U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-KSB

              [ X ] Annual report under Section 13 or 15 (d) of the
   Securities Exchange Act of 1934 For the fiscal year ended December 31, 1996

              [   ] Transition report under Section 13 or 15 (d) of the
   Securities Exchange Act of 1934 For the transition period from_____to _______

Commission File Number 33-28562
                      ----------

                            Toucan Gold Corporation
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


         Delaware                                        75-2661571
-------------------------------                      -------------------
(State or Other Jurisdiction of                       (I.R.S. Employer
Incorporation or Organization)                       Identification No.)

26 Wellington Street East
Suite 905
Toronto, Ontario, Canada                                  M5E 1S2
(Address of Principal Executive Offices)                 (Zip code)

                                 (416)350-3657
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code.)

Securities registered under Section 12(b) of the Exchange Act:


             Title of Each Class                    Name of Each
                    NONE                              Exchange
                                                  on Which Registered
                                                        N/A

Securities registered under Section 12(g) of the Exchange Act:

NONE

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 past 90 days.
Yes  X            No

Check if there is no 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. [X]

State issuer's revenues for its most recent fiscal year. $   0
                                                           ----

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant as of April 7, 1997 was $6,015,062 based upon the average bid and ask
price of the common stock on such date of $1 5/8 per share on the OTC Electronic
Bulletin  Board of NASDAQ.  For  purposes  of this  computation,  all  executive
officers,  directors  and  10%  stockholders  were  deemed  affiliates.  Such  a
determination should not be an admission that such executive officers, directors
or 10% stockholders are affiliates.

As of April 7, 1997, there were 7,264,600  shares of the common stock,  $.01 par
value, of the registrant issued and outstanding.

Transitional Small Business Disclosure Format: Yes  X            No

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<PAGE>



                             TOUCAN GOLD CORPORATION

                                                                                
<TABLE>
<CAPTION>

PART I                                                                                                  Page Number

<S>             <C>                                                                                             <C>
Item 1 and 2.   Description of Business and Property..............................................................1

Item 3.         Legal Proceedings.................................................................................6

Item 4.         Submission of Matters to a Vote of Security-Holders...............................................6

PART II

Item 5.         Market for Common Equity and Related Stockholder Matters..........................................7

Item 6.         Management's Discussion and Analysis of Financial Condition or Plan of Operation..................9

Item 7.         Financial Statements

                Report of Independent Certified Public Accountants..............................................F-2

                Consolidated Balance Sheet as of December 31, 1996..............................................F-3

                Consolidated Statements of Operations for the year ended December 31, 1996
                 and the period from November 3, 1995 to December 31, 1995......................................F-4

                Consolidated Statement of Stockholders' Equity for the year ended December 31, 1996
                 and the period from November 3, 1995 to December 31, 1995......................................F-5

                Consolidated Statements of Cash Flows for the year ended December 31, 1996
                 and the period from November 3, 1995 to December 31, 1995......................................F-6

                Notes to Financial Statements...................................................................F-7

Item 8.         Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure.......................................................................11

PART III

Item 9.         Directors, Executive Officers, Promoters and Control Persons.....................................13

Item 10.        Executive Compensation...........................................................................14

Item 11.        Security Ownership of Certain Beneficial Owners
                  and Management.................................................................................14

Item 12.        Certain Relationships and Related Transactions...................................................16

Item 13.        Exhibits, List and Reports on Form 8-K...........................................................16

SIGNATURES.......................................................................................................18

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS
PURSUANT TO SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS...........................................19

INDEX TO EXHIBITS...........................................................................................INDEX-1

EXHIBIT 21 -- SUBSIDIARIES OF THE COMPANY....................................................................E-21-1
</TABLE>

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                                                         i

<PAGE>



                                     PART I

ITEM 1 AND 2.  DESCRIPTION OF BUSINESS AND PROPERTY

General

         Toucan Gold  Corporation  (the  "Company" or "Toucan") was organized in
the State of Delaware on July 22, 1996.  The  Certificate  of  Incorporation  of
Toucan  authorizes a class of 30,000,000  shares of common stock, par value $.01
per share (the "Company Common Stock"), and 2,000,000 shares of preferred stock,
par  value  $.01  per  share.  The  Company  was  formed  for  the  purposes  of
reincorporating   Starlight   Acquisitions,   Inc.,   a   Colorado   corporation
("Starlight"),  in the State of Delaware (the "Reincorporation").  Starlight was
incorporated  on January 20, 1989. The  Reincorporation  was effected by merging
(the "Merger") Starlight into the Company,  which, prior to the Reincorporation,
was a wholly owned subsidiary of Starlight, pursuant to an Agreement and Plan of
Merger (the "Merger Agreement"). Upon completion of the Merger, Starlight ceased
to exist,  and Toucan  continued to operate the business of Starlight  under the
name Toucan Gold Corporation.  The Reincorporation  became effective on July 29,
1996.  As a  result  of the  Reincorporation,  each  then  outstanding  share of
Starlight  common  stock,  no par value  (the  "Starlight  Common  Stock"),  was
converted  into one  share of  Company  Common  Stock.  Existing  warrants  (the
"Starlight  Warrants")  to purchase an aggregate of 100,000  shares of Starlight
Common  Stock at an  exercise  price of $4.00  per  share  were  exchanged  into
warrants (the "Toucan  Warrants") to purchase an aggregate of 100,000  shares of
Company Common Stock at an exercise price of $4.00 per share.

The Share Exchange

         Effective May 10, 1996,  Toucan Mining  Limited,  an exploration  stage
company  incorporated  on  November  3,  1995  under the laws of the Isle of Man
(British Isles) ("Toucan Mining"), became a wholly owned subsidiary of Starlight
when Starlight acquired all of the outstanding capital stock of Toucan Mining in
exchange for 4,534,999  shares of Starlight  Common Stock (the "Share  Exchange)
pursuant to a Share Exchange  Agreement (the "Share Exchange  Agreement").  As a
result of the Share Exchange,  each  shareholder of Toucan Mining received seven
shares of Starlight Common Stock for each share of common stock of Toucan Mining
held by such  shareholder.  The shares of Starlight Common Stock received by the
Toucan Mining  shareholders  in the Share  Exchange were issued in a transaction
exempt from  registration  under the  Securities  Act of 1933,  as amended  (the
"Securities  Act") and,  therefore,  are  restricted  securities.  The Starlight
Warrants issued in connection with  Starlight's  initial public offering expired
pursuant to their terms prior to the Share  Exchange and the Starlight  Warrants
were  issued  on May 10,  1996 to  purchase  an  additional  100,000  shares  of
Starlight  Common  Stock at an  exercise  price of $4.00 per  share,  which were
immediately  exercisable  and  expire on the later of (i) the  eighteenth  month
anniversary  of the  issuance  date or (ii)  the six  month  anniversary  of the
closing  of the  first  registration  of  securities  by the  Company.  The  new
Starlight  Warrants were issued to former officers and directors of Starlight in
consideration of, among other things, their agreement to indemnify Toucan Mining
and  Starlight  with respect to certain  representations  in the Share  Exchange
Agreement and the  cancellation  of their prior  warrants to purchase  Starlight
Common  Stock.   The  Starlight   Warrants   provided  for  certain   piggy-back
registration  rights  with  respect  to the  shares of  Starlight  Common  Stock
underlying  the  Starlight  Warrants.  Pursuant  to  the  Reincorporation,   the
Starlight  Warrants  were  exchanged  into the Toucan  Warrants  to  purchase an
aggregate  of 100,000  shares of Company  Common  Stock at an exercise  price of
$4.00 per share.  The holders of the Toucan  Warrants  have  certain  piggy-back
registration  rights  with  respect  to  the  shares  of  Company  Common  Stock
underlying the Toucan Warrants. The Toucan Warrants are immediately  exercisable
and expire on the later of (i) the  eighteenth  month  anniversary  of the Share
Exchange  or  (ii)  the  six  month  anniversary  of the  closing  of the  first
registration of securities by the Company.

Toucan Mining Limited

         General.  Toucan conducts its operations  primarily  through its wholly
owned subsidiary, Toucan Mining. The principal executive office of Toucan Mining
is located at Celtic House,  Victoria Street,  Douglas, Isle of Man IM99 1QZ. In
turn,  Toucan Mining conducts its operations  primarily through its wholly owned
subsidiary,  Mineradora de Bauxita Ltda. ("MBL"),  which is an authorized mining
company organized under the laws of Brazil.  The shares of MBL are held in trust
by related  Brazilian  parties for the benefit of Toucan Mining.  The registered
office of MBL is located at Rua 24 de Outubro n(degrees) 3313,  Santarem,  state
of Para,  Brazil. The assets of MBL are mineral claims in the Cuiaba Basin, Mato
Grosso, Brazil. See "Description of Exploration and Mining Concessions" below.


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<PAGE>



         Management.  The directors  of Toucan  Mining are  Robert P.  Jeffcock,
Paraic  O'Dowd and David Karran.  Mr.  Jeffcock  serves as Managing  Director of
Toucan  Mining.  The  directors of MBL are Julio  Lambertson  Rabello and Carlos
Edvardo Lins E Silva. Igor Mousasticoshvily, a U.S. trained geologist, serves as
Chief of Operations of MBL.  Neither  Toucan Mining nor MBL are required to have
titled officers.

Mining Claims

         As of  December  31,  1996,  MBL had  exploration  claims to  1,359,263
Hectares  [5,246  square miles] ("Ha") (2.47 Acres to 1 Ha) in the Cuiaba Basin,
Mato  Grosso,  Brazil.  This  area is  approximately  160  kilometers  long in a
northeast/southwest direction and is from 30-100 kilometers wide. The claims are
located between 15 - 16(degrees) 30' South latitude and between  55(degrees) 40'
- 57(degrees) West longitude.  The large, provincial city of Cuiaba, the capital
of Mato Grosso, is located within MBL's claim area.

         MBL is the  beneficial  owner of  exploration  claims to  1,234,948  Ha
[4,766 square miles] that were filed in 1995 with the  Departamento  Nacional De
Produca Mineral  ("DNPM"),  the Brazilian  governmental  agency  responsible for
regulating  mineral  rights.  These  claims  included  303,190  Ha,  which  were
contested by a previous claimant. The Ministry of Mines and Energy ruled against
the previous claimant,  and the decision was published in the Government Gazette
on April 22, 1996. Accordingly,  MBL's claim to the additional 303,190 Ha became
effective  on May 23,  1996,  after which MBL was able to apply to the  National
Mineral Production  Department (the "DNPM"),  an agency of the Ministry of Mines
and  Energy,  for  formal  documentation  of  the  claim.  See  "Description  of
Exploration and Mining Concessions" below.

         In  November  1996,  the  Company  entered  into  an  agreement  with a
Brazilian  individual  ("the  seller") to acquire  twenty-five  (25)  additional
priority claims in the Cuiaba Basin.  Pursuant to this  agreement,  the "seller"
granted to a representative (the "Representative") of the Company an irrevocable
power-of-attorney  over all  twenty-five  (25)  claims in the  aggregate  in the
Cuiaba  Basin in  exchange  for the  Company (i) paying to the seller an initial
payment in cash;  (ii)  paying to the  seller  additional  payments  in cash and
issuing  shares of Company  Common Stock the amounts of both to be determined by
the number of claims the DNPM  certifies  is held with  priority,  having  good,
clean and transferable  title. The Representative has executed an agreement with
Toucan Mining pursuant to which the  Representative  holds the power of attorney
and such  claims  in trust on  behalf  of Toucan  Mining.  See  "Description  of
Exploration  and Mining  Concessions"  and "Market for Common Equity and Related
Stockholder Matters - Recent Sales of Unregistered Securities" below.

         The  Representative  now holds on behalf of the Company an  irrevocable
power of attorney,  over all of such claims,  which  entitles the Company,  upon
payment for such claims as hereinabove  provided, to transfer such claims to MBL
or another  subsidiary of Toucan Mining.  Sixteen (16) of the  twenty-five  (25)
claims, which cover approximately 135,915 Ha, have been certified by the DNPM as
held in priority,  with good, clean and transferable title. Legal title to these
sixteen (16) claims is in the process of being  transferred to MBL or such other
subsidiary  of Toucan  Mining  pursuant  to the  power-of-attorney.  There is no
assurance  that the remaining  nine (9) claims will be certified by the DNPM and
transferred to the Company.

         Access to Claims. The Cuiaba Basin has a network of hard top roads that
are generally in good condition.  MBL's claims are also  criss-crossed with sand
and gravel roads,  the majority of which are well  maintained.  Daily  scheduled
commercial air service is available to and from Cuiaba.

Mining Operations

         The  following   discussion  of  MBL's  mining  operations  includes  a
discussion of Brazilian law. The discussion of Brazilian law matters  represents
the Company's current  understanding of applicable Brazilian law based on it and
its advisors'  and  consultants'  review of  information  relating  thereto made
available to them as of the date hereof.

         Description of Exploration and Mining Concessions.  Under the Brazilian
Federal Constitution,  all mineral resources belong to Brazil. The government of
Brazil  does not  grant  outright  ownership  of a mineral  deposit  to a mining
company.  Prospecting  and mining of mineral  resources  may be carried out only
following the grant of a prospecting  authorization or mining  concession by the
DNPM,  an agency of the  Ministry of Mines and  Energy,  which  administers  the
Brazilian Mining Code and other laws and regulations  governing  prospecting and
mining  operations in Brazil.  Mining  concessions are granted only to Brazilian
companies that have been duly  authorized by the Ministry of Mines and Energy to
act  as  a  mining  company.  In  1995,  the  Brazilian  government  approved  a
constitutional amendment that eliminated the

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                                                         2

<PAGE>



requirement of Brazilian control of mining companies, so that a Brazilian mining
company can be 100% foreign owned and still qualify as a mining company.

         Under Brazilian law, in order to obtain a mining  concession,  a mining
company must first obtain an exploration permit (referred to herein as a claim).
The first step in  obtaining a mining  claim is filing an  application  with the
DNPM,  which must  include an  exploration  plan as well as comply with  certain
other requirements.

         Under  Brazilian law, if a claim is granted,  the granting of the claim
will, in due course, be published by the Brazilian authorities in the Government
Gazette.  Such  publication  can occur from one to twenty years from the date of
the claimant making such application with respect to such claim.  Once the claim
is  published  in the  Government  Gazette  an  annual  tax of $0.20 per item is
payable on the published claim.

         The  granting of a mining  claim  conveys the right to explore the area
covered by the claim.  Claims are granted for a  three-year  term,  renewable on
request, subject to an annual fee. Exploration must begin in accordance with the
exploration  plan forming part of the application  within a specified  period of
the claim being granted. The claim may be canceled at the discretion of the DNPM
if the  claim  holder  suspends  exploration  for a period  of more  than  three
consecutive months or 120 non-consecutive days. The holder of a terminated claim
may reapply to regain the claim area.  The onus is on the claim holder to notify
the DNPM of any changes to the  exploration  plan.  On completion of the work, a
final  report  must be  filed  with  the  DNPM  describing  the  results  of the
exploration program.

         Mining concessions are granted only after exploration  demonstrates the
existence of a mineral deposit that is economically exploitable.  Therefore, the
report filed by the claimant  with the DNPM must include an economic  assessment
of the claim  area and a  feasibility  analysis.  Moreover,  the  claimant  must
demonstrate  to the DNPM that it has the  financial  capability to carry out the
proposed  plan.  The   application   for  a  concession  must  also  include  an
environmental plan, covering water treatment, soil erosion, air quality control,
re-vegetation and reforestation and site reclamation. Once granted, the terms of
the  concession  will include  conditions  concerning  mitigating  environmental
impacts,  site safety,  construction codes, waste disposal and site reclamation.
Following application, the DNPM may request additional information.

         A mining concession grants the right to extract and process the mineral
contained in the deposit in  accordance  with the plan  approved by the DNPM and
allows a mining company to exploit the deposit to exhaustion,  usually without a
predetermined  or fixed term. The concession  holder also has the right to sell,
transfer or lease such rights to a third party subject to DNPM  approval.  After
the grant of the mining  concession is published in the  Government  Gazette,  a
concession holder has 90 days to request possession of the deposit,  and initial
work in  accordance  with the mining  plan must  begin  within six months of the
publishing  date.  Once begun,  mining may not be suspended for a period of more
than six months on penalty of a possible  cancellation  of the concession at the
discretion of the DNPM. However,  management understands that longer suspensions
have been granted by the DNPM.  Annual  statistical  data on production  must be
reported to the DNPM,  which will also send  representatives  on  periodic  site
inspections.  Failure to comply with  regulations and mining plans may result in
penalties ranging from fines and other restitution to cancellation of the mining
concession and/or prison terms for officers of the company.

         The Brazilian Mining Code and the Federal Constitution of Brazil impose
on mining companies  requirements relating to, among other things, the manner in
which  mineral  deposits are  exploited,  the health and safety of workers,  the
protection and restoration of the  environment,  the prevention of pollution and
the promotion of the health and safety of local  communities where the mines are
located.  The  Mining  Code also  imposes  certain  notification  and  reporting
requirements.

         Landowners.  The  majority of land  covered by MBL's  claims is a sandy
gravely  soil  covered  in  light  scrub.   Cattle  ranching  is  the  principal
agricultural  activity.  Except where the claims fall within a township  such as
Cuiaba, the majority of the land is agricultural and has a low value.

         The Brazilian Mining Code requires a claim holder to obtain the consent
of the  surface  owners to access the  surface  of the  property.  This  usually
entails some form of an agreement  between the claim owner and the surface owner
involving the payment of  compensation to the surface owners for damage and loss
of income  caused by the use and  occupation  of their land in  connection  with
mining  activities.  In the event that an  agreement  cannot be reached with the
surface owner,  MBL may seek legal recourse under  Brazilian law, which provides
that a claim holder has the right of

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access if conducting mineral exploration activities, by seeking a judicial order
to  determine  the amount of  surface  damage to the  property  and to grant the
surface owner a royalty on future production.

         Brief History of Previous  Operations.  Gold mining in the Cuiaba Basin
began  around  1719.  Mining  activity was  sporadic,  tending to coincide  with
periods of high gold price or  technical  innovations  that  enabled  profitable
extraction of the gold.  The most recent phase of activity  occurred  during the
1980's  when a period of high gold prices  coincided  with the  availability  of
sophisticated  metal  detectors.  Miners  quickly  realized  that by using  this
equipment,  near-surface gold mineralization  (nuggets) could be readily located
and  recovered  with the help of earth moving  equipment.  Thousands of hectares
were  stripped of soil and  vegetation.  The easily  located  nugget  fields now
appear to be exhausted as do the majority of the easily mined mineralized quartz
veins.

         Climate.  Exploration and mining operations are possible throughout the
year.  The  rainy  season is from  December  through  to  April.  There are only
occasional thunder storms from May to December.  In summer (December - February)
the  temperature  can reach as high as 45 degrees  Centigrade  although the mean
temperature is 35 degrees Centigrade.

         Environmental Laws. Previous miners have stripped thousands of hectares
of soil and  vegetation  in the Cuiaba  Basin.  MBL will arrange to document the
existing  environmental  condition  of its  claims to place on  record  with the
environmental  authorities  the  damage  done  to the  environment  by  previous
operators.  Environmental  regulation  and  protection  in  Brazil  is  based on
provisions  of the Federal  Constitution,  and of federal,  state and  municipal
legislation.  Mining and  industrial  activities  require the  preparation of an
environmental  impact statement and the acquisition of an environmental  permit.
In addition,  the Mining Code requires the  reclamation and restoration of mined
areas.

         Gold Sales.  Gold mined in Brazil must be sold (i) to the Central  Bank
of Brazil  (via one of their  registered  agents),  (ii) to the Sao  Paulo  gold
exchange  or (iii) to any  registered  gold buyer in  Brazil.  The price paid is
normally  the  London  afternoon  Gold Fix.  On  occasion  a premium  is paid of
typically  2%. The agent  charges a  commission  that is normally  between 0.5 -
1.0%. The seller of the gold is paid in U.S. Dollars.

         Brazilian Taxation. In general,  Brazilian mining companies are subject
to a 25% income tax and an 8% social  security  contribution.  Dividends paid to
shareholders  domiciled  abroad  are  subject  to a 15%  withholding  tax by the
Brazilian taxing authority.

         Exchange Controls.  Exchange  transactions are generally  controlled by
the  Central  Bank of Brazil  which  authorizes  a series of banks to act in the
foreign exchange market,  selling and buying  currencies.  There is a commercial
rate of exchange  published  daily by the Central Bank based upon market results
on said day. A free market,  and quotation  system  exists,  mainly dealing with
tourist activities.  Both rates have been extremely close since the inception of
the  stabilization  plan ("Plano  Real")  several years ago.  Subject to certain
registration  requirements  with the Central Bank of Brazil and compliance  with
certain  regulations,  MBL may repatriate U.S. Dollars earned from its Brazilian
operations  to Toucan  Mining or the Company  through the repayment of loans and
the payment of dividends. On occasions in the past, Brazil has imposed temporary
restrictions  on the conversion and remittance of foreign  capital,  for example
when there was a serious  imbalance  in Brazil's  balance of  payments.  In such
circumstances,  the Company could be adversely affected, if the exchange control
rules were changed to delay or deny remittances abroad from MBL.

         Description  of  Present  Condition  of  Property;   Modernization  and
Physical  Condition  of  Plan  and  Equipment.  MBL  intends  to  obtain  mining
concessions  by  undertaking  a program  of  mineral  exploration  to target and
explore  selected areas of its Brazilian  mining claims to determine which areas
are most likely to contain economic gold mineralization. A mapping program based
upon  satellite  imagery will precede  field  investigation,  which will include
detailed geologic mapping,  geochemical sampling and drilling in accordance with
standard  exploration  practice.  A program of this nature  (bearing in mind the
size of MBL's  claim  area) is likely to take  several  years and could  involve
joint ventures. In the event of encouraging results in a particular area, a more
concentrated  study (with closely spaced  drilling and  metallurgical  analysis)
will be  undertaken  to provide  the basis of a  feasibility  study for  mineral
development. MBL will also be working to acquire additional claims in the Cuiaba
Basin.

         At this time, MBL is an  exploration  stage company and has no probable
or proven reserves as defined by the rules and regulations of the Securities and
Exchange Commission.


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         Description of the Rock Formations and Mineralization. The rocks of the
Cuiaba  Basin are  phyllites  of Archean  age,  which means they are amongst the
oldest rocks known and,  although they were originally  formed from fine grained
sediments  (mudstones  and  siltstones),  they have been  converted to micaceous
metamorphic  rocks  as  a  result  of  exposure  to  elevated  temperatures  and
pressures.

         The Cuiaba Basin has apparently been unusually tectonically stable over
an extended  period of geologic  time,  allowing the  development of a very deep
weathering  profile  in a  climate  characterized  by  alternating  wet  and dry
conditions.

         Primary gold  mineralization  appears to be related to irregular quartz
veins thought to have formed during a period of  metamorphism.  The near surface
gold  mineralization  (nuggets,  flakes and colors) is believed by management to
have developed as a result of leaching and upward  migration of gold in solution
during  development  of the soil profile.  Similar gold  occurrences  or "nugget
patches"  recently  recognized  in  Western  Australia  have  been  found  to be
associated with primary gold  mineralization at depth.  Management believes that
the broad  areas of nugget  development  in the  Cuiaba  Basin  suggest  surface
manifestations of deeper,  disseminated and probably very fine grained,  primary
gold mineralization of the sort found in Western Australia.

Exploration and Development Risks

         The  exploration  for and  development  of  mineral  deposits  involves
significant risks that even a combination of careful evaluation,  experience and
knowledge may not eliminate.  While the discovery of gold reserves may result in
substantial  rewards,  few properties that are explored are ultimately developed
into producing mines. Major expenses may be required to establish gold reserves,
to develop  metallurgical  processes  and to  construct  mining  and  processing
facilities at a particular  site. There can be no assurance that the exploration
programs  planned by the  Company,  Toucan  Mining  and/or MBL will  result in a
profitable commercial mining operation.  There is aggressive  competition within
the mining industry for the discovery and  acquisition of properties  considered
to have commercial  potential.  Toucan Mining,  MBL and the Company will compete
with other interests,  many of which have greater financial  resources than they
will have, for the opportunity to participate in promising projects. Significant
capital investment is required to achieve commercial  production from successful
exploration efforts.

         Whether a mineral  deposit  will be  commercially  viable  depends on a
number of factors,  some of which are the particular  attributes of the deposit,
such as size,  grade and  proximity  to  infrastructure,  as well as gold prices
which are highly  cyclical and  government  regulations,  including  regulations
relating to prices,  taxes,  royalties,  land use,  importing  and  exporting of
minerals and environmental protection.  The exact effect of these factors cannot
be accurately predicted,  but the combination of these factors may result in the
Company not receiving an adequate return on investment capital.

         The economic  feasibility of  prospective  projects such as the mineral
claims in the Cuiaba  Basin is based upon,  among  other  things,  estimates  of
reserves,  metallurgic recoveries,  capital and operating costs of such projects
and future gold prices. These and other prospective projects are also subject to
the successful completion of feasibility studies,  issuance of necessary permits
and receipt of adequate financing.

         Development  projects  have no  operating  history  upon  which to base
estimates  of  future  cash  operating  costs  and  capital   requirements.   In
particular, estimates of reserves, metal recoveries and cash operating costs are
to a large extent based upon the  interpretation  of geologic data obtained from
drill holes and other sampling  techniques and feasibility  studies which derive
estimates of cash operating costs based upon  anticipated  tonnage and grades of
ore to be mined and  processed,  the  configuration  of the ore  body,  expected
recovery  rates from  metals from the ore,  comparable  facility  and  equipment
costs,  anticipated  climate  conditions  and other  factors.  As a result it is
possible that actual cash  operating  costs and economic  returns of any and all
development  projects may materially differ from the costs and returns initially
estimated.

         In addition, mining operations generally involve a high degree of risk.
If MBL were to discover gold reserves and bring them into production,  MBL would
be  subject  to  all  of the  hazards  and  risks  normally  encountered  in the
exploration,   development  and  production  of  gold,   including  unusual  and
unexpected  geology  formations,  rock  bursts,  cave-ins,  flooding  and  other
conditions involved in the drilling and removal of materials, and of which could
result in damage to, or destruction  of, mines and other  producing  facilities,
damage to life or property,  environmental  damage and possible legal liability.
Although adequate  precautions to minimize risk will be taken, mining operations
are subject to

CORPDAL:64048.5  29976-00001
                                                         5

<PAGE>



hazards such as equipment  failure or failure of retaining dams around tailings,
disposal  areas  which may  result in  environmental  pollution  and  consequent
liability.

Proposed Canadianization Transaction

         On November 1, 1996, the  Company completed  an  offering  pursuant  to
Regulation S promulgated  under the  Securities  Act in which the Company raised
aggregate gross proceeds of $4 million. The placement agent for the offering was
Yorkton Securities Inc.  ("Yorkton").  See "Item 5. Market for Common Equity and
Related Stockholder Matters-- Recent Sales of Unregistered Securities."

         Pursuant  to the  placement  agreement  with  Yorkton,  the Company has
agreed that (a) it will use its reasonable best efforts to call a meeting of the
stockholders of Toucan (or otherwise obtain any required  stockholder  approval)
before  October 15, 1997,  for the purpose of  requesting  the  stockholders  to
authorize and approve a merger of Toucan with a Canadian  company (the "Canadian
Successor  Company")  quoted  on the  Canadian  Dealer  Network  that has been a
reporting issuer in Canada for at least one year and that is not in default.  In
addition,  pursuant  to the  placement  agreement  with  Yorkton,  the  Canadian
Successor  Company will appoint  Yorkton as exclusive agent for and on behalf of
the  Canadian  Successor  Company to sell certain  securities  in a placement on
behalf  of the  Canadian  Successor  Company  on or prior to  October  15,  1998
pursuant to certain terms set forth in the placement agreement.  This subsequent
offering is subject to a number of conditions,  including the  determination  by
the Board of Directors of the Canadian  Successor Company in its sole discretion
that raising additional  capital in the minimum amount of U.S.  $5,000,000 is in
the best interests of the Canadian Successor Company.

         The Company has had discussions  with  prospective  Canadian  successor
companies,  but no definitive  agreement with a Canadian  successor  company has
been reached at this time.

Employees.

         As of March 31, 1997, the Company employed seven (7) individuals.


                            ITEM 3. LEGAL PROCEEDINGS

         The Company is not a party to any pending legal proceeding,  nor is the
Company's property the subject of a pending legal proceeding.


           ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

         No matter was  submitted  during the fourth  quarter of the fiscal year
ended  December  31, 1996 to a vote of the  Company's  stockholders  through the
solicitation of proxies or otherwise.

CORPDAL:64048.5  29976-00001
                                                         6

<PAGE>



                                     PART II

        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company Common Stock is listed on the OTC Electronic Bulletin Board
of NASDAQ.  The following  table  indicates the quarterly high and low bid price
for the Company Common Stock on the OTC Electronic Bulletin Board for the period
during 1996 in which  quotations  were  available for Starlight  Common Stock or
Company  Common Stock and for the first  quarter of fiscal year ending  December
31, 1997. Prior to the  consummation of the Share Exchange  Agreement on May 10,
1996,  there was no public  trading market for Starlight  Common Stock.  For the
purposes of the  following  table,  the periods  prior to July 29, 1996 refer to
Starlight  Common  Stock.  Such  inter-dealer   quotations  do  not  necessarily
represent actual transactions, and do not reflect retail mark-ups, mark-downs or
commissions.

                                                  OTC ELECTRONIC
                                                  BULLETIN BOARD
                                                     BID PRICE

                                                     HIGH              LOW
         CALENDAR 1996
         1st Quarter                                 $  N/A            $  N/A
         2nd Quarter (May 9-June 30)                 $ 2.65            $   .25
         3rd Quarter                                 $ 4.125           $  1.25
         4th Quarter                                 $ 3.9375          $  2

         CALENDAR 1997
         1st Quarter                                 $ 2.125           $  1.25

         On April 7, 1997, the bid price of the Company Common Stock as reported
on the OTC Electronic Bulletin Board was $1 5/8.

         As of April 7, 1997, there were  approximately 347 holders of record of
the Company Common Stock.

         The Company has not declared or paid any cash or other dividends on the
Company  Common  Stock  to date for the last  two (2)  fiscal  years  and in any
subsequent  period  for  which  financial  information  is  required  and has no
intention of doing so in the foreseeable future.

Recent Sales of Unregistered Securities

         The following contains  information for all securities that the Company
sold  within  the  past  year  without  registering  the  securities  under  the
Securities Act:

1.   Effective  May 10,  1996,  Toucan  Mining  Limited  became a  wholly  owned
     subsidiary  of Starlight  when  Starlight  acquired all of the  outstanding
     capital  stock of  Toucan  Mining  in  exchange  for  4,534,999  shares  of
     Starlight  Common  Stock  pursuant to the Share  Exchange  Agreement.  As a
     result of the Share  Exchange,  each  shareholder of Toucan Mining received
     seven  shares of  Starlight  Common Stock for each share of common stock of
     Toucan  Mining held by such  shareholder.  The shares of  Starlight  Common
     Stock received by the Toucan Mining shareholders in the Share Exchange were
     issued in a  transaction  exempt from  registration  under Section 4(2) and
     Regulation D  promulgated  under the  Securities  Act and,  therefore,  are
     restricted  securities.  The  Starlight  Warrants  were  issued  to  former
     officers  and  directors  of  Starlight  in  consideration  of, among other
     things,  their  agreement to indemnify  Toucan  Mining and  Starlight  with
     respect to certain  representations  in the Share Exchange  Agreement.  The
     Starlight  Warrants were issued in a transaction  exempt from  registration
     under the  Securities  Act pursuant to Section 4(2) of the  Securities  Act
     and,  therefore,  are restricted  securities.  The holders of such warrants
     were granted  certain  piggy-back  registration  rights with respect to the
     shares of Starlight Common Stock underlying such warrants.

2.   On May 20, 1996,  Starlight  consummated  an offering of 563,141  shares of
     Starlight  Common  Stock  pursuant to  Regulation S  promulgated  under the
     Securities Act. The offering price was $0.20 per share of Starlight

CORPDAL:64048.5  29976-00001
                                                         7

<PAGE>



Common Stock,  and the shares of Starlight  Common Stock issued pursuant to said
     offering were issued on June 17, 1996.

3.   The Company was  organized  in the State of  Delaware  for the  purposes of
     reincorporating  Starlight,  a  Colorado  corporation,   in  the  State  of
     Delaware.  The  Reincorporation  was effected by merging Starlight into the
     Company, which, prior to the Reincorporation, was a wholly owned subsidiary
     of Starlight,  pursuant to an Agreement and Plan of Merger. Upon completion
     of the Merger,  Starlight  ceased to exist, and Toucan continued to operate
     the  business of  Starlight  under the name Toucan  Gold  Corporation.  The
     Reincorporation  became  effective  on July 29,  1996.  As a result  of the
     Reincorporation,  each then outstanding share of Starlight Common Stock, no
     par value,  was  converted  into one share of  Company  Common  Stock.  The
     Starlight  Warrants to purchase an aggregate of 100,000 shares of Starlight
     Common Stock at an exercise  price of $4.00 per share were  exchanged  into
     Toucan  Warrants  to  purchase an  aggregate  of 100,000  shares of Company
     Common  Stock.  The  Toucan  Warrants   provided  for  certain   piggy-back
     registration  rights  with  respect to the shares of Company  Common  Stock
     underlying such warrants. The shares of Company Common Stock and the Toucan
     Warrants issued pursuant to the Merger were issued in a transaction  exempt
     from registration under Rule 145(d) of the Securities Act.

4.   On November 1, 1996,  the Company  completed  the  offering  (the  "Yorkton
     Offering")  of  1,600,000  Units for  aggregate  gross  proceeds of U.S. $4
     million.  Each Unit  consisted of one share of Company  Common  Stock,  par
     value $.01 per share and one Company  Common Stock share  purchase  warrant
     (the  "Company  Warrants").  Each  Company  Warrant  entitles the holder to
     subscribe for one  additional  share of Company  Common Stock at a price of
     U.S.  $3.50 per share at any time  prior to the  close of  business  on the
     first  anniversary  of the original date of issue of the Company  Warrants,
     subject to adjustment in connection with certain anti-dilution  provisions.
     The price of the Units was U.S. $2.50 per Unit. The placement agent for the
     offering  was  Yorkton  Securities  Inc.  ("Yorkton").  Yorkton  received a
     commission of 8% of the gross  proceeds of the offering and was  reimbursed
     for  its  fees  and  expenses.   The  net  proceeds  to  the  Company  were
     approximately  U.S.  $3,600,000.  The  offering was  conducted  pursuant to
     Regulation S promulgated  under the Securities  Act and to exemptions  from
     the  offering  requirements  in any  jurisdiction  in which the Units  were
     offered.  Accordingly,  the Units  were not  offered  or sold in the United
     States or to U.S. persons, as defined in Regulation S.

5.   Certain of the net proceeds of the Yorkton  Offering were to be used by MBL
     or another  Brazilian  mining  subsidiary of the Company to acquire  mining
     claims in the Cuiaba Basin. These claims,  which number twenty-five (25) in
     the  aggregate,  are in the  process  of  being  acquired  pursuant  to the
     following agreement and understanding:

                  (i)  The Company will make an initial payment to the seller in
                  the amount  of U.S.  $500,000.  Upon  receiving  this  initial
                  payment, the  seller will grant to  the Representative  of the
                  Company an irrevocable power-of-attorney over all twenty-five
                  (25) Claims.

                  (ii) The Company  will pay to the seller cash in the amount of
                  U.S.  $36,000 for each claim that the DNPM  certifies  is held
                  with priority,  having good, clean and transferable title. See
                  "Description of Exploration and Mining Concessions" below.

                  (iii) The Company  will issue to the seller  12,000  shares of
                  the Company Common Stock for each claim that DNPM certifies is
                  held with priority, having good, clean and transferable title.

                  (iv) The Company  will issue to the seller a bonus  payment of
                  50,000  shares  of the  Company  Common  Stock if and when the
                  seller  transfers good and clean title to all twenty-five (25)
                  claims to the Company.

         The initial  payment of U.S.  $500,000  has been made by the Company to
         the  seller.  Hence,  the  Representative  on behalf of the Company now
         holds an  irrevocable  power of attorney  over all such  claims,  which
         entitles  the  Company,  upon  payment for such  claims as  hereinabove
         provided,  to  transfer  such  claims to MBL or another  subsidiary  of
         Toucan Mining. In December 1996,  fourteen (14) of the twenty-five (25)
         claims were certified by the DNPM as held in priority, with good, clean
         and transferable  title. In April 1997, two (2) additional  claims were
         certified  by the  DNPM as held  in  priority,  with  good,  clean  and
         transferrable  title.  These  sixteen (16) claims  cover  approximately
         135,916  Ha.  Accordingly,  in  December  1996,  the  Company  made  an
         additional

CORPDAL:64048.5  29976-00001
                                                         8

<PAGE>



         payment to the seller of U.S. $504,000 (14 x 36,000). In addition,  the
         Company is  obligated  to pay to seller  $72,000  (2 x $36,000)  and to
         issue to the seller  193,000 (16 x 12,000) shares of the Company Common
         Stock with  respect to such claims.  Legal title to these  sixteen (16)
         claims is in the process of being  transferred  to MBL  pursuant to the
         power-of-attorney.

         If all  remaining  nine (9) claims are so  certified  by the DNPM,  the
         Company will pay to the seller an additional $324,000 and will issue to
         the seller an additional  108,000  shares of the Company  Common Stock,
         and legal title to these claims will be transferred to MBL. There is no
         assurance that these remaining claims will be certified by the DNPM and
         transferred to the Company.

 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN
                                  OF OPERATION

         Effective  May 10,  1996,  Starlight  acquired  all of the  outstanding
capital stock of Toucan Mining in exchange for shares of Starlight Common Stock.
As a result of the Share  Exchange,  a change in control of Starlight  occurred,
whereby  Toucan  Mining is deemed to have acquired  Starlight.  See Notes to the
Consolidated Financial Statements.

         Toucan  Mining  is  a  development  stage  company  that  conducts  its
operations  primarily  through its  wholly-owned  subsidiary,  MBL,  which is an
authorized  mining  company  organized  under the laws of  Brazil.  MBL has been
financed  entirely  by Toucan  Mining  for the  purpose  of  conducting  mineral
exploration, specifically gold exploration.

         During  July  1996,  Starlight  formed the  Company  as a  wholly-owned
subsidiary. On July 29, 1996, Starlight merged into the Company, and pursuant to
the terms of the Merger,  the outstanding  shares of Starlight Common Stock were
canceled in exchange for shares of the Company Common Stock.

         The  consolidated  financial  statements  for  the  fiscal  year  ended
December  31,  1996,  reflect the  results of the  Company's  operations,  which
consisted  primarily of legal and consulting fees incurred by Toucan Mining with
respect  to the  Share  Exchange  and by the  Company  for  the  Reincorporation
transaction  between  Starlight  and  the  Company,  compliance  with  reporting
requirements  of  applicable  securities  laws,  and financing and joint venture
transactions  by the Company.  In addition,  Starlight and the Company  incurred
travel and interest expense on short-term loans.

         The Company  intends to undertake a program of mineral  exploration  to
target and explore  selected  areas of its Brazilian  mining claims to determine
which  areas are most  likely to  contain  economic  gold  mineralization  or to
effectuate  this program  through joint  ventures.  A mapping program based upon
satellite imagery will precede field investigation,  which will include detailed
geologic mapping,  geochemical sampling and drilling in accordance with standard
exploration  practice. A program of this nature is likely to take several years.
In the event of encouraging  results in a particular  area, a more  concentrated
study will be undertaken to provide the basis of a feasibility study for mineral
development. MBL will also be working to acquire additional claims in the Cuiaba
Basin in the State of Mato Grosso, Brazil.

         The Company  will incur major  expenses to establish  the  existence of
gold reserves.  Accordingly, to fund the Company's exploration program for up to
two  years  and to pay for  normal  expenses,  the  Company  will  need to raise
substantial  funds or enter into joint ventures with industry partners who agree
to provide such funds.  There can be no assurance  that the Company will be able
to raise such capital if needed or on terms that are favorable to the Company or
to enter into such joint  ventures on terms  favorable to the Company.  The plan
will be subject to review depending upon the results obtained.  Costs could rise
if, among other things, the weather proves untypically harsh,  unforeseen ground
conditions  are   encountered,   equipment   becomes   difficult  to  source  or
negotiations with surface owners become prolonged. MBL may spend more or less on
claim acquisitions than currently estimated.  There can be no assurance that the
exploration   program   will  result  in  the   discovery   of   economic   gold
mineralization.  The matters discussed herein contain forward-looking statements
that involve certain risks,  uncertainties and additional costs detailed herein.
The  actual   results  that  are  achieved  may  differ   materially   from  any
forward-looking  projections,  due to such risks,  uncertainties  and additional
costs.

         The  Company  has raised  approximately  $3.6  million in net  proceeds
through the issuance of 1,600,000  Units at $2.50 per Unit, each Unit consisting
of one  share of  Company  Common  Stock and a warrant  to  purchase  a share of
Company Common Stock at an exercise price of $3.50,  in an offering  exempt from
registration  under the  Securities  Act pursuant to Regulation S. This offering
was completed on November 1, 1996.


CORPDAL:64048.5  29976-00001
                                                         9

<PAGE>



         The Company has used certain of the proceeds from the sale of the Units
to finance the purchase of  additional  mining  claims in the Cuiaba  Basin,  to
begin its exploration program, and for general working capital purposes.  If the
purchase of all of such claims is  consummated,  the  aggregate  purchase  price
would consist of  approximately  U.S.  $1,400,000 in cash and 350,000  shares of
Company  Common  Stock,  of which  $1,004,000  has been paid to date and 168,000
shares  of  Company  Common  Stock are to be issued  for  claims  that have been
acquired  to date.  While the Company  has an  agreement  with the owner of such
claims with respect to the purchase terms with respect to the remaining  claims,
the Company's obligations  thereunder are subject to its review of documentation
relating to such claims.  There can be no assurance that the  acquisition of the
remaining claims will be consummated. See "Item 1 and 2. Description of Business
and Property - Mining  Claims" and "Item 5. Market for Common Equity and Related
Stockholder Matters - Recent Sales of Unregistered Securities."

         The  Company  had  entered  into a letter of  intent  (the  "Letter  of
Intent") with Eldorado Gold Corporation  ("Eldorado") pursuant to which Eldorado
would  earn a 50%  interest  in  10% of MBL  mining  claims  to be  selected  by
Eldorado,  through the expenditure of Canadian $5 million by Eldorado within two
years. The Letter of Intent was subject to a number of conditions, including the
negotiation  and  execution  of a  definitive  agreement  within a certain  time
period.  These  conditions  were not  fulfilled,  and the  Letter of Intent  has
expired by its terms.  Eldorado has  asserted  the  position  that the Letter of
Intent constituted a binding agreement that it may seek to enforce if definitive
documents  reflecting  the terms of the Letter of Intent are not  executed.  The
Company believes that El Dorado's position is without merit.

         Certain of the  information  contained  in this  Annual  Report on Form
10-KSB constitutes  forward looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as
amended,  that  involves  certain  risks,  uncertainties  and  additional  costs
described  herein.  The actual  results that are achieved may differ  materially
from any  forward  looking  projections,  due to such risks,  uncertainties  and
additional costs. Although the Company believes that the expectations  reflected
in such forward looking statements are based upon reasonable assumptions, it can
give no assurance that its expectations will be achieved. Subsequent written and
oral forward looking statements attributable to the Company or persons acting on
its behalf are expressly qualified in their entirety by reference to such risks,
uncertainties and additional costs.

                          ITEM 7. FINANCIAL STATEMENTS

         Filed  herewith  beginning  on  page  F-1  are  the  following  audited
financial statements of the Company:

                                                                                

<TABLE>
<CAPTION>
                                                                                                           Page No.
<S>                                                                                                             <C>
Report of Independent Certified Public Accountants..............................................................F-2

Consolidated Balance Sheet as of December 31, 1996..............................................................F-3

Consolidated Statements of Operations for the year ended December 31, 1996
  and the period from November 3, 1995 to December 31, 1995.....................................................F-4

Consolidated Statements of Stockholders' Equity for the year ended December 31, 1996
  and the period from November 3, 1995 to December 31, 1995.....................................................F-5

Consolidated Statement of Cash Flows for the year ended December 31, 1996
  and the period from November 3, 1995 to December 31, 1995.....................................................F-6

Notes to Financial Statements...................................................................................F-7
</TABLE>

CORPDAL:64048.5  29976-00001
                                                        10

<PAGE>


                 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF
                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                                DECEMBER 31, 1996



<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors
Toucan Gold Corporation


We have  audited  the  accompanying  consolidated  balance  sheet of Toucan Gold
Corporation,  as of December 31, 1996, and the related statements of operations,
stockholders'  equity,  and cash flows for the year ended  December 31, 1996 and
the  period  from  November  3, 1995  (inception)  to  December  31,  1995.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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.

As discussed in Note C, Toucan Gold  Corporation is a development  stage company
with a  significant  investment  in  unproven  mineral  rights.  The  Company is
undertaking a program of mineral exploration.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position  of  Toucan  Gold
Corporation  as of December 31, 1996,  and the results of its operations and its
cash flows for the year ended  December 31, 1996 and the period from November 3,
1995  (inception) to December 31, 1995, in conformity  with  generally  accepted
accounting principles.



GRANT THORNTON LLP

Dallas, Texas
March 31, 1997




         The accompanying notes are an integral part of this statement.

                                      F-2
<PAGE>


                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEET

                                December 31, 1996



                                     ASSETS
<TABLE>
<CAPTION>

<S>                                                                             <C>       
Cash                                                                            $2,031,045

Prepaid expenses                                                                     6,374

                  Total current assets                                           2,037,419

Mineral rights                                                                   1,691,442

                                                                                $3,728,861

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Amounts payable to related parties                                                 $ 9,051

Accrued expenses and other liabilities                                              29,311

                  Total current liabilities                                         38,362

Stockholders' equity
    Preferred stock, par value .01 per share; authorized, 2,000,000
       shares; issued and outstanding, none                                              -
    Common stock, $.01 par value per share; authorized 30,000,000
       shares; issued and outstanding, 7,432,600 shares                             74,326
    Additional paid-in capital                                                   4,050,679
    Deficit accumulated during the development stage                              (434,506)
                                                                                 ---------

                  Total stockholders' equity                                     3,690,499

                                                                                $3,728,861
                                                                                 ---------
</TABLE>


         The accompanying notes are an integral part of this statement.

                                       F-3
<PAGE>

                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

            For the year ended December 31, 1996 and the period from
                      November 3, 1995 to December 31, 1995

<TABLE>
<CAPTION>

                                                                                                    For the period
                                                                                                   November 3, 1995
                                                                                                     (commencement
                                                                                                    of operations)
                                                                                                           through
                                                                      1996           1995          December 31,1996
                                                                     ------         ------         ----------------

Cost and expenses
<S>                                                               <C>             <C>                <C>      
    Legal and professional fees                                   $ 180,442        $ 2,500           $ 182,942
    Travel and entertainment                                        114,264         42,553             156,817
    Public relations                                                 33,655             -               33,655
    Other                                                            31,452          9,120              40,572
                                                                    -------         ------             -------

                  Total cost and expenses                           359,813         54,173             413,986

Other (income) expense
    Foreign currency gain                                            (1,342)        (8,830)            (10,172)
    Interest income                                                 (17,650)            -              (17,650)
    Interest expense                                                 48,342             -               48,342
                                                                    -------            ---             -------

                  Total other (income) expense                       29,350         (8,830)             20,520
                                                                    -------        -------             -------

                  Net loss                                        $ 389,163       $ 45,343           $ 434,506
                                                                   ========        =======            ========

Loss per share                                                       $.09            $.07                $.09
                                                                      ===             ===                 ===

Weighted average shares outstanding                               4,210,334        647,857           4,858,191
                                                                  =========        =======           =========
</TABLE>

         The accompanying notes are an integral part of this statement.

                                       F-4
<PAGE>


                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

            For the year ended December 31, 1996 and the period from
                      November 3, 1995 to December 31, 1995

<TABLE>
<CAPTION>

                                                                                          Deficit
                                                                                       accumulated
                                                                        Additional         during
                                                        Common stock      paid-in      development
                                                 Shares       Amount      capital           stage            Total
                                                 ------       ------    ----------     -----------           -----

<S>                                            <C>           <C>        <C>            <C>               <C>
Balance at November 3, 1995                           -      $     -    $       -      $      -          $      -

Issuance of common stock                         647,857       96,170           -             -              96,170

Net loss                                              -            -            -        (45,343)           (45,343)
                                                     ---          ---          ---      --------           --------

Balance at December 31, 1995                     647,857       96,170           -        (45,343)            50,827

Recapitalization of Toucan Mining
    Limited and merger with Starlight
    Acquisitions, Inc.                         4,453,602      (50,787)     150,787            -             100,000

Issuance of common stock, net of
    expenses of $519,700                       2,331,141       28,943    3,899,892            -           3,928,835

Net loss                                              -            -            -       (389,163)          (389,163)
                                                     ---          ---          ---      --------          ---------

Balance at December 31, 1996                   7,432,600     $ 74,326   $4,050,679     $(434,506)        $3,690,499
                                               =========      =======    =========      ========          =========
</TABLE>


         The accompanying notes are an integral part of this statement.

                                       F-5
<PAGE>

                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

            For the year ended December 31, 1996 and the period from
                      November 3, 1995 to December 31, 1995

<TABLE>
<CAPTION>

                                                                                                    For the period
                                                                                                   November 3, 1995
                                                                                                     (commencement
                                                                                                    of operations)
                                                                                                           through
                                                                      1996           1995          December 31,1996
                                                                     ------         ------         ----------------

Operating activities
<S>                                                              <C>             <C>                <C>        
    Net loss                                                     $ (389,163)     $ (45,343)         $ (434,506)
    Net changes in operating assets and liabilities
       Prepaid expenses                                               1,626         (8,000)             (6,374)
       Accrued expenses                                             (11,289)        40,600              29,311
                                                                   --------        -------             -------

                  Net cash used in operating activities            (398,826)       (12,743)           (411,569)

Investing activities
    Acquisition of mineral rights                                (1,235,912)      (119,530)         (1,355,442)

Financing activities
    Net repayments/borrowings from related parties                  (72,260)        81,311               9,051
    Issuance of common stock, net of expenses                     3,624,835         64,170           3,689,005
    Proceeds from merger with Starlight Acquisitions, Inc.          100,000             -              100,000
                                                                   --------            ---            --------

                  Net cash provided by financing activities       3,652,575        145,481           3,798,056
                                                                 ----------       --------          ----------

                  Net increase in cash                            2,017,837         13,208           2,031,045

Cash at beginning of period                                          13,208             -                   -
                                                                    -------            ---                 --

Cash at end of period                                           $ 2,031,045       $ 13,208         $ 2,031,045
                                                                 ==========        =======          ==========

Cash paid during the year for:
    Interest                                                       $ 48,342           $ -
<FN>

Noncash investing and financing activities:
    Mineral  rights were  acquired for 168,000  shares of common stock valued at
$336,000.

    In 1995,  Toucan Mining  Limited  issued 135,000  shares,  valued at $22,500 to certain  suppliers of goods and
    services in lieu of cash payments.
</FN>
</TABLE>



                                       F-6
<PAGE>

                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 1996 and 1995



NOTE A - ORGANIZATION AND NATURE OF OPERATIONS

     Organization

     Starlight  Acquisitions,  Inc.  (Starlight)  was  formed  in 1989 and was a
     publicly-held  development stage company with no principal operations since
     its  incorporation.  On May 10, 1996,  Starlight  merged with Toucan Mining
     Limited (Toucan Mining),  an Isle of Man corporation which began operations
     on November 3, 1995.  Pursuant to the terms of the merger  agreement,  each
     stockholder  of Toucan  Mining  received  seven shares of Starlight  common
     stock for each share of Toucan Mining common stock.  Immediately  after the
     merger,  the stockholders of Toucan Mining owned  approximately  89% of the
     outstanding  common  stock of  Starlight.  Therefore,  the  merger has been
     accounted  for as a reverse  merger,  whereby  Toucan  Mining is deemed for
     accounting purposes to have acquired Starlight.

     During July 1996,  Starlight formed Toucan Gold Corporation (Toucan Gold or
     the Company), a wholly-owned subsidiary and a Delaware corporation. On July
     29, 1996,  Starlight  merged into Toucan Gold, and pursuant to the terms of
     the merger,  the outstanding  shares of Starlight were canceled in exchange
     for shares of Toucan Gold. (See Note F)

     Nature of Operations

     The  Company is engaged in  acquiring,  exploring  and  developing  mineral
rights in Brazil.


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A summary of the significant  accounting policies  consistently  applied in
     the preparation of the accompanying financial statements follows:

     Consolidation

     The consolidated  financial  statements include the accounts of the Company
     and its  wholly-owned  subsidiary,  Toucan Mining and Mineradora de Bauxita
     Ltda.  (MBL),  a  Brazilian  company  whose  shares  are held in trust by a
     Brazilian  related  party for the benefit of Toucan  Mining.  All  material
     intercompany accounts and transactions have been eliminated.

     Mineral Rights

     Acquisition costs of mineral rights and related exploration and development
     expenditures are deferred.  If deferred  expenditures  exceed estimated net
     realizable  values,  the assets will be written down to their estimated net
     realizable  values.   Costs  relating  to  abandoned   properties  will  be
     written-off when such a decision is made.

                                       F-7
<PAGE>


                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1996 and 1995



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     Financial Instruments

     The carrying amounts  reported in the balance sheet for cash,  payables and
     accrued expenses  approximate fair value due to the short-term  maturity of
     these financial instruments.

     Use of Estimates

     In preparing  financial  statements in conformity  with generally  accepted
     accounting  principles,  management  is  required  to  make  estimates  and
     assumptions that affect the reported amounts of assets and liabilities, the
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements,  and the  reported  amounts of revenues and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.


NOTE C - MINERAL RIGHTS

     Mineral rights include the following as of December 31, 1996:
<TABLE>
<CAPTION>

<S>                                                                            <C>       
         Consideration paid for priority claims                                $1,340,000
         Other acquisition and exploration costs (Note D)                         351,442
                                                                                ---------

                                                                               $1,691,442
                                                                                ---------
</TABLE>

     The Company owns priority claims for 1,234,948 hectares which were filed in
     1995  with  the  Departamento  Nacional  De  Produca  Mineral  (DNPM),  the
     Brazilian  governmental  agency  responsible for regulating mineral rights.
     The  Company  was not  required  to make any  payments to the DNPM or third
     parties in relation to the filing of these claims.

     In November 1996, the Company  entered into a transaction  with a Brazilian
     individual to acquire 25 additional priority claims, over a period of time,
     as each of these  claims were  confirmed  by the DNPM.  As of December  31,
     1996, the Company had acquired 14 of these claims, approximately 480 square
     miles, in consideration for $1,004,000 in cash and 168,000 shares of common
     stock,  to be  issued  in  1997.  The  issuance  of these  shares  has been
     reflected as of December 31, 1996 in the accompanying financial statements.

     The  Company's  current  business  plan  includes  undertaking a program of
     mineral  exploration  to target and explore  selected areas of its priority
     claims to determine  which areas are most likely to contain  economic  gold
     reserves or to enter into joint ventures or other  arrangements  to explore
     and develop mineral rights.


                                       F-8

<PAGE>


                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1996 and 1995



NOTE C - MINERAL RIGHTS - CONTINUED

     The  recoverability  of amounts shown for mineral  rights is dependent upon
     the  discovery of  economically  recoverable  reserves,  the ability of the
     Company to obtain  necessary  financing to develop  these  mineral  rights,
     future profitable production, or proceeds from disposition of the rights.


NOTE D - RELATED PARTIES

     From  November 3, 1995  (inception)  until  November  1996,  the  Company's
     activities  were  primarily  financed  by  related  parties  in the form of
     short-term loans.  Advances and repayments during 1996 under the short-term
     loans were $646,704 and $767,564,  respectively.  Interest  expense paid to
     related parties in relation to these loans was $48,342 and $-0- in 1996 and
     1995, respectively.

     Amounts payable to related parties consist of the following at December 31,
1996:

        Stockholders                                            $8,137
        Other                                                      914
                                                                 -----

                                                                $9,051
                                                                 -----

     The loans from the stockholders are noninterest-bearing, unsecured and with
     no specific  maturity date. Other related party loans bear interest at 10%,
     are unsecured and are due upon demand.

     In 1996 and 1995, the Company made payments of  approximately  $307,000 and
     $61,000, respectively, to five stockholders for various consulting services
     including,  geological  surveys  and  advice,  working  with  the  DNPM  to
     establish beneficial ownership of the priority claims,  Brazilian legal and
     regulatory advice in relation to the priority claims,  and the registration
     of MBL.  Included  in these  costs  are  approximately  $318,000  which are
     considered  to be costs  relating to the  acquisition  and  exploration  of
     mineral  rights and have been  capitalized as mineral rights as of December
     31, 1996.


NOTE E - PER SHARE DATA

     Loss per share is determined  by dividing net loss by the weighted  average
     number of common shares outstanding during the period.



                                       F-9

<PAGE>


                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1996 and 1995



NOTE F - STOCK WARRANTS

     As described in Note A,  Starlight's  outstanding  shares were cancelled in
     exchange for shares of the Company.  Additionally,  Starlight warrants were
     issued  on May  10,  1996 to  purchase  an  additional  100,000  shares  of
     Starlight common stock at an exercise price of $4.00 per share,  which were
     exchanged  for the  Company's  warrants to purchase  100,000  shares of the
     Company's common stock at an exercise price of $4.00 per share. The holders
     of these warrants have certain piggy-back  registration rights with respect
     to the shares of the Company's  common stock  underlying the warrants.  The
     warrants are immediately exercisable and expire on the later of January 10,
     1998, or the six month anniversary of closing of the first  registration of
     securities by the Company.

     On November 1, 1996, the Company  completed an offering of 1,600,000  units
     for gross  proceeds  of $4  million.  Each unit  consisted  of one share of
     Company common stock, par value $.01 per share and one Company common stock
     share  purchase  warrant (the  "Company  Warrants").  Each Company  Warrant
     entitles the holder to subscribe for one additional share of Company common
     stock at a price  of $3.50  per  share  at any time  prior to the  close of
     business  on the first  anniversary  of the  original  date of issue of the
     Company  Warrants,   subject  to  adjustment  in  connection  with  certain
     anti-dilution provisions.


NOTE G - INCOME TAXES

     Income tax expense for the year ended December 31, 1996 and the period from
     November 3, 1995 to December 31, 1995  differs from the amount  computed by
     applying the applicable U.S.  corporate  income tax rate of 34% to net loss
     before taxes because a benefit has not been recorded for net operating loss
     carryforwards. At December 31, 1996, the Company had approximately $172,000
     of net operating  loss  carryforwards  which expire  through  2011.  Toucan
     Mining and MBL had approximately $223,000 and $36,000, respectively, of net
     operating loss carryforwards at December 31, 1996.

     The Company's  deferred tax asset at December 31, 1996 and 1995 relating to
     net operating loss  carryforwards was  approximately  $147,000 and $15,000,
     respectively.  A valuation  allowance  for this asset has been  recorded in
     each period.


NOTE H - COMMITMENT AND CONTINGENCY

     The Company had  entered  into a letter of intent (the  "Letter of Intent")
     with  Eldorado Gold  Corporation  ("Eldorado")  pursuant to which  Eldorado
     would earn a 50%  interest  in 10% of MBL mining  claims to be  selected by
     Eldorado, through the expenditure of Canadian $5 million by Eldorado within
     two  years.  The Letter of Intent  was  subject to a number of  conditions,
     including the negotiation and execution of a definitive  agreement within a
     certain time period. These conditions were not fulfilled, and the Letter of
     Intent has expired by its terms.  Eldorado has  asserted the position  that
     the Letter of Intent  constituted a binding  agreement  that it may seek to
     enforce  if  definitive  documents  reflecting  the terms of the  Letter of
     Intent are not executed.  The Company believes that Eldorado's  position is
     without merit.

                                       F-10
<PAGE>


                             TOUCAN GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1996 and 1995



NOTE H - COMMITMENT AND CONTINGENCY - CONTINUED

     Under an  agreement  with a Brazilian  individual  (Note C), the Company is
     committed to acquire 11 additional  priority claims upon clearance of title
     by the DNPM. The  consideration  for each claim will be $36,000 in cash and
     12,000 shares of the Company. In addition, a bonus payment of 50,000 shares
     is due to the seller if all 11 claims are delivered to the Company.



                                       F-11
<PAGE>


       ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                            AND FINANCIAL DISCLOSURE

Removal of Former Certifying Accountant of Starlight

         On May 10, 1996, the Board of Directors of Starlight removed Comiskey &
Company, P.C., as the Company's principal accountants.

         None of the  reports  of  Comiskey  & Company,  P.C.  on the  financial
statements  of Starlight  for either of the past two fiscal  years  contained an
adverse opinion or a disclaimer of opinion,  or was qualified as to uncertainty,
audit scope,  or accounting  principles.  During the Starlight's two most recent
fiscal years and the subsequent interim period preceding such resignation, there
were no disagreements with Comiskey & Company,  P.C. on any matter of accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedures.  None of the  reportable  events  listed  in Item  304(a)(1)(iv)  of
Regulation  S-B  promulgated  by the  Securities  and Exchange  Commission  (the
"Commission") occurred with respect to Starlight and Comiskey & Company, P.C.

         Pursuant  to  Item  304(a)(3)  of  Regulation  S-B  promulgated  by the
Commission,  Starlight  has  provided  Comiskey & Company,  P.C.  with a copy of
Starlight's  Current Report on Form 8-K dated May 13, 1996,  which disclosed the
information  in this Item 8  regarding  the  removal  of  Comiskey  & Company as
Starlight's principal accountants,  and Comiskey & Company, P.C. has provided to
Starlight  a response  addressed  to the  Commission  as to  Comiskey & Company,
P.C.'s  agreement with the statements  made in such Current Report dated May 13,
1996 with  respect  to  Comiskey  & Company,  P.C.  Comiskey  & Company,  P.C.'s
response letter is incorporated by reference to this Form 10- KSB.

Engagement of New Certifying Accountant of Company

         On August 1, 1996,  Grant  Thornton  LLP was engaged as the  certifying
accountants of the Company.  This  appointment was  unanimously  approved by the
Board of  Directors  of the Company  during a meeting of the Board of  Directors
held that same day.

         During the Company's  two most recent  fiscal years and the  subsequent
interim period prior  to its engagement,  Grant Thornton LLP  was not  consulted
regarding any of the items, events or circumstances  listed in Item 304(a)(2) of
Regulation  S-B,  except that  Starlight,  the  predecessor  corporation  to the
Company, consulted with Grant Thornton LLP as to the accounting treatment of the
Merger as defined and  discussed  in Items 1 and 2 hereof.  Grant  Thornton  LLP
advised  Starlight  that  accounting  treatment  similar  to a pooling  would be
available with respect to the Merger and that,  except to reflect the changes in
par value, the Company's financial statements would be substantially  similar to
Starlight's financial statements immediately prior to the Merger.

         Neither  Starlight's  former  accountant  nor  Toucan  Mining's  former
accountant was consulted by the Company regarding any such issues.

         Pursuant  to Item  304(a)(2)(D)  of  Regulation  S-B,  the  Company has
requested Grant Thornton LLP to review the disclosure  concerning Grant Thornton
LLP in the  Company's  Current  Report on Form 8-K dated  July 29,  1996,  which
disclosed  the  information  in this Item 8 regarding  the  engagement  of a new
certifying  accountant of the Company,  and has provided  Grant Thornton LLP the
opportunity  to  furnish  the  Company  a  letter  addressed  to the  Commission
containing any new information, clarification of the Company's expression of its
views,  or the  respects in which it does not agree with the  statements  by the
Company  made in such  Current  Report  dated July 29,  1996 in response to Item
304(a)(2)(D)  of Regulation  S-B.  Grant  Thornton LLP reviewed the  information
provided in response to such Current  Report dated July 29, 1996 and has advised
the Company that it does not have any new  information or  clarification  of the
Company's views and it agrees with the statements made by the Company under such
Current Report dated July 29, 1996.

Resignation of Former Certifying Accountant of Toucan Mining

         On July 21, 1996, the Board of Directors of Toucan Mining  accepted the
resignation of Deloitte & Touche as the certifying accountants of Toucan Mining.
Deloitte & Touche has never been the  certifying  accountants  of the Company or
its predecessor Starlight.

CORPDAL:64048.5  29976-00001
                                                        11

<PAGE>



         Toucan  Mining is a  significant  subsidiary  of the Company;  however,
neither the Company's nor  Starlight's  certifying  accountants  ever  expressed
reliance on Deloitte & Touche's  report with  respect to Toucan  Mining in their
reports.  Accordingly, the Company does not believe it is required to report the
resignation of Deloitte & Touche as the certifying  accountant of Toucan Mining.
The Company voluntarily  reported that the report submitted by Deloitte & Touche
on the financial  statements  of Toucan  Mining for the fiscal period  beginning
with inception (November 3, 1995) and ending March 31, 1996 (the "Report"),  did
not contain an adverse  opinion or a disclaimer of opinion,  or was qualified or
modified as to uncertainty,  audit scope, or accounting principles, as set forth
in Item  304(a)(1)(ii)  of Regulation S-B, except that the Report  contained the
following going concern qualifications:

         The accompanying  financial statements have been prepared assuming that
         Toucan Mining Limited will continue as a going  concern.  Toucan Mining
         Limited is a development stage enterprise engaged in the development of
         mineral  rights in  Brazil.  As  discussed  in Note 1 to the  accounts,
         Toucan Mining Limited is in the initial stage of exploration  and it is
         not possible to ascertain whether future revenues will be sufficient to
         allow  Toucan  Mining  Limited  to  continue  as a going  concern.  The
         consolidated  financial  statements do not include any adjustments that
         might result from the outcome of this uncertainty.

During such fiscal period of Toucan  Mining,  there were no  disagreements  with
Deloitte & Touche on any matter of accounting principles or practices, financial
statement  disclosure,  or  auditing  scope or  procedure  as set  forth in Item
304(a)(1)(iv)  of Regulation  S-B. None of the reportable  events listed in Item
304(a)(1)(iv)(B)  or 304(b) of  Regulation  S-B occurred  with respect to Toucan
Mining or the Company and Deloitte & Touche.

         Pursuant to Item  304(a)(3) of  Regulation  S-B, the Company and Toucan
Mining  have  provided  Deloitte & Touche with a copy of the  Company's  Current
Report on Form 8-K, dated July 29, 1996, which disclosed the information in this
Item 8  regarding  the  resignation  of  Deloitte  & Touche as  Toucan  Mining's
certifying  accountant,  and  Deloitte & Touche has  provided to Toucan Gold and
Toucan Mining a response addressed to the Securities and Exchange  Commission as
to Deloitte & Touche's agreement with the statements made in such portion of the
Current  Report on Form 8-K dated  July 29,  1996 with  respect  to  Deloitte  &
Touche.  Deloitte & Touche's  response letter  incorporated by reference to this
Form 10-KSB.



CORPDAL:64048.5  29976-00001
                                                        12

<PAGE>



                                    PART III

      ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS


         The Board of Directors  currently consists of four (4) persons,  Oliver
Lennox-King,  Robert P.  Jeffcock,  L. Clark Arnold,  and Don Box. The following
table sets forth information  about all directors and executive  officers of the
Company and all persons nominated or chosen to become such:

<TABLE>
<CAPTION>

                                                                                                         YEAR FIRST
                                                                                                          ELECTED
        NAME AND BUSINESS ADDRESS            AGE                         OFFICE                           DIRECTOR
        -------------------------            ---                         ------                           --------
<S>                                           <C>    <C>                                                    <C>
Oliver Lennox-King                            48     Director, President and Chief Executive                1997
26 Wellington Street                                 Officer
Suite 905
Toronto, Ontario CANADA
Robert P. Jeffcock                            58     Chairman of the Board of Directors and Vice            1996
Apt. B42 ROC Fleuri                                  President-Chief Financial Officer, and
1 Rue du Tenao  MONACO                               Secretary
L. Clark Arnold                               57     Director and Executive Vice President-                 1996
201 East Rudasill Road                               Exploration
Tucson, Arizona
Don Box                                       47     Director and Assistant Secretary                       1996
8201 Preston Road, Suite 600
Dallas, Texas
</TABLE>


         Oliver Lennox-King -  Mr.  Lennox-King  has  served  as  the  Director,
President and Chief Executive Officer of the Company since February 1, 1997. Mr.
Lennox-King  has  considerable   experience  with  small  to  medium  size  gold
exploration  companies based in Canada.  Mr.  Lennox-King is a founder of Tiomin
Resources,  Inc.  and served as a director  and the Chief  Executive  Officer of
Tiomin  Resources,  Inc.  from 1991 through  1996.  Tiomin  Resources,  Inc. was
involved in copper and titanium exploration in Panama, Canada and Kenya.

         Robert  Jeffcock - Mr. Jeffcock has served as the Chairman of the Board
of  Directors,  Chief  Financial  Officer and Secretary of the Company since the
date of the Share  Exchange  (May 10,  1996),  and also served as President  and
Chief Executive Officer of the Company from the date of the Share Exchange until
December 31, 1996.  Since 1995,  Mr.  Jeffcock has been a Director of TML.  From
1987 until 1990 Mr.  Jeffcock  was the  Managing  Director of Blue Angel  Mining
Ltd.,  a gold  exploration  company in Ecuador and from 1990 until 1994 he was a
director of Atlantis  Diamonds Ltd.,  which was involved in diamond  exploration
and production in Brazil.  From 1990 until 1994,  Mr.  Jeffcock was President of
Rand Industries Inc., a mining company. In 1981, Mr. Jeffcock was the co-founder
and President of Isle Resources Inc., a public oil and gas company. In 1984, Mr.
Jeffcock  co-founded  Lysander  Petroleum Ltd., which is now Melrose Energy Plc.
Mr.  Jeffcock  was  educated  at Bedales  School and at Aiglon  School  Villars,
Switzerland.

         L. Clark Arnold - Mr. Arnold  has served  as a  Director and  Executive
Vice  President-Exploration of the Company since the date of the Share Exchange.
Mr. Arnold is a registered professional geologist in the State of Arizona. Since
the mid-1970s Mr. Arnold has engaged in a consulting practice located in Tucson,
Arizona, focused on mineral exploration in Southwest U.S., South America and the
Southwest  Pacific.  Mr. Arnold holds a MS Degree and a Pd.D. Degree in Geology,
both from the University of Arizona.

         Don Box - Mr. Box has served as  a Director and Assistant  Secretary of
the  Company  since the date of the Share  Exchange.  Mr.  Box has served as the
Chairman of the Board of Directors of Box Energy  Corporation,  a public company
owning oil and gas  interests  in the Gulf of Mexico and  mainland  U.S.,  since
1993.  Since 1992 Mr. Box has been  President  and a  Director  of Box  Brothers
Holding Company ("Box Brothers"), which is engaged in the oil and gas

CORPDAL:64048.5  29976-00001
                                                        13

<PAGE>



business. Box Brothers underwent a plan of reorganization pursuant to Chapter 11
of the U.S.  Bankruptcy  Code in Federal  Bankruptcy  Court in Delaware in 1995.
Since 1988, Mr. Box has been the President of CKB Petroleum, which is engaged in
the oil and gas  business.  Since 1984,  Mr. Box has been the  President  of CKB
Petroleum,  which is engaged in the oil and gas  business.  From 1990 until 1996
Mr. Box was President of Race Circuit  Management of Texas,  which is engaged in
motor  sports  promotion.  Mr.  Box holds a  Bachelor  of Arts  degree  from the
University of  Pennsylvania,  a Bachelor of Science degree in Economics from the
Warton School of Business and a Masters degree in Business  Administration  from
Southern Methodist University.

         The Company is not aware of any "family  relationships"  (as defined in
Item 401(c) of Regulation S-B  promulgated by the Commission)  among  directors,
executive  officers,  or persons  nominated  or chosen by the  Company to become
directors or executive officers.

         The  Company  is not aware of any event  (as  listed in Item  401(d) of
Regulation S-B promulgated by the Commission) that occurred during the past five
years that are  material to an  evaluation  of the ability or  integrity  of any
director, person nominated to become a director,  executive officer, promoter or
control person of the Company.

                         ITEM 10. EXECUTIVE COMPENSATION

         The following table sets forth the compensation  paid by the Company to
its Chief  Executive  Officer during the fiscal year ended December 31, 1996; no
executive officer earned in excess of $100,000.
<TABLE>
<CAPTION>

                                                                        ANNUAL COMPENSATION

                                                     YEAR
               NAME/PRINCIPAL                       ENDING                                       OTHER ANNUAL
                  POSITION                       DECEMBER 31         SALARY         BONUS        COMPENSATION
<S>                                                  <C>            <C>              <C>              <C>         
           ROBERT P. JEFFCOCK, CEO                   1994             N/A            N/A              N/A
                                                     1995             N/A            N/A              N/A
                                                     1996           $32,000          $ 0              $ 0
</TABLE>

         EFFECTIVE   FEBRUARY  1,  1997,  OLIVER  LENNOX-KING  WAS  ELECTED  THE
PRESIDENT OF THE COMPANY AND A DIRECTOR OF THE COMPANY  PURSUANT TO AN AGREEMENT
IN WHICH MR. LENNOX-KING IS ENTITLED TO AN ANNUAL SALARY OF $100,000  (CANADIAN)
AND WAS GRANTED OPTIONS TO PURCHASE 500,000 SHARES OF COMPANY COMMON STOCK AT AN
EXERCISE PRICE OF $2.50 PER SHARE.  THE OPTIONS ARE EXERCISABLE OVER A PERIOD OF
FIVE YEARS AND WILL  VEST,  SUBJECT TO MR.  LENNOX-KING'S  CONTINUED  EMPLOYMENT
DURING THAT FIVE-YEAR PERIOD AS FOLLOWS: 166,000 SHARES VESTED AS OF FEBRUARY 1,
1997;  166,000  SHARES WILL VEST ON FEBRUARY 1, 1998 AND THE  REMAINING  168,000
SHARES WILL VEST ON FEBRUARY 1, 1999. THE COMPANY AND MR. LENNOX-KING ARE IN THE
PROCESS OF NEGOTIATING AN EMPLOYMENT  AGREEMENT  REFLECTING,  INTER ALIA,  THESE
TERMS.

         HAYDN SILLECK WAS THE PRESIDENT OF STARLIGHT FROM JANUARY 1, 1996 UNTIL
HIS  RESIGNATION,  EFFECTIVE  MAY 10,  1996,  THE  EFFECTIVE  DATE OF THE  SHARE
EXCHANGE  AGREEMENT.  MR. SILLECK  RECEIVED NO  COMPENSATION  FOR SERVICE AS THE
PRESIDENT OF STARLIGHT DURING 1996.

         THE DIRECTORS OF THE COMPANY RECEIVED NO DIRECTOR'S FEES FOR SERVICE AS
A DIRECTOR OF THE COMPANY. EACH DIRECTOR (THE "PRIOR DIRECTORS") OF STARLIGHT IN
1996 PRIOR TO SHARE  EXCHANGE  AGREEMENT WAS PAID  DIRECTORS FEES IN 1996 IN THE
AMOUNT OF $1,200.00.

     ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, as of the close of business on April 7,
1997, information as to the beneficial ownership of shares of the Company Common
Stock for all  directors,  each of the named  executive  officers (as defined in
Item  402(a)(2) of Regulation  S-B  promulgated  by the  Securities and Exchange
Commission), for all directors and executive officers as a group, and any person
or "group" (as that term is defined in Item 403 of Regulation S-B promulgated by
the Securities and Exchange  Commission) who or which is known to the Company to
be the  beneficial  owner of more than 5% of the  outstanding  shares of Company
Common Stock. In addition,  except as set forth below, the Company does not know
of any  person  or group  who or which  owns  beneficially  more  than 5% of its
outstanding  shares of Company Common Stock as of the close of business on April
7, 1997.

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                                                        14

<PAGE>



                             PRINCIPAL SHAREHOLDERS

         The following  table sets forth  information  regarding the  beneficial
ownership of the  Company's  Common Stock as of April 7, 1997 by (i) each person
known by the Company to own more than 5% of the outstanding  Common Stock,  (ii)
each of the Company's directors and executive officers,  and (iii) all directors
and executive officers of the Company as a group.
<TABLE>
<CAPTION>

                                                                                AMOUNT AND
                                                                                 NATURE OF
NAME OF INDIVIDUAL OR                                                           BENEFICIAL       PERCENT
NUMBER OF PERSONS IN GROUP                                                       OWNER(1)       OF CLASS(2)
<S>                                                                              <C>              <C>
Robert P. Jeffcock(3)(5).............................................                    0          *
Don D. Box(3)........................................................                    0          *
Oliver Lennox-King(3)(4).............................................              166,000         2.3
L. Clark Arnold(3)...................................................              420,000         5.8
Caithness Limited(5).................................................            1,082,445        14.9
Zalcany Limited(6)...................................................              504,000         6.9
Roy G. Williams(6)(7)................................................              756,000        10.4
Reeds Trustees Limited(5)............................................            1,671,453        23.1
J. P. Jeffcock No. 2 Settlement(5)...................................              484,008         6.7
Carlos Lins E. Silva(8)..............................................              210,000         2.9
Igor Mousasticoshvily(8).............................................              210,000         2.9
All directors and executive
officers as a group (4 persons)......................................              586,000         8.1
<FN>


         *        Less than 1%

         (1)      The persons named in this table have record  ownership of such
                  shares and except as indicated in the footnotes to this table,
                  the  persons  name in the table  have sole  voting  power with
                  respect to shares shown as beneficially owned by them.

         (2)      Based on 7,264,600 shares of Company Common Stock outstanding.

         (3)      Director and officer of the Company.

         (4)      Includes an option to acquire  166,000  shares of Common Stock
                  that is  presently  exercisable.  Does not include  options to
                  purchase   334,000   shares  of  Common  Stock  that  are  not
                  exercisable within 60 days of the date hereof.

         (5)      Reads  Trustees  Limited,  as  trustee,  has sole  voting  and
                  investment  control  with  respect to the  shares  held by the
                  following  shareholders:  Caithness Limited (1,082,445);  J.P.
                  Jeffcock  No.  2  Settlement   (484,008);   The  Magnum  Trust
                  (105,000).  Peter Edward Francis Newbald,  a director of Reads
                  Trustees  Limited,  owns  individually,  beneficially  and  of
                  record, 211,570 shares.

                  Mr.  Robert  Jeffcock  is  included  in  a class of  potential
                  beneficiaries in a Trust which owns Caithness Limited.

         (6)      Zalcany Limited is  a company  ultimately controlled and owned
                  by Mr.  R.G. Williams, Mr.  R.M. Harris and Mr.  J.D.  Harris.
                  Together  they  effectively  share the  voting and  investment
                  power of  the shares  in the  Company held by Zalcany Limited.
                  Each  of  R.M.  Harris  and  J.D.  Harris  owns  individually,
                  beneficially and of record, 42,000 shares.

         (7)      Mr. R.G. Williams' family owns  the  equity share  capital  of
                  Mustardseed Estates Limited.  Accordingly,  Mr. R.G.  Williams
                  controls or shares voting investment power over  the following
                  shareholders:  R.G.   Williams   (42,000);   Zalcany   Limited
                  (504,000); and Mustardseed Estates Limited (210,000).

         (8)      Officer  of  MBL,  the  principal  mining  subsidiary  of  the
                  Company.
</FN>
</TABLE>

CORPDAL:64048.5  29976-00001
                                                        15

<PAGE>



             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Prior  Directors of Starlight  received the  Starlight  Warrants in
consideration of, among other things, their agreement to indemnify Toucan Mining
and  Starlight  with respect to certain  representations  in the Share  Exchange
Agreement and the  cancellation  of their prior  warrants to purchase  Starlight
Common  Stock.  See "Items 1 and 2.  Description  of Business and Property - The
Share  Exchange." Each Prior Director  (except Peter Daly) also received in 1996
consulting  fees in the amount of  $2,000.00  for  certain  consulting  services
provided by the Prior  Directors to Starlight prior to or in connection with the
Share Exchange.

         Cardinal Holdings, a company affiliated with Roy G. Williams,  made two
unsecured loans to the Company to permit the Company to fund the Initial Payment
with respect to the November 1996  agreement  with the  Brazilian  individual to
acquire  additional  mining claims in the Cuiaba Basin prior to the consummation
of the  Yorkton  Offering.  See  "Items 1 and 2.  Description  of  Business  and
Property  -  Mining  Claims."  One  loan was  made in  October  18,  1996 in the
principal  amount  of  $100,000  at an  interest  ate of 10%  per  annum  plus a
commitment  fee of  $10,000.  The other loan was made on October 23, 1996 in the
principal  amount  of  $400,000  at an  interest  rate of 10% per  annum  plus a
commitment fee of $20,000. Both loans were repaid by the Company on November 15,
1996.

         Certain  officers of the Company or MBL  received  consulting  fees for
various consulting services as follows:

         Mr. Arnold,  Vice  President - Exploration of the Company,  received in
1996 fees totaling $22,368.00 in return for geological  consulting services.  In
addition,  Mr.  Arnold  received  payment for  $4,571.64 in fees for  geological
consulting  services  in the form of  shares of Toucan  Mining  Limited  capital
stock,  which shares were exchanged into shares of Starlight Common Stock in the
Share Exchange.

         In addition, Igor Mousasticoshvily, an officer of MBL, received in 1996
fees totaling $158,503 for geological and general consulting services. Carlos E.
Lins e Silva,  an officer of MBL,  received  in 1996 fees  totaling  $50,000 for
certain success fees in connection with certain transactions.

                 ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a)      Exhibits

Exhibit
Number                                  Description of Exhibit
-------                                 ----------------------
                              
2.1            Agreement  and Plan of  Merger,  dated July 29,  1996,  and among
               Toucan  Gold   Corporation  and  Starlight   Acquisitions,   Inc.
               (incorporated  by reference  from the Current  Report on Form 8-K
               dated July 29, 1996, Exhibit 2.1).

2.2            Share  Exchange  Agreement,  dated  May 10,  1996,  by and  among
               Starlight   Acquisitions,   Inc.   and  Toucan   Mining   Limited
               (incorporated  by reference  from the Current  Report on Form 8-K
               dated May 13, 1996, Exhibit 2).

3.1            Certificate of Incorporation of Toucan Gold Corporation  filed on
               July 22,  1996  with  the  Secretary  of  State  of the  State of
               Delaware  (incorporated  by reference  from the Current Report on
               Form 8-K dated July 29, 1996, Exhibit 4.1).

3.2*           Bylaws of Toucan Gold Corporation.

10.1*          Warrant  Agreement,  dated July 29, 1996,  by and between  Toucan
               Gold Corporation and R. Haydn Silleck.

10.2*          Warrant  Agreement  dated July 29,  1996,  by and between  Toucan
               Gold Corporation and John B. Marvin.

10.3*          Warrant  Agreement  dated July 29,  1996,  by and between  Toucan
               Gold Corporation and Peter S. Daley.


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                                                        16

<PAGE>



10.4*          Warrant  Agreement  dated July 29,  1996,  by and between  Toucan
               Gold Corporation and Jay Lutsky.

10.5           Indemnification  Agreement, dated May 10, 1996, by and between R.
               Haydn  Silleck,  John B.  Marvin,  Peter S.  Daley,  Jay  Lutsky,
               Starlight   Acquisitions,   Inc.   and  Toucan   Mining   Limited
               (incorporated  by reference  from the Current  Report on Form 8-K
               dated May 13, 1996, Exhibit 10.2).

10.6           Letter of Intent, dated August 23, 1996, by and among Toucan Gold
               Corporation,  Toucan Mining Limited, HRC Development  Corporation
               and Eldorado Gold Corporation (Schedule A to the Letter of Intent
               has been omitted  pursuant to Item  601(b)(2) of Regulation  S-B)
               (incorporated  by reference from the Current Report on form 8-K ,
               dated August 23, 1996, Exhibit 10).

10.7           Agreement with Yorkton  Securities,  Inc., dated October 17, 1996
               (incorporated  by reference  from the Current Report on form 8-K,
               dated October 21,1 996, Exhibit 10).

10.8           Amendment to the Agreement with Yorkton  Securities,  Inc., dated
               October  23, 1996  (incorporated  by  reference  from the Current
               Report on Form 8-K, dated October 29, 1996, Exhibit 10.2).

16.1           Statement  from  Comiskey &  Company,  P.C.  regarding  change in
               certifying  accountants   (incorporated  by  reference  from  the
               Current Report on Form 8-K dated May 13, 1996, Exhibit 16).

16.2           Statement from Deloitte & Touche  regarding  change in certifying
               accountants (incorporated by reference from the Current Report on
               Form 8-K dated July 29, 1996, Exhibit 16-1).

21*            Subsidiaries of the Company.

22.1*          Notice and Proxy Statement dated July 16, 1996.

22.2*          Form of  Supplement,  dated  July 19,  1996,  to Notice and Proxy
               Statement, dated July 16, 1996.

27*            Financial Data Schedules.

*Filed herewith

(b)      Reports on Form 8-K

         The  Company  filed the  following  Reports on Form 8-K during the last
quarter of the Company's fiscal year ended December 31, 1996:

         (i)      On October 21,  1996,  the Company  filed a Current  Report on
                  Form 8-K reporting the execution of a placement agreement (the
                  "Placement  Agreement")  with  Yorkton  Securities  Inc.  with
                  respect to an offering (the "Offering") pursuant to Regulation
                  S of the  Securities  Act of 1,200,000  units (the "Units") to
                  raise gross proceeds up to $3 million.

         (ii)     On October 29,  1996,  the Company  filed a Current  Report on
                  Form 8-K/A  reporting an amendment to the Placement  Agreement
                  increasing  the size of the  Offering  to  1,600,000  Units to
                  raise gross proceeds up to $4 million.

         (iii)    On November 1, 1996,  the  Company  filed a Current  Report on
                  Form 8-K in which  the  Company  reported  on a  Regulation  S
                  offering raising net proceeds of approximately $3.6 million.

         (iv)     On November 14, 1996,  the Company  filed a Current  Report on
                  Form 8-K reporting the  consummation  of the sale of 1,600,000
                  Units in the  Offering at a purchase  price of $2.50 per Unit,
                  which  raised  gross  proceeds of $4 million.  Each Unit had a
                  purchase  price of $2.50 and  consisted of one share of common
                  stock and a warrant to purchase  one share of common  stock at
                  an exercise price of $3.50.


CORPDAL:64048.5  29976-00001
                                                        17

<PAGE>



         (v)      On December 19, 1996,  the Company  filed a Current  Report on
                  Form 8-K in which the  Company  reported on (A) the payment by
                  the Company of $504,000 to the seller (the "Seller") of mining
                  claims;  and (B) the  Company's  obligation  to  issue  to the
                  Seller 168,000 shares of Company Common Stock.

CORPDAL:64048.5  29976-00001
                                                        18

<PAGE>




                                   SIGNATURES

         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934,  the registrant has duly caused this annual report on Form 10-KSB to be
signed on its behalf by the undersigned thereto duly authorized.

                                     Toucan Gold Corporation
                                     (Registrant)


Date:  April 30, 1997                By:/s/ Oliver Lennox-King
                                        ----------------------
                                        Oliver Lennox-King, President and
                                        Chief Executive Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this annual report on Form 10-KSB has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>

            SIGNATURE                                OFFICE                                        DATE
          -------------                            ----------                                    --------

<S>                                  <C>                                                    <C>  
/s/ Oliver Lennox-King               Director, President and Chief Executive Officer        April 30, 1997
------------------------------------ (Principal Executive Officer)
Oliver Lennox-King                   

/s/ Robert P. Jeffcock               Chairman of the Board of Directors, Director           April 30, 1997
------------------------------------ and Vice President-Chief Financial Officer
Robert P. Jeffcock                   (Principal Financial Officer)
                                     

/s/ L. Clark Arnold                  Director and Executive Vice President-                 April 30, 1997
------------------------------------ Exploration
L. Clark Arnold                      

/s/ Don Box                          Director and Assistant Secretary                       April 30, 1997
------------------------------------
Don Box
</TABLE>


CORPDAL:64048.5  29976-00001
                                                        19

<PAGE>



              SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS
     PURSUANT TO SECTION 15(D) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS

         The Company hereby  furnishes the  Securities  and Exchange  Commission
(the  "Commission") for its information,  at the time of filing of the Company's
annual report on Form 10-KSB,  four (4) copies of the following  documents  (the
"Proxy Materials"):

1.       Notice and Proxy Statement, dated July 16, 1996, and Form of Proxy; and

2.       Supplement, dated  July 19, 1996, to Notice and  Proxy  Statement dated
         July 16, 1996, and Amended Form of Proxy.

         The foregoing  documents shall not be considered  "filed" or subject to
the  liabilities  of Section 18 of the Exchange Act as the Company  specifically
has not incorporated the Proxy Materials in this Company's annual report on Form
10- KSB.

CORPDAL:64048.5  29976-00001
                                                        20

<PAGE>
                                INDEX TO EXHIBITS

Exhibit
Number                         Description of Exhibit
-------                        ----------------------
2.1                 Agreement and Plan of Merger, dated July 29, 1996, and among
                    Toucan Gold  Corporation  and Starlight  Acquisitions,  Inc.
                    (incorporated  by reference  from the Current Report on Form
                    8-K dated July 29, 1996, Exhibit 2.1).

2.2                 Share Exchange  Agreement,  dated May 10, 1996, by and among
                    Starlight  Acquisitions,  Inc.  and  Toucan  Mining  Limited
                    (incorporated  by reference  from the Current Report on Form
                    8-K dated May 13, 1996, Exhibit 2).

3.1                 Certificate  of  Incorporation  of Toucan  Gold  Corporation
                    filed on July 22,  1996 with the  Secretary  of State of the
                    State  of  Delaware  (incorporated  by  reference  from  the
                    Current  Report on Form 8-K  dated  July 29,  1996,  Exhibit
                    4.1).

3.2*                Bylaws of Toucan Gold Corporation.

10.1*               Warrant  Agreement,  dated  July 29,  1996,  by and  between
                    Toucan Gold Corporation and R. Haydn Silleck.

10.2*               Warrant Agreement dated July 29, 1996, by and between Toucan
                    Gold Corporation and John B. Marvin.

10.3*               Warrant Agreement dated July 29, 1996, by and between Toucan
                    Gold Corporation and Peter S. Daley.

10.4*               Warrant Agreement dated July 29, 1996, by and between Toucan
                    Gold Corporation and Jay Lutsky.

10.5                Indemnification  Agreement,  dated  May  10,  1996,  by  and
                    between R. Haydn  Silleck,  John B. