2010, the exploration team at the Nantawa Project concluded its work program as the field season came to a close. Samples from the drilling and trenching programs are being analyzed by Acme Analytical Laboratories, Vancouver, Canada.








Results of Operations for the Fiscal Years ended May 31, 2010 and May 31, 2009 and the Exploration Stage Period of July 15, 2005 to May 31, 2010:





Our operating results for the years ended May 31, 2010 and May 31, 2009 and the Exploration Stage Period of July 15, 2005 to May 31, 2010 (the ‘Exploration Stage’) are summarized as follows:





May 31, 2010


May 31, 2009


Exploration

StageRevenue

$
-


$
-


$
-Expenses

$
1,396,663


$
23,112


$
1,509,607Net Loss

$
(1,396,663
)

$
(23,112


$
(1,509,607
)








Revenues





We have not earned any revenues since our inception and we do not anticipate earning revenues in the near future.








28
 Table of Contents








Expenses





Exploration Expenses


Exploration expenses were $177,415 and $nil for the years ended May 31, 2010 and May 31, 2009, respectively. Exploration expenses for the Exploration Stage totaled $177,415. During the current year period, exploration expenses related to fees paid to our Chief Geologist, fees for geological consulting services, and geological general contractor fees and expenditures. We expect exploration expenses to increase substantially during the next twelve months as we continue with our exploration strategic plan.





Professional Fees


Profession fees were $136,206 and $15,467 for the years ended May 31, 2010 and May 31, 2009, respectively. Professional fees for the Exploration Stage totaled $215,170. During the current year period, professional fees included fees paid to our CEO, Director, and expenses for legal, auditor and accounting fees. In the next twelve months, we project professional fees will increase modestly or remain at current levels.





Administrative Expenses


Administrative expenses were $27,723 and 4,299 for the years ended May 31, 2010 and May 31, 2009, respectively. During the Exploration Stage Period administrative expenses totaled $41,036. During the current period administrative fees were primarily composed of office expenses, bank charges and filing fees related to our SEC filings. We expect administrative fees to see a moderate increase during the coming year as we continue implementation of our strategic plans.





Investor Relations


Investor Relations expenses comprise costs for press releases, maintenance of the Company’s website and other investor information initiatives. During the years ended May 31, 2010 and May 31, 2009, these expenses totaled $46,296 and $nil, respectively. For the Exploration Stage Period, Investor Relations expenses totaled $46,296. We anticipate Investor Relations expenses will increase substantially during the coming year as we continue our efforts to raise further capital and keep investors informed of Company developments.





Impairment Losses on Mineral Properties


During the period ended May 31, 2010, the Company formalized its debt to ETPI by signing a promissory note in the amount of $943,868 plus share payments. To account for this event, $1,005,668 was entered as a mineral property asset, with a corresponding accounts payable entry. Additionally, to conform with generally accepted accounting principles, pertaining to the classification of the mineral properties as assets, an impairment charge of $1,005,668 was entered against this asset based on the Company’s impairment analysis as of May 31, 2010. On April 6, 2006 we purchased a uranium property in Saskatchewan, Canada and on July 17, 2008 determined not to proceed with this property and formally abandoned the project. This abandonment is recorded in our financial statements as an Asset Impairment and totaled $15,985 and is included in the total loss for the Exploration Stage Period of $1,021,653.











29
 Table of Contents








Net Loss





We incurred a net loss of $(1,396,663) for the twelve months ended May 31, 2010 compared with a net loss of $(23,112) for the same period ended May 31, 2009. The increase of our net loss during fiscal 2010 was due to the impairment costs during the year ended May 31, 2010 and other expenses related to the start of our strategic exploration initiative.





Liquidity and Capital Resources





Our financial position as at May 31, 2010 and 2009 are as follows:


Net Working Capital


As at

May 31, 2010


As at

May 31, 2009Current Assets

$
1,164,953


$
26,841Current Liabilities


559,261



86,285Net Working Capital (Deficiency)


605,692



(59,444
)





Our net working capital increased from a deficiency of $(59,444) at May 31, 2009 to $684,813 at May 31, 2010 as a result of our unit offering private placement initiatives.


Cash Flows


Year ended

May 31, 2010


Year ended

May 31, 2009Net cash (used) by Operating Activities

$
(486,191
)

$
(30,125
)Net cash (used) by Investing Activities


(471,934
)


-Net cash provided in Financing Activities


1,910,714



41,260Increase (Decrease) in Cash during the Year


952,589



11,135Cash, Beginning of Year


20,638



9,503Cash, End of Year


973,227



20,638





Since the date of our incorporation to May 31, 2010, we have raised $2,053,500 though private placements of our common shares. As of May 31, 2010 we had cash on hand of $973,227 and prepaid expenses of $187,726.





Purchase of Significant Equipment





We currently do not have plans to purchase any significant equipment over the next twelve months.





Personnel Plan





We do not expect any material changes in the number of employees over the next 12 month period (although we may enter into employment or consulting agreements with our officers or directors). Wedo and will continue to outsource contract employment as needed.





Off-Balance Sheet Arrangements





There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.








30
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Material Events and Uncertainties





Our operating results are difficult to forecast. Our prospects should be evaluated in light of the risks, expenses and difficulties commonly encountered by comparable early stage companies in mineral resource markets. The continuation of our business is dependent upon obtaining further financing, a successful program of exploration, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.





There are no assurances that we will be able to obtain further funds required for our continued operations. We will pursue various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.





Employees





As of May 31, 2010, we had two employees and used contracted services to perform geological work, legal services and our bookkeeping. Going forward, the Company will use consultants with specific skills to assist with various aspects of its project evaluation, due diligence, acquisition initiatives, corporate governance and property management.





Critical Accounting Policies





The Company’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.





Our significant accounting policies are summarized in NOTE 2 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, the Company views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company’s financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.





Off-Balance Sheet Arrangements





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








31
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ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





We have not entered into derivative contracts either to hedge existing risk or for speculative purposes.




ITEM 8.       FINANCIAL STATEMENTS








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)








INDEX TO FINANCIAL STATEMENTS





PageReport of Independent Registered Public Accounting Firm
33Financial Statements for the years ended May 31, 2010 and May 31, 2009 and for the Exploration Stage of July 15, 2005 to May 31, 2010:Balance Sheets
34Statements of Operations
35Statement of Stockholders’ Equity
36Statements of Cash Flows
37Notes to Financial Statements
39


































32
 Table of Contents








GUINNESS EXPLORATION,INC. AND SUBSIDIARY


(An Exploration Stage Company)











To Board of Directors and


Stockholders of Guinness Exploration, Inc. and Subsidiary





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





We have audited the accompanying consolidated balance sheets of Guinness Exploration, Inc. and Subsidiary (the Company), an Exploration Stage Company, as of May 31, 2010 and 2009 and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended May 31, 2010, and for the period from July 15, 2005 (date of inception) through May 31, 2010. Guinness Exploration, Inc. and Subsidiary’s, an Exploration Stage Company, management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.





We conducted our audit 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 audit provides a reasonable basis for our opinion.





In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Guinness Exploration, Inc. and Subsidiary, an Exploration Stage Company, as of May 31, 2010 and 2009 and the results of its consolidated operations and its cash flows for each of the years in the two-year period ended May 31, 2010, and for the period from July 15, 2005 (date of inception) through May 31, 2010, in conformity with accounting principles generally accepted in the United States of America.





The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has accumulated operating losses since inception and has limited business operations, which raises substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are described in Note 3 to the consolidated financial statements.  These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.








Madsen & Associates CPA’s, Inc.


Salt Lake City, Utah


September 14, 2010

















33
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GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)






Consolidated Balance Sheets




May 31, 2010


May 31, 2009ASSETSCURRENT ASSETSCash

$
973,227


$
20,638Prepaid expenses


191,726



6,203Total current assets


1,164,953



26,841OTHER ASSETSMineral property (Notes 2, 4 and 6)


-



-Total other assets


-



-Total assets

$
1,164,953


$
26,841LIABILITIES AND STOCKHOLDERS’ EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses

$
87,327


$
-Note payable (Note 5)


471,934Shareholder loan (Note 9)


-



86,285Total current liabilities


559,261



86,285STOCKHOLDERS’ EQUITY (DEFICIT)Common shares, 500,000,000 shares with par value $0.001 authorized,134,325,000 and 71,825,000 shares issued and outstanding atMay 31, 2010 and 2009 respectively (Notes 2 and 8)


134,325



71,825Paid-in Capital (Note 8)


1,980,975



(18,325
)Accumulated deficit in the exploration stage


(1,509,608
)


(112,944
)Total stockholders’ equity (deficit)


605,692



(59,444
)Total liabilities and stockholders’ equity

$
1,164,953


$
26,841























The accompanying notes to financial statements are an integral part


of these consolidated financial statements


34
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GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)






Consolidated Statements of Operations





Year ended

May 31, 2010


Year ended

May 31, 2009


July 15, 2005 (inception) through

May 31, 2010EXPENSES:Exploration costs

$
177,415


$
-


$
177,415Professional fees


136,206



15,467



215,170Administrative expenses


27,723



4,229



41,036Investor relations


46,296



-



46,296Impairments mineral properties


1,005,668



-



1,021,653Total expenses


1,393,308



19,696



1,501,570Net (loss) from Operations


(1,393,308
)


(19,696
)


(1,501,570
)Interest expense


(3,355
)


(3,416
)


(8,037
)Net (loss)

$
(1,396,663
)

$
(23,112
)

$
(1,509,607
)Loss per common share

$
(0.01
)

$
nilWeighted average shares  Outstanding


133,926,648



71,825,000








































The accompanying notes to financial statements are an integral part


of these consolidated financial statements


35
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GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)






Consolidated Statement of Stockholders’ Equity


From July 15, 2005 (Inception) through May 31, 2010





Common

Shares


Common

Stock


Paid-in

Capital


Deficit Accumulated During Exploration

Stage


Total

Stockholders’

Equity (Deficit)Common shares issued for cash at $0.001February 7, 2006


39,000,000


$
39,000


$
(36,000
)

$
—


$
3,000Common shares issued for cash at $0.02 during the period ended May 31, 2006


32,825,000


$
32,825


$
17,675


$
—


$
50,500Net loss for the period from July 15, 2005 (inception)to May 31, 2006


—


$
—


$
—


$
(848
)

$
(848
)Balance, May 31, 2006


71,825,000


$
71,825


$
(18,325
)

$
(848
)

$
52,652Net loss for year ended May 31, 2007


—


$
—


$
—


$
(51,071
)

$
(51,071
)Balance, May 31, 2007


71,825,000


$
71,825


$
(18,325
)

$
(51,919
)

$
1,581Net loss for year ended May 31, 2008


—


$
—


$
—


$
(37,913
)

$
(37,913
)Balance, May 31, 2008


71,825,000


$
71,825


$
(18,325
)

$
(89,832
)

$
(36,332
)Net loss for year ended May 31, 2009


—


$
—


$
—


$
(23,112
)

$
(23,112
)Balance, May 31, 2009


71,825,000


$
71,825


$
(18,325
)

$
(112,944
)

$
(59,444
)Common shares issued for property purchase December 29, 2009


60,000,000



60,000



1,800



-



61,800Common shares issued for cash at $0.77February 10, 2010


1,875,000



1,875



1,441,875



-



1,443,7501,875,000 common share purchase warrants issued at $0.03 per warrant February 10, 2010


