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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549



FORM
10-KSB



[X]

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



For the fiscal year ended December 31, 2007



[
 ]

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



For the transition period from ______ to ______



GOLD CREST MINES, INC.

(Exact
name of small business issuer as specified in its charter)



|                                                               |                        |                                     
|-------------------------------------------------------------- | ---------------------- | ------------------------------------
|Nevada                                                         | 000-52392              | 82-0290112                          
|(State or other jurisdiction of incorporation or
organization) | Commission file number | (IRS Employer Identification Number)



|                                                   |  |           
|-------------------------------------------------- |  | ----------
|10807 E Montgomery Dr. Suite #1
Spokane Valley, WA |  | 99206     
|(Address of principal executive offices)           |  | (Zip Code)



Registrant's telephone number, including area code: (509)
893-0171



SECURITIES RESGISTERED UNDER SECTION 12(b) OF THE
EXCHANGE ACT:  Common Stock, $0.001 par value



SECURITIES REGISTERED UNDER SECTION 12(g) OF THE
EXCHANGE ACT:  None



Check whether the issuer is not required to
file reports pursuant to Section 13 or 15(d) of the Exchange Act. [  ]



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



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



Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).Yes [
 ]No [ X]



Revenues of the registrant for its fiscal year ended
December 31, 2007 were $0.



The aggregate market value of voting and non-voting
common stock held by non-affiliates of the registrant was $9,666,283 as of March
12, 2008.



At March 12, 2008, 76,903,828 shares of the registrants
common stock were outstanding.



DOCUMENTS INCORPORATED BY
REFERENCE

None.



Transitional Small Business Disclosure format (check
one):  Yes [ ]  No [X]



---



TABLE OF CONTENTS



|           |                                                                                                                                       |   
|---------- | ------------------------------------------------------------------------------------------------------------------------------------- | --
|           | PART I                                                                                                                                |   
|           |                                                                                                                                       |   
|Item 1.    | Description of Business                                                                                                               | 3 
|Item 2.    | Description of Property                                                                                                               | 9 
|Item 3     | Legal Proceedings                                                                                                                     | 16
|Item 4.    | Submission of Matters to a Vote of Security Holders                                                                                   | 16
|           |                                                                                                                                       |   
|           | PART II                                                                                                                               |   
|           |                                                                                                                                       |   
|Item 5.    | Market for Common Equity and Related Stockholder
Matters and Small Business Issuer of Equity Securities                               | 17
|Item 6     | Management's Discussion and Analysis or Plan of
Operation                                                                             | 17
|Item 7.    | Financial Statements                                                                                                                  | 19
|Item 8     | Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure                                                  | 36
|Item 8A    | Controls and Procedures                                                                                                               | 36
|Item 8B    | Other Information                                                                                                                     | 36
|           |                                                                                                                                       |   
|           | PART III                                                                                                                              |   
|           |                                                                                                                                       |   
|Item 9.    | Directors, Executive Officers, Promoters, Control
Persons and Corporate Governance; Compliance With Section 16(a) of the
Exchange Act | 37
|Item 10.   | Executive Compensation                                                                                                                | 40
|Item 11.   | Security Ownership of Certain Beneficial Owners and
Management and  Related Shareholder Matters                                       | 42
|Item 12.   | Certain Relationships and Related Transactions, and
Director Independence                                                             | 43
|Item 13.   | Exhibits                                                                                                                              | 45
|Item 14.   | Principal Accounting Fees and Services                                                                                                | 45
|           |                                                                                                                                       |   
|Signatures | 47                                                                                                                                   





2





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PART I

ITEM 1.

DESCRIPTION OF BUSINESS

Business
Development

Silver Crest Mines, Inc., the Companys
predecessor, was incorporated under the laws of the State of Idaho in 1968.
 The Company was organized to develop mineral properties located in the
State of Idaho.  The Companys initial and subsequent efforts in the
acquisition, exploration and development of potentially viable and commercial
properties were unsuccessful.  The Company has a history of losses and no
revenues from operations.  The Companys capital needs have historically
been met by the issuance of securities either through private placements, the
issuance of shares for debt or the joint venture or lease of mineral properties.
 In June 2003, the Company merged into its wholly-owned subsidiary, Silver
Crest Resources, Inc., for the purpose of changing the Companys state of
domicile to Nevada.

The Company was
thereafter dormant until the completion of the share exchange effective August
1, 2006 with Niagara Mining & Development Company, Inc. (Niagara), an
Idaho corporation formed on January 11, 2005, and its wholly-owned subsidiary,
Kisa Gold Mining, Inc. (Kisa), an Alaskan corporation formed on July 28, 2006.
 Under the terms of the share exchange, the Company acquired all of the
issued and outstanding shares of Niagara in exchange for 37,500,000 shares of
the Companys common stock.  At the time of the share exchange, Niagara was
in the process of completing the acquisition and staking of mining claims in
Alaska and Idaho.



In August 2006, the Company acquired
exploration properties in southwest Alaska approximately 90 miles east of the
village of Bethel covering approximately 22,500 acres of State of Alaska-owned
lands in 6 claim groups including the Kisa, Gold Lake, Ako, Little Swift, Gold
Creek and Gossan Valley within the Kuskokwim Mineral Belt.  Based on field
work completed in late 2006 and summer of 2007, airborne geophysical surveys
completed in the fall of 2006 and spring of 2007 and results of data
compilations conducted over the winter months, the Company identified additional
ground for acquisition. Approximately 8,000 acres in the Kisa area and
approximately 51,000 acres, located approximately 30-80 miles south of the
Donlin Creek deposit and north of the Companys other claim groups were acquired
based on the results.  The Company acquired rights to 8,640 acres under a
lease/option to purchase agreement with Greatland Exploration on the Seward
Peninsula in northwest Alaska called the Kelly Creek projectand acquired
additional lands adjacent to the Kelly Creek project increasing the total land
holdings in that project area to over 26,000 acres.



In central Idaho, the Company controls
approximately 46 unpatented federal mill site claims and 185 unpatented federal
lode claims in the Stibnite District covering approximately 3,930 acres.
 The Stibnite gold district is located east of McCall in Valley County,
Idaho, approximately 45 miles northeast of Cascade, Idaho.



On January 24, 2008, Gold Crest entered
into an Option and Royalty Sales Agreement with the heirs of the Estate of J.J.
Oberbillig.  Pursuant to the terms of the Agreement, Gold Crest has been
granted an exclusive option through August 15, 2008 to purchase a royalty right
in real property located in Valley County, Idaho.  The royalty right
consists of a 5% (five percent) royalty interest in all net smelter returns, net
revenue and net mint returns.  The Royalty Right has a total Purchase Price
of $1,642,480.  As consideration for entering into the Option Agreement,
Gold Crest paid $400,000.  If Gold Crest elects to exercise this option on
or before August 15, 2008, then there will be another payment upon closing in
the amount of $400,000.  The remaining balance of the Purchase Price,
$842,480 shall be in the form of a promissory note which will accrue interest at
the rate of six percent (6%) per annum commencing on the Closing Date.
  Commencing one (1) year from the Closing Date, five (5) annual
payments of principal plus accrued interest in the amount of $200,000 will be
due on the same day and month as the Closing Date and will end in the year
2013.



On January 24, 2008, Gold Crest entered
into an Option and Real Property Sales Agreement with JJO, LLC, an Idaho limited
liability company and personal representative of the Estate of J.J. Oberbillig.
 Pursuant to the terms of the Agreement, Gold Crest has been granted an
exclusive option through August 15, 2008 to purchase real property located in
Valley County, Idaho consisting of two parcels of patented mill site claims
comprising approximately 135 acres and two parcels of patented lode mining
claims comprising 120 acres.  The Property has a total Purchase Price of
$435,620.  As consideration for entering into the Option Agreement, Gold
Crest paid $125,000.  If Gold Crest elects to exercise this option on or
before August 15, 2008, then there will be another payment upon closing in the
amount of $100,000.  The remaining balance of the Purchase Price, $210,620
shall be in the form of a promissory note which will accrue interest at the rate
of six percent (6%) per annum commencing on the Closing Date.
  Commencing one (1) year from the Closing Date, five (5) annual
payments of principal plus accrued interest in the amount of $50,000 will be due
on the same day and month as the Closing Date and will end in the year 2013.





3





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In October 2007,
our common stock began trading on the NASDAQ Electronic Bulletin Board (OTCBB)
under the symbol GCMN.  Prior to October 2007 our common stock was traded
on the over the counter market in the pink sheets under the symbol GCMN.



We are currently in the process of becoming
listed on the TSX Venture Exchange (TSX-V).  We anticipate being listed
sometime in the second quarter of 2008.



There have been no bankruptcy, receivership
or similar proceedings.



Business of the Company

We are in the business of exploration,
development, and if warranted the mining of properties containing valuable
mineral deposits. The focus of our exploration programs is directed at precious
metals, primarily gold. We currently control approximately 107,500 acres of land
under State of Alaska jurisdiction. In Alaska, the lands are held under and are
subject to the States mining laws and regulations.  We continue to
identify, investigate and acquire potential properties for future exploration
and development when warranted.  We also currently control approximately 46
unpatented federal mill site claims and 185 unpatented federal lode claims in
the Stibnite District covering approximately 3,930 acres.   The Idaho
properties are held under and are subject to the Federal mining laws and
regulations.  In Idaho, we initiated collection and compilation of historic
exploration data and due diligence activities related to our land holdings in
the Stibnite-Yellow Pine Mining District.

Risk
Factors

The Companys business is subject to
numerous risk factors, including the following:

Mineral exploration and development are highly speculative and
capital intensive.  Most exploration efforts are not successful in that
they do not result in the discovery of mineralization of sufficient quantity or
quality to be profitably mined.  The operations of the Company are also
indirectly subject to all of the hazards and risks normally incident to
developing and operating mining properties.  These risks include
insufficient ore reserves; fluctuations in production costs that may make mining
of reserves uneconomic; significant environmental and other regulatory
restrictions; labor disputes; geological problems; failure of pit walls or dams;
force majeure events; and the risk of injury to persons, property or the
environment.

Ore reserve figures and costs are primarily estimates and are not
guarantees of recovery of the indicated quantities of these metals.  There
are numerous uncertainties inherent in estimating proven and probable reserves
and mineralization, including many factors beyond the control of the Company.
 The estimation of reserves and mineralization is a subjective process, and
the accuracy of any such estimates is a function of the quality of available
data and of engineering and geological interpretation and judgment.
 Results of drilling, metallurgical testing and production and the
evaluation of mine plans subsequent to the date of any estimate may justify
revision of such estimates.  No assurance can be given that the estimate of
the amount of metal or the indicated level of recovery of these metals will be
realized.  Reserve estimates for properties that have not yet started
production may change based on actual production experience.  Further,
reserves are valued based on estimates of costs and metals prices.  The
economic value of ore reserves may be adversely affected by:

·

declines in the market
price of the various metals we mine;

·

increased production or
capital costs; or

·

reduced recovery rates.

Assumptions about
prices are subject to greater uncertainty, and metals prices have fluctuated
widely in the past.  Declines in the market price of base or precious
metals also may render reserves or mineralization containing relatively lower
grades of ore uneconomic to exploit.  Changes in operating and capital
costs and other factors including, but not limited to, short-term operating
factors such as the need for sequential development of orebodies and the
processing of new or different ore grades may materially and adversely affect
reserves.  However, if the price of metals declines substantially below the
levels used to calculate reserves for an extended period, we could experience:

·

delays in new project
development;

·

increased net losses;

·

reduced cash flow;

·

reductions in reserves;
and

·

possible write-down of asset values.

The profitability of
mining operations is directly related to the market price of the metals being
mined.  The market price of base and precious metals such as copper, silver
and gold fluctuate widely and is affected by



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numerous factors beyond the control of any mining company.
 These factors include expectations with respect to the rate of inflation,
the exchange rates of the dollar and other currencies, interest rates, global or
regional political, economic or banking crises, and a number of other factors.
 If the market price of silver or copper should drop dramatically, the
value of the Companys exploration properties could also drop dramatically; and
the Company might not be able to recover its investment in those properties.
 The selection of a property for exploration or development, the
determination to construct a mine and place it into production, and the
dedication of funds necessary to achieve such purposes are decisions that must
be made long before the first revenues from production will be received.
 Price fluctuations between the time that such decisions are made and the
commencement of production can drastically affect the economics of a mine.

Our ability to produce gold, silver and copper in the future is
dependent upon our exploration efforts and our ability to develop ore reserves.
 If prices for these metals decline, it may not be economically feasible
for us to continue our development of a project or to continue commercial
production at some of our properties.

In the event that we bring any properties into production, our
ability to sustain or increase any production of metals will depend, in part, on
our ability to develop new orebodies and/or expand existing operations.
 Before we can begin a development project, we must first determine whether
it is economically feasible to do so.  This determination is based on
estimates of several factors, including:

·

reserves;

·

expected recovery rates
of metals from the ore;

·

facility and equipment
costs;

·

capital and operating
costs of a development project;

·

future metals prices;

·

comparable facility and
equipment costs; and

·

anticipated climate
conditions.

Development projects may have no operating history upon which to
base these estimates; and these estimates are based in large part on our
interpretation of geological data, a limited number of drill holes and other
sampling techniques.  As a result, actual cash operating costs and returns
from a development project may differ substantially from our estimates; as a
result of which, it may not be economically feasible to continue with a
development project.

Mineral exploration, particularly for gold, silver and copper, is
highly speculative.  It involves many risks and is often nonproductive.
 Even if we find a valuable deposit of minerals, it may be several years
before production is possible.  During that time, it may become
economically unfeasible to produce those minerals.  Establishing ore
reserves requires us to make substantial capital expenditures and, in the case
of new properties, to construct mining and processing facilities.  As a
result of these costs and uncertainties, we may not be able to expand or replace
our existing ore reserves as they are depleted by current production.

Mines have limited lives and, as a result, mining companies
continually seek to replace and expand their reserves through the acquisition of
new properties.  In addition, there is a limited supply of desirable
mineral lands available in the United States and other areas where we would
consider conducting exploration and/or production activities.  Because we
face strong competition for new properties from other mining companies, most of
whom have greater financial resources than we do, we may be unable to acquire
attractive new exploration properties on terms that we consider acceptable.

Our business is subject to a number of risks and hazards
including:

·

environmental hazards;

·

industrial accidents;

·

labor disputes;

·

unusual or unexpected
geologic formations;

·

cave-ins;

·

explosive rock
failures; and

·

flooding and periodic
interruptions due to inclement or hazardous weather conditions.

Such risks could result in:

·

damage to or
destruction of mineral properties or producing facilities;

·

personal injury;

·

environmental damage;



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·

delays in exploration,
development or mining;

·

monetary losses; and

·

legal liability.

Our properties are located in the northern Idaho and Alaska, and
thus weather may play a role in the cost of implementing an exploration program.
In the United States, our properties are located in National Forests, where
access roads are often poorly maintained. With high rainfall, for example, there
may be some chance of washouts occurring on roads, which could prevent access to
some of, or portions of, the properties. Forest fires could lead to government
agencies restricting or even closing access to our properties such as they did
at Stillwater Mining Company in 2006. Such closures would prevent us from
undertaking planned exploration programs and require those programs to be
postponed. Harsh winter conditions may preclude planned winter access of our
properties and/or reduce the effective summer field season. In Alaska, mild
winter conditions could preclude us from performing winter work programs where
such programs depend upon a winter freeze up of lakes to provide access to the
property (especially for drilling purposes).

For some of these risks, we may be able to obtain insurance to
protect against these losses.  However, we may not be able to obtain this
insurance, particularly if there are significant premiums.  Insurance
against environmental risks is generally either unavailable or too expensive for
us and other companies in our industry; and, therefore, we do not intend to
maintain environmental insurance.  To the extent we are subject to
environmental liabilities, we would have to pay for these liabilities.
 Moreover, in the event that we are unable to fully pay for the cost of
remedying an environmental problem, we might be required to suspend operations
or enter into other interim compliance measures.

In the ordinary course of business, mining companies are required
to seek governmental permits for expansion of existing operations or for the
commencement of new operations.  Obtaining the necessary governmental
permits is a complex and time-consuming process involving numerous jurisdictions
and often involving public hearings and costly undertakings on our part.
 The duration and success of our efforts to obtain permits are contingent
upon many variables not within our control.  Obtaining environmental
protection permits, including the approval of reclamation plans, may increase
costs and cause delays depending on the nature of the activity to be permitted
and the interpretation of applicable requirements implemented by the permitting
authority.  There can be no assurance that all necessary permits will be
obtained; and, if obtained, the costs involved will not exceed those that we
previously estimated.  It is possible that the costs and delays associated
with the compliance with such standards and regulations could become such that
we would not proceed with the development or operation of a mine or mines.

Our business is subject to extensive federal, state and local laws
and regulations governing development, production, labor standards, occupational
health, waste disposal, use of toxic substances, environmental regulations, mine
safety and other matters.  New legislation and regulations may be adopted
at any time that results in additional operating expense, capital expenditures
or restrictions and delays in the mining, production or development of our
properties.  Various laws and permits require that financial assurances be
in place for certain environmental and reclamation obligations and other
potential liabilities.  The amount of the financial assurances and the
amount required to be set aside by us as collateral for these financial
assurances will be dependent upon a number of factors, including our financial
condition, reclamation cost estimates, development of new projects and the total
dollar value of financial assurances in place.

Mining is subject to potential risks and liabilities associated
with pollution of the environment and the disposal of waste products occurring
as a result of mineral exploration and production.  Insurance against
environmental risk (including potential liability for pollution or other hazards
as a result of the disposal of waste products occurring from exploration and
production) is not generally available to the Company (or to other companies in
the minerals industry) at a reasonable price.  To the extent that the
Company becomes subject to environmental liabilities, the satisfaction of any
such liabilities would reduce funds otherwise available to the Company and could
have a material adverse effect on the Company.  Laws and regulations
intended to ensure the protection of the environment are constantly changing and
are generally becoming more restrictive.

The validity of unpatented mining claims, which constitute a
significant portion of the Companys property holdings in the United States, is
often uncertain, and such validity is always subject to contest.
 Unpatented mining claims are unique property interests and are generally
considered subject to greater title risk than patented mining claims or real
property interests that are owned in fee simple.  The Company has not yet
filed a patent application for any of its properties that are located on federal
public lands in the United States; and, under proposed legislation to change the
General Mining Law, patents may be hard to obtain.  Although the Company



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has attempted to acquire satisfactory title to its undeveloped
properties, the Company does not generally obtain title opinions until financing
is sought to develop a property with the attendant risk that title to some
properties, particularly title to undeveloped properties, may be defective.

We have limited financial resources, do not generate operating
revenue, and must finance our operations by other means.  We do not know
whether additional funding will be available for further exploration and
development of our projects.  If we fail to obtain additional financing, we
will have to delay or cancel further exploration and development of our
properties, and we could lose all of our interests in our properties.

If our exploration programs successfully locate an economic
orebody, additional funds will be required to place it into commercial
production.  Substantial expenditures would be required to establish ore
[reserves] through drilling, to develop metallurgical processes to extract the
metals from the ore and to construct the mining and processing facilities at any
site chosen for mining.  We do not know whether additional financing will
be available at all or on acceptable terms.  If additional financing is not
available, we may have to postpone the development of or sell the property.

We have had no revenues or earnings from operations.  We have
no significant assets or financial resources.  As a mineral exploration
company, we will sustain operating expenses without corresponding revenues.
 This will result in us incurring net operating losses that will increase
continuously until we can bring a property into production or lease, joint
venture or sell any property we may acquire.

We compete with other mineral exploration and mining companies,
many of which have greater financial resources than us or are further in their
development, for the acquisition of mineral claims, leases and other mineral
interests as well as for the recruitment and retention of qualified employees
and other personnel.  If we require and are unsuccessful in acquiring
additional mineral properties or personnel, we will not be able to grow at the
rate we desire, or at all.

In recent years, the securities markets in the United States and
Canada have experienced a high level of price and volume volatility, and the
market prices of securities of many companies have experienced wide fluctuations
in price which have not necessarily been related to the operating performance,
underlying asset values or prospects of such companies.  There can be no
assurance that continual fluctuations in price will not occur.  It may be
anticipated that any quoted market for our Common Shares will be subject to
market trends generally, notwithstanding our potential success in delineating
mineral resources.

You should not rely on an investment in our common stock to
provide dividend income, as we do not plan to pay cash dividends on our common
stock in the foreseeable future.  Thus, if you are to receive any return on
your investment in our common stock, it will come from the appreciation, if any,
in the value of the common stock.  The payment of future cash dividends, if
any, will be reviewed periodically by our board of directors and will depend
upon, among other things, conditions then existing, including our earnings,
financial condition and capital requirements, restrictions in financing
agreements, business opportunities and conditions, and other factors.

Shares of our common stock have a limited public market.
 Although the shares are currently traded on the NASDAQ Electronic Bulletin
Board (OTCBB), we cannot assure you that an active and liquid trading market
will develop for our shares.  Such a failure may have a material adverse
impact on the market price of the shares and the ability of a purchaser to
dispose of the shares in a timely manner or at all.

There is no assurance that any of the claims we explore or acquire
will contain commercially exploitable reserves of minerals.  Exploration
for natural resources is a speculative venture involving substantial risk.
 Hazards such as unusual or unexpected geological formations and other
conditions often result in unsuccessful exploration efforts.  We may also
become subject to significant liability for pollution, cave-ins or hazards which
we cannot insure or which we may elect not to insure.

Our competition in the mining industry includes large, established
mining companies with substantial capabilities and with greater financial and
technical resources than we have.  As a result of this competition, we may
be unable to acquire additional financing on terms we consider acceptable.
 We also compete with other mining companies in the recruitment and
retention of qualified managerial and technical employees.  If we are
unable to successfully compete for financing or for qualified employees, our
exploration program may be slowed down or suspended.



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We have not found any mineral reserves on our claims, and there
can be no assurance that any of the mineral claims we intend to explore will
contain commercial quantities of any minerals.  Even if we identify
commercial quantities of minerals in any of our claims, there can be no
assurance that we will be able to exploit the reserves or, if we are able to
exploit them, that we will do so on a profitable basis.

The probability of an individual prospect ever having reserves is
remote.  In all probability, our properties do not contain any reserves.
 As such, any funds spent on exploration could be lost which will result in
a loss of your investment.

Our shares are currently listed and traded on the NASDAQ
Electronic Bulletin Board (OTCBB).  Trading in stock quoted on the (OTCBB)
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.  Accordingly,
shareholders may have difficulty reselling any of the shares.

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 individually 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 NASD has adopted rules that require, 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 NASD believes there is a high probability that speculative, low-priced
securities will not be suitable for at least some customers.  The NASD
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.

Amount
Spent on Exploration for the Last Two Years

During the years ending December 31, 2007
and 2006, we have spent $3,350,798 and $771,292, respectively, on exploration
activities.

Employees

We presently lease an office that consists
of 3,354 square feet and, as of December 31, 2007, we have three full-time
employees and one part-time employee.  We intend to utilize the services of
consultants and contractors to provide additional services to the Company.

Competition

There is aggressive competition within the
minerals industry to discover and acquire properties considered to have
commercial potential.  The Company competes for the opportunity to
participate in promising exploration projects with



8





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other entities,
many of which have greater resources than the Company.  In addition, the
Company competes with others in efforts to obtain financing to explore and
develop mineral properties.

Regulation

The Companys activities in the United
States are subject to various federal, state, and local laws and regulations
governing prospecting, development, production, labor standards, occupational
health and mine safety, control of toxic substances, and other matters involving
environmental protection and taxation.  It is possible that future changes
in these laws or regulations could have a significant impact on the Companys
business, causing those activities to be economically reevaluated at that
time.

Reports to
Security Holders

The Company filed a Form 10-SB with the
Securities and Exchange Commission on January 8, 2007.  The Company has
filed the required quarterly 10-QSB reports and current reports on form 8-K
since that time.

The public may read
a copy of any materials the Company files with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC.

ITEM 2.

DESCRIPTION OF PROPERTY

ALASKA
PROPERTIES



SOUTHWEST KUSKOKWIM PROJECT



Summary

In the Kisaralik Lake area of southwest
Alaska, the Companys wholly owned subsidiary Kisa Gold Mining, Inc. (KGMI) has
staked seven claim blocks consisting of 171 State of Alaska mining claims and 28
Prospecting Sites covering approximately 30,520 acres.  The Company calls
the seven claim blocks the Southwest Kuskokwim Project and the individual names
of each claim block are Kisa, Gold Lake, Luna, AKO, Gold Creek, Gossan Valley
and Little Swift.  Previous workers located and prospected, but never
drilled, two significant precious metal showings in a remote, highly prospective
portion of the Kuskokwim Mineral Belt nearly 20 years ago.  Both of the
showings show striking similarities in mineralization style, alteration and
general geologic characteristics to Nova Gold Resources and Barricks Donlin
Creek project and other major Kuskokwim Mineral Belt gold deposits.

Location and
Access

The Southwest Kuskokwim Project area is
situated in a mountainous, high relief area located approximately 100 miles east
of Bethel, Alaska and approximately 120 miles southwest of Donlin Creek and 40
miles west of the Shotgun Deposit.  The project area lies along the
boundary between the Bristol Bay, Kuskokwim and Bethel Recording Districts in
southwest Alaska on State of Alaska lands.  Bethel is the nearest community
with full, year-round services.  Commercial barge service from Anchorage is
available from late May through early October at Bethel.

The effective work
season in the project area is from July through September.  The lakes in
the immediate area typically remain frozen and snow covers ridges and upper
slopes until late June or early July.  Currently, personnel and equipment
access to the area is limited to float planes capable of landing on lakes, via
helicopter or via small fixed wing aircraft equipped with tundra tires.

The nearest areas
to the prospects that are closed to mineral entry include Wood  Tikchik State
Park located to the east of the Gold Lake and Kisa claim groups.  Areas to
the west and south are property of the Federal government and include the Yukon
Flats National Wildlife and Togiak National Wildlife Refuges respectively.
 There currently are no unusual social, political or environmental
encumbrances to exploration, development or production on the prospects.
 There are currently no roads or power available to the properties.
 Should attempts to develop one or more of the prospects occur, there is no
guarantee that controversy will not arise as a result of any proposed
development.

Geologic Setting and
Deposit Types

The property is situated in the Kuskokwim
Mineral Belt in the southern portion of the Aniak-Tuluksak and southeastern
portion of the Bethel Mining Districts.  Historically the Kuskokwim Mineral
Belt has been a major placer and lode gold producer as well as the major source
of mercury in Alaska since the turn of the twentieth century.  Recent
regional- to deposit-scale investigations by industry, academic institutions and
government workers have helped better define the mineral deposit types and
geologic controls in the Mineral Belt.  This work has been spurred on by
the discovery of major



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gold deposits
throughout the northern and central portion of the belt, including the largest
known deposit in the belt, the Donlin Creek deposit located approximately 250 km
to the northwest.



Rock sequences exposed in the Kuskokwim
region consist of fault-bounded terrains consisting of pre-Cretaceous-age to
Tertiary-age assemblages of sedimentary, volcanic and intrusive rocks. These
rocks were subsequently intruded by middle Cretaceous to Tertiary plutons, and
associated dikes and sills, often in swarms along structural corridors. Glacial
and modern flood plain deposits typically fill the broad glacially-carved
valleys.

Current
Program

The following
points address the most significant accomplishments of the 2007 exploration
program.  They are:

·

Completion of 2,100
square miles of high resolution airborne geophysical surveys south of the Donlin
Creek gold deposit;

·

Completion of 17-line
miles of induced polarization (IP)/Resistivity, 120-line miles of ground
magnetics, collection of over 300 stream sediments and 250 rock samples and
three soil grids on anomalies in the seven claim block area;

·

Completion of over
3,100 feet of drilling at the Kisa Breccia target in the Kisa claim group with
encouraging results;

·

Acquisition of two
historic district-scale industry reconnaissance data sets and development of a
proprietary steam sediment database that includes over 3,000 conventional silt
and pan concentrate stream sediment samples. These samples define district-scale
anomalies along distinct trends identified by the airborne geophysics and cover
an area beginning at Kisa and extending 100 miles to northeast to the southern
reaches of the Donlin Creek deposit;

·

Discovery and staking
of a major new mineral occurrence at the Luna Prospect 6 miles west of the
Companys Kisa claim group.



Southwest Kuskokwim Project
Descriptions

Kisa Prospect

The Kisa claim group is made up of 32 state
mining claims covering approximately 4,520 acres which consist of a narrow,
linear, northeast trending ridge held up with hornfelsed Kuskokwim Group
sedimentary rocks intruded by silicified rhyolite to gabbroic dikes and sills.
 Several northwest-trending spurs off the main ridge appear to be related
to crosscutting dikes of a different age and composition.  Geochemical
analyses suggest associations similar to those known from other gold deposits
within the Kuskokwim Mineral Belt including the producing Fort Knox Mine and
advanced exploration projects at Donlin Creek to the north and Shotgun Hills to
the east.

During 2007, the
Company drilled over 3,100 feet with encouraging results on one of the main
targets of the Kisa claim group, known as the Kisa Breccia Target.
 A poorly exposed, extensively silica-carbonate-sulfide altered breccia
body is located along a ridge crest and steep, north-facing valley walls.
 The breccia is composed of a mixture of altered sedimentary and igneous
clasts, many of which exhibit multiple generations of veining and brecciation.
 The breccia body is exposed over an area approximately 300 meters wide x
500 meters long and roughly 250 meters high.  Systematic rock chip samples
from outcropping exposures of this breccia average over 1.25 grams per tonne
gold with select rock chip samples up to 7 grams per tonne. The Company
completed six core holes into the Target during the 2007 drilling campaign. All
six holes cut broad zones of intensely altered igneous breccia containing low
grade gold mineralization including narrower higher grade intervals. Highlights
include hole K07-04 which cut 206.7 meters averaging 0.3 grams per tonne gold;
hole K07-05 which cut 115.4 meters averaging 0.7 grams per tonne gold, including
a 44 meter intercept averaging 1.3 grames per tonne (0.038 ounces per ton) and
hole K07-06 which cut 148 meters averaging 0.4 grams per tonne gold.

The Golden
Dike Target includes the rocks exposed on and under a prominent
northeast trending ridgeline running through the center of the Kisa claim group.
 The ridge contains numerous silica-carbonate-sulfide altered felsic
rhyolite dikes and sills exposed over an area 300 meters wide x 3000 meters long
with at least 200 meters of exposed vertical extent.  Float mapping, aerial
photographic linears and airborne geophysical data suggest the dike swarm may
extend in both directions under talus covered slopes and into the adjacent
valleys.  Sedimentary rocks are heavily iron oxide stained and fractured in
the hornfelsed zones adjacent to and along the dike and sill margins and contain
various oxidation products after sulfides.  The dikes are often bleached,
silicified and typically contain disseminated to stockwork sulfide veining.
 The large spatial extent and intense alteration associated with gold in
amounts > 0.1 gram per tonne in nearly all the samples collected from this
dike swarm and the heavily iron-stained host rocks suggest the presence of a
major mineralized system at the surface and underlying the ridge.  Similar
dikes swarms and alteration zones are associated with the mineralized zones in
the Donlin Creek deposit.



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Work in 2007 included detailed rock chip and soil sampling, ground
and airborne geophysics and geologic mapping. This work has now expanded the
target area to a zone approximately 820 feet to 1,475 feet wide x 8,200 feet to
14,760 feet long with at least 525 feet and locally up to 1,150 feet of exposed
vertical extent.

The Pirates
Pick Target is located in the northern portion of the Kisa claim
group and consists of a large northwest-trending quartz-carbonate-sulfide veined
fault zone.  The intensely stockwork-veined fault is intermittently exposed
over the crest and flanks of a small ridge in an area roughly 200 meters wide by
350 meters long with several hundred meters of exposed vertical extent.
 The fault occurs along the northern end of the ridge hosting the dike-sill
complex and field evidence suggests the fault may offset and displace the dike
swarm.  The average of 18 rock chip samples collected from this zone is
1.95 grams per tonne gold.

Additional targets
occur along the projections of the dike swarm and fault systems into the
adjacent talus covered slopes and glacial drift filled valleys, but will require
additional work prior to definition of drill targets.  Several small rubble
crop and/or outcrop showings along the valley edge to the northwest of the main
ridge contain anomalous pathfinder element suites and gold values.  These
showings correspond with a marked airborne magnetic geophysical anomaly
identical to that over the main ridge to the southeast and make an intriguing
target.

Gold Lake
Prospect

The Gold Lake claim group is made up of 44
state mining claims covering approximately 6,320 acres approximately 8 miles
west of the Kisa Prospect and covers a broad, bright red, iron oxide stained,
northwest trending ridge several miles long and nearly a mile wide adjacent to
Gold Lake.  The claim group contains at least two generations of
crosscutting igneous dikes and sills similar to the Kisa showing and drill
targets have been defined at several prospects within the claim package.

The Gossan
Ridge Target consists of a series of banded quartz-sulfide veins
associated with a dike-sill swarm that runs along the crest and flanks of
rust-colored ridgeline exhibiting heavily iron oxide-staining reflecting
weathering and oxidation of widespread disseminated sulfides in the rocks
exposed along the ridge.  The vein system has an exposed strike length of
over 500 meters and exposed widths up to 20 meters and the alteration zone and
lower grade old mineralization is up to 100 meters wide and 1500 meters long
with up to 200 meters of exposed vertical extent.  Samples from the vein
system consistently carry highly anomalous gold and pathfinder elements with
select samples running up to 10 grams per tonne gold and 200 grams per tonne
silver.  The vein system appears to be associated with a series of
porphyritic dikes that have produced pervasive and intense hydrothermal
alteration of the host sedimentary rocks.  The dikes and sills typically
contain lower grade gold mineralization, but their widespread presence and
intense alteration associated with the igneous rocks throughout the complex
suggest the presence of a larger, potentially mineralized  igneous body at
depth.

During 2007,
additional rock and soil sampling was completed and the previously outlined soil
anomaly was extended to more than 1 kilometer along strike.  Over 51
line-miles of ground magnetics were completed and located a distinctive circular
magnetic anomaly adjacent to, and overlapping with the main soil and rock chip
anomaly.  The magnetic feature extends beneath a glacial drift-filled
valley and underlies another prominent alteration zone on the adjacent ridge
slopes.  Prospecting this feature in 2007 confirmed the presence of
quartz-arsenopyrite-stibnite veins and fracture-controlled sulfides potentially
indicative of cupola-related mineralization above a buried intrusion.  A
single 3-mile long, induced polarization and resistivity survey line was run
adjacent to the main showing and generated a good IP response over the circular
ground magnetics feature.  A large area of anomalous gold and intense
alteration and the numerous dikes suggests the Gold Lake prospect may overlie a
larger potentially mineralized intrusive hosted system at depth.

The Golden
Alder Target consists of a linear fault zone exposed along the bottom
and valley walls of a small drainage over a strike length of approximately 600
meters.  Soils collected over covered areas on the valley walls and
adjacent uplands suggests the zone may be as wide as 200 meters.  A
pronounced circular airborne geophysical anomaly underlies a portion of the
fault system and its projection into an alluvium covered area and may represent
a leakage halo emanating from a potentially mineralized intrusion at depth
beneath the fault zone.  The average of 18 rock chip samples collected from
this structural zone average over 1.5 grams per tonne gold.

AKO Prospect

The AKO claim group is located in the
southwestern Kuskokwim mountains approximately 9 miles southwest of the Kisa
Prospect.  The Company controls over 7,200 acres on 45 state mining claims.
The AKO prospects were first discovered 20 years ago during a regional
reconnaissance program.  Follow-up included limited rock-chip sampling and
field examination of several linear to ovoid iron-oxide stained ridgeline and
valley-wall color anomalies within and along the faulted, western margin of the
Crooked Mountain Pluton.  These color anomalies are found at the headwaters
of streams



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with strong gold
and multi-element anomalies in stream sediments and pan concentrates and they
are aligned along a pronounced, linear topographic feature that stretches for
several miles.  These prospects have never been drilled.



The Companys exploration in the area
includes compilation of historic data, completion of fixed-wing aeromagnetic and
electromagnetic surveys, aerial reconnaissance mapping, stream sediment sampling
and preliminary prospecting on several of the color anomalies identified to
date. Stream-sediment samples from below the area of the known color anomalies
and gold showings contain highly anomalous gold, arsenic, antimony, molybdenum
and bismuth.  Pan concentrates from streams draining these areas also
contain visible gold. Follow-up work in 2007 has identified a number of targets
on the property for further follow-up and possibly drill testing.



On February 26, 2008, Gold Crest signed a
term sheet with Newmont North America Exploration Limited, a subsidiary of
Newmont Mining Corporation (NYSE: NEM) under which the parties propose to create
a joint venture to explore for gold deposits covering Gold Crests AKO claims.
 For more information on the term sheets, see Note 11, Subsequent
Events.



Luna Prospect

The Luna claim group is located in the
southern Kuskokwim mountains of southwestern Alaska approximately 100 miles to
the southeast of Bethel and 6 miles west of the Kisa prospect.  The project
area is accessed by helicopter or by small aircraft capable of landing on a
tundra dirt strip. The Company staked the property in mid-2007, which consists
of 50 state mining claims covering approximately 8,000 acres.



The Luna prospect was discovered during
follow-up of an airborne geophysical anomaly identified from proprietary surveys
completed in the fall of 2006 and spring of 2007.  A regional-scale
structural zone was interpreted from the airborne geophysical data.
 Follow-up exploration involving IP, resistivity and ground magnetic
surveys, systematic stream-sediment and rock-chip sampling and geologic mapping
led to the discovery.



Follow-up exploration involving IP,
resistivity and ground magnetic surveys, systematic stream-sediment and
rock-chip sampling and geologic mapping led to the discovery.  Over 16
line-miles of IP-resistivity and 40 line-miles of ground magnetics were
completed in 2007.  The geophysical surveys define a 4.8 miles long by 1.4
miles wide IP and resistivity anomaly coinciding with a ground and aerial
magnetic anomaly.  Several conductors identified from the airborne
electromagnetic surveys correspond with zones of semi-massive sulfide
replacement mineralization located on the ground.



A total of 41 stream-sediment samples
collected from streams draining the prospect area outline a distinct 10 square
mile gold, arsenic, and antimony anomaly.  Samples returned values up to
1052 ppb gold.  A total of 40 of 72 rock chip samples collected from the
prospect area contain anomalous gold, with values as high as 0.75 oz Au/t over 5
feet widths reported.  Gold is associated with anomalous arsenic (up to
8400 ppm), antimony (up to 158 ppm), bismuth (up to 36 ppm), molybdenum (up to
64 ppm), silver (up to 23 ppm), copper (up to 0.44%), lead (up to 0.12%) and
zinc (up to 0.6%).



Mineralization is hosted in calcareous
siltstones, cherts and tuffaceous sedimentary rocks as well as in porphyritic
intrusive rocks.  Gold has been found in a broad area that exhibits
pervasive fracturing and clay alteration.  The prospective area contains
ubiquitous disseminated, vein and stockwork sulfide accumulations.
 Intrusive rocks occur as dikes, sills and small stocks and compositionally
include diorites and granodiorites as well as rhyolites.  Several zones of
stratiform sulfide replacement mineralization with cherty silica alteration
containing up to 70% sulfides, primarily fine-grained pyrite, arsenopyrite and
stibnite and to a lesser extent chalcopyrite and sphalerite have been located
within the claim group.



