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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**Washington, D.C. 20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended **MAY 31, 2006**

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT

For the transition period from __________ to __________

Commission file number: **333-127016**

THE CAVALIER GROUP(Exact
name of small business issuer in its charter)

|Wyoming                                          | 98-0463119                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|5728 - 125A Street,                              |                                     
|Surrey, British Columbia                         | V3X 3G8                             
|(Address of principal executive offices)         | (Zip Code)                          

Issuers telephone number: **(604)
597-0028**

Securities Registered Under Section 12(b) of the Exchange Act:
**None**

Securities Registered Under Section 12(g) of the Exchange
Act:**Common Stock, $0.001 par value**(Title of
class)

Check whether the Issuer (1) has 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 disclosure of delinquent filers in response to Item 405
  of Regulation S-B is not 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. [   ]

Check if the registrant is an accelerated filer (as defined in
  Rule 12b-2 of the Act). Yes [   ] No [X]

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

Issuer's revenues for its most recent fiscal year: $0.

The aggregate market value of the voting and non-voting common
  equity held by non-affiliates computed by reference to the price at which the
  common equity was sold, or the average bid and asked price of such

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common equity, as of the last business day of the registrants
  most recently completed fiscal quarter: 6,400,000 common shares at $0.05* =
  $320,000. (* - last price at which the Corporation offered stock for sale under
  its SB-2 registration statement).

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the Issuer's
  classes of common stock, as of the latest practicable date. 6,400,000 common
  shares issued and outstanding as of February 15, 2007.

DOCUMENTS INCORPORATED BY REFERENCE

The following Exhibits are filed as part of this report pursuant
  to Item 601 of Regulation K. All Exhibits have been previously filed unless
  otherwise noted.

Exhibit No.
    Document Description3.1 *
    Articles of Incorporation3.2 *
    Bylaws of The Cavalier Group10.1 *
    Option To Purchase And Royalty Agreement10.2
    Code of Business Conduct and Ethics


* Incorporated by reference to SB-2 Registration Statement
filed on January 18, 2006.

Description of Exhibits Incorporated by Reference

Exhibit 3.1 * Articles of Incorporation of The
Cavalier Group dated February 11, 2005.

Exhibit 3.2 *Bylaws of The Cavalier Group dated
February 25, 2005.

Exhibit 10.1 *Option To Purchase And Royalty
Agreement between The Cavalier Group and Larry Gervais of Timmins, Ontario,
dated April 25, 2005 to acquire a 100% interest in the Casa Claim Block,
Porcupine Mining Division, Ontario.

Exhibit 10.2Code of Business Conduct and Ethics.

* Incorporated by reference to SB-2 Registration Statement
filed on January 18, 2006

Transitional Small Business Disclosure Format (Check one): Yes
  [   ] No [X]

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PART I

Item 1. Description of Business.

Cautionary Statement Regarding Forward-Looking
Statements

This annual report contains forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of 1995. These
statements relate to future events or our future financial performance. Some
discussions in this report may contain forward-looking statements that involve
risk and uncertainty.

A number of important factors could cause our actual results to
differ materially from those expressed in any forward-looking statements made in
this report. Forward-looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar
expressions or words which, by their nature, refer to future events.

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In some cases, you can also identify forward-looking statements
by terminology such as may, will, should, plans, predicts, potential
or continue or the negative of these terms or other comparable terminology.
These statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
"Risk Factors" on page 12, that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or achievements. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles. References to CA$ refer to Canadian Dollars and
references to common shares refer to common shares in our capital stock.

As used in this annual report, the terms "we", "us", "our", and
"Cavalier" mean The Cavalier Group unless otherwise indicated.

Cavalier is an exploration stage Corporation. There is no
assurance that commercially viable mineral deposits exist on the claims we have
under option. Further exploration and/or drilling will be required before a
final evaluation as to the economic and legal feasibility of our projects is
determined.

Glossary of Exploration Terms

The following terms, when used in this report, have the
respective meanings specified below:

|Diamond drill  | A type of rotary drill in which the cutting is done by
      abrasion rather than percussion. The cutting bit is set with diamonds and
      attached to the end of the long hollow rods through which water is pumped
      to the cutting face. The drill cuts a core of rock, which is recovered in
      long cylindrical sections an inch or more in diameter.
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exploration    | The prospecting, trenching, mapping, sampling,
      geochemistry, geophysics, diamond drilling and other work involved in
      searching for mineral bodies.                                                                                                                                                                                                     
|Mineral        | A naturally occurring inorganic element or compound
      having an orderly internal structure, characteristic chemical composition,
      crystal form and physical properties.                                                                                                                                                                                   
|Mineralization | Rock containing an undetermined amount of minerals or
      metals.                                                                                                                                                                                                                                                                                                

Business Development During Last Three Years

Overview

We were incorporated as The Cavalier Group, in the state of
Wyoming on February 11, 2005. Since our incorporation, we have been in the
business of the exploration and development of a mineral property approximately
1,320 acres in size in north-eastern, Ontario. Our property is without known
reserves and our program is exploratory in nature. To date we have spent $0 on
research and development activities.

We have not been involved in any bankruptcy, receivership or
similar proceeding nor has there been any material reclassification or merger,
consolidation or purchase or sale of a significant amount of assets not in the
ordinary course of business

Our Current Business

We were incorporated as The Cavalier Group, in the State of
Wyoming on February 11, 2005 and established a fiscal year end of May 31. We are
a start-up, exploration stage Corporation engaged in the

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search for gold and related minerals; we have not yet generated
or realized any revenues from our business operations. Our statutory registered
agent's office is located at 1620 Central Avenue, Suite 202, Cheyenne, Wyoming
82001 and our business office is located at 5728 - 125A Street, Surrey, British
Columbia, Canada V3X 3G8. The telephone number of our office is (604) 597-0028.

Our office facilities are currently provided to us by Gerald W.
Williams, our director and senior officer, without charge, but such arrangement
may be cancelled at anytime without notice. As our business activities continue,
we anticipate that we will be required to pay a pro rata share of the rent
incurred for the facilities that we occupy. Specific direct expenses incurred
such as telephone and secretarial services are charged back to Cavalier at cost
on a monthly basis.

Mineral Exploration

On April 25, 2005, we optioned a property containing four claim
blocks in Ontario, Canada by entering into an Option To Purchase And Royalty
Agreement with Larry Gervais, the beneficial owner of the claims, an arms-length
Ontario resident, to acquire the claims by making certain expenditures and
carrying out certain exploration work on the claims.

Under the terms of the agreement, Gervais granted to Cavalier
the sole and exclusive right to acquire 100 percent of the right, title and
interest of Gervais in the Casa claims, subject to his receiving annual payments
and a royalty, in accordance with the terms of the agreement, as follows:

| | 1. | Cavalier must incur exploration expenditures on the
      claims of a minimum of $40,000, by October 31, 2006;                                                                      
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Cavalier must incur exploration expenditures on the
      claims of a further $80,000, for an aggregate minimum exploration expense
      of $120,000, by October 31, 2007; and     
| | 3. | Upon exercise of the option, Cavalier is required to pay
      to Gervais, commencing January 1, 2009, the sum of $40,000 per annum, as
      prepayment of the net smelter royalty.

If the results of phase I are unfavourable, we will terminate
the option agreement and will not be obligated to make any subsequent payments.
Similarly, if the results of phase II are unfavourable, we will terminate the
option and will not be obligated to make any subsequent payments.

To date we have not performed any work on the claims nor have
we spent any money on research and development activities. Information about the
claims was presented to Mr. Williams for review without any contractual
obligations.

The claims are unencumbered and there are no competitive
conditions which affect the claims. Further, there is no insurance covering the
claims. We believe that no insurance is necessary since the claims are
unimproved and contain no buildings or improvements.

Item 2. Description of Property

The Casa claims were originally staked in 2004 by Mr. Gervais
who holds the mining rights to the claims which thereby gives him or his
designated agent, the rights to mine and recover all of the minerals contained
within the surface boundaries of the lease continued vertically downward.