-



-



56,250



-



56,250Common shares issued for cash at $0.75May 10, 2010


625,000



625



468,125



-



468,750625,000 common share purchase warrants issued at $0.25 per warrant May 10, 2010


-



-



31,250



-



31,250Net loss for year ended May 31, 2010


—


$
—


$
—


$
(1,396,663
)

$
(1,396,663
)Balance, May 31, 2010


134,325,000


$
134,325


$
1,980,975


$
(1,509,607
)

$
605,692














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


36
 Table of Contents





GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)






Consolidated Statements of Cash Flows





Year ended

May 31, 2010


Year ended

May 31, 2009


July 15, 2005 (inception) through

May 31, 2010Cash flows from operating activities:Net loss for the period

$
(1,396,663
)

$
(23,112
)

$
(1,509,607
)Reconciling adjustments:Adjustments to reconcile net lossto net cash used in operating activities:Accrued interest on shareholder loans


-



3,416



-Net change in operating assets and liabilitiesPrepaid expenses


(185,524
)


(5,088
)


(191,727
)Accounts payable and accrued expenses


87,327



(5,341
)


87,327Mineral property impairments


1,005,668



-



1,021,653Net cash (used) by operating activities


(489,192
)


(30,125
)


(592,354
)Cash flows from investing activities:Purchase of Mineral Property


(471,934
)


—



(487,919
)Net cash (used) by investing activities


(471,934
)


—



(487,919
)Cash flows from financing activities:Common stock issued for cash


2,000,000



—



2,053,500Loans by stockholders


(86,285
)


41,260



-Net cash provided by financing activities


1,913,715



41,260



2,053,500Net increase (decrease) in cash


952,589



11,135



973,227Cash, beginning of period


20,638



9,503



—Cash, end of period

$
973,227


$
20,638


$
973,227





























The accompanying notes to financial statements are an integral part


of these consolidated financial statements




37
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)






Consolidated Supplemental Disclosure of Cash Flow Information





Year ended

May 31, 2010


Year ended

May 31, 2009


July 15, 2005 (inception) through

May 31, 2010Cash paid for interest

$
8,037


$
—


$
8,037











Consolidated Supplemental Disclosure of Non-cash Investing and Financing Activities





Year ended

May 31, 2010


Year ended

May 31, 2009


July 15, 2005 (inception) through

May 31, 2010Common stock issued for property purchase payment

$
61,800


$
—


$
61,800Note payable issued for property purchase payment


471,934



—



471,934











































The accompanying notes to financial statements are an integral part


of these consolidated financial statements


38
 Table of Contents





GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)




Notes to Consolidated Financial Statements








Note 1 – Operations





Organization and Description of Business





Guinness Exploration, Inc. (“Guinness”, “We”, the “Registrant”, or the “Company”) was incorporated in the State of Nevada on July 15, 2005 and incorporated its subsidiary, Nantawa Resources Inc., in Yukon, Canada on November 6, 2009. Guinness Exploration Inc. trades on the OTC-BB under the symbol GNXP. Since inception the Company has not been involved in any bankruptcy, receivership or similar proceedings. Since inception the Company has not been involved in any reclassification, consolidation, or merger arrangements. The financial statements included herein have been prepared by Guinness Exploration, Inc. (the “Company”) in accordance with accounting principles generally accepted in the United States and 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 began exploration operations during fiscal 2010 in Yukon, Canada.








Note 2 – Basis of Presentation and Summary of Significant Accounting Policies





Basis of Presentation





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.





This summary of significant accounting policies is presented to assist in understanding Guinness Exploration Inc.’s financial statements. The financial statements reflect the following significant accounting policies:





Exploration Stage Company





The Company is an exploration stage company as defined by SEC Industry Guide 7, and follows generally accepted accounting principles, where applicable. 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.










39
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)





Notes to Consolidated Financial Statements








Exploration Costs and Mineral Property Right Acquisitions





The Company is primarily engaged in the acquisition and exploration of mining properties.  Mineral property exploration costs are expensed as incurred.  Mineral property acquisition costs are initially capitalized when incurred. The Company assesses the carrying costs for impairment under Accounting Standards 930 Extractive Activities – Mining (AS 930) at each fiscal quarter end. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the proven and probable reserves.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.





Consolidation of Financial Statements





These financial statements include the accounts of the Company and its subsidiary Nantawa Resources Inc., on a consolidated basis. All inter-company accounts have been eliminated.





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.





Basic and Diluted Net Loss 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. Diluted net loss per share is computed by dividing the net loss available to common stockholders by common stock equivalents.





At May 31, 2010, common stock equivalents outstanding included 2,500,000 common share purchase warrants. These warrants were issued as part of unit offerings of 1,875,000 units and 625,000 units (each with identical terms) which were completed on February 10, 2010 and May 10, 2010 respectively, which comprised a total of 2,500,000 Units priced at US$0.80 per Unit. Each Unit consists of one share of common stock of Guinness (each, a "Share"); and one common share purchase warrant (each a “Warrant”) subject to adjustment for stock splits, or stock dividends. Each whole Warrant is non-transferable and entitles the holder to purchase one common share of Guinness (each, a “Warrant Share”), as presently constituted, for a period of twenty four months beginning February 10, 2010 or May 10, 2010 at a price per Warrant Share of US$2.00. These Units are being issued pursuant to Regulation S of the Securities Act of 1933, as amended (“Regulation S”) and Guinness did not engage in any general solicitation or advertising regarding this Unit offering.











40
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)





Notes to Consolidated Financial Statements








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.





Income Taxes





The Company recognizes 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. Additionally, the Company has not recognized any amount for a tax position taken or expected to be taken on its tax return, or for any interest or penalties.





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 expenses the cost of start-up activities, including organizational costs, as those costs are incurred.