The presence of widespread base and
precious metals anomalies in stream sediments and rocks along this newly located
structural zone and the association of these anomalies with intrusive rocks and
reactive sedimentary rocks opens up a wide range of opportunities for future
discoveries.



On February 26, 2008, Gold Crest signed a
term sheet with Newmont North America Exploration Limited, a subsidiary of
Newmont Mining Corporation (NYSE: NEM) under which the parties propose to create
a joint venture to explore for gold deposits covering Gold Crests Luna claims.
 For more information on the term sheets, see Note 11, Subsequent
Events.



Little Swift Prospect
Sites

Little Swift consists of 14 prospecting
sites covering approximately 2,240 acres and were staked to prospect a
distinctively linear, contact zone between the Crooked Mountain quartz monzonite
pluton and the cupola of hornfelsed sedimentary rocks.  The prospect sites
are staked over six large linear to ovoid iron-oxide stained ridgeline and
valley wall color anomalies along the contact zone.  Previous workers
collected highly anomalous stream silt samples from below the area of the color
anomalies containing up to 230 ppb Au, 151 ppm As and 25 ppb Hg.





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Gold Creek
Prospect Sites

Gold Creek consists of 12 prospecting sites
covering approximately 1,920 acres and were staked to prospect several
iron-oxide stained color anomalies developed within the cupola of hornfelsed
sedimentary rocks associated with the eastern margin of Crooked Mountain quartz
monzonite pluton.  The prospect sites are staked over four large
ovoid-valley wall color anomalies that appear to be stratiform in character.
 Previous workers collected highly anomalous stream-sediment samples from
below the area of the color anomalies containing up to 163 ppm As and 57 ppb
Hg.



Gossan Valley Prospect
Sites

Gossan Valley consists of 2 prospecting
sites covering approximately 320 acres located approximately 6 miles south of
the AKO prospect.  The prospect was first discovered 20 years ago during a
regional reconnaissance program.  Follow-up included limited rock-chip
sampling and field examination of several ridgeline and valley-wall color
anomalies within and along the faulted, eastern margin of the Crooked Mountain
Pluton.  The color anomalies are found at the headwaters of streams with
gold (up to 30 ppb) and multi-element anomalies in stream sediments and pan
concentrates and they are aligned along a pronounced, linear topographic feature
that stretches for approximately one mile.  Previous rock sampling in the
area, was limited to the collection of ten float, talus and outcrop samples
below and within one of several color anomalies present in the area.  Two
of the ten samples returned detectable gold with a maximum value of 40 ppb and
weakly anomalous copper in several samples with a maximum value of 357 ppm.
 The prospect was never drilled.



The Companys exploration in the area
includes compilation of historic data, completion of fixed-wing aeromagnetic and
electromagnetic surveys, aerial reconnaissance mapping, stream sediment sampling
and preliminary prospecting on several of the color anomalies. Stream-sediment
samples from below the area of the known color anomalies contain highly
anomalous gold, arsenic, antimony, molybdenum and bismuth.  Pan
concentrates from streams draining these areas also contain visible gold.
 A brief examination of the showing in 2007 included collection of a single
representative rock chip sample over a 3 meter thick exposure of gossanous
hornfels.  The rock chip sample reported 199 ppb gold and 462 ppm copper
consistent with previous sample results from the area.



BUCKSTOCK PROJECT



Summary

The Companys wholly owned subsidiary Kisa
Gold Mining, Inc., (KGMI) has staked 319 State of Alaska mining claims covering
approximately 51,000 acres in seven claim groups.  The claims are situated
approximately 50 miles southwest of Donlin Creek and 45 miles northeast of
KGMIs Kisa Project area.  The Company calls the seven claim blocks the
Buckstock Project Block and the individual names of each claim block are HLK,
Chilly, XMT, KC, Girl, Boy and NN. KGMI initiated an active and aggressive
exploration program in the region as part of a regional program approach
expanding on the Companys results in the Kisa Project area.  These
prospects have been identified through multiple sources including a review and
compilation of data from published federal, state and academic manuscripts,
published and unpublished geochemical data and corporate proprietary data
sets.



Over 1,600 stream sediment, heavy mineral
concentrate and rock samples cover the area and the claim groups are staked in
areas determined to be prospective as potential source areas for the placer
occurrences identified from the companys proprietary geochemical database.
 Each of these prospects falls within much larger, poorly defined
regional-scale geochemical anomalies that represent district-scale exploration
plays.



The project area is underlain by
sedimentary and volcanic rocks of the Triassic and Cretaceous Gemuk Group;
sedimentary rocks of the Cretaceous Kuskokwim Group; and Late Cretaceous and
early Tertiary mafic to felsic volcanic rocks, small granitic intrusions, and
granite porphyry dikes and sills.  Locally there are small accumulations of
Quaternary age olivine basalt.  The project area lies within a structurally
complex flexure zone within a series of crustal-scale wrench faults.



Deformation associated with these faults
and splays appears to be at least locally important in the location of both
igneous rocks and mineralized showings.  Both high level epithermal and
deeper-level shallow intrusive and subvolcanic alteration and mineralization
systems are present in the project.  Initial field follow-up in late 2007
was encouraging with gold showings identified in bedrock on several claim
groups.



HLK

This prospect is situated along an
elongate, 2-3 mile wide x 4-5 mile long trend of extensively silica-tourmaline
altered rhyolitic volcanics at the headwaters of several placers identified in
the late 1980s by a placer exploration program. Stream sediment samples show
anomalous gold and pathfinder elements.  Extensive gold-bearing quartz
stockworks and breccia zones potentially indicative of a large hydrothermal
system are present in several areas along ridge crests and are open into talus
covered slopes and valley areas.  KGMI has identified similar systems in
the region that contain significant



13





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gold
mineralization.  There appear to be multiple mineralized centers in the
volcanic pile.  Rock chip samples contain up to 2.7 gpt gold.



Chilly

This prospect consists of a semicircular,
25-square mile multi-element stream geochemical anomaly draining a large Late
Cretaceous to Early Tertiary, zoned, quartz monzonitic intrusive complex.
 Highly anomalous arsenic in stream silts outlines this intrusive complex
at the regional scale.  Placer gold has been found around the flanks of the
complex coincident with highly anomalous stream silts containing pathfinder
elements.  Seven rock chip samples collected from outcrops in the
headwaters of the anomalous streams contain values ranging from 0.2 to 0.4 gpt
gold.



XMT

This prospect consists of a large rhyolitic
volcanic complex and dike/sill swarm situated in the headwaters of a significant
unworked placer occurrence. Breccias, silica flooded zones and quartz stockworks
contain gold up to 0.3 gpt with anomalous pathfinder elements.  Gold
showings in country rocks exposed on the flanks of a rhyolitic dome complex
consist of vuggy silica- and iron oxide-cemented, clast- and matrix supported
breccias.  Within the rhyolite, gold has been identified in silica-iron
oxide breccias and stockwork veins.





KC

This prospect consists of a large,
13-square mile, coherent multi-element stream geochemical anomaly draining a
steep elongate valley with granitic dikes and sills in the headwaters.
 This area contains highly anomalous gold and pathfinder elements in steams
sediment samples.



Girl

This prospect consists of a 4-mile long
area containing highly anomalous gold and pathfinder elements in stream
sediments.  The stream geochemical anomaly is coincident with a pervasively
sericitic to argillic altered granitic dike swarm containing disseminated
sulfides and quartz-stibnite-arsenopyrite stockworks.  Multiple intrusive
events are evident as well as high level, possibly epithermal-style alteration
and mineralization styles.



Boy

The Boy prospect covers a several square
mile area and contains highly anomalous gold and pathfinder elements in stream
sediments.  The stream geochemical anomaly is coincident with the
intersection of several distinctive regional trending lineaments and pervasively
sericite altered granitic dike swarms containing disseminated sulfides and
quartz-stibnite-arsenopyrite stockworks.



NN

Several highly anomalous stream sediment
samples and a historic placer site are located within low-lying hills at the
intersection of several large regional geophysical and topographic lineament at
this prospect.



KELLY CREEK PROJECT



The Kelly Creek Project is located
approximately 40 miles northwest of Quartz Creek, the northern terminus of the
Nome-Taylor Highway, and 90 miles northwest of Nome on Alaskas gold-rich Seward
Peninsula.  The project consists of 165 mining claims on state land
covering approximately 26,400 acres.  The claims are held by Kisa Gold
Mining, Inc. a wholly owned subsidiary of Gold Crest Mines, Inc. under an
exploration lease and option to purchase agreement with Greatland Exploration,
Ltd., a private Alaskan Corporation.



During 2007, Company geologists completed a
systematic, district-scale reconnaissance mapping and sampling program.
 The work included compilation and verification of historic soils, rock and
stream sediment geochemical data and collection of over 330 new rock, soil, and
stream sediment samples.  The geochemical sampling work confirmed the
earlier work, expanded the aerial extent of two previously known prospects and
discovered three new prospects that are ready for drill testing.



Anaconda Minerals originally discovered the
KC Prospectin 1982.  Their work outlined a 2000-foot long by 300-
foot wide gold-arsenic-antimony-mercury soil anomaly.  The program
culminated in completion of four, small diameter, core holes totaling 608 feet
into a short segment of the soil anomaly.  The drill holes cut significant
thicknesses of anomalous to potentially ore-grade gold mineralization hosted in
quartz-carbonate-clay altered, stockworked and brecciated calcareous and
carbonaceous schists.  The drilled mineralization occurs in the footwall of
a thrust complex containing dominantly carbonate rocks.  The 2007 program
extended the original 2000-foot long by 300-foot wide soil anomaly by more than
160%, and the anomalous zone now measures over 3300 feet in length, and remains
open along strike.





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The Ox
Prospectis located approximately 1200 feet west of the KC Prospect and was
originally discovered during the 1980s era Anaconda program. Prior to the 2007
program, the prospect consisted of a 500-foot wide by 600-foot long
gold-arsenic-antimony-mercury soil anomaly defined by a few scattered samples.
 Grid work in 2007 substantially increased the dimensions of the anomaly
which is defined by soils with values ranging from 50 ppb to 300 ppb gold and
now measures over 750 feet wide by 2900 feet long.  Field mapping indicates
that gold mineralization is localized in carbonaceous schists along a reverse
fault contact with overlying marble.  Quartz vein stockworks, brecciation
and resilicification are locally observed in surface float of the lower plate
schist.  No drilling has been completed on the Ox Prospect.



The newly discovered Wolverine
Prospect, located approximately 3.5 miles northeast of the KC Prospect, is a
500-foot wide by 1500-foot long soil gold anomaly along a high-angle structural
zone that juxtaposes carbonaceous schist against a marble and schist-bearing
sequence.  The soil anomaly is open in three directions and is defined by
values ranging from 15 ppb gold to as high as 1146 ppb gold with coincident
anomalous arsenic and antimony.  Wolverine has not been drilled.



The Wolf Prospectis located
approximately 2500 feet south of the KC Prospect and consists of an open-ended
zone of anomalous gold, arsenic, antimony and mercury measuring approximately
1000 feet wide and over 3500 feet long at the intersection of several transverse
faults cutting the Kelly Creek fault system.



At the Foxand Bearprospects, located several miles from the KC Prospect, mapping and results
from reconnaissance soil lines have outlined several other gold-bearing areas
along favorable stratigraphic and structural corridors.



The Company is pleased with the results of
the 2007 exploration program.  Company management believe the tenor of gold
mineralization, styles of alteration, stratigraphic and structural relations and
the widespread soil anomalies identified to date are highly promising and
indicate the discovery of a district-scale gold play.

IDAHO
PROPERTIES



Niagara Mining and Development Corporation,
a wholly owned subsidiary of Gold Crest Mines, Inc has established a dominant
land position in the historic Yellow Pine-Stibnite Mining District. The District
is located approximately 45 miles northeast of Cascade, in Valley County in
south-central Idaho.  The area is situated in a high relief terrane with
surrounding mountains rising up to 8000 feet in elevation. Networks of paved and
unpaved public roads access the property and an airstrip is present on the site.
The Company now controls over 230 unpatented federal mining claims and a
substantial acreage of patented lode and mill site claims through preliminary
option agreements totaling approximately 4500 acres in the district. According
to a 2000 report by the Idaho Geological Survey, the Stibnite district has
produced over 500,000 ounces of gold as well as substantial quantities of
silver, antimony and tungsten.



The Company has entered into an agreement
with the J.J. Oberbillig Estate and heirs for an option to purchase a 5% Net
Smelter Royalty (NSR) and real property in the Stibnite Mining District in
central Idaho.  GCMN has purchased an option, through August 15, 2008 to
acquire the 5% NSR from the heirs of the J.J. Oberbillig Estate.  This
royalty applies to any metal produced from lands sold by the Oberbilligs to
Bradley Mining Co. in 1941. This option also gives the Company the right to
acquire approximately 255 acres of patented mining and mill site claims in the
Stibnite area from the Oberbillig Estate.  These lands have been the
subject of several exploration programs over the years, but contain no reserves
calculated to modern standards. The Company has initiated due diligence on the
underlying royalty and real property interest included within the option
agreement.  For more information on the options, see Note 11, Subsequent
Events.



In addition, the Company has entered into a
letter agreement with the Bradley Mining Company which provides the Company the
opportunity to evaluate the 175 acres of patented mining claims owned by Bradley
in the Stibnite mining district and, upon a successful evaluation, to obtain a
one year lease on the mining claims with the option during the lease term to
purchase the claims. The patented claims lie in a North-South direction and
cover approximately 1.5 miles of the surface expression of the Meadow Creek
fault, the primary mineralized zone in the district.  Underlying the claims
are the past producing Meadow Creek underground mine, the DMEA and North
exploration workings and a portion of the Monday Tunnel, an exploration drift.
 For more information on the letter agreement, see Note 11, Subsequent
Events.



The 2000 Idaho Geological Survey report
credits the Meadow Creek mine with producing some 49,500 ounces of gold from
underground operations during the period 1932 through 1937, as well as silver,
antimony and tungsten.  Additional work was carried out on these claims
from the 1930s through the 1950s by the U.S. Bureau of Mines (DMEA workings)
and the Bradley Mining Company (Monday Tunnel and North Drift).  Work
during this period included extensive drifting along and adjacent to the Meadow
Creek fault system as well as both surface and underground diamond drilling.



Considerable data (maps, mine plans, drill
logs and assay results) on these claims was acquired through the land and
royalty purchase option agreement.  Based on a review of this data and
information available in State and Federal



15





---

agencies
archives, the underground drifts encountered numerous zones of mineralization,
many of which were further explored by diamond drilling.  Nevertheless, no
proven or probable ore reserves have been established on the Bradley lease.



Bedrock in the district consists of
granitic rocks of the Cretaceous-age Idaho Batholith and a roof pendant of
metasedimentary rocks dominated by carbonates and quartzites. Much of the
Districts valley area is covered with unconsolidated alluvial and glacial
deposits. Gold and antimony mineralization are epithermal in character and
related to north- and northeast-trending structures, which are believed to be
related to the nearby Tertiary-age Thunder Mountain caldera complex. Production
in the district started in the early 1900s and considerable quantities of gold,
antimony, and tungsten have been mined there since World War II. In the late
1980s and early 1990s about 3 million tons of oxide ore was heap leached.
Total recorded past production from the District is well over 500,000 oz of
gold.



Numerous areas of sulfide mineralization
are found throughout the District and on lands under the Companys control. Much
of this mineralization has been extensively drilled by previous operators during
early stage exploration and development as well as part of past mining
operations focused on the previously exploited leachable oxide ores. The largest
currently known single sulfide occurrence in the district is the Yellow Pine
prospect currently under option by Vista Gold. The Company has acquired an
option to acquire a 5% Net Smelter Returns royalty interest any future
production from the main Yellow Pine deposit and any additional production from
the Vista-controlled patented claim block.  As part of the royalty and land
acquisition, the Company has acquired a large amount of historical data from the
district dating back as early as the 1920s when the districts first major
development occurred.  Review and compilation of these historical records
indicates a surprisingly large number of undeveloped mineralized areas
containing the potential to host considerable tonnages of mineralized oxide and
sulfide material within the Companys land package. Large areas underlain by
oxidized gold-bearing mineralized rock were identified and drilled during the
early 1990s, but were never mined by previous operators and are now under the
Companys control. The company is establishing a district-scale drill and
geologic database to place the mineralization into a consistent framework for
exploration.



ITEM 3.

LEGAL PROCEEDINGS



We are not a party to any legal proceedings and are not
aware of any such proceedings known to be contemplated.



ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS



We held a Special Meeting of Shareholders
on December 18, 2007 to consider the approval of the Gold Crest Mines, Inc. 2007
Stock Plan.



At the time of the record date for the
meeting, there were 74,086,328 shares of Common Stock outstanding.
 45,394,163 shares, or 61.3% of our total outstanding shares, were
represented in person or by proxy at the meeting.



The shareholders approved the 2007 Stock
Plan by the following vote:  44,738,486 shares of common stock (98.6%) were
voted in favor, 567,510 shares of common stock (1.2%) were voted against, and
113,667 shares of common stock were held in abstention.



16





---

PART II



ITEM
5.

MARKET FOR COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
SECURITIES

In October 2007,
our common stock began trading on the NASDAQ Electronic Bulletin Board (OTCBB)
under the symbol GCMN.  Prior to October 2007 our common stock was quoted
on the over the counter market in the Pink Sheets.



The following table sets forth for our
common stock, the high and low closing bid quotations per share for our common
stock for each quarter since January 1, 2006.  The quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.



|     |                                        |              |            
|---- | -------------------------------------- | ------------ | -----------
|Year | Quarter                                | High Closing | Low Closing
|2006 | First Quarter                          | $0.15        | $0.035     
|     | Second Quarter                         | $0.35        | $0.15      
|     | Third Quarter                          | $0.65        | $0.35      
|     | Fourth Quarter                         | $0.63        | $0.49      
|2007 | First Quarter                          | $0.64        | $0.40      
|     | Second Quarter                         | $0.63        | $0.50      
|     | Third Quarter                          | $0.55        | $0.22      
|     | Fourth Quarter                         | $0.30        | $0.20      
|2008 | First Quarter (through March 12, 2008) | $0.29        | $0.14      

Holders

As of March 12,
2008, there were approximately 463 shareholders of record of the Companys
common stock.

Dividends



The Company has never paid any dividends
and does not anticipate the payment of dividends in the foreseeable future.



See Item 11 herein for information relating
to our equity compensation plan.

ITEM 6.

MANAGEMENTS
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



Plan of Operation



We are in the business of exploration,
development, and if warranted the mining of properties containing valuable
mineral deposits. The focus of the Companys exploration programs is directed at
precious metals, primarily gold. The Company currently controls approximately
107,500 acres of land under State of Alaska jurisdiction and controls
approximately 46 unpatented federal mill site claims and 185 unpatented federal
lode claims in the Stibnite District in Central Idaho covering approximately
3,930 acres.  In Alaska, the lands are held under and are subject to the
States mining laws and regulations and the Idaho properties are held under and
are subject to the Federal mining laws and regulations.  We continue to
identify, investigate and acquire potential properties for future exploration
and development when warranted.



We intend to continue exploration work on
our Alaska claims. The work program for the next 12 months is preliminary, but
includes geologic mapping, soil, stream sediment and rock sampling and
geophysical surveys and possibly drilling. On the Kisa, Gold Lake and Buckstock
area claim groups the Company is planning on conducting additional ground
geophysical surveys and grid sampling work to try and expand known areas of gold
mineralization previously identified by soil, rock and drill sampling. Drilling
may be completed depending upon results and availability of sufficient funds to
complete a reasonable drilling program.