The names, tenure numbers, date of recording and expiration
date of the claims are as follows:

Claim Name
    Tenure
    Recording Date
    Expiry Date
    SizeNumber
    
    
    (acres)Casa 1
    P 3012728
    February 02, 2004
    February 02, 2007
    40Casa 2
    P 3012010
    May 26, 2004
    May 26, 2007
    40Casa 3
    P 3019152
    December 07, 2004
    December 07, 2007
    640Casa 4
    P 3019153
    December 07, 2004
    December 07, 2007
    600


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The claims were selected for acquisition due to their cost,
previously recorded surrounding exploration, development and extraction work and
because the claims are not located in an environmentally sensitive region. The
claims are located approximately 18 miles north of the Eades railway station
north of Lake Abitibi which is 100 miles east of Cochrane, Ontario. Access is
via muskeg tractor road and a gravel road (Road #643) that extends north to the
west boundary of the property.

The area is part of the Casa Berardi Berntbush portion of the
Abitibi Greenstone Belt. The rocks in the claim area are ancient in nature,
generally associated with the oldest Precambrian era and are mainly comprised of
iron rock forming silicas. The claim block is situated in a regional iron
formation and, therefore, a favourable base metal and precious metal host rock
series may exist on the property. These factors merely indicate the possibility
of gold being found on the Casa claim group. However, until exploration work is
completed it should be assumed that there is no gold on the property.

The principle exploration effort in the past 25 years has been
base metal exploration using electromagnetic methods for outlining conductors.
Gold analysis was not routinely done during these base metal programs, and, as a
result, the gold potential for the area was not assessed. The claims present
additional challenges for exploration as the area is covered by significant
deposits of overburden and there are no significant outcroppings. Therefore, the
property has not been subject to previous gold exploration activities.

Our Current and Proposed Exploration Program  Plan of
Operation

Our business plan is to proceed with the initial exploration of
the Casa claims to determine if there are commercially exploitable deposits of
gold and silver. Mr. R. S. Middleton, P. Eng., authored the Report On The Casa
Claims Group Property, dated May 19, 2005, in which he recommended a two-phase
exploration program to properly evaluate the potential of the claims. We must
conduct exploration to determine if gold exists on our properties and if any
gold which is found can be economically extracted and profitably processed.

Mr. Middleton is a registered Professional Engineer in good
standing in the Association of Professional Engineers of Ontario and the
Geological Association of Canada. He is a graduate of the Michigan Technological
University, (B.S., 1968 and M.S., 1969). He has practiced his profession as an
exploration geologist for more than 35 years.

We do not claim to have any ores or reserves whatsoever at this
time on our optioned claims.

We anticipate that phase I of the recommended geological
exploration program will cost $40,000 based on the report and is a reflection of
local costs for the specified type of work. We had $4,839 in cash reserves as of
May 31, 2006. Accordingly, we will not be able to proceed with the exploration
program without additional financing.

The laying out of a grid and line cutting involves the physical
cutting of the underbrush and overlay to establish an actual grid on the ground
whereby items can be related one to another more easily and with greater
accuracy. When we map, we essentially generate a drawing of the physical
features of the land we are interested in as well as a depiction of what may
have been found in relation to the boundaries of the property. So we will
actually draw a scale map of the area and make notes on it as to the location
where anything was found that was of interest or not.

Geophysical surveying involves the measurement of various
physical properties of the rocks at the site as well as interpreting that
information in terms of the structure and nature of the rock. The geologist will
take different surface and airborne measurements of the various physical
properties of the rocks and interpret the results in terms of what we are
seeking. These methods include magnetic, electrical and seismic measurements.
Our engineers will then interpret all the data obtained, plot it on the map they
have generated and provide their best estimate of the chances of finding gold
and what additional efforts we must undertake in a follow-up phase.

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Previously run magnetometer and VLF-EM, very low frequency
electromagnetic surveys, will be used as an aid to mapping and structural
interpretation and may assist in locating gold and serve to assist in the
delineation of the various physical properties of the rock which can be used as
pointers towards whether gold may be present or not. Anomalies will be evaluated
closely and diamond drilled to help in determining their economic potential.

We plan for approximately 1,000 feet of diamond drilling in the
first phase which is an essential component of exploration and aids in the
delineation and definition of any deposits. The geophysical work gives a general
understanding of the location and extent of the mineralization at depths that
are unreachable by surface excavations and provides a target for more extensive
trenching and core drilling.

Phase 1 will begin by establishing a base line grid with
25-meter stations and cross lines run every 50 meters for 100 meters each side
of the baseline. We will then relate previous ground and airborne
electromagnetic surveys over the grid followed by approximately 1,000 feet of
diamond drilling over selected target areas based on the results of previous
exploration which will be coordinated with the results of the EM surveys.
Diamond drilled samples will be tested for traces of gold, silver, lead, copper,
zinc, iron and other metals; however, our primary focus is the search for gold
and silver. We will then compare the relative concentrations of gold, silver,
lead and other indicator metals in samples so the results from different samples
can be compared in a more precise manner and plotted on a map to evaluate their
significance. We expect the costs of the geophysical work and diamond drilling
to total approximately $40,000.

These surveys and drilling may require up to three weeks for
the base work and an additional three months for analysis, evaluation of the
results of the work and the preparation of a report on the work accomplished and
will bear an estimated total cost of $40,000 based on Mr. Middletons report
which is a reflection of local costs for the specified type of work. This cost
is made up of wages and fees, grid materials (pickets, paint, flagging etc.),
diamond drilling, geological and geochemical supplies, assaying, camp equipment
and operation costs. It is our intention to carry the work out in 2006,
predicated on completion of the offering described in this document.

Phase II will not be carried out until 2007 and will be
contingent upon favourable results from phase I and any specific recommendations
of Mr. Middleton. It will be directed towards an expansion of the diamond
drilling. The second phase may require up to three weeks work and will cost
approximately $80,000 comprised of wages, fees, camp, diamond drilling, assays
and related. The cost estimate is also based on the report and is a reflection
of local costs for the specified type of work. A further three months may be
required for analysis and the preparation of a report and evaluation of the work
accomplished.

There is no power available on the property or within a
reasonable distance from the property. All contract work will involve bringing
to the site portable power generation units.

Although it may appear that phase II merely continues phase I,
such is not entirely the case. The work is phased in such a manner as to allow
decision points to ensure that future work has a value and will provide better
or additional information as to the viability of the claims. By utilizing a
multi-phase work program, at the end of each phase a decision can be made as to
whether the phase has provided the necessary information to increase the
viability of the project. If the information obtained as a result of any phase
indicates that there is no increased probability of finding an economically
viable deposit at the end of the project, a determination would be made that the
work should cease at that point. This is a standard procedure in the industry
prior to the commitment of additional funding to move a project forward to the
next phase of exploration and/or development.

Employees

Initially, we intend to use the services of subcontractors for
manual labour exploration work on our claims and an engineer or geologist to
manage the exploration program. Our only employees will be Gerald W. Williams,
our senior officer and a director and Mr. Roy D. West, a director.

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7

At present, we have no employees, other than Mr. Williams and
Mr. West. Neither has an employment agreement with us. We presently do not have
pension, health, annuity, insurance, stock options, profit sharing or similar
benefit plans; however, we may adopt such plans in the future. There are
presently no personal benefits available to any employee.

We intend to hire geologists, engineers and excavation
subcontractors on an as needed basis. We have not entered into negotiations or
contracts with any of them although it is our intention to retain Mr. Middleton
as senior geological consultant. We do not intend to initiate negotiations or
hire anyone until we receive proceeds from our offering.

Neither Mr. Williams or Mr. West will be compensated for their
services on the Board of Directors. Mr. West will assist with the field work in
the exploration of our optioned claim and will be paid for the specific services
rendered on the same industry standard as other persons working on the project
and which will be a reflection of local costs for the specified type of work.
If, as and when a public market for Cavaliers shares is established an
incentive stock option plan may be established under which both Messrs. Williams
and West would receive stock options.

Item 3. Legal Proceedings

We know of no material, active or pending legal proceedings
against our Corporation, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which our
director, officer or affiliates, or any registered or beneficial shareholder, is
an adverse party or has a material interest adverse to our interest.

Item 4. Submissions of Matters to a Vote of Security Holders

Within the current fiscal year, no matters have been submitted
  to a vote of security holders.

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PART II

Item 5. Market for Common Equity and Related Stockholder
Matters

Overview

Sequent to the end of the year under review, we engaged a
market maker to assist in the filing of a Form 211 in an effort to have the
common shares of The Cavalier Group quoted on the NASD Over-The-Counter Bulletin
Board. There is currently no public market for Altons common shares.

