---

Exhibit 99.2



|Baja Mining Corp.                
|---------------------------------
|                                 
|Consolidated Financial Statements
|December 31, 2007 and 2006       
|(expressed in Canadian dollars)  







---

Managements Responsibility for Financial Reporting

The accompanying consolidated financial statements are the responsibility of management. The consolidated financial statements of Baja Mining Corp. (Baja) have been prepared within reasonable limits of materiality and in accordance with Canadian generally accepted accounting principles. Since a precise determination of many assets and liabilities is dependent on future events, the preparation of financial statements necessarily involves the use of estimates and approximations. These have been made using careful judgment and with all information available up to March 18, 2008.

To meet its responsibility for reliable and accurate financial statements, management has established systems of internal control which are designed to provide reasonable assurance that financial information is relevant, reliable and accurate, and that assets are safeguarded and transactions are executed in accordance with managements authorization.

Management has assessed the effectiveness of the Companys internal control over financial reporting as at December 31, 2007. In making its assessment, management has used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its Internal ControlIntegrated Framework. Based on our assessment, utilizing those criteria, management concluded that the Companys internal control over financial reporting was effective as at that date.

The consolidated financial statements have been audited by PricewaterhouseCoopers LLP on behalf of the shareholders. Their responsibility is to express a professional opinion on the fair presentation of the consolidated financial statements in accordance with Canadian generally accepted accounting principles. The Auditors Report outlines the scope of their examination and sets forth their opinion.

The Audit Committee of the Board of Directors, composed of three independent directors, meets periodically and has reviewed these statements with management and the Auditors and has recommended their approval to the Board of Directors. The Board of Directors has approved the consolidated financial statements of Baja.

|/s/ John Greenslade                   | /s/ Rowland Wallenius  
|------------------------------------- | -----------------------
|                                     
|John Greenslade                       | Rowland Wallenius      
|President and Chief Executive Officer | Chief Financial Officer

Vancouver, B.C 
March 20, 2008

---

Independent Auditors Report

To the Shareholders of 
Baja Mining Corp.

We have audited the consolidated  balance sheets of Baja Mining Corp. as at December 31, 2007 and 2006 and the consolidated statements of operations,  comprehensive loss and deficit, changes in shareholders’ equity and cash flows for  the years then ended. These financial statements are the responsibility of the  Company’s management. Our responsibility is to express an opinion on these  financial statements based on our audits.

We conducted our audits in  accordance with Canadian generally accepted auditing standards. Those  standards require that we plan and perform an audit to obtain reasonable  assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts  and disclosures in the financial statements. An audit also includes assessing  the accounting principles used and significant estimates made by management, as  well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2007 and 2006 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

/s/ PricewaterhouseCoopers LLP

Chartered AccountantsVancouver, British Columbia 
March 20, 2008

---

|Baja Mining Corp.               
|--------------------------------
|Consolidated Balance Sheets     
|As at December 31, 2007 and 2006
|                                
|(expressed in Canadian dollars) 

|                                         | 2007        |   | 2006        |  
|---------------------------------------- | ----------- | - | ----------- | -
|                                         | $           |   | $           |  
|Assets                                   |             |   |             |  
|Current assets                           |             |   |             |  
|Cash and cash equivalents                | 1,043,292   |   | 1,475,375   |  
|Short term deposits (note 4)             | 32,183,356  |   | 8,874,554   |  
|Other current assets                     | 1,206,990   |   | 850,056     |  
|                                         | 34,433,638  |   | 11,199,985  |  
|Mineral properties(note 5 and 9)         | 18,570,806  |   | 757,793     |  
|Property, plant and equipment(note 6)    | 1,668,224   |   | 464,034     |  
|                                         | 54,672,668  |   | 12,421,812  |  
|Liabilities                              |             |   |             |  
|Current liabilities                      |             |   |             |  
|Accounts payable and accrued liabilities | 2,691,712   |   | 1,139,707   |  
|Special warrant liability(note 7)        | 752,539     |   | -           |  
|                                         | 3,444,251   |   | 1,139,707   |  
|Shareholders Equity                     |             |   |             |  
|Share capital(note 8)                    | 105,841,420 |   | 65,258,086  |  
|Share purchase warrants(note 8(d))       | 17,199,279  |   | 6,496,517   |  
|Contributed surplus(note 8(g))           | 6,744,132   |   | 6,972,565   |  
|Deficit                                  | (78,556,414 | ) | (67,445,063 | )
|                                         | 51,228,417  |   | 11,282,105  |  
|                                         | 54,672,668  |   | 12,421,812  |  

|Commitments(note 13)       
|---------------------------
|Significant events(note 16)
|Subsequent events(note 17) 

On behalf of the Board

|__/s/ John Greenslade_____________________Director | __/s/ Robert Mouat_______________________Director
|-------------------------------------------------- | -------------------------------------------------

See accompanying notes to the consolidated financial statements.

---

|Baja Mining Corp.                                                   
|--------------------------------------------------------------------
|Consolidated Statement of Operations, Comprehensive Loss and Deficit
|For the years ended December 31, 2007 and 2006                      