Foreign Currency





The books of the Company are maintained in United States dollars and this is the Company’s functional and reporting currency. Transactions denominated in other than the United States dollar are translated as follows with the related transaction gains and losses being recorded in the Statements of Operations:





(i)
Monetary items are recorded at the rate of exchange prevailing as at the balance sheet date;


(ii)
Non-Monetary items including equity are recorded at the historical rate of exchange; and


(iii)
Revenues and expenses are recorded at the period average in which the transaction occurred.

















41
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)





Notes to Consolidated Financial Statements








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.





Recent Accounting Pronouncements





Various accounting pronouncements have been issued during 2010 and 2009, none of which are expected to have a material effect on the financial statements of the Company.





Reclassifications





Certain prior period amounts have been reclassified to conform to current year presentation.





Other





The Company consists of one reportable business segment.





We did not have any off-balance sheet arrangements as of May 31, 2010.








Note 3– Going Concern





Generally accepted accounting principles in the United States of America contemplate the continuation of the Company as a going concern. However, the Company had a net loss for the twelve month period ended May 31, 2010, of $(1,396,663). Additionally it has accumulated operating 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. As of May 31, 2010, we projected the Company would need additional cash resources to operate during the upcoming 12 months. The Company intends to attempt to acquire additional operating capital through private equity offerings to the public and existing investors 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.














42
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)





Notes to Consolidated Financial Statements








Note 4 – Acquisition of Mineral Properties





On November 19, 2009, and as amended on February 4, 2010, the Company signed the Nantawa Agreement for purchase of a 65% ownership interest in two exploration properties in Yukon, Canada. The agreement also includes an option (the “Option”) for Guinness to increase its ownership in the properties by 35%. A copy of which agreement, and the February 4, 2010 Amendment (collectively the “Agreement”), was filed as an Exhibit to a Form 8-K filed April 9, 2010. The terms of the Nantawa Agreement specify Guinness’ wholly owned Yukon subsidiary Nantawa Resources Inc. will receive a 65% interest in the Nantawa properties in return for payment to Eagle Trail Properties Inc. (‘ETPI’) of $1,005,668 (comprised of: $943,868 cash, plus 60,000,000 restricted common shares of Guinness valued at US$0.00103 per share for a total share value of US$61,800). These payments are to be made over a 12 month period in two equal installments of $471,934; plus immediate issuance to ETPI of the 60 million restricted common shares. Subsequently, Guinness was required to make a deposit of $951 to maintain the Option and then incur exploration expenditures of $1,895,735 million over a two year period to earn an additional 35% interest. ETPI will retain a 3% Net Smelter Royalty. To confirm the cash payments owed by us to ETPI, we provided ETPI with a Promissory Note (the “Note”), stating our indebtedness to ETPI in the amount of $943,868. This Promissory Note was filed as Exhibit 10.3 with a Current Report on Form 8-K on April 9, 2010. To account for this event, $1,005,668 was entered as a mineral property asset, with a corresponding note payable entry. As of May 31, 2010, the Company did not have sufficient geological evidence to establish a reserves estimate. Accordingly, the Company has recorded an impairment loss on the mineral property asset.





On December 29, 2009, to fulfill payment terms of the Nantawa Agreement, the Company issued 60,000,000 restricted shares of its common stock valued at US$0.00103 per share to ETPI and made payment of $951 to ETPI. Subsequently on February 12, 2010, the Company paid ETPI US$471,934.





The Company’s remaining payments under the Nantawa Agreement are as follows:





PART ONE – Monetary Consideration:





Item

Installments Required $


Payments Made


Balance Due


DeadlinesClaims payment #1 to ETPI


471,934



471,934



Nil



-Claims payment #2 to ETPI


471,934



-



71,934


November 30, 2010Sub-total

$
943,868


$
471,934


$
471,934























43
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)





Notes to Consolidated Financial Statements











Note 5 –  Note Payable





To confirm the cash payments owed by us to ETPI under the Nantawa Agreement, we have provided ETPI with a Promissory Note, stating our indebtedness to ETPI in the amount of $943,868. To fulfill our first payment, on February 12, 2010 the Company paid to ETPI $471,934, which was prior to the first installment payment deadline of May 31, 2010. The second installment of  $471,934 on the Note is due by November 30, 2010. The terms of the Note provide that interest on the unpaid balance of the aforesaid principal sum shall be paid at a rate equal to Eight percent (8%) per annum calculated annually, not in advance, computed from December 1, 2010, to be payable monthly on the first day of each and every month commencing January 1, 2011, so long as any principal sum remains outstanding.








Note 6 – Impairments on Mineral Properties





On July 17, 2008, the Company determined it should abandon the mineral property assetwhich consisted of 100% ownership of a uranium mineral property staked as Saskatchewan Claim number S-108991. An impairment loss of $15,985 is reflected in the attached statement of operations for the year ended May 31, 2009.





As detailed in Note 4, on November 19, 2009, and as amended on February 4, 2010, the Company signed the Nantawa Agreement for purchase of a 65% ownership interest in two exploration properties in Yukon, Canada. To conform with generally accepted accounting principles, pertaining to the classification of the mineral properties as assets, an impairment charge of $1,005,668 was entered against this asset based on the Company’s impairment analysis as of May 31, 2010.








Note 7 – Income Taxes





The Company is subject to federal income taxes in the US and Canada. The Company has had no net income and therefore has not paid nor has any income taxes owing in the US or Canada.





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.























44
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)





Notes to Consolidated Financial Statements








Due to the change of control of the Company during the year ended May 31, 2010, under Section 382 of the Internal Revenue Code, there may be limitations on the amount of Net Operating Loss carryforwards the Company will be able to use in the future. Some of the loss carryforwards may be unusable.