Our common shares are issued in registered form. Pacific Stock
Transfer Corporation is the registrar and transfer agent for our common shares
and is located at 500 East Warms Springs Road, Las Vegas, Nevada 89119
(Telephone: (702) 361-3033; Facsimile: (702) 433-1979).

On February 15, 2007 the shareholders' list of our common
shares showed 9 registered shareholders holding 6,400,000 shares; there are no
shares held by broker-dealers. There are 6,400,000 shares outstanding.

Subsequent to year end, we have completed our SB-2 registration
statement offering. As of the date of this report, we have received
approximately $54,500 in gross proceeds and will be issuing approximately
1,090,000 shares prior to the end of August, 2006 to 39 new stockholders.

We have not declared any dividends since incorporation and do
not anticipate that we will do so in the foreseeable future. Although there are
no restrictions that limit the ability to pay dividends on our common shares,
our intention is to retain future earnings for use in our operations and the
expansion of our business.

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8

Equity Compensation Plan Information

No stock options or have been issued and there are no
outstanding stock options and Cavalier does not have any stock option plans
under consideration.

Recent Sales of Unregistered Securities

In connection with the early development of Cavalier, we issued
a total of 6,400,000 shares of our common stock. We issued 4,000,000 shares to
our founder and president, Gerald W. Williams under Section 4(2) of the Act in
February, 2005 and issued 2,400,000 shares to 8 individuals pursuant to Rule 903
of Regulation S of the Securities Act of 1933, as amended, in April, 2005. None
of the above are deemed to be accredited investors and each was in possession of
all material information relating to Cavalier. Further, no commissions were paid
to anyone in connection with the sale of the shares and no general solicitation
was made to anyone.

Changes in Securities

The Corporation had 6,400,000 shares of common stock issued and
outstanding as of May 31, 2006. Of these shares, approximately 4,000,000 shares
are held by an affiliate of the Corporation. A certain number of those shares
can be resold in compliance with the limitations of Rule 144.

In general, under Rule 144, a person who has beneficially owned
shares privately acquired directly or indirectly from us or from one of our
affiliates, for at least one year, or who is an affiliate, is entitled to sell,
within any three-month period, a number of shares that do not exceed the greater
of 1% of the then outstanding shares or the average weekly trading volume in our
shares during the four calendar weeks immediately preceding such sale. Sales
under Rule 144 are also subject to certain manner of sale provisions, notice
requirements and the availability of current public information about us. A
person who is not deemed to have been an affiliate at any time during the 90
days preceding the sale, and who has beneficially owned restricted shares for at
least two years, is entitled to sell all such shares under Rule 144 without
regard to the volume limits, current public information requirements, manner of
sale provisions or notice requirements.

Item 6. Management's Discussion and Analysis or Plan of
Operation

THE FOLLOWING ANALYSIS OF THE RESULTS OF OPERATIONS AND
FINANCIAL CONDITION OF THE CORPORATION FOR THE PERIOD ENDING MAY 31, 2006 SHOULD
BE READ IN CONJUNCTION WITH THE CORPORATIONS FINANCIAL STATEMENTS, INCLUDING
THE NOTES THERETO CONTAINED ELSEWHERE IN THIS FORM 10-KSB

Our consolidated financial statements are stated in United
States Dollars and are prepared in accordance with United States Generally
Accepted Accounting Principles.

Overview

We were incorporated as The Cavalier Group in the state of
Wyoming on February 11, 2005. Since our incorporation, we have been in the
business of the exploration and development of a mineral property. Our optioned
mining property consists of four mineral claims covering an area of
approximately 427 acres. To the date of this report, we have spent $0 on
research and development and $0 on exploration of the claim.

Comparative periods for the years ended May 31, 2006, February
11, 2005 (Inception) through May 31, 2005 and February 11, 2005 (Inception)
through May 31, 2006 are presented in the following discussion.

Results of Operations

Since our inception we have used our common stock to raise
money for our optioned mineral acquisition, corporate expenses and to repay
outstanding indebtedness. Net cash provided by financing activities from

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9

inception on February 11, 2005 to May 31, 2006 was $28,000 from
proceeds received from sales of our common stock.

We have not generated any revenues from any of our operations
for the year ended May 31, 2006 or for any prior period.

REVENUES

REVENUE: To date, we have not generated any revenues from our
mineral exploration business.

COMMON SHARES: Since inception, we have used our common stock
to raise money for our optioned acquisition and for corporate expenses. Net cash
provided by financing activities in the most recent fiscal year ended May 31,
2006 was $0. In the fiscal year ended May 31, 2005 $28,000 cash was provided by
financing activities. From inception on February 11, 2005 to May 31, 2006
$28,000 net cash was provided as a result of proceeds received from sales of our
common stock.

No other shares or warrants or options were issued in the most
recent fiscal year.

EXPENSES

SUMMARY

Expenses
    For the Year ended May 31, 2006
    Feb. 11, 2005 (Inception) thru May
      31, 2005
    Feb. 11, 2005 (Inception) thru May
      31, 2006Contributed rent
    1,200
    200
    1,400Contributed administrative support
    200
    150
    350Professional fees
    5,900
    3,000
    8,900Travel and meals
    2,884
    560
    3,444Office
    6,990
    696
    7,686Organization costs
      
    250
    250Bank Charges
    170
    150
    320Licenses, permits, filing fees
    4,295
    
    4,295TOTAL
    21,639
    5,006
    26,645


During the year ended May 31, 2006 Cavalier incurred operating
expenses of $21,639 as compared to $5,006 for the four month period last year
and a total of $26,645 for the period from inception on February 11, 2005 to May
31, 2006. The increase in the current years spending can be attributed to the
Corporation moving forward with its business plan and the finalization with the
SEC of our SB-2 registration statement. The costs incurred can be further
subdivided into the following categories.

RESEARCH AND DEVELOPMENT: Cavalier has not incurred any
expenses for research and development since inception on February 11, 2005.

CONTRIBUTED EXPENSES: $1,400 in contributed expenses (for
contributed rent and administrative costs) were incurred for the year ended May
31, 2006 while $350 was incurred in the period ended May 31, 2005. For the
period February 11, 2005 (inception) through May 31, 2006 a total of $1,750 in
contributed expenses has been reflected in the financial statements. All
contributed expenses are reported as contributed costs with a corresponding
credit to additional paid-in capital. These costs remain relatively constant
from quarter to quarter and year to year.

The Corporations president contributed office space to the
Corporation for the period presented. The office space was valued at $100 per
month based on the market rate in the local area. In addition, the president
contributed administrative services to the Corporation for the period presented.
The time and effort was recorded in the accompanying financial statements based
on the prevailing rates for such services, which

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10

equalled $50 per hour based on the level of services performed.
Each of these services are reported as contributed rent or administrative
services with a corresponding credit to additional paid-in capital.

MINERAL EXPLORATION COSTS: No such costs were incurred for the
year ended May 31, 2006 or for the period ended May 31, 2005. For the period
February 11, 2005 (inception) through May 31, 2006 $0 was recorded in exploring
our optioned projects.

PROFESSIONAL FEES: Cavalier incurred $5,900 in professional
fees for the fiscal year ended on May 31, 2006 as compared to $3,000 for the
previous fiscal year. Increased costs were incurred in the past year as the
result of the completion of the filing of an SB-2 registration statement and the
attendant legal, accounting and filing expenses as well as the formal
commencement of our operational business plan. From inception to February 11,
2005 we have incurred $8,900 in professional fees mainly spent on legal and
accounting matters.

COMPENSATION: No compensation costs were incurred for the
fiscal year ended on May 31, 2006 and none were incurred in the previous fiscal
year which ended on May 31, 2005. From inception to May 31, 2006 nothing has
been charged to the compensation account.

OFFICE EXPENSES: $6,990 in office costs were incurred in the
past year which ended on May 31, 2006. By comparison, $696 was incurred for
previous fiscal period ended May 31, 2005. For the period February 11, 2005
(inception) through May 31, 2006 a total of $7,686 has been spent on office
related expenses. Office costs increased in the most recent year as the result
of our commencement of full time business operations.

ORGANIZATIONAL COSTS: no such costs were incurred in fiscal
year under review while $250 was incurred for the period ended May 31, 2004 in
the initial organizing of Cavalier. For the period February 11, 2005 (inception)
through May 31, 2006 we have spent a total of $250 on organizational expenses.