(expressed in Canadian dollars)

|                                                  | 2007        |   | 2006        |  
|------------------------------------------------- | ----------- | - | ----------- | -
|                                                  | $           |   | $           |  
|                                                 
|                                                 
|Exploration expenses(note 9)                      | 7,506,581   |   | 19,827,154  |  
|                                                 
|General and administrative expenses               |             |   |             |  
|Amortization                                      | 88,655      |   | 59,372      |  
|Audit and legal fees                              | 392,103     |   | 259,696     |  
|Directors fees                                    | 65,000      |   | 42,500      |  
|Stock exchange and transfer agent fees            | 376,891     |   | 86,322      |  
|Interest and bank charges                         | 11,143      |   | 11,628      |  
|Management and consulting fees                    |             |   |             |  
|Related party (note 9)                            | 150,000     |   | 165,000     |  
|Other                                             | 295,715     |   | 186,449     |  
|Office and general                                | 346,424     |   | 168,412     |  
|Promotion, trade show and marketing               | 504,373     |   | 147,734     |  
|Rent                                              | 171,742     |   | 135,121     |  
|Stock-based compensation expense (note 8(f))      | 513,392     |   | 1,996,339   |  
|Telephone                                         | 97,690      |   | 55,203      |  
|Travel                                            | 296,077     |   | 186,839     |  
|Wages and subcontract                             | 915,641     |   | 461,153     |  
|                                                  | 4,224,846   |   | 3,961,768   |  
|Loss before other items                           | (11,731,427 | ) | (23,788,922 | )
|Foreign exchange gain (loss)                      | 52,638      |   | 60,995      |  
|Interest income and other                         | 567,438     |   | 505,138     |  
|Loss and comprehensive loss for the year          | (11,111,351 | ) | (23,222,789 | )
|Deficit  Beginning of year                       | (67,445,063 | ) | (44,222,274 | )
|Deficit  End of year                             | (78,556,414 | ) | (67,445,063 | )
|Basic and diluted loss per share for the year     | (0.09       | ) | (0.24       | )
|                                                  |             |   |             |  
|**Weighted average number of shares** outstanding | 117,866,327 |   | 97,927,466  |  

See accompanying notes to the consolidated financial statements.

---

|Baja Mining Corp.                                        
|---------------------------------------------------------
|Consolidated Statement of Changes in Shareholders Equity
|For the years ended December 31, 2007 and 2006           

(expressed in Canadian dollars)

|                                           | 2007        |   | 2006        |  
|------------------------------------------ | ----------- | - | ----------- | -
|                                           | $           |   | $           |  
|                                          
|Share capital                              |             |   |             |  
|Balance  beginning of year                | 65,258,086  |   | 44,284,417  |  
|Non-brokered private placement             | 21,776,590  |   | -           |  
|Brokered private placement                 | 10,835,840  |   | 17,634,879  |  
|Share issuance costs                       | (1,497,680  | ) | (2,076,487  | )
|Shares issued on exercise of warrants      | 5,017,325   |   | 3,023,163   |  
|Fair value of warrants exercised           | 1,974,924   |   | 699,882     |  
|Shares issued on exercise of stock options | 845,250     |   | 684,250     |  
|Fair value of stock options exercised      | 1,631,085   |   | 1,007,982   |  
|Balance  end of year                      | 105,841,420 |   | 65,258,086  |  
|                                          
|                                          
|Share purchase warrants                    |             |   |             |  
|Balance  beginning of year                | 6,496,517   |   | 1,121,953   |  
|Non-brokered private placement share       |             |   |             |  
|purchase warrants                          | 8,262,410   |   | -           |  
|Brokered private placement share purchase  |             |   |             |  
|warrants                                   | 4,165,059   |   | 5,365,121   |  
|Share purchase warrants issue costs        | (534,055    | ) | (631,736    | )
|Fair value of agent warrants               | 631,310     |   | 1,308,952   |  
|Fair value of additional agent warrants    | 105,380     |   | 32,109      |  
|Fair value of shares issued on exercise of |             |   |             |  
|warrants                                   | (1,974,924  | ) | (699,882    | )
|Fair value of special warrants             | 47,582      |   | -           |  
|Balance  end of year                      | 17,199,279  |   | 6,496,517   |  
|                                          
|                                          
|Contributed Surplus                        |             |   |             |  
|Balance  beginning of year                | 6,972,565   |   | 2,739,721   |  
|Fair value of stock options re-priced      | -           |   | 1,100,000   |  
|Fair value of stock options granted        | 1,402,652   |   | 4,140,826   |  
|Fair value of stock options exercised      | (1,631,085  | ) | (1,007,982  | )
|Balance  end of year                      | 6,744,132   |   | 6,972,565   |  
|                                          
|                                          
|                                          
|Deficit                                    |             |   |             |  
|Balance  beginning of year                | (67,445,063 | ) | (44,222,274 | )
|Loss for the year                          | (11,111,351 | ) | (23,222,789 | )
|Balance  end of year                      | (78,556,414 | ) | (67,445,063 | )
|                                          
|                                          
|Total Shareholders Equity                 | 51,228,417  |   | 11,282,105  |  

See accompanying notes to the consolidated financial statements.

---

|Baja Mining Corp.                             
|----------------------------------------------
|Consolidated Statement of Cash Flows          
|For the years ended December 31, 2006 and 2005

(expressed in Canadian dollars)

|                                                   | 2007        |   | 2006        |  
|-------------------------------------------------- | ----------- | - | ----------- | -
|                                                   | $           |   | $           |  
|                                                  
|Cash flows from operating activities               |             |   |             |  
|Loss for the year                                  | (11,111,351 | ) | (23,222,789 | )
|Items not affecting cash                           |             |   |             |  
|Amortization                                       | 155,176     |   | 168,803     |  
|Fair value of special warrants                     | 805,161     |   | -           |  
|Accretion of special warrants liability            | 62,965      |   | -           |  
|Impairment of property, plant and equipment        | -           |   | 125,284     |  
|Stock-based compensation expense                   | 1,197,449   |   | 5,240,826   |  
|Unrealized foreign exchange                        | (128,292    | ) | -           |  
|                                                  
|                                                   | (9,018,892  | ) | (17,687,876 | )
|Net changes in working capital balances            |             |   |             |  
|Other current assets                               | (356,934    | ) | (589,515    | )
|Accounts payable and accrued liabilities           | 677,344     |   | 747,578     |  
|                                                  
|                                                   | (8,698,482  | ) | (17,529,813 | )
|                                                  
|Cash flows from investing activities               |             |   |             |  
|Investment in short term deposits                  | (23,308,802 | ) | (8,874,554  | )
|Mineral properties and related deferred costs, net | (16,600,585 | ) | -           |  
|Acquisition of property, plant and equipment       | (1,431,644  | ) | (159,407    | )
|                                                  
|                                                   | (41,341,031 | ) | (9,033,961  | )
|                                                  
|Cash flows from financing activities               |             |   |             |  
|Repayments of amounts due to related parties       | -           |   | (61,186     | )
|Net proceeds from issuance of common shares        | 49,607,430  |   | 25,340,251  |  
|                                                  
|                                                   | 49,607,430  |   | 25,279,065  |  
|                                                  
|Decrease in cash and                               |             |   |             |  
|cash equivalents                                   | (432,083    | ) | (1,284,709  | )
|                                                  
|Cash and cash equivalents - Beginning of year      | 1,475,375   |   | 2,760,084   |  
|                                                  
|Cash and cash equivalents - End of year            | 1,043,292   |   | 1,475,375   |  