On February 26, 2008, Gold Crest signed two
separate term sheets with Newmont North America Exploration Limited, a
subsidiary of Newmont Mining Corporation (NYSE: NEM) under which the parties
propose to create joint ventures to explore for gold deposits covering our AKO
and Luna claims in our Southwest Kuskokwim Project. If this occurs, then Newmont
may utilize a variety of exploration methods to explore the claim package
including, but not limited to stream



17





---

sediment, soil
and rock sampling, geologic mapping and other related activities. For more
information on the term sheets, see Note 11, Subsequent Events.



The Company has entered into a letter
agreement and an option agreement for private lands within its Golden Meadows
project area in the historic Stibnite-Yellow Pine District of south-central
Idaho. The Company will be conducting due diligence on the real property
interests that are the subject of these agreements. The due diligence work will
include a review of public property ownership records from local, state and
federal sources through the use of surveyors, attorneys and contract land
specialists. In addition, since some of the areas to potentially be acquired
have been sites of past mining, milling or waste rock storage a review of
available environmental monitoring activities, restoration activities and other
pertinent environmental-related records will be completed. Additional site
assessment sampling and monitoring work will be completed on site once weather
conditions permit in collaboration with appropriate state and federal agency
officials. The off- and on-site due diligence will be accomplished using
in-house staff and qualified experts to insure any existing or future potential
liabilities that might exist from these past activities are quantified and
disclosed prior to execution of any final agreements that would potentially pass
these potential liabilities to the Company.  For more information on the
letter agreement and the option agreement, see Note 11, Subsequent Events.



A very large quantity of past exploration
data developed during the period from the late 1920s through the late 1990s is
available from public and private sources or already in the Companys
possession. The primary focus is currently the compilation of these historic
files and exploration and development records and synthesis of this data into a
District-scale geologic, geochemical and geophysical database. A large number of
both surface and underground drill holes have been drilled on prospects within
the Companys land holdings by previous operators and exploration groups.
 Many of these holes have defined coherent and contiguous zones of gold
mineralized rock and were drilled with sufficient detail for reserve
calculations and were reported as reserves by past operators. However, since
these drill programs are at approximately a decade old or older, and numerous
engineering, environmental and economic factors have changed, these previous
reserve estimates reported by previous operators in the district will require
reevaluation. Detailed reevaluation of these previously drilled and sampled
areas and reported mineralized reserves will be completed to determine whether
these zones warrant additional drilling, sampling metallurgical and engineering
studies for reserve estimation purposes. On-the-ground work may include
topographic surveys, airborne geophysical surveys, detailed ground geophysical
and soil sampling surveys and possibly confirmation drilling pending a review of
recently acquired historic data for the District and availability of funds.



Based on the current financial state of the
Company, we will require additional financing in order to carry out our proposed
operations for 2008.  We are currently in talks with investment firms in
order to accomplish this.



We are currently in the process of becoming
listed on the TSX Venture Exchange (TSX-V).  We anticipate being listed
sometime in the second quarter of 2008 if we are successful in raising the
needed funds.

Changes in Accounting
Policies

We did not change
our accounting policies during fiscal 2006 or 2007.





18





---

ITEM
7.

FINANCIAL
STATEMENTS









GOLD CREST MINES, INC.

(An Exploration Stage Company)



FINANCIAL STATEMENTS



December 31, 2007













19





---

GOLD CREST
MINES, INC.(An Exploration Stage Company)

December 31, 2007

CONTENTS

|                                                                                                                                                                              |  |    | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -- | 
|Report of
Independent Registered Public Accounting Firm                                                                                                                       |  | 21 | 
|Financial
Statements:                                                                                                                                                         |  |    | 
|                                                                                                                                                                              |  |    | 
|Consolidated
Balance Sheets as of December 31, 2007 and December 31,
2006                                                                                                     |  | 22 | 
|Consolidated
Statements of Operations for the years ended December 31, 2007,
December 31, 2006 and for the period from inception of Exploration
Stage until December 31, 2007 |  | 23 | 
|Consolidated
Statement of Stockholders Equity for the years ended December 31, 2007
and 2006, and from inception to December 31, 2005                                        |  | 24 | 
|Consolidated
Statements of Cash Flows for the years ended December 31, 2007,
December 31, 2006 and for the period from inception of Exploration
Stage until December 31, 2007 |  | 25 | 
|Notes
to Financial Statements                                                                                                                                                 |  | 26 | 







20





---







REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM





Board of Directors Gold Crest Mines, Inc.



We have audited the accompanying
consolidated balance sheets of Gold Crest Mines, Inc. (An Exploration Stage
Company) (the Company) as of December 31, 2007 and 2006, and the related
consolidated statements of operations, changes in stockholders equity, and cash
flows for the years then ended and for the period from inception (January 11,
2005) to December 31, 2007. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.



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



In our opinion, based on our audits, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Gold Crest Mines, Inc. as of
December 31, 2007 and 2006, and the results of its operations and its cash flows
for the years then ended and for the period from inception (January 11, 2005) to
December 31, 2007, in conformity with accounting principles generally accepted
in the United States of America.





/s/ DeCoria, Maichel & Teague P.S.



DeCoria, Maichel & Teague P.S.



Spokane, Washington March 18, 2008













































21





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|                                     |                                                                                         |                                                                |                                                                       |                            |         |              |        |             
|------------------------------------ | --------------------------------------------------------------------------------------- | -------------------------------------------------------------- | --------------------------------------------------------------------- | -------------------------- | ------- | ------------ | ------ | ------------
|GOLD CREST MINES,
INC.              
|(AN EXPLORATION STAGE
COMPANY)      
|Consolidated Balance
Sheets         
|                                     |                                                                                         |                                                                |                                                                       |                            |         | At           |        | At          
|                                     |                                                                                         |                                                                |                                                                       |                            |         | December 31, |        | December 31,
|                                     |                                                                                         |                                                                |                                                                       |                            |         | 2007         |        | 2006        
|ASSETS                               |                                                                                         |                                                                |                                                                       |                           
|                                     | CURRENT ASSETS                                                                          |                                                                |                                                                       |                            |        
|                                     |                                                                                         | Cash and cash equivalents                                      | $                                                                     | 778,696                    | $       | 2,183,027   
|                                     |                                                                                         | Interest receivable, current                                   |                                                                       | 893                        |         | -           
|                                     |                                                                                         | Prepaid expenses                                               |                                                                       | 94,085                     |         | -           
|                                     |                                                                                         | Deposits, current                                              |                                                                       | 4,104                      |         | 43,982      
|                                     |                                                                                         |                                                                |                                                                       | Total Current Assets       |         | 877,778      |        | 2,227,009   
|                                     | Note receivable                                                                         |                                                                | 120,000                                                               |                            | -      
|                                     | Interest receivable, non-current                                                        |                                                                | 3,920                                                                 |                            | -      
|                                     | Deposits, non-current                                                                   |                                                                | 50,000                                                                |                            | -      
|                                     | Equipment, net of accumulated depreciation of
$23,944 and $432 respectively             |                                                                | 110,977                                                               |                            | 38,810 
|                                     | Mineral properties                                                                      |                                                                | 188,175                                                               |                            | 133,175
|                                     |                                                                                         |                                                                |                                                                       |                            |         |              |        |             
|                                     |                                                                                         | TOTAL ASSETS                                                   | $                                                                     | 1,350,850                  | $       | 2,398,994   
|                                     |                                                                                         |                                                                |                                                                       |                            |         |              |        |             
|LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                                         |                                                                |                                                                       |                           
|                                     | CURRENT LIABILITIES                                                                     |                                                                |                                                                       |                            |        
|                                     |                                                                                         | Accounts payable and accrued liabilities                       | $                                                                     | 341,930                    | $       | 37,434      
|                                     |                                                                                         |                                                                |                                                                       | Total Current Liabilities  |         | 341,930      |        | 37,434      
|                                     |                                                                                         |                                                                |                                                                       |                            |         |              |        |             
|                                     |                                                                                         | Total Liabilities                                              |                                                                       | 341,930                    |         | 37,434      
|                                     |                                                                                         |                                                                |                                                                       |                            |         |              |        |             
|                                     | STOCKHOLDERS' EQUITY                                                                    |                                                                |                                                                       |                            |        
|                                     |                                                                                         | Preferred stock; no par value; 10,000,000
shares               |                                                                       |                            |         |             
|                                     |                                                                                         |                                                                | authorized, none issued or outstanding                                |                            | -       |              | -     
|                                     |                                                                                         | Common stock; $0.001 par value; 500,000,000 shares
authorized; |                                                                       |                            |         |             
|                                     |                                                                                         |                                                                | 77,416,328 and 64,738,829 shares issued and
outstanding, respectively |                            | 77,417  |              | 64,739
|                                     |                                                                                         | Common stock subscribed                                        |                                                                       | (132,500)                  |         | -           
|                                     |                                                                                         | Additional paid-in capital                                     |                                                                       | 8,511,183                  |         | 4,141,924   
|                                     |                                                                                         | Accumulated deficit                                            |                                                                       | (7,447,180)                |         | (1,845,103) 
|                                     |                                                                                         |                                                                |                                                                       | Total Stockholders' Equity |         | 1,008,920    |        | 2,361,560   
|                                     |                                                                                         |                                                                |                                                                       |                            |         |              |        |             
|                                     |                                                                                         | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     | $                                                                     | 1,350,850                  | $       | 2,398,994   
|                                     |                                                                                         |                                                                |                                                                       |                            |         |              |        |             
|                                     | The accompanying notes are an integral part of these
consolidated financial statements.





22





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|                                      |                                                                                         |             |              |             |              |             |               
|------------------------------------- | --------------------------------------------------------------------------------------- | ----------- | ------------ | ----------- | ------------ | ----------- | --------------
|GOLD CREST MINES,
INC.               
|(AN EXPLORATION STAGE
COMPANY)       
|Consolidated Statements of
Operations
|                                      |                                                                                         |             |              |             |              |             |               
|                                      |                                                                                         |             |              |             |              |             | From Inception
|                                      |                                                                                         |             |              |             |              |             | 11-Jan-05     
|                                      |                                                                                         |             | Years Ended  |             | to          
|                                      |                                                                                         |             | December 31, |             | December 31, |             | December 31,  
|                                      |                                                                                         |             | 2007         |             | 2006         |             | 2007          
|                                      |                                                                                         |             |              |             |              |             |               
|REVENUES                              | $                                                                                       | -           | $            | -           | $            | -          
|                                      |                                                                                         |             |              |             |              |             |               
|OPERATING
EXPENSES:                   |                                                                                         |             |              |             |              |            
|                                      | Exploration
expenditures                                                                |             | 3,373,798    |             | 771,292      |             | 4,145,090     
|                                      | Legal and
accounting expenses                                                           |             | 241,586      |             | 76,285       |             | 317,871       
|                                      | Directors'
fees                                                                         |             | 214,000      |             | 590,000      |             | 804,000       
|                                      | General
and administrative                                                              |             | 1,835,449    |             | 403,608      |             | 2,239,057     
|                                      | TOTAL
OPERATING EXPENSES                                                                |             | 5,664,833    |             | 1,841,185    |             | 7,506,018     
|                                      |                                                                                         |             |              |             |              |             |               
|LOSS FROM
OPERATIONS                  |                                                                                         | (5,664,833) |              | (1,841,185) |              | (7,506,018)
|                                      |                                                                                         |             |              |             |              |             |               
|OTHER
INCOME (EXPENSE):               |                                                                                         |             |              |             |              |            
|                                      | Interest
income                                                                         |             | 62,756       |             | 10,855       |             | 73,611        
|                                      | Interest
expense                                                                        |             | -            |             | (14,773)     |             | (14,773)      
|                                      | TOTAL
OTHER INCOME (EXPENSE)                                                            |             | 62,756       |             | (3,918)      |             | 58,838        
|                                      |                                                                                         |             |              |             |              |             |               
|LOSS
BEFORE TAXES                     |                                                                                         | (5,602,077) |              | (1,845,103) |              | (7,447,180)
|INCOME
TAXES                          |                                                                                         | -           |              | -           |              | -          
|                                      |                                                                                         |             |              |             |              |             |               
|NET LOSS                              | $                                                                                       | (5,602,077) | $            | (1,845,103) | $            | (7,447,180)
|                                      |                                                                                         |             |              |             |              |             |               
|                                      |                                                                                         |             |              |             |              |             |               
|NET LOSS PER
COMMON SHARE - BASIC     | $                                                                                       | (0.08)      | $            | (0.07)      |              |            
|                                      |                                                                                         |             |              |             |              |             |               
|                                      |                                                                                         |             |              |             |              |             |               
|WEIGHTED
AVERAGE NUMBER               |                                                                                        
|                                      | OF SHARES
OUTSTANDING                                                                   |             |              |             |              |             |               
|                                      | BASIC                                                                                   |             | 72,370,920   |             | 26,040,987   |             |               
|                                      |                                                                                         |             |              |             |              |             |               
|                                      | The accompanying notes are an integral part of these
consolidated financial statements.







23





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|                                                           |  |              |  |               |  |                  |  |                  |  |                    |  |                  | 
|---------------------------------------------------------- |  | ------------ |  | ------------- |  | ---------------- |  | ---------------- |  | ------------------ |  | ---------------- | 
|Gold Crest Mines, Inc.                                    
|(An Exploration Stage Company)                            
|Consolidated Statements of Changes in Stockholders'
Equity
|                                                           |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|                                                           |  |              |  |               |  |                  |  |                  |  | Deficit            |  |                 
|                                                           |  |              |  |               |  |                  |  |                  |  | Accumulated        |  |                 
|                                                           |  | Common Stock |  | Additional    |  | Common           |  | During           |  |                   
|                                                           |  |              |  |               |  | Paid-in          |  | Stock            |  | Exploration        |  |                 
|                                                           |  | Shares       |  | Amount        |  | Capital          |  | Subscribed       |  | Stage              |  | Total           
|Balances,
January 11, 2005 and                             |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|December
31, 2005                                          |  | -            |  | $
          - |  | $
             - |  | $
             - |  | $
               - |  | $
             -
|                                                           |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|Issuance of
Common Stock:                                  |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|for
cash, pre-merger                                       |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|at
$0.004 per share                                        |  | 37,500,000   |  | 37,500        |  | 112,500          |  | -                |  | -                  |  | 150,000         
|In
connection with reverse                                 |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|merger
(Note 1)                                            |  | 14,600,100   |  | 14,600        |  | (7,144)          |  | -                |  | -                  |  | 7,456           
|for
cash, post-merger                                      |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|at
$0.30 per share                                         |  | 10,797,062   |  | 10,797        |  | 2,887,910        |  | -                |  | -                  |  | 2,898,707       
|for
interest at $0.30 per share                            |  | 41,667       |  | 42            |  | 12,458           |  | -                |  | -                  |  | 12,500          
|for
share-based compensation                               |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|at
$0.59 and $0.63 per share                               |  | 1,800,000    |  | 1,800         |  | 1,064,200        |  | -                |  | -                  |  | 1,066,000       
|Stock options
granted                                      |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|at
$0.30 per share                                         |  | -            |  | -             |  | 72,000           |  | -                |  | -                  |  | 72,000          
|Net loss for
year ended                                    |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|December
31, 2006                                          |  | -            |  | -             |  | -                |  | -                |  | (1,845,103)        |  | (1,845,103)     
|Balances,
December 31, 2006                                |  | 64,738,829   |  | $
 64,739     |  | $
 4,141,924     |  | $
            -  |  | $
 (1,845,103)     |  | $
  2,361,560   
|                                                           |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|Issuance of
Common Stock:                                  |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|for
directors fees between                                 |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|$0.53
and $0.54 per share                                  |  | 400,000      |  | 400           |  | 213,600          |  | -                |  | -                  |  | 214,000         
|for
share-based compensation                               |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|at
$0.28 per share                                         |  | 50,000       |  | 50            |  | 13,950           |  | -                |  | -                  |  | 14,000          
|for
cash at $0.30 per share                                |  | 7,529,999    |  | 7,530         |  | 2,251,470        |  | -                |  | -                  |  | 2,259,000       
|for
brokerage fees                                         |  | -            |  | -             |  | (77,335)         |  | -                |  | -                  |  | (77,335)        
|for
cash at $0.20 per share                                |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|with
warrants attached                                     |  | 4,035,000    |  | 4,035         |  | 802,965          |  | -                |  | -                  |  | 807,000         
|for
common stock issuable                                  |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|at
$0.20 per share with                                    |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|warrants
attached                                          |  | 662,500      |  | 663           |  | 131,837          |  | -                |  | -                  |  | 132,500         
|for
common stock subscribed                                |  | -            |  | -             |  | -                |  | (132,500)        |  | -                  |  | (132,500)       
|Stock options
granted                                      |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|at
$0.28 and $0.53 per share                               |  | -            |  | -             |  | 1,032,772        |  | -                |  | -                  |  | 1,032,772       
|Net Loss for the
year ended                                |  |              |  |               |  |                  |  |                  |  |                    |  |                 
|December
31, 2007                                          |  |              |  |               |  |                  |  | -                |  | (5,602,077)        |  | (5,602,077)     
|Balances,
December 31, 2007                                |  | 77,416,328   |  | $
   77,417   |  | $
  8,511,183    |  | $
   (132,500)   |  | $
  (7,447,180)    |  | $
 1,008,920    
|                                                           |  |              |  |               |  |                  |  |                  |  |                    |  |                 



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



24





---



|                                                                                        |                                                      |                                                      |             |              |             |              |             |                 
|--------------------------------------------------------------------------------------- | ---------------------------------------------------- | ---------------------------------------------------- | ----------- | ------------ | ----------- | ------------ | ----------- | ----------------
|GOLD CREST MINES,
INC.                                                                 
|(AN EXPLORATION STAGE
COMPANY)                                                         
|Consolidated Statements of Cash
Flows                                                  
|                                                                                        |                                                      |                                                      |             |              |             |              |             | From Inception  
|                                                                                        |                                                      |                                                      |             | Year         |             | Year         |             | January 11, 2005
|                                                                                        |                                                      |                                                      |             | Ended        |             | Ended        |             | to              
|                                                                                        |                                                      |                                                      |             | December 31, |             | December 31, |             | December 31,    
|                                                                                        |                                                      |                                                      |             | 2007         |             | 2006         |             | 2007            
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                   |                                                      |                                                      |             |              |             |             
|                                                                                        | Net loss                                             | $                                                    | (5,602,077) | $            | (1,845,103) | $            | (7,447,180)
|                                                                                        | Adjustments to reconcile net loss to net cash
used   |                                                      |             |              |             |              |            
|                                                                                        | by operating
activities:                             |                                                      |             |              |             |              |            
|                                                                                        |                                                      | Depreciation                                         |             | 23,562       |             | 432          |             | 23,994          
|                                                                                        |                                                      | Share-based compensation                             |             | 1,260,773    |             | 1,138,000    |             | 2,398,773       
|                                                                                        |                                                      | Interest paid with common shares                     |             | -            |             | 12,500       |             | 12,500          
|                                                                                        | Changes in operating assets and liabilities:         |                                                      |             |              |             |              |            
|                                                                                        |                                                      | Decrease (increase) in interest receivable           |             | (3,920)      |             | -            |             | (3,920)         
|                                                                                        |                                                      | Decrease (increase) in prepaid expenses and
deposits |             | 25,792       |             | (43,982)     |             | (18,190)        
|                                                                                        |                                                      | (Decrease) increase in accounts payable              |             | 304,497      |             | 37,434       |             | 341,931         
|                                                                                        |                                                      | Net cash
used by operating activities                |             | (3,991,373)  |             | (700,719)    |             | (4,692,092)     
|                                                                                        |                                                      |                                                      |             |              |             |              |             |                 
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                   |                                                      |                                                      |             |              |             |             
|                                                                                        | Cash received in reverse merger (Note 1)             |                                                      | -           |              | 7,456       |              | 7,456      
|                                                                                        | Note receivable issued                               |                                                      | (200,000)   |              | -           |              | (200,000)  
|                                                                                        | Purchase of mineral properties                       |                                                      | (55,000)    |              | (133,175)   |              | (188,175)  
|                                                                                        | Deposit on purchase of property                      |                                                      | (50,000)    |              | -           |              | (50,000)   
|                                                                                        | Purchase of equipment                                |                                                      | (95,729)    |              | (39,242)    |              | (134,971)  
|                                                                                        |                                                      | Net cash
used by investing activities                |             | (400,729)    |             | (164,961)    |             | (565,690)       
|                                                                                        |                                                      |                                                      |             |              |             |              |             |                 
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                   |                                                      |                                                      |             |              |             |             
|                                                                                        | Borrowings under line of credit                      |                                                      | -           |              | 250,000     |              | 250,000    
|                                                                                        | Payments of line of credit                           |                                                      | -           |              | (250,000)   |              | (250,000)  
|                                                                                        | Sale of common stock, net of issuance costs          |                                                      | 2,987,771   |              | 3,048,707   |              | 6,036,478  
|                                                                                        |                                                      | Net cash
provided by financing activities:           |             | 2,987,771    |             | 3,048,707    |             | 6,036,478       
|                                                                                        |                                                      |                                                      |             |              |             |              |             |                 
|                                                                                        | Net increase (decrease) in cash and cash
equivalents |                                                      | (1,404,331) |              | 2,183,027   |              | 778,696    
|                                                                                        | Cash and cash equivalents, beginning of
period       |                                                      | 2,183,027   |              | -           |              | -          
|                                                                                        | Cash and cash equivalents, end of period             | $                                                    | 778,696     | $            | 2,183,027   | $            | 778,696    
|                                                                                        |                                                      |                                                      |             |              |             |              |             |                 
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:                                      |                                                      |                                                      |             |             
|                                                                                        | Interest paid                                        | $                                                    | -           | $            | 2,273       | $            | 2,273      
|                                                                                        |                                                      |                                                      |             |              |             |              |             |                 
|The accompanying notes are an integral part of these
consolidated financial statements.
|                                                                                        |                                                      |                                                      |             |              |             |              |             |                 





25





---

Gold Crest Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



NOTE
1.

