BIO-CARBON SYSTEMS INTERNATIONAL INC. (A Development Stage Company)  Audited Financial Statements As of December 31, 2010 and For the Period Inception (July 10, 2009) to December 31, 2009
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TABLE OF CONTENTS



Bio-Carbon Systems International Inc.      FINANCIAL INFORMATION        PageAuditor Letter
     3Balance Sheets
     4Statements of Stockholders Deficit
     5Statements of Operations and Comprehensive Loss
     6Statements of Cash Flows
     7Notes to the financial statements
     8
 
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Report of Independent Registered Public Accounting Firm To Stockholders of
Bio-Carbon Systems International Inc. We have audited the accompanying balance sheet of Bio-Carbon Systems International Inc. as of December 31, 2010, and the related statements of operations, changes in stockholders deficit, and cash flows for the year then ended.Bio-Carbon Systems International Incs management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bio-Carbon Systems International  Inc. as of December 31, 2010, and the results of its operations and its cash flows for the year then ended 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s significant operating losses raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ DNTW Chartered Accountants, LLP DNTW Chartered Accountants, LLPLicensed Public Accountants Markham, Ontario, Canada 
April 14, 2011
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Bio-Carbon Systems International  Inc. (A Development Stage Company) Balance Sheets As at December 31, 2010
     December 31, 2009ASSETSCurrent assets:Cash
     $     24,786
     -Accounts receivable
     999
     -Notes receivable
     14,997
     -Prepaid expense
     12,997
     -Accounts receivable from discontinued operations
     10,942
     -Total Current Assets
     64,721
     -Mineral Rights
     199,960Total Assets
     $   264,681
     -LIABILITIESCurrent liabilitiesAccounts payable and accrued liabilities
     $   17,580
     2,946Advances from shareholders
     39,711
     10,000Due on mineral rights acquisition - current portion
     34,993
     -Liabilities from discontinued operations
     83,756
     -Total Current Liabilities
     176,040
     12,946Due on mineral rights acquisition
     64,987
     -Long term liabilities from discontinued operations
     26,245
     -Total Long Term Liabilities
     91,232
     -Total Liabilities
     267,272
     12,946Stockholders' DeficitCommon stock, $0.001 par value; 400,000,000 shares authorized,
265,190,000 (2009 - 35,000,000) shares issued and outstandingCommon stock
     26,519
     3,500Preferred stock, $0.001 par value; 100,000,000 shares authorized,
240,000 (2009 - zero) shares issued and outstandingPreferred shares
     24
     -Shares to be issued
     98,450
     -Additional paid in capital
     340,196
     -Accumulated other comprehensive income
     1,919
     -Deficit accumulated during the development stage
     (469,699)
     (16,446)Total Stockholders Deficit
     (2,591)
     (12,946)Total Liabilities and Stockholders Deficit
     $     264,681
     - See accompanying notes to the financial statements.
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Bio-Carbon Systems International  Inc. (A Development Stage Company) Statements of Stockholders Deficit For the Period Inception (July 10, 2009) to December 31, 2010  Preferred Stock
     Common Stock
     Additional
     Acc. Other
     
     TotalClass A
     
     
     
     Shares
     Paid-In
     Comprehensive
     Accumulated
     Stockholders'Shares
     
     Par Value
     Shares
     
     Par Value
     to be Issued
     Capital
     income
     Deficit
     DeficitIssuance of stock for cash
     
     
     
     35,000,000
     
     $3,500
     
     
     
     
     $3,500Net loss
     
     
     
     
     
     
     
     
     
     (16,446)
     (16,446)Balance, 31 December 2009
     
     
     
     35,000,000
     
     3,500
     
     
     
     (16,446)
     (12,946)Issuance of stock for cash
     
     
     
     96,550,000
     
     9,655
     
     70,518
     
     
     80,173Issuance of stock for notes receivable
     
     
     
     50,000,000
     
     5,000
     
     9,435
     
     
     14,435Issuance of stock for services
     240,000
     
     24
     83,640,416
     
     8,364
     
     260,243
     
     
     268,631Issuance of stock for acquisition for mineral rights
     
     
     
     1,000,000
     
     
     98,450
     
     
     
     98,450Foreign currency translation
     
     
     
     
     
     
     
     
     1,919
     
     1,919Net loss
     
     
     
     
     
     
     
     
     
     (453,253)
     (453,253)Balance, 31 December 2010
     240,000
     
     $24
     266,190,416
     
     $26,519
     $98,450
     $340,196
     $1,919
     $(469,699)
     $(2,591)
  See accompanying notes to the financial statements.
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Bio-Carbon Systems International  Inc. (A Development Stage Company) Statements of Operations and Comprehensive Loss  For the Year Ended December 31, 2010
     For the Period from Inception (July 10, 2009) to December 31, 2009
     For the Period from Inception (July 10, 2009) to December 31, 2010Operating expensesGeneral and administrative
     $       143
     $      3,446
     $        3,589Professional fees
     11,624
     13,000
     24,624Total Operating Expenses
     11,767
     16,446
     28,213Loss From Continuing Operations Before Taxes
     (11,767)
     (16,446)
     (28,213)Income taxes
     -
     -
     -Loss from continuing operations
     (11,767)
     (16,446)
     (28,213)Loss from discontinued operations
     (441,486)
     -
     (441,486)Net Loss
     (453,253)
     (16,446)
     (469,699)Foreign currency translation adjustment
     1,919
     -
     1,919Comprehensive Loss
     $ (451,334)
     $  (16,446)
     $ (467,780)Net loss per common share - basic and dilutedContinuing operations
     $0.00
     $0.00Discontinued operations
     $0.00
     $0.00Weighted average number of shares outstanding -basic and diluted
     167,399,518
     35,000,000
  See accompanying notes to the financial statements.
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Bio-Carbon Systems International  Inc. (A Development Stage Company) Statements of Cash Flows  For the Year Ended December 31, 2010
     For the Period from Inception (July 10, 2009) to December 31, 2009
     For the Period from Inception (July 10, 2009) to December 31, 2010Cash flows for continuing operationsOperating activitiesNet loss from continuing operations
     $(11,767)
     $(16,446)
     $(28,213)Change in non-cash working capital balances:
     
     
     -Accounts receivable
     (999)
     -
     (999)Prepaid expenses
     (12,997)
     -
     (12,997)Accounts payable and accrued liabilities
     14,634
     2,946
     17,580Net cash used in operating activities from continuing operations
     (11,129)
     (13,500)
     (24,629)Financing  activitiesAdvances from shareholders
     29,711
     10,000
     39,711Issuance of common stock for cash
     
     3,500
     3,500Net cash provided by financing activities from continuing operations
     29,711
     13,500
     43,211Net increase in cash from continuing operations
     18,582
     -
     18,582Cash flows for discontinued operationsOperating activitiesLoss from discontinued operations
     (441,486)
     -
     (441,486)Items not affecting cashStock-based compensation
     270,859
     -
     270,859Interest accrued on the long term loan for discontinued operations
     1,213
     -
     1,213Change in non-cash working capital balances:Accounts receivable from discontinued operations
     (10,942)
     -
     (10,942)Liabilities for discontinued operations
     61,585
     -
     61,585Net cash used in operating activities
     $(118,771)
     -
     $(118,771)Financing  activitiesAdvances from shareholders
     22,171
     -
     22,171Proceeds from long term debt
     24,995
     -
     24,995Issuance of common stock for cash
     83,783
     -
     83,783Net cash provided by financing activities
     130,949
     -
     130,949Net increase in cash from discontinued operations
     12,178
     -
     12,178Effect of foreign currency translation
     (5,974)
     -
     (5,974)Net increase in cash
     24,786
     -
     24,786Cash - beginning of year
     -
     -
     -Cash - ending of year
     $24,786
     -
     $24,786
 See accompanying notes to the financial statements.
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Bio-Carbon Systems International  Inc.
(A Development Stage Company)Notes to the Financial Statements(expressed in U.S. dollars except as otherwise noted)
  Nature of Operations and Organization
 Bio-Carbon Systems International  Inc. (June 4, 2010 known as ABC Acquisition Corp. 1501, collectively referred to herein as BCSI, or the Company), was incorporated on July 10, 2009 in the state of Nevada. The Company intends to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business. From January 1 to June 3, 2010 the Company was a blank check shell company. On June 4, 2010,On June 4, 2010 the Company changed its status and became a start-up carbon measuring company based in Sault Ste Marie, Ontario.  The Company entered into certain license and consulting agreements with individuals and/or entities owned by former directors.The Company planned to use its licensed intellectual property and technology to conduct airborne and other surveys of forested lands in areas that are difficult to access. Those surveys would be conducted in a statistically verifiable process designed for use in carbon trading programs to assess the potential value of the surveyed lands as carbon sequestration land parcels in carbon trading, carbon sequestration, and other greenhouse gas emission control, offset and reduction programs. However, the Company later found that the current North American regulatory and economic framework surrounding the emerging business of carbon measurement, carbon storage, carbon sequestration and carbon trading activities was not economically viable at this time.  Therefore, the Company decided not to pursue the carbon business and terminated the license agreements and the consulting agreements on December 23, 2010.  The termination has not given rise to any penalties against the Company as the termination was concluded through a mutual agreement of separation. After exiting the carbon measuring business, the Company became a mineral exploration business located in Chapleau, Ontario.The Companys principal business activity is the acquisition, exploration and development of mineral property interests in Canada.  The Company is considered to be in the exploration stage and substantially all of the Companys efforts are devoted to financing and developing these property interests.  There has been no determination whether the Companys interests in unproven mineral properties contain mineral reserves which are economically recoverable. On December 23, 2010, the Company optioned a 1,550 acre mineral lease in the Canadian territory, the North West Territories, two hours north-north-west of the capital city of Yellowknife. Management retained an independent geological firm, Aurora Geosciences Inc, to visit the property, named the Carson property, and write a report under National Instrument 43-101(NI 43-101) guidelines evaluating such.  The author, a Qualified Person under NI 43-101, Dave White completed the report and recommended further exploration and a phased exploration budget in three stages.   8


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The accompanying audited financial statements of Bio-Carbon Systems International Inc., have been prepared in accordance with accounting principles generally accepted in the United States of America.  Going Concern  The financial statements have been prepared on a going concern basis.  The going concern basis of presentation assumes that the Company will continue operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of operation.  The Company has incurred a net loss of $453,253 for the year ended December 31, 2010 (2009 - $16,446), and a   working capital deficit of $111,319 (2009  12,946).  This casts substantial doubt on the Companys ability to continue as a going concern unless it can generate net profit and raise adequate financing.  The Company has been seeking additional debt or equity financing to support its operations until it becomes cash flow positive.  There can be no assurances that action and plan such as above will be sufficient for the Company to continue operating as a going concern.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be unable to continue in existence. These adjustments could be material.  Change in Functional Currency  On June 4, 2010, the Company entered into two license agreements from related companies, owned by former directors, and started to conduct the majority of its business in Canada.  As a result, the Company changed its functional currency from US dollar to Canada dollar effective June 4, 2010.  Significant Accounting Policies   Development Stage Company  The Company is a development stage company as defined by Accounting Standards Codification (ASC) 915-10-05,Development Stage Entity. The Company is still devoting substantially all of its efforts on establishing the business.  All losses accumulated, since inception, have been considered as part of the Companys development stage activities.  Foreign Translation Adjustment  The accounts of the Company, a US registered Company whose functional currency is the Canadian dollar, were translated into United States dollars in accordance with the provisions of ASC 830,Foreign Currency Matters.  In accordance with the provisions of ASC 830, transaction gains and losses on these assets and liabilities are included in the determination of income for the relevant periods.  Adjustments resulting from the translation of the financial statements from their functional currencies to United States dollars are accumulated as a separate component of accumulated other comprehensive income and have not been included in the determination of income for the relevant periods. Discontinued operations  The discontinued operations has been reported separately  in accordance with the provisions of ASC 205-20,Presentation of Financial Statements  Discontinued operation, which provides guidance on when the results of operations of a component of an entity that either has been disposed of or is classified as held for sale would be reported as a discontinued operation in the financial statements. A component of an entity comprises operations and


cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit.
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Use of estimates  The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.  Some of the Company's more significant estimates include those related to uncollectible receivables, stock-based compensation, equity instruments, and its intangible assets.These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. Comprehensive Income The Company follows the guidance in ASC 220,Comprehensive Income. ASC 220 establishes standards for the reporting and presentation of comprehensive income and its components in a full set of financial statements.  Comprehensive income is presented in the statements of changes in stockholders' deficit, and consists of foreign currency translation adjustments.  ASC 220 requires only additional disclosures in the financial statements and does not affect the Company's financial position or results of operations.  Fair value of financial instruments  The Company measures its financial assets and liabilities in accordance with the requirements of ASC 820,Fair Value Measurements and Disclosures, and elects not to disclose fair value information about financial assets and liabilities for which fair value was not readily available.  Impairment of long-lived assets In accordance with ASC 360,Property and Equipment, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  The Company evaluates annually at year end whether events and circumstances have occurred that indicate possible impairment.  If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable.  In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value.  Income Taxes  The Company accounts for income taxes pursuant to ASC 740,Income Taxes.Deferred tax assets and liabilities are recorded for differences between the financial statements and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.  Stock-based compensation  The Company accounts for Stock-Based Compensation in accordance with ASC 718,Compensation  Stock Compensation. ASC 718 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity  s equity instruments or that may be settled by the issuance of those equity instruments.  ASC 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  ASC 718 requires that the


compensation cost relating to share-based payment transactions be recognized in the financial statements.  That cost is measured based on the fair value of the equity or liability instruments issued.
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Net loss per share  The Company accounts for loss per share pursuant ASC 260,Earnings Per Share, which requires disclosure on the financial statements of basic and diluted earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year.  Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year. There were no dilutive financial instruments for the year ended December 31, 2010 and the period from inception (July 10, 2009) to December 31, 2009.  Recently Issued Accounting Pronouncements  From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.  In October 2009, the Financial Accounting Standards Board (FASB) issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement.   Among the amendments, this standard eliminates the use of the residual method for allocating arrangement consideration and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items.  This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition.  This standard, for which the Company is currently assessing the impact, became effective for the Company on January 1, 2011.  In January 2010, the FASB issued (ASU) No. 2010-06,Fair Value Measurements and Disclosures(Topic 820), Improving Disclosures about Fair Value Measurements (ASU No. 2010-06).  ASU No. 2010-06 requires new disclosures about significant transfers in and out of Level 1 and Level 2 fair value measurements and the reasons for such transfers and in the reconciliation for Level 3 fair value measurements, the requirement to disclose separately information about purchases, sales, issuances and settlements.  The Company adopted the provisions of ASU No. 2010-06 on January 1, 2010, except for disclosures about purchases, sales, issuances and settlements in the reconciliation for Level 3 fair value measurements.  Those disclosures will be effective for financial statements issued for fiscal years beginning after December 15, 2010.  The Company does not expect the impact of its adoption to be material to its financial statements.  In July 2010, the FASB issued (ASU) No. 2010-20,Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. ASU No. 2010-20 requires companies that hold financing receivables, which include loans, lease receivables, and the other long term receivables to provide more information in their disclosures about the credit quality of their financing receivables and the credit reserves held against them. On December 31, 2010, we adopted all amendments that require disclosures as of the end of a reporting period, and on January 1, 2011, the Company adopted all amendments that require disclosures about activity that occurs during a reporting period (the remainder of this ASU).   The adoption of this ASU did not have a material impact on the Companys financial statements.
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6.Mineral rights

On December 23, 2010,  the Company entered into a mineral property acquisition agreement (the Acquisition Agreement) with 2214098 Ontario Ltd. (2214098), an Ontario corporation, pursuant to which 2214098 has agreed to sell to the Company the property (mining lease) located 195 kilometers north-northwest of the City of Yellowknife, N.W.T, on the west shore of Damoti Lake in the Indin Lake Greenstone Belt and known as a claim BR2 (the Carson Lake Property). The claim covers an area of 1549.5 acres. Under the Acquisition Agreement, the Company will acquire the Carson Lake Property in consideration for the following payments.  (1) the Corporation paying CDN$100,000 to be paid by the Corporation to 2214098 as follows: a. $25,000 on or before April 30, 2011; b. $10,000 on or before each of September 30th, 2011, 2012, 2013, 2014; and c. $35,000 on or before September 30th, 2015;  (2) the Corporation paying 1,000,000 common shares in the capital of the Corporation (the Shares) to 2214098, and deliver the Shares to 2214098 on or before March 30th, 2011;  (3) upon and following the commencement of commercial production, the Corporation shall pay a 2% royalty to John Rapski, and a 1% royalty to 2214098 of net smelter returns on the terms and conditions as set out in the Acquisition Agreement  The Company's intangible assets consist of the value of mineral acquisition agreement with 2214098 Ontario Ltd.  The mineral acquisition agreement is a single mining lease that expires June 30, 2024.  Therefore, the agreement is being amortized using the straight-line method over the term of the mining lease (13.5 years).  Amortization expense for the year ended December 31, 2010 was nil.  The Company determined that, as of December 31, 2010, there have been no significant events which may affect the carrying value of the mineral acquisition agreement.   Related Party Transactions  During the year, the Company has entered into licensing agreements with related companies, owned by former Directors,Luc C. Duchesne and Robert G. Cormier. The Company paid 37,500,000 common shares, with value of $10,918 as royalty fee for these two license rights.  During the year, the Company paid services fee of $130,186 as discontinued cost of goods sold to a related company, owned by former Director, Robert G. Cormier.  During the year, the Company paid consulting fee of $61,533 to two former directors, Luc C. Duchesne and Robert G. Cormier.  During the year, the Company received loans from a current director or a company owned by a current director, Ben Fuschino.  The loans accrue interest at 1% per month.  At year end, the balance due was $15,000.  During the year, the Company entered into an advisor agreement that provided a current director, Ben Fuschino, 60,000 preferred shares valued at $57,738 and $7,000 for services provided up to date and to year end.  Discontinued Operations  On June 4, 2010, the Company entered into two license agreements with related parties, owned by former directors (the Licensors) to acquire exclusive, non-transferable and irrevocable rights to develop and commercialize certain intellectual property that is to be used in conducting airborne and other surveys of forested lands and quantifying the value of forested lands and other parcels of property within the context of carbon trading programs. To facilitate the use of the two license rights, the Company entered into consulting agreements with Luc C. Duchesnes and Rober G. Cormier, pursuant to which Mr. Duchesne and Mr. Cormier will provide


the Company with management and advisory services with respect to the intellectual property licensed to the Company under those licenses.
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Near year end, the Company determined not to pursue the carbon businessandelected to terminate the License Agreements and the Consulting Agreements as of December 23, 2010.  The termination has not given rise to any penalties against the Company, as it was concluded through a mutual agreement of separation.  The Company's results of operations related to discontinued operations for the years ended December 31, 2010 and 2009 are as follows:  Years ended December 31,2010
     
     2009$
     
     $Revenue
     130,186
     
     -Cost of Goods SoldServices
     130,186
     
     -Royalties
     10,918
     
     -Total Cost of Goods Sold
     141,104
     
     -Gross Margin
     (10,918)
     
     -Operating expensesGeneral and administrative
     2,997
     
     -Professional fees
     89,725
     
     -Consulting fees
     88,707
     
     -Interest Expense
     2,826
     
     -Stock-based compensation
     246,313
     
     --Total operating expenses
     430,568
     
     -Loss from discontinued operations net of tax
     (441,486)
     
     -
  Advance from shareholders The advances from shareholders bear interest at 1% per month, unsecured and due on demand. Due on mineral rights acquisition There are payments due on the Carson Lake Property mineral rights acquisition of $100,000 (note 6),which bears no interest, and is repayable over the next five years as follows: 2011
     $35,0002012
     10,0002013
     10,0002014
     10,0002015
     35,000Total
     $100,000
  Long term liabilities fromdiscontinued operation The long term liabilities fromdiscontinued operations is a two year loan of $25,000, bearing interest at 1% per month, and is repayable on July 28, 2012.  Accrued interest on the loan will total $6,000 over the two year term.
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Shareholders Equity a)Common shares  Common Shares Issued
     Total#
     $Issued for cash at par value
     35,000,000
     3,500Balance as of December 31, 2009
     35,000,000
     3,500Issued for Directors services at C$0.0003 per share
     6,500,000
     1,876Issued at C$0.0003 per share for technology licenses royalties
     37,500,000
     10,826Issued at C$0.0003 per share for consulting services
     39,500,000
     11,403Issued in a private placement at C$0.0003 per share for notes receivable
     50,000,000
     14,453Issued in a private placement at C$0.0003 per share for cash
     96,000,000
     27,714Issued in a private placement at C$0.10 per share for cash
     550,000
     52,459Issued in a private placement at C$0.10 per share for legal services
     140,416
     13,573To be issued for Mineral Rights acquisition
     1,000,000
     98,450Common stock as at December 31, 2010
     266,190,416
     234,237
 b)Class A Preferred Stock  During the year, the Company paid C$240,000 consulting fees to advisors in the form of 240,000 Class A preferred shares (non-convertible). The Class A Preferred Shares were issued for C$1.00 per share, are non-participating and non-voting and accrue cumulative dividends a the rate of 10% per annum. The Company may retract the shares at any time upon the payment of C$1.00 per share plus any unpaid dividends. In the event of any wind-up of the Company, the Class A Preferred Shares have a priority distribution equivalent to C$1.00 per share plus any unpaid dividends before any distribution to the common shareholders.   Preferred
Shares Issued
     Total#
     $Balance as of December 31, 2009
     -
     -Issued to advisors for services
     240,000
     230,952Balance as of December 31, 2010
     240,000
     230,952
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13.Financial Instruments  Foreign Currency Risk The Company is exposed to currency risks due to certain payables that are to be settled in US funds.  We monitor our foreign currency exposure regularly to minimize our foreign currency risk exposure. Concentration of Credit Risk The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.  During fiscal 2010, the Company derived 100% of its revenue from one customer. All receivable from this customer has been received and related to the discontinued operations.  Liquidity Risk The Company is exposed to liquidity risk as its continued operations are dependent upon obtaining additional capital or achieving profitable operations to satisfy its liabilities as they come due. Fair Values The Companys financialinstruments consist of cash, accounts receivable, notes receivable, accounts receivable from discontinued operation, accounts payable and accrued liabilities, advances from shareholders, liabilities for discontinued operation, due on mineral rights acquisition, and long term liabilities for discontinued operation.  Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.  The fair value of these financial instruments approximate their carrying values due to the short-term maturity of these instruments.   Concentrations and Credit Risk  Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.  During fiscal 2010, the Company derived 100% of its revenue from one customer from its discontinued operations. 14.Subsequent Events There are no subsequent events to report.
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