TRAVEL COSTS: $2,884 in travel expenses were incurred in fiscal
year under review while $560 was incurred for the period ended May 31, 2005. For
the period February 11, 2005 (inception) through May 31, 2006 Cavalier has spent
a total of $3,444 on travel related costs.

LICENSES, PERMITS & FILING FEES: $4,295 in licences,
permits and other filing fees were incurred in fiscal year under review while $0
was incurred for the period ended May 31, 2005. For the period February 11, 2005
(inception) through May 31, 2006 Cavalier has spent a total of $4,295 on
licenses, permits, filing fees and related costs.

OTHER COSTS: $170 in other costs were incurred in fiscal year
under review while $150 was incurred during the period ended May 31, 2005. For
the period February 11, 2005 (inception) through May 31, 2006 Cavalier has spent
a total of $320 on other or miscellaneous expenses.

OTHER CONSIDERATIONS

NET CASH USED IN OPERATING ACTIVITIES: For the year ended May
31, 2006 $21,657 in net cash was used as compared to $1,656 in the period ended
May 31, 2005. A total of $23,313 in net cash has been used for the period from
Inception on February 11, 2005 to May 31, 2006. Again the amounts have risen
significantly in the most recent year as the result of our commencing full
operations, moving ahead with our business plan and completing our SB-2
registration statement.

INTEREST INCOME / EXPENSES: Cavalier has neither received nor
paid interest since its inception on February 11, 2005.

INCOME TAX PROVISION: As a result of operating losses, there
has been no provision for the payment of income taxes to date in 2005 - 2006 or
from the date of inception.

---

11

At the end of the fiscal year under review, May 31, 2006 and as
of the date of this report, Cavalier had 6,400,000 common shares issued and
outstanding. Approximately, 1,100,000 shares will be issued by the end of
August, 2006 in regards to the sale of shares under our SB-2 registration
statement which has now been closed.

Cavalier continues to carefully control its expenses and
overall costs as it moves forward with the development of its business plan. At
present, we have no employees, other than Messrs. Williams and West, our
officers and directors. Neither Mr. Williams nor Mr. West has an employment
agreement with us. We presently do not have pension, health, annuity, insurance,
stock options, profit sharing or similar benefit plans; however, we may adopt
such plans in the future. There are presently no personal benefits available to
any employee. We otherwise engage required personnel through outside consulting
contracts or agreements or other such arrangements, including for legal,
accounting and technical consulting.

RESULTS OF OPERATIONS: Operations have not commenced on the
Corporations optioned mineral claims in north-eastern Ontario. However, we
expect to have a crew on site during October, 2006 to do the field work
associated with the phase I part of the planned two phase exploration program.

Risks

At present we do not know whether or not the claims contain
commercially exploitable reserves of gold or any other valuable mineral.
Additionally, the proposed expenditures to be made by us in the exploration of
the claims may not result in the discovery of commercial quantities of ore.
Problems such as unusual or unexpected formations and other unanticipated
conditions are involved in mineral exploration and often result in unsuccessful
exploration efforts. In such a case, we would be unable to complete our business
plan.

As a result of the completion of our SB-2 offering, we will
have sufficient financial resources to continue operations for the coming fiscal
year and to complete the first phase of the planned two phase exploration
program but do not have the funds required to carry out the next phase of the
recommend work program. Further, in order to complete future phases of our
proposed exploration program we will need to raise additional funding. Even if
the first phase of our exploration program is deemed to be successful there is
no guarantee that we will be able to raise any additional capital in order to
finance the second phase.

Finally, even if our exploration program is successful we may
not be able to obtain commercial production. If our exploration program is
successful and commercial quantities of ore are discovered we will require a
significant amount of additional funds to place the claims into commercial
production. Should we be unable to raise the additional funds required we would
be unable to see the claims evolve into an operating mine and would have to
cease business operations.

Use of Proceeds

Net cash provided by financing activities from inception on
February 11, 2005 to May 31, 2006 was $28,000 as a result of proceeds received
from the sale of our common stock. During that same period, the following table
indicates how those proceeds have been spent to date:

Professional Fees
    $8,900Office Expenses
    7,686Organizational Costs
    250Travel Expenses
    3,444Licences, Permits & Filing Fees
    4,295Miscellaneous Expenses
    320Total Use of
      Proceeds to May 31, 2006
    $24,895


Plan of Operation

---

12

When Cavaliers SB-2 registration statement became effective,
on January 31, 2006 Cavalier became a reporting issuer under the Exchange Act
and is subject the reporting requirements of the Exchange Act.

We believe we can satisfy our cash requirements through the
fiscal year end of May 31, 2007 through current cash on hand and funds received
as the result of the completion of the Corporations SB-2 offering.

For the current fiscal year we will concentrate our efforts on
completion of the first phase of the exploration program on our optioned mineral
claim in north-eastern Ontario. We do not plan on completing phase II until the
summer of 2007 and will only commence phase II if phase I proves to be
successful.

Following industry trends and demands, we are also considering
the acquisition of other resource properties. In either situation, a new public
offering might be needed.

We do not expect any changes or more hiring of employees since
contracts will be given to consultants and sub-contractor specialists in
specific fields of expertise for the exploration work.

Liquidity and Capital Resources

As of end of the fiscal year on May 31, 2006 we have yet to
generate any revenues from our business operations.

Since inception, we have used our common stock to raise money
for our optioned mineral claim and for corporate expenses. Net cash provided by
financing activities for the fiscal year ended May 31, 2006 was $0. By
comparison for the similar period last year, we raised $28,000 as the result of
proceeds from the sale of common shares pursuant to the sale of 4,000,000 shares
of common stock through a Section 4(2) offering in February, 2005 for cash
consideration of $4,000 and for the issuance of 2,400,000 shares of common stock
through a Regulation S offering in April, 2005 for cash consideration of
$24,000. From inception on February 11, 2005 to May 31, 2006 we have been
successful in raising $28,000 as a result of proceeds received from sales of our
common stock. Subsequent to year end, we have raised approximately $54,500
through the sale of 1,090,000 shares under our Regulation SB-2 prospectus
offering which will be reflected on the financial records of the next quarter
ending August 31, 2006.

As of May 31, 2006 our total assets which consist of cash and
deferred offering costs amounted to $9,839 ($4,839 in cash and $5,000 in
deferred offering costs) and our total liabilities were $3,000. Working capital
stood at $3,257.

For the year ended May 31, 2006 our net loss was $21,639
($0.0034 per share). The loss per share was based on a weighted average of
6,400,000 common shares outstanding. For the previous fiscal year the
comparative numbers were a net loss of $5,006 and a loss per share of $0.0011
per share based on a weighted average of 4,422,018 shares outstanding. From
inception on February 11, 2005 to May 31, 2006 we have incurred a net loss of
$26,645.

Future Operations

Presently, our revenues are not sufficient to meet operating
and capital expenses. We have incurred operating losses since inception, and
this is likely to continue through fiscal 2006 - 2007. Management projects that
we may require $200,000 to fund our ongoing operating expenses and working
capital requirements for the next twelve months, broken down as follows:

Operating expenses
    $ 50,000Phase I of the exploration program
    50,000Phase II of the exploration program
    100,000Working Capital
    50,000Total
    $250,000


---

13

As at May 31, 2006 we had a working capital surplus of $3,257.
We plan to raise the additional capital required to meet the balance of our
estimated funding requirements for the next twelve months, primarily through the
completion of our SB-2 registration statement offering and the issuance of other
privately placed securities. We do not anticipate that we will be able to
satisfy any of these funding requirements internally until we significantly
increase our revenues.

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on the annual financial
statements for the year ended May 31, 2006, our independent auditors included an
explanatory paragraph regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosures
describing the circumstances that lead to this disclosure by our independent
auditors.

There is substantial doubt about our ability to continue as a
going concern as the continuation of our business is dependent upon obtaining
further financing. The issuance of additional equity securities by us could
result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

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

Application of Critical Accounting Policies

Our consolidated financial statements and accompanying notes
are prepared in accordance with generally accepted accounting principles in the
United States. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by management's application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our consolidated financial statements is critical
to an understanding of our financial statements.