Organization and
Description of Business:

Gold Crest Mines,
Inc. (Gold Crest and the Company) is a Nevada corporation originally
incorporated on August 20, 1968, as Silver Crest Mines, Inc., an Idaho
corporation.  Effective August 1, 2006, Gold Crest acquired 100% of the
issued and outstanding shares of Niagara Mining and Development Co.,
(Niagara), an Idaho corporation formed on January 11, 2005, and its
wholly-owned subsidiary, Kisa Gold Mining, Inc. (Kisa), an Alaskan corporation
formed on July 28, 2006.  Gold Crests sole asset on the merger date was
cash of $7,456, which was accounted for as being acquired by Niagara in exchange
for 14,600,100 common shares of Niagara.    Niagaras sole asset
on the merger date was cash of $150,000.   Neither company had
liabilities on the date of the merger.  This transaction has been treated
as a reverse merger, effectively as if Niagara had issued shares for
consideration equal to the net monetary assets of Gold Crest. Under reverse
acquisition accounting, the consolidated financial statements of the entity are
considered a continuation of the financial statements of Niagara, the accounting
acquirer.



The focus of the Companys exploration
programs is directed at precious metals, primarily gold. The Company currently
controls approximately 107,500 acres of land under State of Alaska jurisdiction
and the Company controls approximately 46 unpatented federal mill site claims
and 185 unpatented federal lode claims in the Stibnite District covering
approximately 3,930 acres.  In Alaska, the lands are held under and are
subject to the States mining laws and regulations and the Idaho properties are
held under and are subject to the Federal mining laws and regulations.  We
continue to identify, investigate and acquire potential properties for future
exploration and development when warranted.



NOTE
2.

Summary of
Significant Accounting Policies



This summary of significant accounting
policies is presented to assist in understanding the financial statements. The
financial statements and notes are representations of the Companys management,
which is responsible for their integrity and objectivity. These accounting
policies conform to accounting principles generally accepted in the United
States of America and have been consistently applied in the preparation of the
financial statements.



Accounting Method

The Companys financial statements are
prepared using the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America.



Adoption of New Accounting Principles

On January 1, 2007, the Company adopted
Financial Accounting Standards Board Interpretation No. 48 (FIN No. 48)
Accounting for Uncertainty in Income Taxes. FIN No. 48 clarifies the
accounting for uncertainty in income taxes recognized in accordance with
Statement of Financial Accounting Standard (SFAS) No. 109 Accounting for
Income Taxes, prescribing a recognition threshold and measurement attribute for
the recognition and measurement of a tax position taken or expected to be taken
in a tax return. In the course of our assessment, we have determined that we are
subject to examination of our income tax filings in the United States and state
jurisdictions for the 2004 through 2006 tax years. In the event that the Company
is assessed penalties and or interest, penalties will be charged to other
operating expense and interest will be charged to interest expense.



The Company adopted FIN No. 48 using the
modified prospective transition method, which requires the application of the
accounting standard as of January 1, 2007. There was no impact on the financial
statements as of and for the year ended December 31, 2007 as a result of the
adoption of FIN No. 48. In accordance with the modified prospective transition
method, the financial statements for prior periods have not been restated to
reflect, and do not include, the impact of FIN No. 48.



New Accounting Pronouncements

In September 2006, the Financial Accounting
Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements (SFAS
157). SFAS 157 defines fair value, establishes a framework for measuring fair
value, and expands disclosures about fair value measurements required under
other accounting pronouncements, but does not change existing guidance as to
whether or not an instrument is carried at fair value. SFAS 157 is effective for
the Companys fiscal year 2008.





26





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



In February 2007, the FASB issued SFAS No.
159, The Fair Value Option for Financial Assets and Financial Liabilities
(SFAS 159), which will permit entities to choose to measure many financial
assets and financial liabilities at fair value. The standard requires companies
to provide additional information that will help investors and other users of
financial statements more easily understand the effect of the companys choice
to use fair value on its earnings. It also requires entities to display the fair
value of those assets and liabilities for which the company has chosen to use
fair value on the face of the balance sheet.  This Statement is effective
as of the beginning of an entitys first fiscal year beginning after November
15, 2007.  The Company is currently evaluating the potential impact of this
statement on the financial statements and at this time does not anticipate a
material effect.

In December 2007,
FASB issued SFAS No. 141 (R) Business Combinations. This standard is effective
for transactions where the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. SFAS No.
141 (R) will change the accounting for assets acquired and liabilities assumed
in a business combination. These changes include:

·

Acquisition costs will generally be expensed as incurred;

·

Non
controlling interests will be valued at fair value at the acquisition date;

·

Acquired contingent liabilities will be recorded at fair value at
the acquisition date and subsequently measured at either the higher of such
amount or the amount determined under existing guidance for non acquired
contingencies;

·

In-process research and development will be recorded at fair value
as an indefinite-lived intangible asset at the acquisition date;

·

Restructuring costs associated with a business combination will
generally be expensed subsequent to the acquisition date; and

·

Changes in deferred tax asset valuation allowances and income tax
uncertainties after the acquisition date generally will affect income tax
expense.



The adoption of SFAS No. 141 (R) is not
expected to have a material effect on the Companys financial statements.
 Any future business combination occurring on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008 will be
accounted for in accordance with this guidance.



In December 2007, FASB issued SFAS No. 160 Non
Controlling Interests in Consolidated Financial Statements - an amendment of
 ARB 51 which is effective for fiscal years and interim periods within
those years beginning on or after December 15, 2008. SFAS No. 160 amends ARB 51
to establish accounting and reporting standards for the non controlling
ownership interest in a subsidiary and for the deconsolidation of a subsidiary.
The Company is currently evaluating the potential impact of this statement on
our consolidated financial statements.



Consolidation of
Subsidiaries

The consolidated financial statements
 include the Companys accounts and the accounts of wholly-owned
subsidiaries.  All significant intercompany balances and transactions have
been eliminated in consolidation.



Cash and Cash Equivalents

Highly liquid short-term investments with a
remaining maturity when purchased of three months or less are classified as cash
equivalents.  The Company deposits its cash and cash equivalents in high
quality financial institutions.



Use of Estimates

In preparing financial statements in
conformity with generally accepted accounting principles, management is required
to make estimates and assumptions that affect the amounts reported in those
statements and accompanying notes. Actual results could differ from those
estimates.



27





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



Exploration Stage Enterprise

The Company's financial statements are
prepared pursuant to the provisions of SFAS No. 7, Accounting for Development
Stage Enterprises, as it devotes substantially all of its efforts to acquiring
and exploring mining interests that will eventually provide sufficient net
profits to sustain the Companys existence. Until such interests are engaged in
major commercial production, the Company will continue to prepare its financial
statements and related disclosures in accordance with entities in the
development stage.  Mining companies subject to SFAS No. 7 are required to
label their financial statements as an Exploratory Stage Company, pursuant to
guidance provided by SEC Guide 7 for Mining Companies.



Niagara was incorporated on January 11,
2005, but had no activity until July 19, 2006, when shares of common stock were
issued for cash.   Therefore, the historical financial statements
presented are for the year ended December 31, 2006, and for the period from
inception (January 11, 2005) through December 31, 2007.



Fair Values of Financial Instruments

The carrying amounts of financial
instruments including cash and cash equivalents, note receivable and accounts
payable approximated their fair values as of December 31, 2006 and 2007.



Share-Based Compensation

The Company applies SFAS No. 123
Share-Based Payments (SFAS No. 123(R)) to share-based compensation, which
requires the measurement of the cost of services received in exchange for an
award of an equity instrument based on the grant-date fair value of the award.
 Compensation cost is recognized when the event occurs.  The
Black-Scholes option-pricing model is used to estimate the fair value of options
granted.



Basic and Diluted Net Loss Per
Share

Net loss per share was computed by dividing
the net loss by the weighted average number of common shares outstanding during
the period.  The weighted average number of shares was calculated by taking
the number of shares outstanding and weighting them by the amount of time that
they were outstanding.  Diluted net loss per share for the Company is the
same as basic net loss per share, as the inclusion of common stock equivalents
would be antidilutive.  At December 31, 2007 the common stock equivalents
consisted of 5,920,000 options exercisable at prices ranging from $0.28 to $0.53
per share and 4,697,500 common stock warrants exercisable at $0.30 per
share.



Mine Exploration and Development Costs

All exploration costs are expensed as
incurred. Mine development costs are capitalized after proven and probable
reserves have been identified.  Amortization is calculated using the
units-of-production method over the expected life of the operation based on the
estimated recoverable mineral ounces.



Mineral Properties

Significant payments related to the
acquisition of mineral properties, mineral rights, and mineral leases are
capitalized.  If a commercially mineable ore body is discovered, such costs
are amortized when production begins using the units-of-production method based
on proven and probable reserves. If no commercially mineable ore body is
discovered, or such rights are otherwise determined to have no value, such costs
are expensed in the period in which it is determined the property has no future
economic value.



Property Evaluations

Management of the Company will periodically
review the net carrying value of its properties on a property-by-property basis.
These reviews will consider the net realizable value of each property to
determine whether a permanent impairment in value has occurred and the need for
any asset write-down. An impairment loss will be recognized when the estimated
future cash flows (undiscounted and without interest) expected to result from
the use of an asset are less than the carrying amount of the asset.
 Measurement of an impairment loss will be based on the estimated fair
value of the asset if the asset is expected to be held and used.



Although management will make its best
estimate of the factors that affect net realizable value based on current
conditions, it is reasonably possible that changes could occur in the near term
which could adversely affect management's estimate of net cash flows expected to
be generated from its assets, and necessitate asset impairment write-downs.





28





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



Income Taxes

The Company accounts for income taxes using
the liability method.  Under this method, deferred income tax liabilities
or assets at the end of each period are determined using the tax rate expected
to be in effect when the taxes will be actually paid or recovered.  A
valuation allowance is recorded to reduce the deferred tax assets, if there is
uncertainty regarding their realization.



Property, Plant and
Equipment

Property, plant and equipment is carried at
cost and depreciated using the straight line method over five to seven years.
 Maintenance and repairs are charged to operations as incurred. Betterments
of a major nature are capitalized.  When assets are retired or sold, the
costs and related accumulated depreciation are eliminated from the accounts and
any resulting gain or loss is reflected in operations.



Reclamation and Remediation Costs
(Asset Retirement Obligations)

The Company had no operating properties at
December 31, 2006 and 2007, but the Companys mineral properties will be subject
to standards for mine reclamation that are established by various governmental
agencies. For these non-operating properties, the Company accrues costs
associated with environmental remediation obligations when it is probable that
such costs will be incurred and they are reasonably estimable. Costs of future
expenditures for environmental remediation are not discounted to their present
value. Such costs are based on management's current estimate of amounts that are
expected to be incurred when the remediation work is performed within current
laws and regulations.



It is reasonably possible that due to
uncertainties associated with defining the nature and extent of environmental
contamination, application of laws and regulations by regulatory authorities,
and changes in remediation technology, the ultimate cost of remediation and
reclamation could change in the future. The Company continually reviews its
accrued liabilities for such remediation and reclamation costs as evidence
becomes available indicating that its remediation and reclamation liability has
changed.



The Company recognizes the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred, if a reasonable estimate of fair value can be made.  The
associated asset retirement costs are capitalized as part of the carrying amount
of the associated long-lived assets and depreciated over the lives of the assets
on a units-of-production basis.  Reclamation costs are accreted over the
life of the related assets and are adjusted for changes resulting from the
passage of time and changes to either the timing or amount of the original
present value estimate on the underlying obligation.



NOTE 3.

Note Receivable



On January 11, 2007, the Company advanced
Diamond Drilling Consultants Con Ag., Inc. (Diamond Drilling) $150,000 of a
$200,000 secured promissory note to secure the construction of a drilling rig
for use by the Company. The final $50,000 was advanced during May 2007, when the
drilling rig construction was completed. Interest accrues at six percent (6%)
per annum, from June 15, 2007, until paid. This note, including principal and
interest, is payable in full on or before January 15, 2009, or at the
termination of the drilling contract between the parties, whichever shall occur
first. In consideration for the Company providing this note, the Company will
have exclusive use of the drilling rig for two calendar years, which also serves
as collateral for the note. Upon successful completion of the contractual
obligations of the note, the Company agrees to grant Diamond Drilling a forty
percent (40%) reduction in the amount of principal and accrued interest payable.
 During the third quarter of 2007, the Company determined that the 40%
reduction is probable and likely to occur.  Therefore 40% of the note
receivable, or $80,000, has been recorded as prepaid exploration costs and is
being amortized over the life of the note receivable.  The expense is being
charged to exploration expenditures.



NOTE 4.

Mining Properties

The Companys
mineral properties consist of various mining claims in Alaska and Idaho.
 The Company is in the business of exploration, development, and if
warranted the mining of properties containing valuable mineral deposits. The
focus of the Companys exploration programs is directed at precious metals,
primarily gold. The Company currently controls approximately 107,500 acres of
land under State of Alaska jurisdiction and over 3,930 acres of unpatented mill
site and load claims in Idaho under Federal jurisdiction. In Alaska, the lands
are held under and are subject to the States mining laws and regulations and
the Idaho properties are held under and are subject to the Federal mining laws
and regulations.  We continue to identify, investigate and acquire
potential properties for future exploration and development when warranted.



29





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



Alaska Properties

In August 2006, the Company acquired
exploration properties in southwest Alaska approximately 90 miles east of the
village of Bethel covering approximately 22,500 acres of State of Alaska owned
lands in 5 claim groups including the Kisa, GL, Ako, Little Swift, and Gossan
Valley within the Kuskokwim Mineral Belt.  Based on field work completed in
late 2006 and summer of 2007, airborne geophysical surveys completed in the fall
of 2006 and spring of 2007 and results of data compilations conducted over the
winter months, the Company identified additional ground for acquisition.
Approximately 8,000 acres in the Kisa area and approximately 51,000 acres,
located approximately 30-80 miles south of the Donlin Creek deposit and north of
the Companys other claim groups were acquired based on the results.  The
Company also acquired rights to 8,640 acres under a lease/option to purchase
agreement with Greatland Exploration on the Seward Peninsula in northwest Alaska
called the Kelly Creek project.  The Company also acquired additional lands
adjacent to the Kelly Creek project increasing the total land holdings in that
project area to over 26,500 acres.

Idaho
Properties

In central Idaho, the Company controls
approximately 46 unpatented federal mill site claims and 185 unpatented federal
lode claims in the Stibnite District covering approximately 3,930 acres.
 The Stibnite gold district is located east of McCall in Valley County,
Idaho, approximately 45 miles northeast of Cascade, Idaho.  The terrain is
mountainous characterized by a narrow, flat valley at approximately 6,500 feet
elevation with surrounding mountains rising to 8,000 feet elevation.



The Company is required to perform certain
work commitments and pay annual assessments to the States of Alaska and Idaho to
hold these claims in good standing (see Note 10, Commitments and
Contingencies).



The following is a summary of our mineral
properties at December 31, 2007 and December 31, 2006.



|                            |  |                      |  |                     
|--------------------------- |  | -------------------- |  | --------------------
|                            |  | At
December 31,
2007 |  | At
December 31,
2006
|Alaska Properties           |  |                      |  |                     
|AKO                         |  | $
     16,875        |  | $
     16,875       
|Gold Creek                  |  | 4,500                |  | 4,500               
|Gold Lake                   |  | 25,435               |  | 25,435              
|Gossan Valley               |  | 750                  |  | 750                 
|Kisa                        |  | 18,640               |  | 18,640              
|Little Swift                |  | 5,250                |  | 5,250               
|Kelly Creek                 |  | 28,600               |  | 28,600              
|Kelly Creek  Mineral
Lease |  | 55,000               |  |                    
|Idaho Properties            |  |                      |  |                     
|Niagara Project             |  | 33,125               |  | 33,125              
|Total                       |  | $
      188,175      |  | $
    133,175       



NOTE
5.

Related Party
Transactions



During the year ended December 31, 2007,
the Company paid various expenses amounting to $9,164 for the benefit of Frank
Duval, a greater than 5% (five percent) shareholder, as payment for professional
services rendered to the Company.  The Company also awarded 2,000,000 stock
options to Frank D. Duval.  This stock option award was recorded as
professional consulting fees of $357,099 using the Black Scholes Model.
 The following assumptions were made in estimating the fair value:
 risk free interest of 3.53%; volatility of 99.9%; dividend rate of 0%; and
expected life of 4.51 years.



On June 1, 2007, the Company entered into a
twenty-one month consulting agreement with Janice Duval, the wife of Frank
Duval, a greater than 5% (five percent) shareholder, as payment for professional
services rendered to the Company.  The agreement is for $3,000 per month
for twenty-one months ending February 2009.





30





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



During the year ended December 31, 2007,
the Company awarded 1,500,000 stock options to Terrence J. Dunne while serving
as Chief Executive Officer and Director of the Company.  The award was for
consulting services and guaranteeing a line of credit in 2006 of which all funds
were paid back by the Company by December 31, 2006. This stock option award was
recorded as professional consulting fees of $267,825 using the Black Scholes
Model.  The following assumptions were made in estimating the fair value:
 risk free interest of 3.53%; volatility of 99.9%; dividend rate of 0%; and
expected life of 4.51 years.