Income taxes at the statutory rate are reconciled to the Company’s actual income taxes as follows:





Income tax benefit at statutory rate resulting from net operating Loss carryforward


(35
%)Deferred income tax valuation allowance


35
%Actual tax rate


0
%





The Company's deferred tax assets, valuation allowance, and change in valuation allowance are as follows (“NOL” denotes Net Operating Loss):








Year

Ending

Estimated

NOL

Carry-forward


NOL

Expires


Estimated

Tax

Benefit

from NOL


Valuation

Allowance


Net Tax

Benefit2006

$
(848
)


2026


$
297


$
(297
)

$
—2007


(51,071
)


2027



17,875



(17,875
)


—2008


(37,913
)


2028



13,270



(13,270
)


—2009


(23,112
)


2029



8,089



(8,089
)


—2010


(1,396,663
)


2029



488,836



488,836



—$
(1,509,607
)





$
528,367


$
528,367


$
—





The total valuation allowance for the year ended May 31, 2010 is $(528,367) which increased by $(488,836) for the year ended May 31, 2010, including adjustments to prior year tax year rate estimations.








Note 8 – Common Stock





On February 7, 2006, the Company issued 39,000,000 shares of its common stock to its President for cash. This transaction was valued at a board approved value of $0.001 per share for total proceeds of $3,000.





During the fiscal year ending May 31, 2006, the Company issued 32,825,000 shares of its common stock in a private offering at $0.02 per share for total proceeds of $50,500.





On May 26, 2008, the Company declared a 12 for 1 stock dividend. The Record date and Payment date for this stock dividend were June 4, 2008 and June 6, 2008 respectively. The Company instructed its Transfer Agent to round up to one for any fractional interest which resulted in the calculation of the dividend. This dividend had the effect of increasing the issued and outstanding share capital of the Company from 5,525,000 shares to 71,825,000 shares. All references in these financial statements to stock issued and stock outstanding have been retroactively adjusted as if the stock dividend had taken place on July 15, 2005 (inception).








45
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)





Notes to Consolidated Financial Statements








On November 30, 2009, the Company submitted to a vote of the Company's security holders a proposal to increase the authorized common shares limit of the Company from 75,000,000 to 500,000,000 and add authorization for issuance of up to 100,000,000 preferred shares, par value $0.001, for which the Board of Directors may fix and determine the designations, rights, preferences or other variation to each class or series within each class of preferred shares. Shareholder approval for this change was received November 26, 2009 and a Definitive 14C was filed with the Securities Exchange Commission on December 9, 2009.





On December 29, 2009 to fulfill a Nantawa Agreement payment term, the Company issued 60,000,000 restricted shares of its common stock valued at US$0.00103 per share to Eagle Trail Properties, Inc. representing aggregate proceeds of US$61,800. These shares were issued pursuant to Regulation S of the Securities Act of 1933, as amended. These shares were issued pursuant to Regulation S of the Securities Act of 1933, as amended and the Company did not engage in any general solicitation or advertising regarding these shares.





On February 10, 2010 the Company completed a Unit offering which raised aggregate proceeds of US$1,500,000 and was comprised a unit (‘Unit’) sale by Guinness of 1,875,000 Units priced at US$0.80 per Unit for one share of common stock in the capital of Guinness (each, a "Share"); and one common share purchase warrant (each a “Warrant”) subject to adjustment.  The US$0.80 per Unit value was allocated US$0.77 to the common stock (closing price of the Company’s stock on the date the agreement was executed, January 26, 2010) and US$0.03 to the share purchase warrant. Each whole Warrant is non-transferable and entitles the holder to purchase one common share of Guinness (each, a “Warrant Share”), as presently constituted, for a period of twenty four months beginning February 10, 2010 at a price per Warrant Share of US$2.00. These Units are being issued pursuant to Regulation S of the Securities Act of 1933, as amended (“Regulation S”) and Guinness did not engage in any general solicitation or advertising regarding this Unit offering.





On May 10, 2010 the Company completed a Unit offering which raised aggregate proceeds of US$500,000 and was comprised a unit (‘Unit’) sale by Guinness of 625,000 Units priced at US$0.80 per Unit for one share of common stock in the capital of Guinness (each, a "Share"); and one common share purchase warrant (each a “Warrant”) subject to adjustment. The US$0.80 per Unit value was allocated US$0.75 to the common stock (closing price of the Company’s stock on the date the agreement was executed, April 22, 2010) and US$0.05 to the share purchase warrant. Each whole Warrant is non-transferable and entitles the holder to purchase one common share of Guinness (each, a “Warrant Share”), as presently constituted, for a period of twenty four months beginning May 10, 2010 at a price per Warrant Share of US$2.00. These Units are being issued pursuant to Regulation S of the Securities Act of 1933, as amended (“Regulation S”) and Guinness did not engage in any general solicitation or advertising regarding this Unit offering.





At May 31, 2010, common stock equivalents outstanding included the 2,500,000 common share purchase warrants relating to the February 10, 2010 and May 10, 2010 Unit offerings.














46
 Table of Contents








GUINNESS EXPLORATION, INC. AND SUBSIDIARY


(An Exploration Stage Company)





Notes to Consolidated Financial Statements








Note 9 – Shareholder Loan





Prior to a shareholder loan payout on February 9, 2010, during the twelve months ended May 31, 2010, our CEO Alastair Brown made additional shareholder loans to the Company totaling $51,663. These advances brought total shareholder loans owing to Mr. Brown prior to payout to $141,303. This total included $3,355 of accrued interest for the period from September 1, 2009 to February 8, 2010, plus prior accrued interest of $4,682, for total accrued interest of $8,037. On February 9, 2010, the Company paid $141,303 to Mr. Brown as full payment of all shareholder loans and accrued interest. As at May 31, 2010, the Company had no further shareholder loans outstanding.








Note 10 – Incorporation of Subsidiary





On November 6, 2009, the Company incorporated a wholly owned subsidiary named Nantawa Resources Inc., in Yukon, Canada.