Going Concern

These consolidated financial statements have been prepared on
the going concern basis which assumes that adequate sources of financing will be
obtained as required and that our assets will be realized and liabilities
settled in the ordinary course of business. These consolidated financial
statements do not include any adjustments related to the recoverability of
assets and classification of assets and liabilities that might be necessary if
we are unable to continue as a going concern.

In order to continue as a going concern, we require additional
financing. There can be no assurance that additional financing will be available
to us when needed or, if available, that it can be obtained on commercially
reasonable terms. If we are not able to continue as a going concern, we would
likely be unable to realize the carrying value of our assets reflected in the
balances set out in the preparation of the consolidated financial
statements.

Research and Development

Research costs are expensed as incurred. During the year, $0
(2005 - $0) was incurred on research and development.

Mineral Exploration, Licenses, Permits and Filing Fees

---

14

Mineral exploration costs, licenses, permits and filing fees
related to exploration matters are expensed as incurred. During the year, $4,295
(2005 - $0) was incurred on such costs.

Foreign Currency and Exchange Rates

The financial position and results of operations are determined
using local currency (the Canadian Dollar) as the functional currency. Dollar
costs of Cavaliers property acquisition and planned exploration costs are in
Canadian Dollars. For purposes of consistency and to express United States
Dollars throughout this report, Canadian Dollars have been converted into United
States currency. At May 31, 2006 the exchange rate was approximately CA $1.12 to
US $1.00.

Inflation / Currency Fluctuations

Inflation has not been a factor during the recent fiscal year
ended May 31, 2006. Inflation is moderately higher than it was during 2005 but
the actual rate of inflation is not material and is not considered a factor in
our contemplated capital expenditure program.

Item 7. Financial Statements.

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

The Report of Independent Auditor's by Cordovano & Honeck,
LLP, for the audited consolidated financial statements for the year ended May
31, 2006 is included herein immediately preceding the audited financial
statements.

---

THE CAVALIER GROUP 
  (An Exploration Stage Company) 
  Index to Financial Statements

|                                                                                 |                                                                                                                                                      | Page
|-------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                 |                                                                                                                                                      |     
|                                                                                 |                                                                                                                                                      |     
|Balance Sheet at May 31, 2006                                                    | F-3                                                                                                                                                 
|                                                                                 |                                                                                                                                                      |     
|Statements of Operations for the year ended May 31, 2006,
        for the period | F-4                                                                                                                                                 
|                                                                                 | from February 11, 2005 (inception) through May 31, 2005,
        and for 
        the period from February 11, 2005 (inception) through May 31, 2006 |     
|                                                                                 |                                                                                                                                                      |     
|Statement of Changes in Shareholders' Equity for the period
        from         | F-5                                                                                                                                                 
|                                                                                 | February 11, 2005 (inception) through May 31, 2006                                                                                                   |     
|                                                                                 |                                                                                                                                                      |     
|Statements of Cash Flows for the year ended May 31, 2006,
        for the period | F-6                                                                                                                                                 
|                                                                                 | from February 11, 2005 (inception) through May 31, 2005,
        and for 
        the period from February 11, 2005 (inception) through May 31, 2006 |     
|                                                                                 |                                                                                                                                                      |     
|Notes to Financial Statements                                                    | F-7                                                                                                                                                 

F-1

---

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders 
  The Cavalier Group:

We have audited the accompanying balance sheet of The Cavalier
  Group as of May 31, 2006 and the related statements of operations, changes in
  shareholders equity, and cash flows for the year ended May 31, 2006, from
  February 11, 2005 (inception) through May 31, 2005, and from February 11, 2005
  (inception) through May 31, 2006. These financial statements are the responsibility
  of the Companys management. Our responsibility is to express an opinion
  on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audit to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. 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 audits provide
  a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of The Cavalier Group
  as of May 31, 2006, and the results of its operations and its cash flows for
  the year ended May 31, 2006, from February 11, 2005 (inception) through May
  31, 2005, and from February 11, 2005 (inception) through May 31, 2006 in conformity
  with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As discussed in Note 1 to
  the financial statements, the Company has incurred operating losses since inception,
  which raises substantial doubt about its ability to continue as a going concern.
  Managements plan in regard to this matter is also discussed in Note 1.
  The financial statements do not include any adjustments that might result from
  the outcome of this uncertainty.

Cordovano and Honeck LLP 
  Englewood, Colorado 
  June 30, 2006

F-2

---

THE CAVALIER GROUP 
  (An Exploration Stage Company) 
  Balance Sheet 
  May 31, 2006

|Assets                                                              |  
|------------------------------------------------------------------- | -
|Current assets:                                                     |  
|Cash                                                                | $
|Deferred offering costs                                             |  
|                                                                    | $
|                                                                    |  
|Liabilities and Shareholders
      Equity                          |  
|Current liabilities:                                                |  
|Accounts payable                                                    | $
|Accrued liabilities                                                 |  
|Total current liabilities                                           |  
|                                                                    |  
|Shareholders equity (Note 2):                                      |  
|Common stock, $.001 par value; 200,000,000
      shares authorized, |  
|6,400,000
      shares issued and outstanding                       |  
|Additional paid-in capital                                          |  
|Accumulated deficit                                                 |  
|Cumulative translation adjustment                                   |  
|Total shareholders equity                                          |  
|                                                                    | $

See accompanying notes to financial statements 
  F-3

---

THE CAVALIER GROUP 
  (An Exploration Stage Company) 
  Statements of Operations

|                                                  |   |            |   |   | February 11, 2005 |   |   | February 11, 2005 |  
|------------------------------------------------- | - | ---------- | - | - | ----------------- | - | - | ----------------- | -
|                                                  |   | For The    |   |   | (Inception)       |   |   | (Inception)       |  
|                                                  |   | Year Ended |   |   | Through           |   |   | Through           |  
|                                                  |   | May 31,    |   |   | May 31,           |   |   | May 31,           |  
|Expenses:                                         |   | 2006       |   |   | 2005              |   |   | 2006              |  
|Contributed rent (Note
      2)                   | $ | 1,200      |   | $ | 200               |   | $ | 1,400             |  
|Contributed administrative support (Note
      2) |   | 200        |   |   | 150               |   |   | 350               |  
|Professional fees                                 |   | 5,900      |   |   | 3,000             |   |   | 8,900             |  
|Travel and meals                                  |   | 2,884      |   |   | 560               |   |   | 3,444             |  
|Office                                            |   | 6,990      |   |   | 696               |   |   | 7,686             |  
|Organization costs                                |   |           |   |   | 250               |   |   | 250               |  
|Bank Charges                                      |   | 170        |   |   | 150               |   |   | 320               |  
|Licenses, permits, filing fees                    |   | 4,295      |   |   |                  |   |   | 4,295             |  
|Public relations                                  |   |           |   |   |                  |   |   |                  |  
|Total expenses                                    |   | 21,639     |   |   | 5,006             |   |   | 26,645            |  
|                                                  |   |            |   |   |                   |   |   |                   |  
|Loss before
      income taxes                    |   | (21,639    | ) |   | (5,006            | ) |   | (26,645           | )
|                                                  |   |            |   |   |                   |   |   |                   |  
|Income tax provision (Note 4)                     |   |           |   |   |                  |   |   |                  |  
|                                                  |   |            |   |   |                   |   |   |                   |  
|Net loss                                          | $ | (21,639    | ) | $ | (5,006            | ) | $ | (26,645           | )
|                                                  |   |            |   |   |                   |   |   |                   |  
|Basic and diluted loss per share                  | $ | -0.00      |   | $ | -0.00             |   |   |                   |  
|                                                  |   |            |   |   |                   |   |   |                   |  
|Basic and diluted weighted average                |   |            |   |   |                   |   |   |                   |  
|common shares outstanding                         |   | 6,400,000  |   |   | 4,422,018         |   |   |                   |  

See accompanying notes to financial statements 
  F-4

---

THE CAVALIER GROUP 
  (An Exploration Stage Company) 
  Statement of Changes in Shareholders' Equity

CumulativeTranslationAdjustmentAdditional
      
      
      
      
      
      OtherCommon
        Stock
      
      
      Paid-In
      
      
      Accumulated
      
      
      ComprehensiveShares
      
      
      Par Value
      
      
      Capital
      
      
      Deficit
      
      
      Income
      
      
      TotalBalance at February 11, 2005 (inception)
      
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      February 2005, common stock sold to anofficer ($.001/share) (Note 2)
      
      4,000,000
      
      
      4,000
      
      
      
      
      
      
      
      
      
      
      
      4,000April 2005 through May 2005, commonstock sold in private placement offering($.01/share) (Note 4)
      
      2,400,000
      
      
      2,400
      
      
      21,600
      
      
      
      
      
      
      
      
      24,000Office space and administrative supportcontributed by an officer (Note
        2)
      
      
      
      
      
      
      
      350
      
      
      
      
      
      
      
      
      350Net loss, period ended May 31, 2005
      
      
      
      
      
      
      
      
      
      
      (5,006
      )
      
      
      
      
      (5,006
      )Balance at May 31, 2005
      
      6,400,000
      
      
      6,400
      
      
      21,950
      
      
      (5,006
      )
      
      
      
      
      23,344Office space and administrative supportcontributed by an officer (Note
        2)
      
      
      
      
      
      
      
      1,400
      
      
      
      
      
      
      
      
      1,400Comprehensive loss:Net loss, period endedFebruary
        28, 2006
      
      
      
      
      
      
      
      
      
      
      (21,639
      )
      
      
      
      
      (21,639
      )Cumulative translation adjustment
      
      
      
      
      
      
      
      
      
      
      
      
      
      152
      
      
      152Comprehensive loss
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      (21,487
      )Balance at May 31, 2006
      
      6,400,000
      
      $
      6,400
      
      $
      23,350
      
      $
      (26,645
      )
      $
      152
      
      $
      3,257


See accompanying notes to financial statements 
  F-5

---

THE CAVALIER GROUP 
  (An Exploration Stage Company) 
  Statements of Cash Flows

|                                                    |   |            |   |   | February 11, 2005 |   |  | February 11, 2005 |  
|--------------------------------------------------- | - | ---------- | - | - | ----------------- | - |  | ----------------- | -
|                                                    |   | For The    |   |   | (Inception)       |   |  | (Inception)       |  
|                                                    |   | Year Ended |   |   | Through           |   |  | Through           |  
|                                                    |   | May 31,    |   |   | May 31,           |   |  | May 31,           |  
|                                                    |   | 2006       |   |   | 2005              |   |  | 2006              |  
|Cash flows from operating activities:               |   |            |   |   |                   |   |  |                   |  
|Net loss                                            | $ | (21,639    | ) | $ | (5,006            | ) |  | (26,645           | )
|Adjustments to reconcile net loss
      to net cash |   |            |   |   |                   |   |  |                   |  
|used in operating
      activities:                 |   |            |   |   |                   |   |  |                   |  
|Office space and administrative support             |   |            |   |   |                   |   |  |                   |  
|contributed by an officer (Note 2)                  |   | 1,400      |   |   | 350               |   |  | 1,750             |  
|Changes in operating assets and liabilities:        |   |            |   |   |                   |   |  |                   |  
|Deferred offering costs                             |   | (5,000     | ) |   |                  |   |  | (5,000            | )
|Accounts payable and accrued liabilities            |   | 3,582      |   |   | 3,000             |   |  | 6,582             |  
|Net cash used in                                    |   |            |   |   |                   |   |  |                   |  
|operating activities                                |   | (21,657    | ) |   | (1,656            | ) |  | (23,313           | )
|                                                    |   |            |   |   |                   |   |  |                   |  
|Cash flows from financing activities:               |   |            |   |   |                   |   |  |                   |  
|Proceeds from the sale of common stock              |   |           |   |   | 28,000            |   |  | 28,000            |  
|Net
      cash provided by                          |   |            |   |   |                   |   |  |                   |  
|financing activities                                |   |           |   |   | 28,000            |   |  | 28,000            |  
|                                                    |   |            |   |   |                   |   |  |                   |  
|Net
      change in cash                            |   | (21,657    | ) |   | 26,344            |   |  | 4,687             |  
|                                                    |   |            |   |   |                   |   |  |                   |  
|Effect of exchange rate changes on cash             |   | 152        |   |   |                  |   |  | 152               |  
|                                                    |   |            |   |   |                   |   |  |                   |  
|Cash, beginning of period                           |   | 26,344     |   |   |                  |   |  |                  |  
|                                                    |   |            |   |   |                   |   |  |                   |  
|Cash, end of period                                 | $ | 4,839      |   | $ | 26,344            |   |  | 4,839             |  
|                                                    |   |            |   |   |                   |   |  |                   |  
|Supplemental disclosure of cash flow information:   |   |            |   |   |                   |   |  |                   |  
|Cash paid during the period for:                    |   |            |   |   |                   |   |  |                   |  
|Income taxes                                        | $ |           |   | $ |                  |   |  |                  |  
|Interest                                            | $ |           |   | $ |                  |   |  |                  |  

See accompanying notes to financial statements 
  F-6

---

The Cavalier Group 
  (An Exploration Stage Company) 
  Notes to Financial Statements

(1)Summary of Significant Accounting Policies

Organization and Basis of PresentationThe Cavalier Group (the Company) was incorporated in the
  state of Wyoming on February 11, 2005 to engage in the acquisition, exploration
  and development of mineral properties. The Company is in the exploration stage
  in accordance with Industry Guide 7. On April 25, 2005, the Company entered
  into an option agreement to acquire 100 percent of the right, title and interest
  in mineral claims located in northeast Ontario, Canada. The accompanying financial
  statements have been prepared assuming that the Company will continue as a going
  concern.

The Companys significant operating losses raise substantial
  doubt about its ability to continue as a going concern. Inherent in the Companys
  business are various risks and uncertainties, including its limited operating
  history, historical operating losses, dependence upon strategic alliances, and
  the historical success rate of mineral exploration. Managements plan is
  to acquire interests in certain mining claims and explore for minerals.

The Companys future success is primarily dependent upon
  the existence of minerals on the property for which the Company owns an option
  to acquire claims. No minerals have yet been discovered on the property. The
  Companys success will also be dependent upon its ability to raise sufficient
  capital to fund its exploration program and, if minerals are discovered, to
  mine the discovery on a timely and cost-effective basis.

Use of EstimatesThe preparation of financial statements in accordance with generally
  accepted accounting principles requires management to make estimates and assumptions
  that affect the reported amounts of assets and liabilities and the disclosure
  of contingent assets and liabilities at the date of financial statements and
  the reported amounts of revenues and expenses during the reporting period. Actual
  results could differ from those estimates.

Functional CurrencyThe Companys functional currency is the Canadian dollar; however,
  the accompanying financial statements and footnotes refer to United States (U.S.)
  dollars unless Canadian dollars are specifically designated with CDN.

Cash and Cash EquivalentsThe Company considers all highly liquid securities with original maturities
  of three months or less when acquired to be cash equivalents. There were no
  cash equivalents at May 31, 2006.

Financial InstrumentsAt May 31, 2006, the fair value of the Companys financial instruments
  approximate their carrying value based on their terms and interest rates.

Mineral InterestsMineral interest acquisition costs include cash consideration and the
  estimated fair value of common shares issued for mineral properties, based on
  recent share issuances. Exploration and development expenditures are expensed
  in the period incurred until such time as the Company establishes the existence
  of commercial feasibility, at which time these costs will be deferred. Administrative
  expenditures are expensed in the period incurred.

F-7

---

The Cavalier Group 
  (An Exploration Stage Company) 
  Notes to Financial Statements

Mineral interest acquisition costs and related interest and financing
  costs may be deferred until the property is placed into production, sold or
  abandoned. Mineral interest acquisition costs will be deferred only when and
  if proven and probable reserves have been found to exist. No proven or probable
  reserves are currently known to exist.

Any deferred costs will be amortized on a unit-of-production
  basis over the estimated proven and probable reserves of the property following
  commencement of commercial production or written off if the property is sold,
  allowed to lapse or abandoned.

Earnings (loss) per Common ShareThe Company reports loss per share using a dual presentation of basic
  and diluted loss per share. Basic loss per share excludes the impact of common
  stock equivalents. Diluted loss per share utilizes the average market price
  per share when applying the treasury stock method in determining common stock
  equivalents. At May 31, 2006, there were no variances between the basic and
  diluted loss per share as there were no potentially dilutive securities outstanding.

Income TaxesThe Company accounts for income taxes under the provisions of SFAS No.
  109, Accounting for Income Taxes (SFAS 109). SFAS 109 requires recognition
  of deferred tax liabilities and assets for the expected future tax consequences
  of events that have been included in the financial statements or tax returns.
  Under this method, deferred tax liabilities and assets are determined based
  on the difference between the financial statement and tax bases of assets and
  liabilities using enacted tax rates in effect for the year in which the differences
  are expected to reverse.