During the year ended December 31, 2007,
the Company awarded 1,500,000 stock options to Howard M. Crosby while serving as
a Director of the Company.  The award was for consulting services and
guaranteeing a line of credit. This stock option award was recorded as
professional consulting fees of $267,825 using the Black Scholes Model.
 The following assumptions were made in estimating the fair value:
 risk free interest of 3.53%; volatility of 99.9%; dividend rate of 0%; and
expected life of 4.51 years.



For the year ended December 31, 2006, the
Company paid various expenses amounting to $3,688 for the benefit of Frank
Duval, a greater than 5% (five percent) shareholder, as payment for professional
services rendered to the Company. In addition, the Company issued 400,000 shares
of unregistered common shares to Mr. Duval in November 2006, valued at $0.59 per
share, for a total value of $236,000, as payment for geological exploration
services.



NOTE 6.

Common Stock and Common Stock
Warrants



The Company is authorized to issue
500,000,000 shares of its common stock.  All shares of common stock are
equal to each other with respect to voting, liquidation, dividend, and other
rights.  Owners of shares are entitled to one vote for each share owned at
any Shareholders meeting.  The common stock of the Company does not have
cumulative voting rights, which means that the holders of more than fifty
percent (50%) of the shares voting in an election of directors may elect all of
the directors if they choose to do so.



In November 2007 the Company completed a
private placement of units for gross proceeds of $939,500, of which $74,500
remains in the form of promissory notes dated November 20, 2007 with due dates
extending through June 1, 2008.  In the aggregate, the Company issued
4,697,500 units at a price of $0.20 per unit.  Each unit consisted of one
share of common stock and one full common stock purchase warrant.  Each
warrant is exercisable for a period of two (2) years from the closing to
purchase one share of common stock at a price of $0.30 per share.  At
December 31, 2007 there were 4,697,500 warrants outstanding exercisable at $0.30
per share.



During the year ended December 31, 2007,
the Company issued 50,000 common shares to an officer of the Company as
share-based compensation, and valued the shares at market price on the date of
grant, which was $0.28 per share.  This amounted to share-based
compensation of $14,000.  The Company also issued 200,000 common shares
each to two new directors of the Company as share-based compensation, and valued
the shares at market price on the date of grant, which was $0.54 and $0.53 per
share, respectively. This amounted to director fee share-based compensation of
$214,000.

In August 2006,
the Company authorized the private placement of common shares at a price of
$0.30 per share. The shares were offered and sold on a best efforts basis by
the Company and certain sales agents.  Through December 31, 2006, the
Company had sold 10,797,062 shares, resulting in gross proceeds to the Company
of $3,239,119. Included in that amount were sales agent commissions of $320,912,
and $19,500 in legal fees.  By May 2007, the Company completed the private
placement of 7,529,999 additional shares of its common stock at a price of $0.30
per share.  Gross proceeds from the additional shares resulted in
$2,259,000 and commissions of $77,335 were paid.



During the year ended December 31, 2006,
the Company borrowed $250,000 from a financing company to finance its
operations.  On September 13, 2006, the loan principal was repaid and
interest expense and loan fees of $12,500 were paid through the issue of 41,667
shares of the Companys common stock at $0.30 per share.



During the year ended December 31, 2006,
the Company issued 1,800,000 common shares as share-based compensation to
directors, officers, and other individuals, and valued the shares at market
prices on the dates of grant, which varied between $0.59 and $0.63 per share.
These issuances included 200,000 common shares issued to Terrence Dunne for his
services as Chief Financial Officer, and for providing administrative services
and office space to the Company during the year ended December 31, 2006. These
shares were valued at $0.59 per share, for a total value of $118,000. Subsequent
to December 31, 2006, the Company leased separate office space and hired
administrative staff.



31





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



In August 2006, prior to the merger
discussed in Note 1, the Company received $150,000 from the sale of 37,500,000
shares of common stock, at $.004 per share, to officers, directors, a consultant
who is a significant shareholder, a company of which the president is a director
of Gold Crest, and various other individuals and companies.



NOTE 7.

Preferred Stock



The Company is authorized to issue
10,000,000 shares of Preferred Stock. The Preferred Stock is entitled to
preference over the common stock with respect to the distribution of assets of
the Company in the event of liquidation, dissolution, or winding-up of the
Company, whether voluntarily or involuntarily, or in the event of any other
distribution of assets of the Company among its shareholders for the purpose of
winding-up its affairs.  The authorized but un-issued shares of Preferred
Stock may be divided into and issued in designated series from time to time by
one or more resolutions adopted by the Board of Directors.  The Directors
in their sole discretion have the power to determine the preferences,
limitations, and relative rights of each series of Preferred Stock within the
limits set forth in the Nevada Business Corporation Act.  At December 31,
2007, no preferred stock has been issued.



NOTE
8.

Stock Based
Compensation

Stock Based
Compensation Plans

In June 2007, the Board of Directors
adopted the 2007 Gold Crest Stock Plan (the Plan) which was approved by
shareholders in December 2007.  The purposes of the Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to employees, directors and consultants and to
promote the success of the companys business.



The maximum number of shares available for
issuance pursuant to the Plan adopted by the Company is currently set at
12,000,000 shares of which 4,000,000 may be granted as Incentive Stock Options
to employees (pursuant to Internal revenue Code 422).  As of December 31,
2007, the maximum number of shares available for issuance under the 2007 Stock
Plan was 5,570,000.



Stock Options

During the year ended December 31, 2007,
the Company issued 6,380,000 options under the 2007 Stock Plan with exercise
prices ranging from $0.28 to $0.53 with vesting at various dates through 2009.
 These options were granted to members of the board of directors, officers,
employees and consultants of the Company.  The fair value of each option is
estimated on the date of grant using the Black-Scholes Option Price Calculation.
 The following assumptions were made in estimating the fair value:
 risk free interest of 3.53%; volatility of 99.9%; dividend rate of 0%; and
expected life of 4.51 to 6.51 years.  The total value of options awarded
during the year ended December 31, 2007 was calculated at $1,167,217.
 Expense was recorded of $1,032,773 for the options which were earned in
the year ended December 31, 2007.  The expense was recorded $945,975 as
professional consulting fees and $86,798 as compensation expense.  At
December 31, 2007 the amount of non-vested compensation totaled $134,444 and
will be recognized on a quarterly basis through March 31, 2009.



During the year ended December 31, 2006,
the Company granted 200,000 non-qualified stock options outside of the Stock
Plan with an exercise price of $0.30 that vested on August 21, 2007.  These
options were granted to an officer of the Company.  The fair value of each
option is estimated on the issue date using the Black-Scholes Option Price
Calculation.  The following assumptions were made in estimating the fair
value:  risk free interest of 4.66%; volatility of 51.49%; dividend rate of
0%; and expected life of 3 years.  The total value of options awarded and
expense recorded during the year ended December 31, 2006 was calculated at
$72,000.





32





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



The following is a summary of stock option activity in
2006 and 2007:



|                                                           |  |                                |  |                                 
|---------------------------------------------------------- |  | ------------------------------ |  | --------------------------------
|                                                           |  | Number of Shares Under
Options |  | Weighted Average  Exercise
Price
|Outstanding January 1, 2006                                |  |                               |  | $
                             
|Granted                                                    |  | 200,000                        |  | 0.30                            
|Exercised                                                  |  |                               |  |                                
|Forfeited                                                  |  |                               |  |                                
|Expired                                                    |  |                               |  |                                
|Outstanding at December 31, 2006                           |  | 200,000                        |  | $
                      0.30    
|Options exercisable at December 31, 2006                   |  |                               |  |                                 
|Weighted average fair value of options granted
during 2006 |  | $
                       0.36  |  |                                 
|Outstanding January 1, 2007                                |  | 200,000                        |  | $
                     0.30     
|Granted                                                    |  | 6,380,000                      |  | 0.52                            
|Exercised                                                  |  |                               |  |                                
|Forfeited                                                  |  |                               |  |                                
|Expired                                                    |  |                               |  |                                
|Outstanding at December 31, 2007                           |  | 6,580,000                      |  | $
                      0.51    
|Options exercisable at December 31, 2007                   |  | 5,920,000                      |  | $
                      0.51    
|Weighted average fair value of options granted
during 2007 |  | $
                       0.18  |  |                                 



At December 31, 2007 the intrinsic value of the fully
vested stock options is $0.00 due to the fact that the option exercise prices
are greater than the market price on that date.



Stock Awards Under the 2007 Stock Plan

During the year ended December 31, 2007,
the Company issued 50,000 shares of fully-vested common stock to an officer of
the Company that was earned based on field performance.  The total value of
the stock award granted and expensed during the year ended December 31, 2007 was
calculated at $14,000.



NOTE 9.

Income Taxes



At
December 31, 2007 and 2006 the Company had deferred tax assets principally
arising from the net operating loss carry forwards for income tax purposes
multiplied by an expected rate of 34%.  As management of the Company cannot
determine that it is more likely than not that the Company will realize the
benefit of the deferred tax assets, a valuation allowance equal to the deferred
tax asset has be established at December 31, 2007 and December 31,
2006. The significant component of the deferred tax asset at December 31,
2007 and 2006 was as follows:

|                                       |  |                  |            |                  |   |           |   | 
|-------------------------------------- |  | ---------------- | ---------- | ---------------- | - | --------- | - | 
|                                       |  | December 31,2007 |            | December 31,2006 |   |          
|Net
operating loss carry forward       |  | $                | 7,200,000  |                  | $ | 1,800,000 |   | 
|Deferred
tax asset                     |  | $                | 2,448,000  |                  | $ | 612,000   |   | 
|Deferred
tax asset valuation allowance |  |                  | (2,448,000 | )                |   | (612,000  | ) | 
|Net
deferred tax asset                 |  | $                |           |                  | $ |          |   | 



At December 31, 2007 and 2006 the Company had net operating
loss carry forwards of approximately $7,200,000 and $1,800,000 respectively,
which expire in the years 2026 through 2027. The change in the allowance account
form December 31, 2006 to December 31, 2007 was $1,836,000.



33





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



NOTE 10.

Commitments and
Contingencies



Mineral Property
Commitments

In Alaska, land holdings consist of State
Mining Claims and Prospecting Sites totaling 107,480 acres of land. The holdings
are in good standing until September 1, 2008, at which time the Company will
need to have completed $173,200 of assessment work on the claims and pay annual
rent amounting to $64,375 to the State of Alaska.  Included in the 107,480
acres of land, the Companys wholly-owned subsidiary, Kisa Gold Mining, Inc.,
has a lease and option agreement dated January 30, 2007, with Greatland
Exploration on 26,400 acres, known as the Kelly Creek claims, in the Cape Nome
Recording District in Alaska. The Company is required to pay $45,000 to
Greatland Exploration by September 1, 2008, to hold the claims for another year.
 Also, as part of the Greatland Exploration lease, the Company will need to
perform $400,000 in work commitments on the property by December 31, 2008.
 The $400,000 work commitment can be credited towards $44,400 worth of
assessment work for the State of Alaska, or at the option of the Company, in
lieu of the $400,000 work commitment with Greatland Exploration, the Company can
pay a one-time fee to Greatland Exploration of $200,000.  This amounts to a
total maximum commitment of $638,175, plus filing fees, to hold the Alaska
claims for another year.



In central Idaho, the Company controls
approximately 46 unpatented federal mill site claims and 185 unpatented federal
lode claims in the Stibnite District covering approximately 3,930 acres on
federally-owned public lands administered by the Payette and Boise National
Forests. Mill site claims do not require annual assessment work, but do require
annual maintenance payments to DOI Bureau Land Management which will total
$5,750.  The 185 unpatented federal lode claims will require a total of
$18,500 worth of assessment work to be performed by September 1, 2008 or in lieu
of the work, a one-time payment of $23,125 would satisfy the annual maintenance
fee in order to hold the Idaho properties for an additional year.



As part of the contract with Diamond
Drilling, the Company had a 10,000 foot minimum drilling requirement of which we
only completed a total of 3,105 feet and as of December 31, 2007 the Company has
accrued the liability to Diamond Drilling for the undrilled footage in the
amount of $100,585 which is net of a prepaid balance we carried with them.



On January 24, 2008, Gold Crest entered
into an Option and Royalty Sales Agreement with the heirs of the Estate of J.J.
Oberbillig and an Option and Real Property Sales Agreement with JJO, LLC, an
Idaho limited liability company and personal representative of the Estate of
J.J. Oberbillig.  If the Company decides to continue with the options on
both the Royalty and the Land, the Company will be required to make the
following payments.  A combined payment of $500,000 will be required upon
closing on or before August 15, 2008, then the remaining balance of the Purchase
Price, for both agreements combined will be $1,053,100 shall be in the form of
promissory notes which will accrue interest at the rate of six percent (6%) per
annum commencing on the Closing Date.   Commencing one (1) year from
the Closing Date, five (5) annual payments of principal plus accrued interest on
both agreements in the amount of $250,000 will be due on the same day and month
as the Closing Date and will end in the year 2013.  See further details on
the Option and Royalty Sales Agreement and the Option and Real Property Sales
Agreement in Note 11 Subsequent Events.



Environmental Matters

A predecessor entity to the Company owned
mineral property interests on certain public and private lands in Idaho and
Montana.  Holdings included lands in mining districts designated as
Superfund sites pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"). The properties were, and are,
subject to a variety of federal and state regulations governing land use and
environmental matters. A consultant reviewed the potential environmental impact
of the prior mineral exploration and development activities, and believes there
was substantial compliance with all such regulations, and is unaware of any
pending action or proceedings relating to regulatory matters that would affect
the financial position of the Company. Management acknowledges, however, that
the possibility exists that the Company may be subject to environmental
liabilities associated with its prior activities in the unforeseeable future,
although the likelihood of such is deemed remote and the amount and nature of
the liabilities is impossible to estimate.



NOTE 11.

Subsequent Events



Effective as of January 15, 2008, the Board
of Directors accepted the resignation of Terrence J. Dunne as the Chief
Financial Officer of the Company.  Mr. Dunne will continue in his duties as
a director of the Company.  On the same date, the Board of Directors
appointed Matt J. Colbert as the new Chief Financial Officer of the Company.





34





---

Gold Crest
Mines, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial
Statements



On January 24, 2008, Gold Crest received a
letter of resignation from Fred Brackebusch as director effective immediately.
 Mr. Brackebusch also served on the Audit Committee.  On March 3,
2008, the Board of Directors appointed Thomas Loucks to the Audit Committee by
unanimous consent to replace Mr. Brackebusch.



On January 24, 2008, Gold Crest entered
into an Option and Royalty Sales Agreement with the heirs of the Estate of J.J.
Oberbillig.  Pursuant to the terms of the Agreement, Gold Crest has been
granted an exclusive option through August 15, 2008 to purchase a royalty right
in real property located in Valley County, Idaho.  The royalty right
consists of a 5% (five percent) royalty interest in all net smelter returns, net
revenue and net mint returns.  The Royalty Right has a total Purchase Price
of $1,642,480.  As consideration for entering into the Option Agreement,
Gold Crest paid $400,000.  If Gold Crest elects to exercise this option on
or before August 15, 2008, then there will be another payment upon closing in
the amount of $400,000.  The remaining balance of the Purchase Price,
$842,480 shall be in the form of a promissory note which will accrue interest at
the rate of six percent (6%) per annum commencing on the Closing Date.
  Commencing one (1) year from the Closing Date, five (5) annual
payments of principal plus accrued interest in the amount of $200,000 will be
due on the same day and month as the Closing Date and will end in the year
2013.



On January 24, 2008, Gold Crest entered
into an Option and Real Property Sales Agreement with JJO, LLC, an Idaho limited
liability company and personal representative of the Estate of J.J. Oberbillig.
 Pursuant to the terms of the Agreement, Gold Crest has been granted an
exclusive option through August 15, 2008 to purchase real property located in
Valley County, Idaho consisting of two parcels of patented mill site claims
comprising approximately 135 acres and two parcels of patented lode mining
claims comprising 120 acres.  The Property has a total Purchase Price of
$435,620.  As consideration for entering into the Option Agreement, Gold
Crest paid $125,000.  If Gold Crest elects to exercise this option on or
before August 15, 2008, then there will be another payment upon closing in the
amount of $100,000.  The remaining balance of the Purchase Price, $210,620
shall be in the form of a promissory note which will accrue interest at the rate
of six percent (6%) per annum commencing on the Closing Date.
  Commencing one (1) year from the Closing Date, five (5) annual
payments of principal plus accrued interest in the amount of $50,000 will be due
on the same day and month as the Closing Date and will end in the year 2013.



On February 26,
2008, Gold Crest signed two separate term sheets with Newmont North America
Exploration Limited, a subsidiary of Newmont Mining Corporation (NYSE: NEM)
under which the parties propose to create two joint ventures to explore for gold
deposits covering Gold Crests AKO and Luna claim groups, located in the
Kuskokwim region of southwestern Alaska approximately 120 miles south of the
Donlin Creek deposit.  The proposed joint venture is subject to a 30-day
due diligence period by Newmont and will require the parties to negotiate final
terms and prepare, approve and execute a definitive joint venture agreement.
 Under the proposed terms, Newmont can earn a 51% interest in Gold Crests
properties by spending $3,000,000 in Qualifying Work Expenditures and by
completing a minimum of 3,000 meters of drilling on each property on or before
January 15, 2011.  In addition, Newmont must make cash payments to Gold
Crest for both properties of $25,000 on or before January 15, 2009 and $50,000
on or before January 15, 2010.  Newmont will be the operator of the
proposed Joint Venture.  Newmont has the option to increase its interest to
70% by completing an additional $6,000,000 in Qualifying Work Expenditures and
completing a minimum of 3,000 additional meters of drilling on each property on
or before December 31, 2015.  In the event a decision is made to build a
mine on either property, either company may elect to have Newmont provide all
the financing for the mine in return for Newmont receiving an additional 10%
interest in that property.  Gold Crest would repay Newmont with interest
from Gold Crests share of future profits.

On March 3, 2008
the Company entered into a letter agreement with the Bradley Mining Company
which provides the Company the opportunity to evaluate for 30 days, the 175
acres of patented mining claims owned by Bradley Mining Company in the Stibnite
mining district and, upon a successful evaluation, to obtain a one year lease on
the mining claims with the option during the lease term to purchase the claims.
The financial terms of the agreement are still in negotiations.  The
patented claims lie in a North-South direction and cover approximately 1.5 miles
of the surface expression of the Meadow Creek fault, the primary mineralized
zone in the district.  Underlying the claims are the past producing Meadow
Creek underground mine, the DMEA and North exploration workings and a portion of
the Monday Tunnel, an exploration drift.







35





---

ITEM
8.

CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 8A.

CONTROLS AND
PROCEDURES



Evaluation of Disclosure Controls and
Procedures

At the end of the period covered by this
report, an evaluation was carried out under the supervision of, and with the
participation of, the Companys management, including the President and Chief
Financial Officer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures (as defined in Exchange Act Rules
13a  15(e) and Rule 15d  15(e)) [and internal control over financial reporting
(as defined in Exchange Act rules 13a-15(f) and 15d-15(f))]. Based on that
evaluation, the President and Chief Financial Officer have concluded that as of
the end of the period covered by this report, the Companys disclosure controls
and procedures were adequately designed and effective in ensuring that
information required to be disclosed by the Company in its reports that it files
or submits to the SEC under the Exchange Act, is recorded, processed, summarized
and reported within the time period specified in applicable rules and forms and
to provide reasonable assurance that such information is accumulated and
communicated to our management, including our principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding
required disclosures.