Supplemental cash flow information (note 14)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                

(expressed in Canadian dollars)

|1 | Nature and continuance of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  | Baja Mining Corp. (the Company), was incorporated on July 15, 1985 under the Company Act of British Columbia. The Company is a reporting issuer in British Columbia and began trading on the Toronto Stock Exchange as of February 7, 2007 (previously listed on the TSX Venture Exchange) and the Frankfurt Stock Exchange as of March 3, 2006. Effective April 20, 2004, the Company completed a business combination with Mintec International Corporation (now known as Mintec Processing Ltd. Mintec) through a reverse takeover.        
| 
|  | The Companys common shares have been registered in the United States through the filing of a Form 20-F Registration Statement with the United States Securities and Exchange Commission (SEC). The Form 20-F was filed with the SEC on December 8, 2006 and finalized as of January 15, 2007.                                                                                                                                                                                                                                                  
| 
|  | On May 29, 2007, the Company received the results of the Definitive Feasibility Study (DFS), prepared by Bateman Engineering Inc. (Bateman) on the economic and technical viability of the Boleo project and, due to the positive results of the DFS, the project has moved from the exploration stage to the development stage.                                                                                                                                                                                                              
| 
|  | These financial statements are presented in Canadian dollars and have been prepared in accordance with Canadian generally accepted accounting principles. The recoverability of the Companys investment in its mineral properties is dependant on the Companys ability to complete debt financings (note 16), equity financing and the ability to generate profitable operations in the future.                                                                                                                                                 
| 
|2 | Incorporation of Invebaja, S.A. de C.V.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| 
|  | On December 28, 2007 Invebaja, S.A. de C.V. (Invebaja) was incorporated in Mexico as a wholly owned subsidiary of Mintec. On December 31, 2007 a share exchange occurred in which Invebaja received all the issued and outstanding shares of Minera y Metalurgica del Boleo, S.A de C.V., (MMB) from Mintec in exchange for 100% of Invebaja. This reorganization was completed to revise the operating structure in Mexico, which will undergo further changes with the formation of additional subsidiaries in Mexico for contract services.
| 
|3 | Summary of significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| 
|  | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 

(1)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|3 | Summary of significant accounting policies(continued)
|- | -----------------------------------------------------
| 
|  | b)                                                   
| 
|  |                                                      
| 
|  |                                                      
| 
|  |                                                      
| 
|  |                                                      
| 
|  | c)                                                   
| 
|  |                                                      
| 

| | Office equipment and furniture | five years   | 
| | ------------------------------ | ------------ | 
| | Leasehold improvements         | five years   | 
| | Computer equipment             | three years  | 
| | Vehicles                       | five years   | 
| | Software                       | two years    | 
| | Buildings                      | twenty years | 
| | Mining machinery and equipment | five years   | 
| | Transportation equipment       | four years   | 
| | Test mining equipment          | two years    | 

(2)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|3 | Summary of significant accounting policies(continued)
|- | -----------------------------------------------------
| 
|  | d)                                                   
| 
|  |                                                      
| 
|  | e)                                                   
| 
|  |                                                      
| 
|  |                                                      
| 
|  |                                                      
| 
|  |                                                      
| 
|  |                                                      
| 
|  | f)                                                   
| 
|  |                                                      
| 

(3)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|3 | Summary of significant accounting policies(continued)
|- | -----------------------------------------------------
| 
|  | g)                                                   
| 
|  |                                                      
| 
|  | h)                                                   
| 
|  |                                                      
| 
|  | i)                                                   
| 
|  |                                                      
| 
|  | j)                                                   
| 
|  |                                                      
| 
|  | k)                                                   
| 
|  |                                                      
| 

(4)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|3 | Summary of significant accounting policies(continued)
|- | -----------------------------------------------------
| 
|  | l)                                                   
| 
|  |                                                      
| 
|  | m)                                                   
| 
|  |                                                      
| 
|  | n)                                                   
| 
|  |                                                      
| 
|  | o)                                                   
| 
|  |                                                      
| 
|  |                                                      
| 

(5)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|3 | Summary of significant accounting policies(continued)
|- | -----------------------------------------------------
| 
|  | o)                                                   
| 
|  |                                                      
| 
|  |                                                      
| 
|  |                                                      
| 
|  | p)                                                   
| 
|  |                                                      
| 
|  |                                                      
| 