Foreign Currency TranslationThe accounts of the Companys foreign operations have been translated
  into United States dollars. Assets and liabilities of those operations are translated
  in U.S. dollars using exchange rates as of the balance sheet date; income and
  expenses are translated using the average exchange rates for the reporting period.
  Translation adjustments are deferred in accumulated other comprehensive income
  (loss), a separate component of shareholders equity. There are no translation
  adjustments during the period.

Fiscal Year-endThe Company operates on a May 31 year-end.

(2)Related Party Transactions

The Companys president contributed office space to the
  Company for the period presented. The office space was valued at $100 per month
  based on the market rate in the local area and is included in the accompanying
  financial statements as contributed rent expense with a corresponding credit
  to additional paid-in capital.

The president contributed administrative services to the Company
  for the period presented. The time and effort was recorded in the accompanying
  financial statements based on the prevailing rates for such services, which
  equaled $50 per hour based on the level of services performed. The services
  are reported as contributed administrative services with a corresponding credit
  to additional paid-in capital.

F-8

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The Cavalier Group 
  (An Exploration Stage Company) 
  Notes to Financial Statements

In February 2005, the Company sold 4,000,000 shares of its restricted
  common stock to its president for $4,000 ($.001/share).

(3)          
  Option Agreement on Mineral Interests

Casa Claims Option Agreement (formerly referred to as the
  Mineta Resources Ltd. Option Agreement)

On April 25, 2005, the Company entered into an option agreement
  to acquire 100 percent of the right, title and interest in a mineral claim located
  in northeast Ontario, Canada. Under the terms of the Option Agreement, the Company
  is required to:

| | A. | Make option exploration expenditures as follows:
| | -- | ------------------------------------------------

ExplorationExpenditures
      
      
      
      
      Due DateCDN
      $
      50,000.00
      
      
      October 31, 2006CDN
      
      100,000.00
      
      
      October 31, 2007$
      150,000.00


| | B. | Make annual payments of CDN$50,000, commencing January
        1, 2009, as long as the Company held any interest in the claim.
| | -- | ------------------------------------------------------------------------------------------------------------------------------

In addition to the above terms, the optionor is to retain a three
  percent net smelter royalty.

(4)          
  Shareholders Equity

The Company filed a Form SB-2 registration statement with the
  SEC on July 29, 2005 to offer up to 2,000,000 shares of the Companys common
  stock at a price of $0.05 per share. The registration statement became effective
  on January 31, 2006. No shares were sold pursuant to the registration statement
  as of May 31, 2006.

Between April 2005 and May 2005, the Company offered for sale
  3,000,000 shares at of its common stock at a price of $0.01 per share. The Company
  closed the offering after selling 2,400,000 shares for gross proceeds of $24,000.
  The offering was made in reliance on an exemption from registration of a trade
  in the United States under Rule 903 of Regulation S of the United States Securities
  Act of 1933, as amended.

(5)          
  Income Taxes

A reconciliation of the U.S. statutory federal income tax rate
  to the effective tax rate is as follows:

F-9

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The Cavalier Group 
  (An Exploration Stage Company) 
  Notes to Financial Statements

May
        31,2006
      
      
      2005U.S. statutory federal rate
      
      15.00%
      
      
      15.00%Contributed rent and services
      
      -0.97%
      
      
      -1.05%Net operating loss for which no taxbenefit is currently available
      
      -14.03%
      
      
      -13.95%0.00%
      
      
      0.00%


May
        31,2006
      
      
      2005Deferred tax assets
      $
      3,036
      
      $
      698Deferred tax liabilities
      
      -
      
      
      -Valuation allowance
      
      (3,036
      )
      
      (698
      )$
      -
      
      $
      -


At May 31, 2006, deferred tax assets consisted of a net tax asset
  of $3,734, due to operating loss carryforwards of $24,895, which was fully allowed
  for, in the valuation allowance of $3,734. The valuation allowance offsets the
  net deferred tax asset for which there is no assurance of recovery. The net
  operating loss carryforward expires through the year 2026.

The valuation allowance will be evaluated at the end of each
  year, considering positive and negative evidence about whether the deferred
  tax asset will be realized. At that time, the allowance will either be increased
  or reduced; reduction could result in the complete elimination of the allowance
  if positive evidence indicates that the value of the deferred tax assets is
  no longer impaired and the allowance is no longer required.

Should the Company undergo an ownership change as defined in
  Section 382 of the Internal Revenue Code, the Companys tax net operating
  loss carryforwards generated prior to the ownership change will be subject to
  an annual limitation, which could reduce or defer the utilization of these losses.

F-10

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15

Item 8. Changes In & Disagreements With Accountants on
Accounting & Financial Disclosure

There have been no changes in or disagreements with our
accountants on issues of accounting or financial disclosure since inception of
Cavalier on February 11, 2005.

Item 8A. Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, as of May
31, 2006, the end of the year to which this annual report relates, we have
carried out an evaluation of the effectiveness of the design and operation of
Cavaliers disclosure controls and procedures. This evaluation was carried out
under the supervision and with the participation of our Corporation's
management, including our President. Based upon that evaluation, our President
concluded that the disclosure controls and procedures are effective. There have
been no changes in our internal controls or in other factors, which could affect
internal controls.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in Cavalier's reports filed under the
Exchange Act is accumulated and communicated to management, including our
President and Chief Executive Officer as appropriate, to allow timely decisions
regarding required disclosure.

We do not have an audit committee currently but we anticipate
that one will be appointed as the current year progresses; however, the board
committee that performed the equivalent functions of an audit committee was
comprised of our President, Gerald W. Williams and our independent director, Roy
D. West. None of our officers or directors has been determined to be an audit
committee financial expert. The committee reviewed and discussed the audited
financial statements with management and with the current Board of Directors.
The committee has discussed with the independent auditors all matters required
to be discussed. The committee has received the written disclosures and the
letter from the independent accountants as required by Independence Standards
Board Standard No. 1 and has discussed with the independent accountant the
independent accountants independence.

Item 8B. Other Information

Code of Ethics

The Board of Directors on April 30, 2005 adopted a formal
written Code of Business Conduct and Ethics and Compliance Program for all
officers, directors and senior employees. The Code of Business Conduct and
Ethics has been filed with this annual report as an exhibit and a copy is
available upon written request by any person without charge. To obtain a copy,
an interested party should contact our offices by telephone at (604) 597-0028 or
write to 5728 - 125A Street, , Surrey, B.C. V3X 3G8.

Web Site

Cavalier does not maintain a Web site.

---

PART III

Item 9. Directors, Executive Officers, Promoters and Control
Persons

All directors of our Corporation hold office until the next
annual general meeting of the shareholders or until their successors are elected
and qualified. The officers of our Corporation are appointed by our board of
directors and hold office until the earlier of their death, retirement,
resignation or removal.

---

16

Our directors, executive officers and other significant
employees, their ages, positions held and duration each person has held that
position, are as follows:

Name
    Position Held with the
      Corporation
    Age
    Date First Elected / AppointedGerald W. Williams
    President, Secretary, Treasurer
      and Director
    56
    February 11, 2005Roy D. West
    Director
    56
    November 01, 2005


Business Experience

None of the directors or officers has professional or technical
accreditation in the exploration, development or operations of mining or mining
related projects. During the past year, our president, Mr. Williams, spent
approximately 15% of his time (approximately 9 hours per week) while Mr. West
spent approximately 5% of his time (approximately 3 hours per week) on the
affairs of Cavalier. For the coming year, it is anticipated that time commitment
and requirement will remain approximately the same.

The following is a brief account of the education and business
experience of each director, executive officer and key employee during at least
the past five years, indicating each person's principal occupation during the
period, and the name and principal business of the organization by which he was
employed.

Gerald W. Williams, a director serving as president and
chief executive officer is, and has been, a management and business consultant
since 1984. He is President, 1983 to present, of Sylco Investments Ltd., a
private British Columbia company, incorporated in 1983 which is in the business
of providing financial, management and consulting services to development and
exploration stage businesses in Canada and the United States; he has been
performing such services since 1983. Prior to that he spent 13 years in real
estate sales, appraisal and land development. In addition, he is the President
and a director of The Stallion Group, a Wyoming registered reporting issuer
which is involved in the exploration business in British Columbia. He is not a
director of any other corporation.