Managements Report on Internal Control
over Financial Reporting

Management is
responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rule 13a-15(f) of the 1934 Act. Management
has assessed the effectiveness of our internal control over financial reporting
as of December 31, 2007 based on criteria established in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission. As a result of this assessment, management concluded
that, as of December 31, 2007, our internal control over financial
reporting was effective in providing reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles.



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



Changes in internal controls over
financial reporting

During the period covered by this report,
there have been no changes in the Companys internal control over financial
reporting during the fourth fiscal quarter that have materially affected, or are
reasonably likely to materially affect, the Companys internal control over
financial reporting.



Inherent Limitations on Effectiveness of
Internal Controls

The Companys management, including the
Chief Executive Officer and chief Financial Officer, do not expect that our
disclosure controls or our internal control over financial reporting will
prevent or detect all errors and al fraud that could occur.  A control
system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control systems objectives will be met.
 The design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs.  Further, because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
misstatements due to error or fraud will not occur or that all control issues
within the Company have been detected.  These inherent limitations include
the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake.  Controls can also
be circumvented by the individual acts of some persons, by collusion of two or
more people, or by management override of the controls.  The design of any
system of controls is based in part on certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions.
 Projections of any evaluation of controls effectiveness to future periods
are subject to risks.  Over time, controls may become inadequate because of
changes in conditions or deterioration in the degree of compliance with policies
or procedures.



ITEM 8B.

OTHER INFORMATION



None.



36





---

PART
III



ITEM
9.

DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION
16(a) OF THE EXCHANGE ACT

The following
table provides the names, positions and ages of our directors and officers:

Name

Age

Position

Thomas H.
Parker

64

President, Chief
Executive Officer and Director

Howard M.
Crosby(3)

55

Director

Bobby E.
Cooper(2)(3)

62

Director and
Chairman of the Board

Thomas
Loucks

58

Director

Fred
Brackebusch(1)(4)

63

Director

Robert
OBrien(3)

73

Director

Gerald G.
Booth(1)(2)

64

Director

Terrence J.
Dunne(1)(2)

59

Secretary/Treasurer
and Director

Matthew J.
Colbert

39

Chief Financial
Officer

Christopher
Dail

48

Vice President 
Exploration

_____________________

(1)

Member of the Audit Committee

(2)

Member of the Nominating and Corporate Governance Committee

(3)

Member of the Compensation Committee.

(4)

On January 24, the Company received a letter of resignation from
Fred Brackebusch as director effective immediately, and as such Mr. Brackebusch
no longer serves on the Audit Committee.

(5)

On March 3, 2008, Thomas Loucks replaced Fred Brackebusch as
a member of the Audit Committee.

We have no
knowledge of any arrangements, including any pledge by any person of our
securities, the operation of which may at a subsequent date result in a change
in our control.  We are not, to the best of our knowledge, directly or
indirectly owned or controlled by another corporation or foreign government.

Thomas H.
Parker.  Mr. Parkerhas been the President, Chief
Executive Officer and Director of the Company since March 2007.  Mr. Parker
has worked extensively in senior management positions in the mining industry for
the past 40 years.  From March 2006, until February 2007, Mr. Parker was
the Chief Executive Officer and a Director of High Plains Uranium.  From
1995 to March 2006, he was the Executive Vice President of Anderson and Schwab,
a New York-based consulting firm where his clients included UBS Warburg and
Norilsk Nickel.  Prior to joining Anderson and Schwab, he was President and
Chief Executive Officer of Costain Coal Inc., a large coal company with over
2,000 employees that produced steam and metallurgical coal from January 1992, to
September 1994.  Earlier in his career, Mr. Parker managed coal mining
operations for Arco Coal, Anaconda Minerals, and Kerr McGee, among others.
 From 1978 to 1981, he was director and project manager for Conocos
uranium joint venture with Cogema and the French government in Niger.  Mr.
Parker is a mining engineering graduate from the South Dakota School of Mines
with a Masters Degree in mineral engineering management from Pennsylvania State
University.

Howard M.
Crosby.  Mr. Crosby has served as a Director since August 2006, and
served as the Company President From August 2006, until March 2007.  Since
1989, Mr. Crosby has been president of Crosby Enterprises, Inc., a family-owned
business advisory and public relations firm.  Mr. Crosby received a B.A.
degree from the University of Idaho.  Mr. Crosby is also an officer and
director of White Mountain Titanium Corporation, a publicly traded mining
exploration company, Dotson Exploration Company and Nevada-Comstock Mining
Company (formerly Caledonia Silver-Lead Mines Company), all of the latter being
privately held companies.  Mr. Crosby is also a director of Apoquindo
Minerals (AQM-TSX.V), International consolidated Minerals (London AIM-ICM) and
Tomco Energy PLC (London AIM-TOM).

Bobby E.
Cooper.  Mr. Cooper became a director of the Company in August 2006.
 Mr. Cooper has over thirty years of mining industry experience.
 Prior to retiring in 1997, he was the chief executive officer and
president of Kennecott Corporation, a wholly-owned subsidiary of Rio Tinto
(RTZ), both mining companies.  Before being named chief executive officer
and president, Mr. Cooper held various other positions with Kennecott since
1983, including chief operating officer and vice president of U.S. Mines.
 Mr. Cooper is currently a director of 3L&T Corp., a private chemical
company.



37





---

Thomas Loucks.  Mr. Loucks has been a director of the
Company since August 2006.  Mr. Loucks is mining industry executive with
over thirty years of diversified Fortune 500 and small cap experience in mining
company management as well as international exploration, mineral project
development, corporate planning, acquisitions, and divestitures. Mr. Loucks has
worked with a number of small cap mining companies in recent years.  From
1988 through 1999 Mr. Loucks served as Executive Vice President, Treasurer, and
Chief Financial Officer of Royal Gold, Inc., prior to which Mr. Loucks was
responsible for business development activities of Newmont Mining Corporation,
New York.  Previously, he worked in major mineral project development
programs at Climax Molybdenum Company and in international exploration with
Kennecott Copper Corporation.  He holds a B.A. and an M.A. in geology from
Dartmouth College, an M.B.A. from Stanford University, is a Fellow of the
Society of Economic Geologists, and member of the Geological Society of
America.

Fred
Brackebusch.  On January 24, 2008, the Company received a letter of
resignation from Fred Brackebusch as director effective immediately.  Mr.
Brackebusch had been a director of the Company since August 2006.  Since
1996, Mr. Brackebush has been the President and a Director of New Jersey Mining
Company.  He has a B.S. and an M.S. in Geological Engineering both from the
University of Idaho.  He is a consulting engineer with extensive experience
in mine development, mine backfill, mine management, permitting, process control
and mine feasibility studies.  He has over 25 years of experience in the
Coeur dAlene Mining District principally with Hecla Mining Co.  He has
been the principal owner of Mine Systems Design, Inc., a mining consulting
business, since 1987.  Mr. Brackebusch is also on the Board of Directors of
Mascot Mines, Inc.

Robert
OBrien.  Mr. OBrien has served as a director of the Company since
2004.  Mr. OBrien graduated from Gonzaga University with a BA degree in
Economics.  Since July 1996, Mr. OBrien has been the sole owner and
manager of Spokane Quotation Bureau, LLC, a company, which publishes stock
quotations for companies traded over-the-counter.

Gerald G.
Booth.  Mr. Booth, a director of the Company since January 2007, has
over 40 years experience in mineral and natural gas exploration and development.
Since 1998 he has been the President of G.G. Booth and Associates, a project
management services company serving mining and petroleum clients, primarily in
Alaska.  Mr. Booth previously served as Vice President - Resources for Cook
Inlet Regional Corporation (CIRI), the native corporation representing the
Natives of south central Alaska. While with CIRI, Mr. Booth also served as
President of North Pacific Mining Company, and President of Cook Inlet
Production Company. Prior to his work with CIRI, Mr. Booth was employed with
Teck Cominco for over 24 years as Manager, Alaska Exploration and Manager Alaska
Operations during the 1970s and 1980s.  Mr. Booth obtained a B.S. from
Washington State University and is a member of the Society for Mining,
Metallurgy and Exploration, the Northwest Mining Association, the Alaska Miners
Association and the Resource Development Council for Alaska.

Terrence J.
Dunne.  Mr. Dunne has served as a director and the Companys
Secretary/Treasurer since 2006.  Mr. Dunne currently serves as a director
of Rock Energy Resources, Inc., which trades on the OTCBB.  For more than
the past five years Mr. Dunne has operated Terrence J. Dunne & Associates, a
sole proprietorship which provides bookkeeping, income tax return preparation
and business consulting services for small businesses.  Mr. Dunne received
his BBA, MBA and Masters in Taxation degrees from Gonzaga University.



Matthew J. Colbert.  Mr.
Colbert has served as the Chief Financial Officer of the Company since December
2007.  Mr. Colbert has over ten years of experience in public accounting.
 He has a Bachelor of Science degree in Accounting from the University of
Idaho and is licensed as a Certified Public Accountant in the State of
Washington.  Before being appointed CFO, Mr. Colbert had been the
Controller of the Company since August 2007.  Most recently, Mr. Colbert
Served as Chief Financial Officer and President of Lifestream Technologies,
Inc., a publicly traded company.  Lifestream Technologies, Inc. was a
leading supplier of cholesterol monitors.  Mr. Colbert also served on
Lifestreams Board of Directors.  Earlier in his career, Mr. Colbert served
as a Business Assurance Associate in the audit department of
PricewaterhouseCoopers, LLP, an international accounting and consulting
firm.

Christopher
Dail.  Mr. Dail is the Companys Vice President of Exploration.
 Mr. Dail has 19 years of experience in the exploration and mining industry
and government.  Chris obtained his undergraduate training in geology at
the University of Fairbanks, Old Dominion University and University of Idaho.
 During his career he has served in various capacities ranging from a field
and mine geologist to VP exploration and operations for a number of major and
junior mining companies.  His most recent positions included serving as
lead geologist for Cominco Americans eastern U.S. exploration office, as a
senior consultant and corporate officer for several Canadian junior exploration
companies and as a mine permitting specialist for the USDA Forest Service.
 Mr. Dail is a member of the Northwest Mining Association, Alaska Miners
Association, Geological Society of America and is a member and Certified
Professional Geologist with the American Institute of Professional Geologists.





38





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Audit Committee

On January 24, the Company received a
letter of resignation from Fred Brackebusch as director effective immediately,
and as such Mr. Brackebusch no longer serves on the Audit Committee.  On
March 3, 2008 the Board of Directors appointed Thomas Loucks to the Audit
Committee by unanimous consent to replace Mr. Brackebusch.  Terrence Dunne,
Gerald Booth and Thomas Loucks now comprise the Companys Audit Committee.
 The Audit Committee approves the selection of the Companys independent
certified public accountants to audit the annual financial statements and review
the quarterly financial statements, discusses with the auditors and approves in
advance the scope of the audit and reviews, reviews managements administration
of the system of internal controls, and reviews the Companys procedures
relating to business ethics. The Board of Directors has determined that Thomas
Loucks is an independent director as that term is defined in Rule 4200(a) (14)
of the NASDs listing standards.  The Board of Directors has also
determined that Terrence Dunne meets the SEC definition of an audit committee
financial expert.

Nominating and
Corporate Governance Committee

Gerald Booth, Bobby Cooper and Terrence
Dunne comprise the Companys Nominating and Corporate Governance Committee.
 Mr. Cooper is an independent member of that Committee. The Corporate
Governance and Nominating Committee is responsible for developing the Companys
approach to corporate governance issues and compliance with governance rules.
The Corporate Governance and Nominating Committee is also mandated to plan for
the succession of the Company, including recommending director candidates,
review of board procedures, size and organization, and monitoring of senior
management with respect to governance issues. The committee is responsible for
the development and implementation of corporate communications to ensure the
integrity of the Companys internal control and management information systems.
The purview of the Corporate Governance and Nominating Committee also includes
the administration of the boards relationship with the management of the
Company, monitoring the quality and effectiveness of the Companys corporate
governance system and ensuring the effectiveness and integrity of the Companys
communication and reporting to shareholders and the public generally.



Compensation Committee

Bobby Cooper, Howard Crosby and Robert
OBrien comprise the Companys Compensation Committee.  Mr. Cooper is an
independent member of that Committee. The Compensation Committee is responsible
for setting the compensation for the officers and the other agents and employees
of the corporation. The Committee may delegate the authority to set the
compensation of the officers, agents, and employees to the President.  No
officer may be prevented from receiving compensation as an officer solely
because the officer is also a director of the corporation.  The Committee
shall fix the amount or salary to be paid to each director for service as a
director or for attendance at each meeting of the Board.  Salary or payment
for service as a director shall not preclude a director from serving the
corporation in any other capacity or from receiving compensation for service in
that other capacity.

Legal
Proceedings

No Director, or
person nominated to become a Director or Executive Officer, has been involved in
any legal action involving the Company during the past five years.

Section 16(a)
Beneficial Ownership Reporting Compliance



Section 16(a) of the Securities Exchange
Act of 1934 requires our officers, directors, and any person who beneficially
owns more than 10% of our common stock to file reports of ownership and changes
in ownership with the Securities and Exchange Commission.  Executive
officers, directors, and more than 10% shareholders are required by regulation
to furnish us with copies of all Section 16(a) forms which they file.
 During 2007, certain of our directors and executive officers who own our
stock filed Forms 3 or 4 with the Securities and Exchange Commission.  The
information on these filings reflects the current ownership position of all such
individuals.  To the best of our knowledge, during 2007 all such filings by
our officers and directors were made timely, except that due to an
administrative error in each instance, all initial forms 3 were filed late for
all Directors and Officers of the Company as of June 30, 2007.  Forms 4
were not filed in a timely manner for the following Officers:  Thomas H.
Parker (one filing disclosing one transaction), Christopher Dail (one filing
disclosing one transaction). Forms 3 and 4 were not filed in a timely manner for
the following Directors:  Fred Brackebusch (one Form 3 filing disclosing
one transaction and fourteen Form 4 filings disclosing one transaction each).
 A form 5 was filed on February 14 for Fred Brackebusch disclosing the late
form 3 and 4 filings.





39





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Code of Ethics



We have adopted a
Code of Conduct and Ethics for our Directors, Officers and employees.  A
copy of our Code of Conduct and Ethics can be obtained at no cost, by telephone
at (509) 893-0171 or by mail at: Gold Crest Mines, Inc., 10807 E.
Montgomery Dr., Suite 1, Spokane Valley, Washington 99206, attention:
Investor Relations.  We believe our Code of Conduct and Ethics is
reasonably designed to deter wrongdoing and promote honest and ethical conduct;
provide full, fair, accurate, timely and understandable disclosure in public
reports; comply with applicable laws; ensure prompt internal reporting of code
violations; and provide accountability for adherence to the code.

ITEM 10.

EXECUTIVE COMPENSATION



Summary Compensation Table

The following
table sets forth, for the year ended December 31, 2007 and 2006,
compensation paid to our Chief Executive Officer, Chief Financial Officer and
Vice President of Exploration (collectively, the Named Executive
Officers).

SUMMARY COMPENSATION TABLE

FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2007 and 2006

|                               |  |      |  |             |  |                  |  |                   |  |            
|------------------------------ |  | ---- |  | ----------- |  | ---------------- |  | ----------------- |  | -----------
|Name and Principal
Position    |  | Year |  | Salary ($)  |  | Stock Awards ($) |  | Option Awards ($) |  | Total ($)  
|Thomas H. Parker (1)(4)        |  | 2007 |  | $  125,000  |  | $   106,000      |  | $    195,151      |  | $   426,151
|President and Chief
Executive  |  |      |  |             |  |                  |  |                   |  |            
|Officer                        |  |      |  |             |  |                  |  |                   |  |            
|                               |  |      |  |             |  |                  |  |                   |  |            
|Christopher M. Dail            |  | 2007 |  | $  115,417  |  | $     14,000     |  |                  |  | $   129,417
|V.P. of Exploration            |  | 2006 |  | $    39,919 |  | $     63,000     |  | $
     72,000     |  | $   174,919
|                               |  |      |  |             |  |                  |  |                   |  |            
|Terrence J. Dunne (2)(4)(5)(6) |  | 2007 |  |            |  |                 |  | $    267,825      |  | $   267,825
|Chief Financial Officer        |  | 2006 |  |            |  | $   236,000      |  |                  |  | $   236,000
|                               |  |      |  |             |  |                  |  |                   |  |            
|Howard M. Crosby (3)(4)(6)     |  | 2007 |  |            |  |                 |  | $    267,825      |  | $   267,825
|President and Chief
Executive  |  | 2006 |  |            |  |                 |  |                  |  |           
|Officer                        |  |      |  |             |  |                  |  |                   |  |            



(1)

Mr. Parker was appointed President and Chief Executive
Officer and Director on March 13, 2007.

(2)

Mr. Dunne
resigned as Chief Financial Officer effective January 15, 2008.

(3)

Mr. Crosby served as President and Chief Executive
Officer from August 17, 2006 until March 13, 2007 but received no compensation
for those roles.

(4)

The
named individuals also served as Directors of the Company and the compensation
related to their services as Director is reflected in this table and not in the
Director Compensation Table.

(5)

The
Stock Awards for Terrence Dunne were $118,000 for services as a Director and
$118,000 for turnkey accounting services.

(6)

The
Option Awards were for Services and LOC guarantee, not related to Officer or
Director Compensation.





40





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Outstanding
Equity Awards at Fiscal Year-End

The following
table sets forth information concerning year-end number and value of unexercised
options, stock that has not vested and equity incentive plan awards for each of
the Named Executive Officers.

OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END

|                              |  |                                                    |           |                                                    |  |                     |         |                  |  |                                                    |       |                                                         |  |            |            |  |  |  |  |  |  | 
|----------------------------- |  | -------------------------------------------------- | --------- | -------------------------------------------------- |  | ------------------- | ------- | ---------------- |  | -------------------------------------------------- | ----- | ------------------------------------------------------- |  | ---------- | ---------- |  |  |  |  |  |  | 
|                              |  | Option Awards                                      |           | Stock Awards                                       | 
|                              |  | Number ofSecuritiesUnderlyingUnexercisedOptions(#) |           | Number ofSecuritiesUnderlyingUnexercisedOptions(#) |  | OptionExercisePrice |         | OptionExpiration |  | Number ofShares orUnits ofStock ThatHave NotVested |       | MarketValue ofShares orUnits ofStock ThatHave NotVested | 
|Name                          |  |                                                    |           | Exercisable                                        |  | Unexercisable       |         | ($)              |  | Date                                               |       | (#)                                                     |  | ($)        |           
|Thomas
H. Parker(1)           |  |                                                    | 340,000   |                                                    |  |                     |        |                  |  |                                                    | $     | 0.53                                                    |  |            | 06/19/2012 |  |  |  |  | 
|President
and Chief Executive |  |                                                    |           |                                                    |  |                     | 330,000 |                  |  |                                                    | $0.53 |                                                         |  | 06/19/2013 |            |  |  |  | 
|Officer                       |  |                                                    |           |                                                    |  |                     | 330,000 |                  |  |                                                    | $0.53 |                                                         |  | 06/19/2014 |            |  |  |  | 
|Christopher
M. Dail           |  |                                                    | 200,000   |                                                    |  |                     |         |                  |  |                                                    | $     | 0.30                                                    |  |            | 09/20/2009 |  |  |  |  | 
|V.P. of
Exploration           |  |                                                    |           |                                                    |  |                     |         |                  |  |                                                    |       |                                                         |  |            |            |  |  |  | 
|                              |  |                                                    |           |                                                    |  |                     |         |                  |  |                                                    |       |                                                         |  |            |            |  |  |  | 
|Terrence
J. Dunne(2)          |  |                                                    | 1,500,000 |                                                    |  |                     |         |                  |  |                                                    | $     | 0.53                                                    |  |            | 06/19/2012 |  |  |  |  | 
|Chief
Financial Officer       |  |                                                    |           |                                                    |  |                     |         |                  |  |                                                    |       |                                                         |  |            |            |  |  |  | 
|                              |  |                                                    |           |                                                    |  |                     |         |                  |  |                                                    |       |                                                         |  |            |            |  |  |  | 
|Howard M. Crosby(3)           |  |                                                    | 1,500,000 |                                                    |  |                     |         |                  |  |                                                    | $0.53 |                                                         |  | 06/19/2012 |            |  |  |  | 
|President
and CEO             |  |                                                    |           |                                                    |  |                     |         |                  |  |                                                    |       |                                                         |  |            |            |  |  |  | 
|                              |  |                                                    |           |                                                    |  |                     |         |                  |  |                                                    |       |                                                         |  |            |            |  |  |  |  |  |  | 



(1)Mr. Parker was appointed President and Chief Executive Officer and
Director on March 13, 2007.