(6)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31,2007 and 2006                 
|                                          
|(expressed in Canadian dollars)           

|3 | Summary of significant accounting policies(continued)                                                                                                                                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  | p)                                                                                                                                                                                                           
| 
|  |                                                                                                                                                                                                              
| 
|  |                                                                                                                                                                                                              
| 
|4 | Short term deposits                                                                                                                                                                                          
| 
|  | The Company has invested in one year guaranteed term deposits with its Canadian bank at fixed interest rates established at the time of investment. At December 31, 2007 all deposits mature within one year.
| 
|5 | Mineral properties                                                                                                                                                                                           
| 
|  | Boleo Project details, acquisition and deferred costs from June 1, 2007 are as follows:                                                                                                                      
| 

| |                                               | 2007       | 2006   
| | --------------------------------------------- | ---------- | -------
| |                                               | $          | $      
| |                                              
| | Property rights and land (note 5(a))          | 734,424    | 651,443
| | Mining concessions (note 5(b))                | 106,350    | 106,350
| | Deferred development costs                    |            |        
| | Stock based compensation                      | 205,203    | -      
| | Accretion of special warrant liability        | 60,287     | -      
| | Amortization                                  | 72,278     | -      
| | Engineering                                   | 6,554,354  | -      
| | Site work                                     | 4,058,143  | -      
| | Construction in progress                      | 3,837,045  | -      
| | Salary, consulting, financing and other costs | 2,942,722  | -      
| |                                              
| |                                              
| | Total at cost                                 | 18,570,806 | 757,793

(7)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|5 | Mineral properties(continued)
|- | -----------------------------
| 
|  | a)                           
| 
|  |                              
| 
|  | b)                           
| 
|  |                              
| 
|  | c)                           
| 

| |                                        | Exploration | Exploration
| | -------------------------------------- | ----------- | -----------
| |                                        | 2007        | 2006       
| |                                        | $           | $          
| |                                       
| |                                       
| | Amortization                           | 257,171     | 190,650    
| | Camp, general and travel               | 2,374,964   | 2,088,798  
| | Concession fees and other              | 1,881,164   | 1,851,296  
| | Drilling                               | 14,095,800  | 12,690,696 
| | Feasibility studies                    | 9,154,385   | 7,292,178  
| | Geological and environmental           | 10,027,302  | 8,523,038  
| | Infrastructure                         | 687,494     | 687,494    
| | Management fees                        | 3,636,203   | 3,438,073  
| | Metallurgical and contract services    | 6,085,912   | 5,949,272  
| | Pilot plant costs                      | 5,327,406   | 5,327,406  
| | Professional fees                      | 5,146,975   | 4,523,116  
| | Accretion of special warrant liability | 62,965      | -          
| | Stock-based compensation expenses      | 5,002,440   | 4,318,384  
| | Wages and subcontracts                 | 2,433,976   | 1,787,175  
| |                                       
| |                                        | 66,174,157  | 58,667,576 

(8)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007and 2006                 
|                                          
|(expressed in Canadian dollars)           

|6 | Property, plant and equipment
|- | -----------------------------

| |                                 |           |              | 2007     
| | ------------------------------- | --------- | ------------ | ---------
| |                                
| |                                 |           | Accumulated  |          
| |                                 | Cost      | amortization | Net      
| |                                 | $         | $            | $        
| |                                
| | Computer equipment and software | 512,773   | 185,093      | 327,680  
| | Leasehold improvements          | 149,162   | 55,149       | 94,013   
| | Machinery and equipment         | 1,057,501 | 192,696      | 864,805  
| | Mining equipment                | 86,262    | 86,262       | -        
| | Office equipment and furniture  | 182,562   | 73,302       | 109,260  
| | Transportation equipment        | 67,590    | 48,927       | 18,663   
| | Buildings                       | 287,229   | 33,426       | 253,803  
| |                                
| |                                 | 2,343,079 | 674,855      | 1,668,224
| |                                
| |                                
| |                                
| |                                 |           |              | 2006     
| |                                
| |                                 |           | Accumulated  |          
| |                                 | Cost      | amortization | Net      
| |                                 | $         | $            | $        
| |                                
| | Computer equipment and software | 178,313   | 119,188      | 59,125   
| | Leasehold improvements          | 101,559   | 28,428       | 73,131   
| | Machinery and equipment         | 357,636   | 121,094      | 236,542  
| | Mining equipment                | 86,262    | 75,189       | 11,073   
| | Office equipment and furniture  | 89,054    | 44,825       | 44,229   
| | Transportation equipment        | 67,590    | 41,173       | 26,417   
| | Buildings                       | 38,784    | 25,267       | 13,517   
| |                                
| |                                 | 919,198   | 455,164      | 464,034  

(9)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007and 2006                 
|                                          
|(expressed in Canadian dollars)           

|7 | Special warrants liability
|- | --------------------------

On January 9, 2007, the Company reached an agreement with the Commission of Natural Protected Areas (CONANP), Bank Monex, and Ecobanca, a Mexican non-profit organization, to establish a trust fund to support environmental conservation measures within the El Vizcaino Biosphere. The Companys El Boleo property is located within the Buffer Zone of this Biosphere. The Company paid US$100,000 on January 31, 2007, and issued three Special Warrants on January 9, 2007, for an aggregate of 180,000 common shares of the Company. The Special Warrants will mature in each of February 2009, 2010 and 2011, respectively. Each Special Warrant may be converted, in whole or in part, at any time prior to maturity into 60,000 common shares of the Company. In addition, the trustee of the Special Warrants can require the Company to repurchase any or all of the Special Warrants represented by a certificate at a price of USD$5.555 per underlying common share at any time within 30 days of the Maturity Date of each such Special Warrant. The Special Warrants contain provisions for cancellation prior to a maturity date if development of the El Boleo project does not proceed. If cancellation occurs after any of the maturity dates, any matured or exercised certificates are considered a final contribution to the trust fund.

The total repurchase liability of US$999,900 has been recorded, as the project is expected to proceed. The liability has been discounted using an interest rate of 15%.