Roy D. West, a director has been retired since 2003.
Prior to that date he spent four years as the equipment and tooling supply
manager and thirteen years as the assistant for Okanagan University College in
Kelowna, British Columbia and its vocational college predecessors where he was
responsible for the procurement and handling of tooling and supplies for the
industrial trades and aviation curricula at the college. He is not a director of
any other corporations. He holds a current British Columbia Free Miners
Certificate issued under the Mining Act (B.C.) which allows him to stake and
hold mineral claims in the province of B.C.

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

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                                 
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Commission or the Commodity Futures Trading Commission
      to have violated a federal or state securities or commodities law, and the
      judgment has not been reversed, suspended, or
vacated.                                           

Item 9A. Compliance With Section 16(a) of the Exchange
Act

---

17

Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our executive officers and directors and persons who own more
than 10% of a registered class of our equity securities to file with the
Securities and Exchange Commission initial statements of beneficial ownership,
reports of changes in ownership and annual reports concerning their ownership of
our common stock and other equity securities, on Forms 3, 4 and 5 respectively.
Executive officers, directors and greater than 10% shareholders are required by
the Securities and Exchange Commission regulations to furnish our Corporation
with copies of all Section 16(a) reports they file.

To the best of our knowledge, all executive officers, directors
and greater than 10% shareholders filed the required reports in a timely manner,
with the exception of the following: (n/a).

Item 10. Executive Compensation.

No chief executive officer of our Corporation received any cash
or other compensation during the fiscal years ended May 31, 2006 or 2005. An
affiliate of Cavalier provided office space to us at the deemed rate of $100 per
month for a total of $1,200 during the past fiscal year. In addition, that same
affiliate has contributed services to Cavalier during the year ended May 31,
2006 at a deemed amount of $200. The total of these amounts are charged to their
appropriate expense items and an equal amount is posted to shareholders equity.
No other executive officer of our Corporation received annual salary and/or
bonus.

During the year ended May 31, 2006 we did not grant any stock
options or stock appreciation rights to any of our directors or officers. There
were no stock options exercised during the year ended May 31, 2006 and there
were no stock options or stock appreciation rights outstanding on May 31, 2006.

We have no plan for compensating our directors for their
service in their capacity as directors, although such directors are expected in
the future to receive stock options to purchase common shares as awarded by our
board of directors or (as to future stock options); a compensation committee
which has been established. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of our board of directors. Our board of directors may
award special remuneration to any director undertaking any special services on
our behalf other than services ordinarily required of a director. No director
received and/or accrued any compensation for their services as a director,
including committee participation and/or special assignments.

There are no management or other agreements with our directors
or executive officers and we do not anticipate that written agreements will be
put in place in the foreseeable future.

We have no plans or arrangements in respect of remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control.

There are no plans or arrangements in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the Board of Directors or
a committee thereof.

Item 11. Security Ownership of Certain Beneficial Owners and
Management & Related Stockholder Matters.

The following table sets forth, as of February 15, 2007,
certain information with respect to the beneficial ownership of our common
shares by each shareholder known to us to be the beneficial owner of 5% of our
common shares, and by each of our officers and directors. Each person has sole
voting power with respect to the common shares, except as otherwise indicated.
Beneficial ownership consists of a direct interest in the common shares, except
as otherwise indicated.

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18

Name and Address of Beneficial Owner
    Amount and Nature of Beneficial Ownership
    Percentage of Class(1)Gerald W. Williams
    4,000,000
    62.5%Directors and Officers (as a group)
    4,000,000
    62.5%


| | (1) | Based on 6,400,000 shares outstanding as of February 15,
      2007 and, as to a specific person, shares issuable pursuant to the
      conversion or exercise, as the case may be, of currently exercisable or
      convertible debentures, share purchase warrants and stock options within
      60 days.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change in control of our
Corporation.

Item 12. Certain Relationships and Related Transactions.

There have been no transactions, or proposed transactions,
which have materially affected or will materially affect us in which any
director, executive officer or beneficial holder of more than 10% of the
outstanding common stock, or any of their respective relatives, spouses,
associates or affiliates, has had or will have any direct or material indirect
interest except as noted.

In February, 2005 we issued a total of 4,000,000 shares of
restricted common stock to our president and chief executive officer, Gerald W.
Williams. The fair market value of the shares, $4,000, was paid in cash.

As at the date of this annual report, we do not have any
policies in place with respect to whether we will enter into agreements with
related parties in the future.

Item 13A. Exhibits and Reports on Form 8-K.

The following reports on Form 8-K were filed during the year
ended May 31, 2006: None

Item 13B. Exhibits and Reports Attached.

The following are exhibits to this Annual Report

|31.1 | Certification of Chief Executive
        Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
        302 of the Sarbanes-Oxley Act of 2003.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                   
|31.2 | Certification of Chief Financial
        Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
        302 of the Sarbanes-Oxley Act of 2003.
|     |                                                                                                                                                                   
|32.1 | Certification of Chief Executive
        Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
        906 of the Sarbanes-Oxley Act of 2003.
|     |                                                                                                                                                                   
|32.2 | Certification of Chief Financial
        Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
        906 of the Sarbanes-Oxley Act of 2003.

The following Exhibits are filed as part of this report
pursuant to Item 601 of Regulation K. All Exhibits have been previously filed
unless otherwise noted.

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19

|Exhibit No. | Document Description                                                                                                                                                                                                     
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                                                                                          
|3.1 *       | Articles of
        Incorporation of The Cavalier Group dated January 09, 2004.                                                                                                                                          
|            |                                                                                                                                                                                                                          
|3.2 *       | Bylaws of The
        Cavalier Group dated January 28, 2004.                                                                                                                                                             
|            |                                                                                                                                                                                                                          
|10.1 *      | Option To Purchase
        And Royalty Agreement between The Cavalier Group and Larry Gervais of
        Timmins, Ontario, dated May 25, 2005 to acquire a 100% interest in the
        Casa 1-4 Mineral Claims, Ontario.
|            |                                                                                                                                                                                                                          
|10.2        | Code
        Of Business Conduct & Ethics and Compliance Program                                                                                                                                                         

* Incorporated by reference to SB-2
Registration Statement filed on January 18, 2006.

Item 14. Principal Accounting Fees and Services

Audit Fees: The aggregate fees billed for the fiscal year ended
May 31, 2006 for professional services rendered by the principal accountant for
the audit of our annual financial statements and the review of financial
statements included in our filed Form 10Q was approximately $3,000 as compared
to $3,000 for the similar period of the preceding fiscal year and for the period
from inception on February 11, 2005 to May 31, 2005 the amount was approximately
$6,000.

Audit-Related Fees: The aggregate fees billed for the fiscal
year ended May 31, 2006 for assurance and related services by the principal
accountant that are reasonably related to the performance of the audit or review
for the audit or review of our annual financial statements and the review of
financial statements and are not reported under the previous item, Audit Fees,
was approximately $0 versus $0 for the similar period last year and for the
period from inception on February 11, 2005 to May 31, 2006 the amount was
approximately $0.

Tax Fees: The aggregate fees billed for the fiscal year ended
May 31, 2006 for professional services rendered by the principal accountant for
tax compliance and tax planning was approximately $0 and for the period from
inception on February 11, 2005 to May 31, 2006 the amount was approximately $0.

All Other Fees: The aggregate fees billed for the fiscal year
ended May 31, 2006 for products and services provided by the principal
accountant other than the services reported above was approximately $0 and for
the period from inception on February 11, 2005 to May 31, 2006 the amount was
approximately $0.

---

20

SIGNATURES

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

THE CAVALIER GROUP (Registrant)

By:          
/s/ Gerald W. Williams

Gerald W. Williams, President,
Secretary, Treasurer and Director (Principal Executive Officer, Chief Executive
Officer, Principal Financial Officer and Chief Financial Officer)

Date: February 15, 2007

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

By:          
/s/ Gerald W. Williams

Gerald W. Williams, President,
Secretary, Treasurer and Director (Principal Executive Officer, Chief Executive
Officer, Principal Financial Officer and Chief Financial Officer)

By:          
/s/ Roy D. West

Roy D. West, Member of the Board of
Directors

Date: February 15, 2007

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