(2)Mr. Dunne resigned as Chief Financial Officer effective
January 15, 2008.

(3)Mr. Crosby served as President and Chief Executive Officer from
August 17, 2006 until March 13, 2007.



Employment
Agreements

The following is a
summary of the employment agreements that were in effect between us and each of
the Named Executive Officers during the last fiscal year. In March 2007, we
entered into an employment agreement with Thomas H. Parker who was elected as
our President and Chief Executive Officer. His agreement is summarized
below.

Thomas H.
Parker

Thomas H. Parkers executive compensation
agreement is for a 2-year term commencing on March 1, 2007, and thereafter on a
yearly basis, unless otherwise terminated on 30 days notice.  Mr. Parkers
compensation is $150,000 for the initial year and $200,000 for the second year
subject to adjustments for merit at the discretion of the Board.  In
addition, Mr. Parker was granted one million incentive stock options at an
option price exercisable at $0.53 per share.  Options to acquire 340,000
shares to vest immediately, options to acquire 330,000 shares to vest on March
31, 2008, and options to acquire 330,000 shares to vest on March 31, 2009.
 All of the options have a term of 5 years from the date of vesting.
 Upon termination by the Company without cause, Parker is entitled to 18
months of his then current salary.  There is a termination for cause
provision.  A change in control of the Company, to be defined in the
agreement, triggers a lump sum payment to Mr. Parker equal to eighteen months of
his then current salary.





41





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Director
Compensation

The following
table sets forth information concerning compensation paid for the year ended
December 31, 2007 to directors who were not employees. Mr. Parker, who
is an employee and Terrence Dunne and Howard Crosby who were employees at one
time, have their compensation as a Director fully reflected in the Summary
Compensation Table.

DIRECTOR
COMPENSATION

|                |  |  |  |                                |  |                   |  |                           |         |           |  |  |   |  |  |   |         |  |  | 
|--------------- |  |  |  | ------------------------------ |  | ----------------- |  | ------------------------- | ------- | --------- |  |  | - |  |  | - | ------- |  |  | 
|Name            |  |  |  | Fees Earned orPaid in Cash ($) |  | Option Awards ($) |  | All OtherCompensation ($) |         | Total ($) | 
|Gerald G.
Booth |  |  |  |                               |  |                   |  | $                         | 108,000 |           |  |  |  |  |  | $ | 108,000 | 



ITEM
11.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED SHAREHOLDER MATTERS



Securities
Authorized for Issuance under Equity Compensation Plans

The table below sets forth
certain information with respect to our equity compensation plans as of
December 31, 2007:

|                                                           |  |                                                                     |           |                                                    |  |                                                                                          |   |      |  |  |  |           |     | 
|---------------------------------------------------------- |  | ------------------------------------------------------------------- | --------- | -------------------------------------------------- |  | ---------------------------------------------------------------------------------------- | - | ---- |  |  |  | --------- | --- | 
|                                                           |  | Number of securitiesto be issued uponexercise ofoutstanding options |           | Weighted averageexcise price ofoutstanding options |  | Number of securitiesremaining availablefor future issuanceunder equitycompensation plans |  
|Equity
compensation plans not approved by security holders |  |                                                                     | 200,000   |                                                    |  |                                                                                          | $ | 0.30 |  |  |  | n/a       |     | 
|Equity
compensation plans approved by security holders:    |  |                                                                     |           |                                                    |  |                                                                                          |   |      |  |  |  |           |    
|2007 Stock
Plan                                            |  |                                                                     | 6,380,000 |                                                    |  |                                                                                          | $ | 0.52 |  |  |  | 5,570,000 | (1) | 
|Total                                                      |  |                                                                     | 6,580,000 |                                                    |  |                                                                                          | $ | 0.51 |  |  |  | 5,570,000 |     | 



(1)The aggregate number of shares of common stock that may be issued
pursuant to awards granted under the 2007 Stock Plan will not exceed
12,000,000.

Security
Ownership of Certain Beneficial Owners and Management

The following table sets forth
information as of March 12, 2008 regarding the ownership of our Common
Stock by:

·each person who is known by us
to own more than 5% of our shares of common stock;

·each of our named executive
officers and directors; and

·all of our executive officers
and directors as a group.

The number of
shares beneficially owned and the percentage of shares beneficially owned are
based on 77,416,328 shares of common stock outstanding as of March 12,
2008.  This amount includes 512,500 shares issuable pursuant to promissory
notes issued by the Company to participants in the November 2007 subscription
agreement.

For the purposes
of the information provided below, beneficial ownership is determined in
accordance with the rules of the SEC, and for each person includes shares
that person has the right to acquire within 60 days following
March 12, 2008 subject to options, warrants or similar instruments.



42





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|               |                                                                    |                                       |                     
|-------------- | ------------------------------------------------------------------ | ------------------------------------- | --------------------
|Title of
Class | Name of Beneficial
Owner                                           | Amount and Nature of Beneficial
Owner | Percent of Class (1)
|Common         | Thomas H.
Parker(2)                                                | 2,400,000                             | 3.06%               
|Common         | Howard M.
Crosby (3)                                               | 5,250,000                             | 6.63%               
|Common         | Bobby E.
Cooper (4)                                                | 1,700,000                             | 2.19%               
|Common         | Thomas
Loucks(5)                                                   | 1,300,000                             | 1.68%               
|Common         | Fred
Brackebusch (1)(6)                                            | 1,832,800                             | 2.37%               
|Common         | Gerald G.
Booth(7)                                                 | 400,000                               | 0.52%               
|Common         | Robert W.
OBrien(8)                                               | 3,272,963                             | 4.21%               
|Common         | Terrence
J. Dunne(9)                                               | 10,066,464                            | 12.71%              
|Common         | Christopher
Dail(10)                                               | 350,000                               | 0.45%               
|Common         | Matt J.
Colbert(11)                                                | 125,000                               | 0.16%               
|Common         | Tony
Alford(12)                                                    | 5,139,000                             | 6.55%               
|Common         | Frank D.
Duval(13)                                                 | 6,533,750                             | 8.27%               
|Common         | Total of
all executive officers and directors (10 individuals)(14) | 26,697,227                            | 32.23%              

__________________________________________________

(1)

Based on 77,416,328 shares issued and outstanding.  This
amount includes 512,500 shares issuable pursuant to promissory notes issued by
the Company to participants in the November 2007 subscription agreement.

(2)

Based on 78,336,328 shares issued and outstanding which includes
670,000 shares issuable upon the exercise of vested options and 250,000 shares
issuable upon the exercise of a warrant.

(3)

Includes 3,000,000 shares owned by Cork Investments, Inc. all of
which are controlled by Mr. Crosby.  Based on 79,116,328 shares issued and
outstanding which includes 1,500,000 shares issuable upon the exercise of vested
options and 250,000 shares issuable upon the exercise of a warrant.

(4)

Based on 77,666,328 shares issued and outstanding which include
250,000 shares issuable upon the exercise of a warrant.

(5)

Based on 77,466,328 shares issued and outstanding which include
50,000 shares issuable upon the exercise of a warrant.

(6)

Mr. Brackebusch resigned as Director effective on January 24,
2008.  Includes 1,632,800 Shares held by New Jersey Mining Company.
 Mr. Brackebusch is President and a controlling shareholder of that
Company.

(7)

Based on 77,516,328 shares issued and outstanding which include
100,000 shares issuable upon the exercise of vested options.

(8)

Based on 77,666,328 shares issued and outstanding which include
250,000 shares issuable upon the exercise of a warrant.

(9)

Based on 79,191,328 shares issued and outstanding which includes
1,500,000 shares issuable upon the exercise of vested options and 275,000 shares
issuable upon the exercise of a warrant.

(10)

Based on 77,616,328 shares issued and outstanding which include
200,000 shares issuable upon the exercise of vested options.

(11)

Based on 77,541,328 shares issued and outstanding which include
125,000 shares issuable upon the exercise of vested options.

(12)

Mr. Alford is not an Officer or Director of the Company but is a
5% or greater shareholder.  Based on 78,416,328 shares issued and
outstanding which includes 2,000,000 shares issuable upon the exercise of vested
options and 250,000 shares issuable upon the exercise of a warrant.  The
shares were verified by the Columbia Stock Transfer Company.

(13)

Mr. Duval is not an Officer or Director of the Company but a 5% or
greater shareholder.  Based on 79,666,328 shares issued and outstanding
which includes 2,000,000 shares issuable upon the exercise of vested options and
250,000 shares issuable upon the exercise of a warrant.  The shares were
verified by the Columbia Stock Transfer.

(14)

Based on 82,836,328 shares issued and outstanding which includes
4,095,000 shares issuable upon the exercise of vested options and 1,325,000
shares issuable upon the exercise of warrants.



There are no arrangements known to the
Company, the operation of which may at a subsequent time result in the change of
control of the Company.



ITEM
12.

CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE

During the year
ended December 31, 2007, the Company awarded 2,000,000 stock options to Frank D.
Duval, a greater than 5% (five percent) shareholder.  This stock option
award was recorded as professional consulting fees of $357,099 using the Black
Scholes Model.

During the year
ended December 31, 2007, the Company awarded 1,500,000 stock options to Terrence
J. Dunne while serving as Chief Executive Officer and Director of the Company.
 The award was not related to his services as CFO or Director, but for
consulting services and guaranteeing a LOC. This stock option award was recorded
as professional consulting fees of $267,825 using the Black Scholes Model.



43





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During the year ended December 31, 2007, the Company awarded
1,500,000 stock options to Howard M. Crosby while serving as a Director of the
Company.  The award was not related to his services as Director, but for
consulting services and guaranteeing a LOC. This stock option award was recorded
as professional consulting fees of $267,825 using the Black Scholes Model.

Director Independence



Directors Bobby E. Cooper, Thomas A. Loucks
and Fred Brackebusch are independent members of the board of directors as
defined by NASDAQ Marketplace Rules 4200(a)(15) and 4350(d)(2) respectively.
 On January 24, 2008 Mr. Brackebusch resigned from the board of directors.



In determining the matter of independence,
neither Messrs. Cooper, Loucks or Brackebusch had any transactions,
relationships or arrangements with the Company prior to or after becoming
directors of the Company except for becoming shareholders of the Company
pursuant to the shares granted to each director as directors fees, their
investment participation in the Companys private placements on the same terms
as all other investors in that offering.  In determining the matter of
director independence, the following matrix was utilized.



|                  |                      |                               |                        |                     
|----------------- | -------------------- | ----------------------------- | ---------------------- | --------------------
|Director          | Company Employee (1) | Compensation from Company (2) | Other
Relationship (3) | Independent
Director
|Thomas H.
Parker  | Yes                  | Yes                           | No                     | No                  
|Howard M. Crosby  | Yes                  | No                            | Yes                    | No                  
|Bobby E.
Cooper   | No                   | No                            | No                     | Yes                 
|Thomas
Loucks     | No                   | No                            | No                     | Yes                 
|Fred Brackebusch  | No                   | No                            | No                     | Yes                 
|Robert
OBrien    | No                   | No                            | Yes                    | No                  
|Gerald G. Booth   | No                   | Yes                           | No                     | Yes                 
|Terrence J.
Dunne | Yes                  | Yes                           | Yes                    | No                  



(1)

a director who is, or at any time
during the past three years was, employed by the company or by any parent or
subsidiary of the company;

(2)

a director who accepted
or who has a Family Member who accepted any compensation from the company in
excess of $60,000 during any period of twelve consecutive months within the
three years preceding the determination of independence, other than the
following:

(i)

compensation for board or board
committee service;

(ii)

compensation paid to a Family Member
who is an employee (other than an executive officer) of the company ; or

(iii)

benefits under a tax-qualified
retirement plan, or non-discretionary compensation

(3)

Other relationships include:

(i)

a
director who is a Family Member of an individual who is, or at any time during
the past three years was, employed by the Company or by any parent or subsidiary
of the Company made, or from which the Company received, payments for property
or services in the current or any of the past three fiscal years that exceed 5%
of the recipient's consolidated gross revenues for that year, or $200,000,
whichever is more, other than (i) payments arising solely from investments in
the company's securities; or(ii) payments under non-discretionary charitable
contribution matching programs.

(ii)

a
director of the Company who is, or has a Family Member who is, employed as an
executive officer of another entity where at any time during the past three
years any of the executive officers of the Company serve on the compensation
committee of such other entity; or

(iii)

a
director who is, or has a Family Member who is, a current partner of the
Company's outside auditor, or was a partner or employee of the Company's outside
auditor who worked on the company's audit at any time during any of the past
three years.



44





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ITEM 13.

EXHIBITS



|               |                                                                                                                                                                                       
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number | Description of
Document                                                                                                                                                               
|3.1(2)         | Articles of Incorporation for Silver Crest Mines,
Inc. 9/11/1968                                                                                                                      
|3.2(2)         | Articles of Merger of Domestic Corporations into
Silver Crest Mines, Inc. 12/20/1982                                                                                                  
|3.3(2)         | Articles of Incorporation of Silver Crest
Resources, Inc. 1/28/2003                                                                                                                   
|3.4(2)         | Articles of Merger between Silver Crest Mines, Inc.
into Silver Crest Resources, Inc. as filed in Nevada on
6/11/2003                                                                 
|3.5(2)         | Articles of Merger between Silver Crest Mines, Inc.
into Silver Crest Resources, Inc. as filed in Idaho on 6/11/2003                                                                  
|3.6(2)         | Articles of Exchange of Niagara Mining and
Development Company, Inc., and Silver Crest Resources, Inc. as filed in
Nevada on 8/4/2006                                                 
|3.7(2)         | Articles of Exchange of Niagara Mining and
Development Company, Inc., and Silver Crest Resources, Inc. as filed in
Idaho on 8/4/2006                                                  
|3.8(2)         | Certificate of Amendment to Articles of
Incorporation for a Nevada Corporation 8/14/2006                                                                                              
|3.9(2)         | Articles of Incorporation for Kisa Gold Mining,
Inc. 7/28/2006                                                                                                                        
|3.10(2)        | Articles of Incorporation for Niagara Mining and
Development Company, Inc. 1/11/2005                                                                                                  
|3.11(1)        | Amended Bylaws adopted September 12, 2007                                                                                                                                             
|10(2)          | Employment Contract of Chris Dail executed
8/21/2006                                                                                                                                  
|10a(3)         | Employment Contract of Thomas H. Parker                                                                                                                                               
|10.3(1)        | Option and Royalty Sales Agreement
between Gold Crest Mines, Inc. and the heirs of the Estate of J.J.
Oberbillig.                                                                     
|10.4(1)        | Option and Real Property Sales
Agreement between Gold Crest Mines, Inc. and JJO, LLC, an Idaho limited
liability company and personal representative of the Estate of J.J.
Oberbillig.
|14(4)          | Code of Conduct and Ethics of Gold
Crest Mines, Inc. adopted March 3, 2008                                                                                                            
|21(2)          | Subsidiaries of the Issuer                                                                                                                                                            
|99(3)          | Gold Crest Mines, Inc., 2007 Stock
Plan                                                                                                                                               
|31.1(1)        | Certification of CEO pursuant to
Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act                                                                                              
|31.2(1)        | Certification of CFO pursuant to
Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act                                                                                              
|32.1(1)        | Certification of CEO pursuant to 18 U.S.C.
Section 1350                                                                                                                               
|32.2(1)        | Certification of CFO pursuant to 18 U.S.C.
Section 1350                                                                                                                               

(1)

Filed herewith.

(2)

Incorporated by reference to the Report on Form 10-SB12G filed by
Gold Crest Mines, Inc. on January 8, 2007.

(3)

Incorporated by reference to the Report on Form 10-SB12G/A filed
by Gold Crest Mines, Inc. on August 6, 2007.

(4)

Incorporated by reference to the Report on Form 8-K filed by Gold
Crest Mines, Inc. on March 3, 2008.



ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND
SERVICES



Audit Fees



The aggregate fees billed for professional
services rendered by the Companys Auditors for the audit of the Companys
annual consolidated financial statements for the fiscal years ended
December 31, 2007 and 2006  and reviews of the consolidated financial
statements included in the Companys Forms 10-QSB were $37,900 and $29,673,
respectively.



Audit-Related Fees



There were no fees billed in the last two
fiscal years for assurance and related services by the principal accountant that
are reasonably related to the performance of the audit or review of the
Companys financial statements except as set forth in the preceding
paragraph.



Tax Fees



The Companys auditors billed $800 and $0
for professional services for tax compliance, tax advice and tax planning for
fiscal 2007 and 2006, respectively.





45





---

All Other
Fees



The Company incurred no fees from the
principal accountant during the last two fiscal years for products and services
other than as set forth above.



Policy on Audit Committee Pre-Approval
of Audit and Non-Audit Services of Independent Auditors



The Audit Committee meets prior to the
filing of any Form 10-QSB or 10-KSB to approve those filings.  In addition,
the committee meets to discuss audit plans and anticipated fees for audit and
tax work prior to the commencement of that work.  At the Board of Directors
meeting held on January 15, 2007 it was approved that we would continue to use
our current auditing firm to audit our 2007 year-end consolidated financial
statements.





46





---

SIGNATURES



In accordance with
the requirements of the Section 13 or 15(d) of the Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized in Spokane, Washington on March 26,
2008.

GOLD CREST MINES, INC.



By:

/s/ Thomas H. Parker

Thomas H. Parker

President and CEO

(Principal Executive Officer)



In accordance with
the requirements of the Section 13 or 15(d) of the Exchange Act, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities on March 26, 2008.

|                                             |  |  |  |                                                
|-------------------------------------------- |  |  |  | -----------------------------------------------
|/s/  THOMAS H.
PARKER                        |  |  |  | President, Chief Executive
Officer and Director
|Thomas H. Parker                             |  | 
|(Principal Executive Officer)               
|/s/  MATT J. COLBERT                         |  |  |  | Chief Financial
Officer                        
|Matt J. Colbert                              |  | 
|(Principal Financial and Accounting
Officer)
|/s/  BOBBY E. COOPER                         |  |  |  | Director and Chairman of
the Board             
|Bobby E. Cooper                              |  | 
|/s/  TERRENCE J. DUNNE                       |  |  |  | Director and Secretary /
Treasurer             
|Terrence J. Dunne                            |  | 
|/s/  HOWARD M. CROSBY                        |  |  |  | Director                                       
|Howard J. Crosby                             |  | 
|/s/  GERALD G. BOOTH                         |  |  |  | Director                                       
|Gerald G. Booth                              |  | 
|/s/  THOMAS A. LOUCKS                        |  |  |  | Director                                       
|Thomas A. Loucks                             |  | 
|/s/  ROBERT W. OBRIEN                       |  |  |  | Director                                       
|Robert W. OBrien                            |  | 











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