The fair value of the special warrants granted on January 9, 2007 was, using the Black-Scholes pricing model, estimated to be $47,582. The weighted average assumptions utilized included a risk free interest rate of 4.19%, a dividend yield of nil%, an expected volatility of 91% and an expected life of the warrants of three years.

| |                                                     | Amount    |   | Discounted |   | Discounted |  
| | --------------------------------------------------- | --------- | - | ---------- | - | ---------- | -
| |                                                     | US$       |   | US$        |   | CDN$       |  
| |                                                    
| | Balance - December 31, 2006                         | -         |   | -          |   | -          |  
| |                                                    
| | Fair value of obligations, January 9, 2007          | 1,140,354 |   | 784,544    |   | 922,161    |  
| | Fair value of special warrants, equity(note 8 (d)) | (40,454   | ) | (40,454    | ) | (47,582    | )
| | Payment on January 31, 2007  (US$100,000)          | (100,000  | ) | (100,000   | ) | (117,000   | )
| | Accretion of discounted liability                   | -         |   | 115,054    |   | 123,252    |  
| | Unrealized foreign exchange                         |           |   |            |   | (128,292   | )
| |                                                    
| | Balance  December 31, 2007                         | 999,900   |   | 759,144    |   | 752,539    |  

(10)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|8 | Share capital
|- | -------------

|a) | Authorized                                       
|-- | -------------------------------------------------
|   | Unlimited common shares without par value        
|  
|b) | Details of share capital activity are as follows:

| |                                             | Shares      | Amount      |  
| | ------------------------------------------- | ----------- | ----------- | -
| |                                             |             | $           |  
| | Balance  December 31, 2005                 | 76,280,820  | 44,284,417  |  
| | Brokered private placement (note 8(c))      | 25,555,556  | 17,634,879  |  
| | Share issue costs (note 8(c))               | -           | (2,076,487  | )
| | Shares issued on exercise of warrants       | 4,092,641   | 3,023,163   |  
| | Fair value of warrants exercised            | -           | 699,882     |  
| | Shares issued on exercise of stock options  | 1,955,000   | 684,250     |  
| | Fair value of options exercised             | -           | 1,007,982   |  
| | Balance  December 31, 2006                 | 107,884,017 | 65,258,086  |  
| | Non-brokered private placement (note 8 (c)) | 16,150,000  | 21,776,590  |  
| | Brokered private placement (note 8(c))      | 8,065,000   | 10,835,840  |  
| | Share issue costs (note 8(c))               | -           | (1,497,680  | )
| | Shares issued on exercise of warrants       | 6,324,497   | 5,017,325   |  
| | Fair value of warrants exercised            | -           | 1,974,924   |  
| | Shares issued on exercise of stock options  | 2,275,000   | 845,250     |  
| | Fair value of options exercised             | -           | 1,631,085   |  
| | Balance  December 31, 2007                 | 140,698,514 | 105,841,420 |  

|c) | Private placements                                                                               
|-- | -------------------------------------------------------------------------------------------------
|  
|   | During the financial year ended December 31, 2007, the following share placements were completed:
|  
|   | i)                                                                                               
|  

(11)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|8 | Share capital(continued)
|- | ------------------------

|c) | Private placements (continued)
|-- | ------------------------------

|i)  (continued)
|---------------
|               
|               
|               
|ii)            
|               
|iii)           
|               

During the financial year ended December 31, 2006, the following share placements were completed:

|iv) | April 2006 - a brokered private placement of 25,555,556 units at $0.90 per unit, realizing gross proceeds of $23,000,000. Each unit consists of one share and one half-share purchase warrant.                                                                                                                                                                                                             
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | One share purchase warrant entitles the holder to acquire one share at $1.25 within two years of issue, extended to five years on August 25, 2006 as the Company achieved Tier 1 status. The warrants are also subject to an accelerated expiry provision whereby the Company may, in the event that the common shares trade at a closing price of $2.50 for twenty consecutive days, accelerate the expiry
|   

(12)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|8 | Share capital(continued)
|- | ------------------------
| 
|  | c)                      
| 
|  |                         
| 
|  |                         
| 
|  | d)                      
| 

| |                                                              | Shares     |   |            |  
| | ------------------------------------------------------------ | ---------- | - | ---------- | -
| |                                                              | purchase   |   |            |  
| |                                                              | warrants   |   | Amount     |  
| |                                                              |            |   | $          |  
| |                                                             
| | Balance  December 31, 2005                                  | 13,078,403 |   | 1,121,953  |  
| |                                                             
| | Brokered private placement share purchase warrants           |            |   |            |  
| | (note 8 (c) (iv))                                            | 12,777,774 |   | 5,365,121  |  
| | Share purchase warrants issue costs (note 8 (c) (iv))        | -          |   | (631,736   | )
| | Fair value of agent warrants (note 8 (c) (iv))               | 983,993    |   | 1,308,952  |  
| | Fair value of additional agent warrants                      | 173,017    |   | 32,109     |  
| | Shares issued on exercise of additional agent warrants       | (4,092,641 | ) | (699,882   | )
| |                                                             
| | Balance  December 31, 2006                                  | 22,920,546 |   | 6,496,517  |  
| |                                                             
| | Brokered private placement share purchase warrants           |            |   |            |  
| | (note 8 (c) (ii))                                            | 5,242,250  |   | 4,165,059  |  
| | Non-brokered private placement share purchase warrants       |            |   |            |  
| | (note 8 (c) (i))                                             | 10,497,500 |   | 8,262,410  |  
| | Share purchase warrants issue costs (note 8 (c) (i,) & (ii)) | -          |   | (534,055   | )
| | Fair value of agent warrants (note 8 (c) (ii))               | 428,250    |   | 631,310    |  
| | Fair value of additional agent warrants                      | 89,767     |   | 105,380    |  
| | Fair value of special warrants (note 7)                      | 180,000    |   | 47,582     |  
| | Fair value of share purchase warrants exercised              | (6,324,497 | ) | (1,974,924 | )
| |                                                             
| |                                                             
| | Balance  December 31, 2007                                  | 33,033,816 |   | 17,199,279 |  