Note 11 – Subsequent Events





The Company has evaluated subsequent events from the balance sheet date through September 14, 2010, which is the date these consolidated financial statements were issued.


























































47
 Table of Contents








ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





We have had no disagreements with accountants on accounting and financial disclosure.




ITEM 9A.    CONTROLSANDPROCEDURES





Evaluation of Disclosure Controls and Procedures





The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e). The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company's desired disclosure control objectives. In designing periods specified in the SEC's rules and forms, and that such information is accumulated and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and


management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company's certifying officer has concluded that the Company's disclosure controls and procedures are not effective in reaching that level of assurance.





At the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.





Management's Report on Internal Control over Financial Reporting





Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section 13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or under the supervision of, the Company's CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.








48
 Table of Contents





As of May 31, 2010, management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the criteria established by COSO management concluded that the Company's internal control over financial reporting was not effective as of May 31, 2010, as a result of the identification of the material weaknesses described below.





A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.





Specifically, management identified the following control weaknesses:





(1)  The Company has not properly segregated duties as one or two individuals initiate, authorize, and complete all transactions. The Company has not implemented measures that would prevent the individuals from overriding the internal control system. The Company does not believe that this control weakness has resulted in deficient financial reporting because the Chief Financial Officer is aware of his responsibilities under the SEC's reporting requirements and personally certifies the financial reports;





(2)  The Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.





Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps.





Remediation Plan





We have identified that additional staff will be required to properly segment the accounting duties of the Company. However, we do not currently have resources to fulfill this part of our plan and will be addressing this matter once sufficient resources are available.





Changes in Internal Control over Financial Reporting





During the fourth quarter of the Company’s fiscal year ended May 31, 2010, no material changes were made to the Company’s internal control over financial reporting





Limitations on the Effectiveness of Controls





The Company has confidence in its revised regime of internal controls and procedures. Nevertheless, the Company’s management (including the Chief Executive Officer and Chief Financial Officer) believes that a control system, no matter how well designed and operated can provide only reasonable assurance and cannot provide absolute assurance that the objectives of the internal control system are met, and no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitation in all internal control systems, no evaluation of controls can provide absolute assurance that all control issuers and instances of fraud, if any, within the Company have been detected.







49
 Table of Contents








ITEM 9B.    OTHER INFORMATION





Changes in Control of Registrant





As reported in a Current Report on Form 8-K filed October 19, 2009, Mr. Michael Juhasz and Mr. Alastair Brown entered an agreement which effected a change in control of the Company. Under this agreement, Mr. Juhasz sold his common share holding in Company to Mr. Brown for $40,000. These shares represent 29% of the total outstanding common stock of the Company. This transaction also included Mr. Brown receiving assignment of $87,952 of shareholder loans owed to Mr. Juhasz by the Company in return for payment to Mr. Juhasz of the loan balance by Mr. Brown. There was no additional consideration or financial statements or other reportable out of pocket expenses associated with this transaction. No assets or properties have been acquired nor is there any agreement for further consideration associated with the transaction.





Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.





As reported in a Current Report on Form 8-K filed October 19, 2009, Mr. Michael Juhasz resigned his positions as Chair, Director, President and CEO, Chief Financial Officer, and Principal Accounting Officer of the Company for personal reasons and there was no disagreement with the Company relating to its operations, policies or practices. Mr. Juhasz also affirmed to the Company that he would remain as an interim role as Secretary and Treasurer and would accept the new interim role of Vice President. Effective October 19, 2009, Mr. Alastair Brown was appointed to the positions of Chair, Director, President and CEO, Chief Financial Officer, and Principal Accounting Officer of the Company.





As reported in a Current Report on Form 8-K filed December 1, 2009, on December 1, 2009, Mr. Michael Juhasz resigned his positions as Vice President, and Secretary and Treasurer of the Company for personal reasons and there was no disagreement with the Company relating to its operations, policies or practices. Effective December 1, 2009, Mr. Alastair Brown was appointed to the position of Secretary and Treasurer of the Company.





As reported in a Current Report on Form 8-K filed December 15, 2009, On December 10, 2009, Mr. John Hiner, B.Sc. (geology), M.Sc. (geology), was appointed as our Chief Geologist, Vice President, Secretary and Treasurer. Effective December 10, 2009, Mr. Alastair Brown resigned his position as Secretary and Treasurer of the Company in favour or Mr. Hiner.





As reported in a Current Report on Form 8-K filed January 14, 2010, on January 13, 2010, Mr. Nigel Mattison was appointed as a member of the Board of Directors of the Registrant.





There is no other information the Company would have been required to file on Form 8K during the fourth quarter of the fiscal year ended May 31, 2010.

































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PART III




ITEM 10.     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, 2010.





All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:





Name

Positions Heldwith the Company

Age

Date First Elected or AppointedAlastair Brown

Director, Chair, President and Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer

42

October 19, 2009Nigel Mattison

Director

60

January 13, 2010John Hiner

Chief Geologist, Vice President, and Secretary and Treasurer

62

December 10, 2009





Business Experience


The following is a brief account of the education and business experience during at least the past five years of each of our directors and executive officers, indicating their principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.





Alastair Brown- President & CEO, CFO, PAO, Board Chair, and Director


Mr. Brown has no experience in mineral explorations. For the past five years, and presently, Mr. Brown has been the Sales Director of Conrad Properties Inc., a large scale residential property developer in New Zealand. From 1986 to 1990, Mr. Brown attended the University of Auckland, New Zealand where he received his Bachelor of Commerce degree in 1990. From 1990 to 2005, Mr. Brown had a successful business career in a variety of large property developments in New Zealand and Australia. In 2005, Mr. Brown moved operations to London, UK where he raised equity for mixed use property projects in the United States, and in 2009 moved back to New Zealand to focus on management of a 280 residential unit project for Conrad Properties in Wellington, New Zealand.





Mr. Brown has extensive professional experience in the field of large scale international property development. We believe Mr. Brown's considerable organizational, operational and financial skills are of value to our company as we implement our plans for mineral exploration and development. Mr. Brown is now assembling a skilled team of mining industry professionals and identifying prospective mineral exploration projects, with a focus to creating and enhancing shareholder value in the years ahead.








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John Hiner - Chief Geologist, Vice President, and Secretary and Treasurer


John Hiner has over 35 years of experience in resource exploration and management worldwide. He has managed exploration, acquisition, and development programs for metals and industrial minerals on four continents. His range of experience includes mineral and petroleum exploration, energy minerals, and geothermal energy development. Over the past five years and previously, Mr. Hiner has provided contracted geological services and managed projects from a conceptual exploration stage to positive feasibility and finance level studies on proven deposits in South America, North America, and Africa. As both geologist and manager, Mr. Hiner has held positions of increasing responsibility with a variety of companies, ranging in size from multinational Phillips Petroleum Company to both Canadian and American junior companies and has several years experience in running publicly traded companies.





Mr. Hiner received his B.S., Geology in 1972 from San Diego State University and his M.S., Geology in 1978 from the University of Nevada-Reno, Mackay School of Mines. In addition to being President of Lynden, Washington based geological consulting firm Jehcorp Inc. from 1990 to present, Mr. Hiner’s employment and educational history includes the following: 1973-1974, Michael T. Halbouty Inc. and Occidental Petroleum, Windsor, England and Inverness, Scotland, Well Site Geologist North Sea; 1974-1976, graduate school, Reno Nevada; 1976-1982, Phillips Petroleum Co, Reno, Nevada, Geologist; 1982-1984, Queenstake Resources Inc., Reno, Nevada, Senior Geologist; 1985-1990, Nicor Mineral Ventures-Westmont Gold, Spokane Washington, District Manager; 1990-1992, Westmont Gold Inc., Denver Colorado, Vice President Exploration 1993-2000, Champion Resources Inc., Vancouver, BC, Vice President Exploration; 2003-2007, Geocom Resources Inc. Bellingham WA, President.





Mr. Hiner is also involved in both the mining industry and the community. He belongs to several industry trade organizations comprising a spectrum of energy and mining groups, and is involved in local volunteer activities through church and benevolent organizations. Mr. Hiner has published through the auspices of the Nevada Bureau of Mines and Geology, the Northwest Mining Association, and various trade journals.





Nigel Mattison - Director


Nigel Mattison has a strong background in the governance of national and community based organizations. His breadth of skills includes company directorship, management, accounting and auditing, international sales and marketing, strategic planning, public relations and fund raising. Mr. Mattison’s employment background includes senior positions with: Conrad Properties (2005 to 2010); Kuranda Resort and Spa (2003 to 2005); Russley Hotel, Christchurch (1994 – 2000); Pan Pacific Hotels and Resorts, a subsidiary of the Tokyu Corporation, Japan (1998 to 1992); ITT Sheraton (1982 to 1988); Groote Eylandt Mining Company Australia (which is jointly owned by BHP Billiton and Anglo American Corporation) (1975); Lion Nathan Brewing (1970 to 1975); and property development projects, and communications and marketing consulting engagements (1975 to 2003).





Mr. Mattison is a former Board Member of: the New Zealand Tourist Industry Federation (1991 to 1992); the New Zealand Convention Association (1986 to 1989); Tourism Auckland (1989 to 1992 ); New Zealand Football (1998 to 2005); Canterbury Football (1997 to 2000); and the Association of Consumers and Taxpayers New Zealand (1997 to 2001).





Family Relationships





Because we only have a sole officer and director, there are no family relationships between any director or executive officer.











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Significant Employees





Mr. Brown and Mr. Hiner are the employees of the Company. Other duties required to operated the Company are fulfilled by contracted service providers.





Involvement in Certain Legal Proceedings





Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:




1.
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;2.
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);3.
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business,  securities or banking activities; or4.
being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.





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.





Compliance With Section 16(a) of the Securities Exchange Act of 1934





Section 16(a) of the Securities and Exchange Act of 1934 requires our executive officers, directors and persons who own more than 10% of our equity securities registered pursuant to Section 12 of the Exchange Act of 1934 (the “Act”) to file with the SEC initial statements of beneficial ownership on Form 3, reports of changes in ownership on Form 4 and annual reports concerning their ownership on Form 5. Executive officers, directors and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Mr. Brown has filed a Form 3 and a Schedule 13D to report his holdings in the Company.





Code of Ethics





We have adopted a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer. This code is incorporated by reference herein as Exhibit 14.1. Upon request, the Company will furnish a copy of this Code of Ethics by mail to any person without charge. Such requests should be made in writing and mailed to: Guinness Exploration Inc., P.O. Box 1910 – Level 7 Anzac House, 181 Willis Street, Wellington, New Zealand 6140 attn: Code of Ethics Request.








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ITEM 11.     EXECUTIVE COMPENSATION





Executive Compensation





The particulars of compensation paid by our company to the following persons:





(a)
our principal executive officer;





(b)
each of our two most highly compensated executive officers who were serving as executive officers at the end of the year ended May 31, 2010 and May 31, 2009; and





(c)
up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as an executive officer at the end of the year ended May 31, 2010, who we will collectively refer to as our named executive officers are set out in the following summary compensation table:





The following table sets forth the salaries and director fees we paid to our current executive officers in our most recent fiscal year ended May 31, 2010 and since inception:





Name and Principal Positions

Fiscal

Year

Salary

($)

Bonus

($)

Other Annual Compensation

($)

Restricted Stock Awards/SARs

($)(1)

Securities Underlying Options/SARs

(#)

LTIP

Payouts

($)(2)

All Other Compensation

($)(3)Alastair Brown

President and CEO, CFO, PAO, Chair, and Director(4)

2010

2009

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

$45,000

N/AJohn Hiner

Chief Geologist, Vice President, and Secretary & Treasurer(5)

2010

2009

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

$14,274

N/ANigel Mattison

Director(6)

2010

2009

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

Nil

N/A

$5,000

N/AMichael Juhasz

Former President ,CEO, CFO, PAO, Secretary & Treasurer, Chair, and Director(7)

2010

2009

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil





Notes:(1)
SAR’s are “Stock Appreciation Rights”. We have to date not issued any SARs.(2)
LTIP’s are “Long-Term Incentive Plans”. We have to date not created and LTIPs.(3)
There are no compensatory plans or arrangements with respect to our executive officers resulting from their resignation, retirement or other termination of employment or from a change of control.(4)
Effective October 19, 2009, Mr. Alastair Brown was appointed as a Director, President, Chief Executive Officer, Chief Financial Officer and as the Principal Accounting Officer of our company. Effective December 1, 2009, Mr. Brown was appointed as our Secretary and Treasurer. During the year ended May 31, 2010, Mr. Brown was paid $45,000 in consulting fees.(5)
Effective December 10, 2009, Mr. John Hiner, B.Sc. (geology), M.Sc. (geology), was appointed to as our Chief Geologist, Vice President, Secretary and Treasurer. During the year ended May 31, 2010, Mr. Hiner was paid $14,274 in consulting fees.(6)
Effective January 13, 2010, Mr. Nigel Mattison was appointed as a Director of our company. During the year ended May 31, 2010, Mr. Mattison was paid $5,000 in director fees.(7)
Effective October 19, 2009, Mr. Michael Juhasz resigned his positions as Director, President, Chief Executive Officer Chief Financial Officer, and Principal Accounting Officer of our company and on December 1, 2009, Mr. Michael Juhasz resigned his positions as Vice President, Secretary and Treasurer of our company.


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ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS





The following table sets forth, as of May 31, 2010, certain information as to shares of our common stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group:




Name

Amount and Nature of Beneficial

Shares Owned(1)

Percent of Outstanding Ownership(2)Alastair Brown

Director, Chair, President & CEO, CFO,and PAO

39,000,000 restricted common shares

29.0%Nigel Mattison

Director

Nil

NilJohn Hiner

Chief Geologist, Vice President, and Secretary & Treasurer

Nil

NilAll Officers, Directors and Control Persons as a Group

39,000,000 restricted common shares

29.0%Eagle Trail Properties Inc.

45,000,000 restricted common shares

33.5%Mark Donaldson

15,000,000 restricted common shares

11.1%





Notes:(1)
Based on 134,325,000 shares of common stock issued and outstanding as of September 13, 2010. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect tosecurities. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based oninformation furnished by such owners, have sole investment and voting power with respect to such shares, subject tocommunity property laws where applicable.(2)
No member of Management has the right to acquire within sixty days through options, warrants, rights, conversion, privilege or similar obligations any security of the Company.









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ITEM 13.    CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS





Other than the property transaction with Eagle Trail Properties Inc. referenced in Item 2, during the two years ended May 31, 2010, there have been no material transactions or series of similar transactions to which the Company was or will be a party, in which the amount involved exceeds $60,000 and in which any promoter, founder, director or executive officer, or any security holder who is known to us to own of record, or beneficially, more than five percent of the our common stock, or any member of the immediate family of any of the foregoing persons, had a material interest, and none is presently proposed.




ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES




The following table presents the fees for professional audit services rendered by Madsen & Associates CPA’s Inc. for the audit of the Corporation’s annual financial statements for the years ended May 31, 2010 and May 31, 2009 and fees billed for other services rendered by Madsen & Associates CPA’s Inc. during those periods. All services reflected in the following fee table for 2010 and 2009 were pre-approved, respectively, in accordance with the policy of the Board of Directors.




May 31, 2010


May 31, 2009Audit fees (1)- Madsen & Associates

$
9,275


$
10,100Audit-related fees - Madsen & Associates


-



-Tax fees - Madsen & Associates


-



-All other fees - Madsen & Associates


-



-TOTAL FEES

$
9,275


$
10,100  Notes:(1)
Audit fees consist of audit and review services, consents and review of documents filed with the SEC.





In its capacity as the Audit Committee, the Board of Directors pre-approves all audit (including audit-related) and permitted non-audit services to be performed by the independent auditors. The Board of Directors annually approves the scope and fee estimates for the year-end audit to be performed by the Corporation’s independent auditors for the fiscal year. With respect to other permitted services, the Board of Directors pre-approves specific engagements, projects and categories of services on a fiscal year basis, subject to individual project and annual maximums. To date, the Company has not engaged its auditors to perform any non-audit related services.



























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PARTIV








ITEM 15.     EXHIBITS





EXHIBIT INDEX


Number
Exhibit Description3.1*
Articles of Incorporation3.2*
Certificate of Amendment of Articles of Incorporation3.3*
Bylaws14.1*
Code of Ethics24.1*
Power of Attorney31.1
Certificate of President & Chief Executive Officer (principal executive officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
Certificate of Chief Financial Officer (principal financial officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
Certificate of President & Chief Executive Officer and Chief Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 *    Filed as an exhibit to our registration statement on Form SB-2 filed December 27, 2006 and incorporated herein by this reference





























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SIGNATURES




Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.




GUINNESS EXPLORATION, INC./s/ Alastair BrownAlastair BrownPresident and Chief Executive Officer,Chief Financial Officer, Principal AccountingOfficer, Director and Chair of BoardDated: September 14, 2010


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.





/s/ Alastair Brown


Alastair Brown


President and Chief Executive Officer,


Chief Financial Officer, Principal Accounting Officer ,


Director and Chair of Board





/s/ Nigel Mattison


Nigel Mattison


Director





/s/ John Hiner


John Hiner


Chief Geologist, Vice President,


Secretary and Treasurer





Dated: September 13, 2010

























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