(13)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|8 | Share capital(continued)
|- | ------------------------
| 
|  | e)                      
| 
|  |                         
| 

| |                     |            |   | 2007     |            |   | 2006    
| | ------------------- | ---------- | - | -------- | ---------- | - | --------
| |                    
| |                     |            |   | Weighted |            |   | Weighted
| |                     |            |   | average  |            |   | average 
| |                     | Number of  |   | exercise | Number of  |   | exercise
| |                     | warrants   |   | price    | warrants   |   | price   
| |                     |            |   | $        |            |   | $       
| |                    
| | Balance - Beginning |            |   |          |            |   |         
| | of year             | 22,920,546 |   | 1.10     | 13,078,403 |   | 0.86    
| |                    
| | Issued              | 16,437,767 |   | 2.51     | 13,934,784 |   | 1.22    
| | Exercised           | (6,324,497 | ) | 0.79     | (4,092,641 | ) | 0.75    
| | Expired             | -          |   | -        | -          |   | -       
| |                    
| | Balance - End       |            |   |          |            |   |         
| | of year             | 33,033,816 |   | 1.86     | 22,920,546 |   | 1.10    

The following table summarizes information about share purchase warrants outstanding at December 31, 2007:

| |              | Number of   |             |               
| | ------------ | ----------- | ----------- | --------------
| |              | warrants    | Weighted    |               
| |              | outstanding | average     | Weighted      
| | Range of     | and         | contractual | average       
| | prices       | exercisable | life        | exercise price
| | $            |             | (years)     | $             
| |             
| | 0.90 to 0.99 | 347,916     | 3.28        | 0.90          
| | 1.00 to 1.49 | 16,337,900  | 2.57        | 1.21          
| | 1.50 to 2.50 | 16,168,000  | 4.73        | 2.49          
| | US 5.555     | 180,000     | 2.28        | US 5.555      
| |             
| |              | 33,033,816  | 3.63        | 1.86          

(14)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|8 | Share capital(continued)
|- | ------------------------
| 
|  | f)                      
| 
|  |                         
| 

| |                     |            |   | 2007     |            |   | 2006    
| | ------------------- | ---------- | - | -------- | ---------- | - | --------
| |                    
| |                     |            |   | Weighted |            |   | Weighted
| |                     |            |   | average  |            |   | average 
| |                     | Number of  |   | exercise | Number of  |   | exercise
| |                     | options    |   | price    | options    |   | price   
| |                     |            |   | $        |            |   | $       
| |                    
| | Balance - Beginning |            |   |          |            |   |         
| | of year             | 9,940,000  |   | 0.83     | 6,525,000  |   | 0.35    
| |                    
| | Granted             | 1,750,000  |   | 1.62     | 5,445,000  |   | 1.23    
| | Exercised           | (2,275,000 | ) | 0.37     | (1,955,000 | ) | 0.35    
| | Cancelled           | (50,000    | ) | 1.33     | (75,000    | ) | 1.21    
| |                    
| | Balance  End       |            |   |          |            |   |         
| | of year             | 9,365,000  |   | 1.08     | 9,940,000  |   | 0.83    

The following table summarizes information about stock options outstanding and exercisable at December 31, 2007:

| |              |             | Weighted | Weighted |             | Weighted
| | ------------ | ----------- | -------- | -------- | ----------- | --------
| |              | Number of   | average  | average  | Number of   | average 
| | Range of     | outstanding | years to | exercise | exercisable | exercise
| | prices       | options     | expiry   | price    | options     | price   
| | $            |             |          | $        | $           | $       
| |             
| | 0.22 to 0.49 | 2,365,000   | 2.25     | 0.35     | 2,365,000   | 0.35    
| | 0.50 to 0.99 | 700,000     | 3.13     | 0.78     | 700,000     | 0.78    
| | 1.00 to 1.49 | 5,450,000   | 3.73     | 1.32     | 5,150,000   | 1.33    
| | 1.50 to 1.99 | 850,000     | 4.27     | 1.88     | 379,167     | 1.72    
| |             
| |              | 9,365,000   | 3.17     | 1.08     | 8,594,167   | 1.14    

During the year, the Company adopted a new stock option plan (the plan) whereby the Company may grant stock options up to a maximum of ten percent of the number of issued shares of the Company. At December 31, 2007, the Company has reserved 11,194,749 common shares under the plan (2006 10,788,402).

(15)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and2006                 
|                                          
|(expressed in Canadian dollars)           

|8 | Share capital(continued)
|- | ------------------------
| 
|  | f)                      
| 
|  |                         
| 
|  |                         
| 
|  |                         
| 

| |                                              |   | 2007      |  |   | 2006      | 
| | -------------------------------------------- | - | --------- |  | - | --------- | 
| |                                              |   | $         |  |   | $         | 
| |                                             
| |                                             
| | Risk-free interest rate                      |   | 4.21%     |  |   | 4.15%     | 
| | Dividend yield                               |   | 0%        |  |   | 0%        | 
| | Expected volatility                          |   | 88%       |  |   | 89%       | 
| | Expected stock option life                   |   | 3.2 years |  |   | 3.5 years | 
| | Weighted average fair value of stock options |   |           |  |   |           | 
| | granted                                      | $ | 0.96      |  | $ | 0.80      | 

| | g) | Contributed surplus    
| | -- | -----------------------
| |    |                        
| |    | Details are as follows:
|

| |  |                                                       | $          |  
| |  | ----------------------------------------------------- | ---------- | -
| |  | Balance - December 31, 2005                           | 2,739,721  |  
| |  | Fair value of options re-priced                       | 1,100,000  |  
| |  | Fair value of options granted (note 8(f))             | 4,140,826  |  
| |  | Fair value of 1,955,000 options exercised (note 8(b)) | (1,007,982 | )
| |  | Balance - December 31, 2006                           | 6,972,565  |  
| |  | Fair value of options granted (note 8(f))             | 1,402,652  |  
| |  | Fair value of options exercised (note 8(b))           | (1,631,085 | )
| |  | Balance  December 31, 2007                           | 6,744,132  |  

(16)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007and 2006                 
|                                          
|(expressed in Canadian dollars)           

|9 | Related party transactions
|- | --------------------------
| 
|  | a)                        
| 

| |                                     | 2007    | 2006   
| | ----------------------------------- | ------- | -------
| |                                     | $       | $      
| |                                    
| | Management fees  exploration       | 339,130 | 544,107
| | Management fees - administration    | 150,000 | 165,000
| | Management fees  development costs | 328,750 | -      
| |                                     | 817,880 | 709,107

The above transactions, occurring in the normal course of operations, are measured at the exchange amount, which is the fair value consideration established and agreed to by the related parties.

|10 | Income taxes
|-- | ------------
|  
|   | a)          
|  

| |                                       | 2007       |   | 2006       |  
| | ------------------------------------- | ---------- | - | ---------- | -
| |                                       | $          |   | $          |  
| |                                      
| |                                      
| | Accounting loss for the year          | 11,111,351 |   | 23,222,789 |  
| | Statutory rate                        | 31.50%     |   | 34.10%     |  
| |                                      
| | Expected recovery                     | 3,500,076  |   | 7,918,971  |  
| |                                      
| | Stocked-based compensation            | (377,196   | ) | (1,787,122 | )
| | Tax deductible prior year exploration | 2,290,634  |   | -          |  
| | Non-deductible expenses               | (36,403    | ) | (61,369    | )
| | Foreign tax rate differential         | (465,041   | ) | (904,376   | )
| | Foreign exchange and other            | (1,453,814 | ) | 81,470     |  
| |                                      
| |                                       | 3,685,182  |   | 5,247,574  |  
| | Current valuation allowance           | (3,685,182 | ) | (5,247,574 | )
| |                                      
| |                                       | -          |   | -          |  

(17)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007and 2006                 
|                                          
|(expressed in Canadian dollars)           

|10 | Income taxes(continued)
|-- | -----------------------
|  
|   | b)                     
|  

| |                                 | 2007        |   | 2006       |  
| | ------------------------------- | ----------- | - | ---------- | -
| |                                 | $           |   | $          |  
| |                                
| | Non-capital loss carry-forwards | 12,152,517  |   | 8,286,692  |  
| | Property, plant and equipment   | 114,479     |   | 13,216     |  
| | Share issuance costs            | 713,557     |   | 619,116    |  
| |                                
| |                                 | 12,980,553  |   | 8,919,024  |  
| | Valuation allowance             | (12,980,553 | ) | (8,919,024 | )
| |                                
| | Future income tax asset         | -           |   | -          |  

| | c) | As at December 31, 2007 the Company has incurred non-capital losses for income tax purposes in Canada and Mexico of approximately $42,444,000, which may be used to reduce future taxable income. The income tax benefits, if any, of these losses have not been recorded in these financial statements because of uncertainty of their recovery. These losses will expire as follows:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|

| |            | $          | 
| | ---------- | ---------- | 
| |            |           
| | 2008       | 213,000    | 
| | 2009       | 62,000     | 
| | 2010       | -          | 
| | 2011       | 189,000    | 
| | Thereafter | 41,980,000 | 
| |            |           
| |            | 42,444,000 | 

(18)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007and 2006                 
|                                          
|(expressed in Canadian dollars)           

|11 | Segmented information
|-- | ---------------------

The Companys only business activity is exploration and development of mineral properties. This activity is carried out in Mexico.

The breakdown by geographic area for the year ended December 31, 2007 is as follows:

| |                | Canada     | Mexico     | Consolidated
| | -------------- | ---------- | ---------- | ------------
| |                | $          | $          | $           
| |               
| | Capital assets | 783,662    | 19,775,368 | 20,559,030  
| | Current assets | 32,513,882 | 1,919,816  | 34,433,638  
| | Total assets   | 33,297,484 | 21,375,184 | 54,672,668  

The breakdown by geographic region for the year ended Dec. 31, 2006 is as follows:

| |                | Canada    | Mexico    | Consolidated
| | -------------- | --------- | --------- | ------------
| |                | $         | $         | $           
| |               
| |               
| | Capital assets | 149,427   | 1,072,400 | 1,221,827   
| | Current assets | 9,294,793 | 1,905,192 | 11,199,985  
| | Total assets   | 9,444,220 | 2,977,592 | 12,421,812  

No revenues were earned in either of the geographic areas.

|12 | Foreign financial instruments
|-- | -----------------------------

As at December 31, 2007, the Company has the following foreign denominated financial instruments, which are recorded at the Canadian dollar amount and are subject to foreign exchange risk:

| |                                                | Foreign   | Canadian
| | ---------------------------------------------- | --------- | --------
| |                                                | currency  | dollar  
| |                                                | amount    | amount  
| |                                                | $         | $       
| |                                               
| | Cash in United States dollars                  | 771,991   | 762,804 
| | Cash in Mexican pesos                          | 1,001,796 | 90,653  
| | Value added taxes recoverable in Mexican pesos | 2,155,500 | 195,051 
| | Accounts payable in United States dollars      | 516,340   | 514,340 
| | Accounts payable in Mexican Pesos              | 3,126,273 | 284,803 
| | Accounts payable in Euros                      | 68,635    | 102,533 
| | Accounts payable in Australian dollars         | 228,470   | 198,084 

(19)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007and 2006                 
|                                          
|(expressed in Canadian dollars)           

|12 | Foreign financial instruments(continued)
|-- | ----------------------------------------

As at December 31, 2006, the Company has the following foreign denominated financial instruments, which are recorded at the Canadian dollar amount and are subject to foreign exchange risk:

| |                                                | Foreign   | Canadian 
| | ---------------------------------------------- | --------- | ---------
| |                                                | currency  | dollar   
| |                                                | amount    | amount   
| |                                                | $         | $        
| |                                               
| | Cash in United States dollars                  | 1,051,211 | 1,225,081
| | Cash in Mexican pesos                          | 947,019   | 102,183  
| | Value added taxes recoverable in Mexican pesos | 3,843,919 | 414,759  
| | Accounts payable in United States dollars      | 780,963   | 910,135  
| | Accounts payable in Mexican Pesos              | 343,981   | 37,116   

|13 | Commitments
|-- | -----------

|a) | The Company has entered into numerous contracts regarding development of the Boleo project. Total contractual obligations entered at December 31, 2007 are estimated to be $27.1 million. The amounts paid or accrued on those contracts was $7.6 million, for a remaining commitment of $19.5 million.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b) | The Company has a number of management and consulting agreements. The future commitments under these contracts as at December 31, 2007 amount to:                                                                                                                                                      
|  

| |      | $         | 
| | ---- | --------- | 
| | 2008 | 779,000   | 
| | 2009 | 586,000   | 
| | 2010 | 295,000   | 
| |      | 1,660,000 | 

(20)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|13 | Commitments(continued)
|-- | ----------------------
|  
|   | c)                    
|  

| |      | $       | 
| | ---- | ------- | 
| |      |        
| | 2008 | 104,000 | 
| | 2009 | 104,000 | 
| | 2010 | 77,000  | 
| |      |        
| |      | 285,000 | 

|14 | Supplemental cash flow information
|-- | ----------------------------------

The following are the non-cash investing and financing activities of the Company:

| |                                          | 2007    | 2006     
| | ---------------------------------------- | ------- | ---------
| |                                          | $       | $        
| |                                         
| | Fair value of warrants issued as share   |         |          
| | capital issuance expense                 | 666,785 | 1,003,618
| | Fair value of warrants issued as share   |         |          
| | purchase warrants issuance expense       | 69,905  | 305,334  
| | Fair value of special warrants issued    | 47,582  | -        
| | Increase in accounts payable and accrued |         |          
| | liabilities related to mineral property  |         |          
| | and deferred development costs           | 874,660 | -        
| | Special warrant accretion included in    |         |          
| | mineral property and deferred            |         |          
| | development costs                        | 60,287  | -        
| | Stock-based compensation included in     |         |          
| | mineral property and deferred            |         |          
| | development costs                        | 205,203 | -        

Other supplemental information:

| |                   | 2007    | 2006   
| | ----------------- | ------- | -------
| |                   | $       | $      
| |                  
| | Interest received | 410,746 | 243,590
| | Interest paid     | -       | -      

(21)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|15 | United States generally accepted accounting principles (GAAP)
|-- | ---------------------------------------------------------------

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada. These financial statements also comply, in all material aspects, with accounting principles generally accepted in the United States.

| | a) | Recent United States accounting pronouncements
| | -- | ----------------------------------------------

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157). SFAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of this statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. SFAS 157 has been partially deferred, but some items are effective for fiscal years beginning after November 15, 2007. Earlier adoption is permitted, provided the Company has not yet issued financial statements, including for interim periods, for that fiscal year. We intend to adopt this standard effective January 1, 2008 and we do not expect the adoption of this standard to have a material impact on our consolidated US GAAP financial statement disclosure.

In February, 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We are currently assessing the impact of SFAS No. 159 on our consolidated financial position and results of operations under US GAAP.

|16 | Significant events
|-- | ------------------

|a) | On September 12, 2007 the Company entered into an underwritten commitment with Bayerische Hypo- und Vereinsbank AG, a member of the UniCredit Group (UniCredit) as Mandated Lead Arranger to arrange and underwrite a limited-recourse term loan facility in an aggregate principal amount of up to US$475 million (the Term Loan Facility), as well as a cost overrun loan facility in an aggregate principal amount of US$40 million (the Cost Overrun Facility and together with the Term Loan Facility, the Facilities) to the Company. UniCredit will be the sole arranger and underwriter of the Facilities.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The senior financing  commitment has received all necessary credit approvals,  subject to finalization of the capital cost  update and other standard terms and conditions precedent agreed to by the  Company and UniCredit.                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | The proceeds of the Facilities will be used to partly finance the development, construction and working capital costs of the El Boleo project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  

(22)

---

|Baja Mining Corp.                         
|------------------------------------------
|Notes to Consolidated Financial Statements
|December 31, 2007 and 2006                
|                                          
|(expressed in Canadian dollars)           

|16 | Significant events(continued)
|-- | -----------------------------

|b) | On November 13, 2007 the Company entered into an agreement with Caterpillar Financial SARL (Cat Financial (Zurich)), of Zurich, Switzerland, to act as Arranger and Provider in relation to an Equipment Lease Facility (the Facility) in an aggregate principal amount of up to US$64 million.                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The proceeds of the Facility will be used for the financing of mobile (underground and surface) equipment in connection with the El Boleo project (Boleo) located near Santa Rosalia, Baja California Sur, Mexico. The Facility has a final maturity date of 7 years from initial drawdown. The Agreement is subject to the satisfaction of various conditions precedent. The Company will act as guarantor of the transaction.
|  

|17 | Subsequent event
|-- | ----------------

Subsequent to year-end, the Company granted 300,000 stock options to new consultants and employees of the Company at exercise prices ranging from $1.64 to $1.77 per share, for a period of five years from the date of grant.

(23)

---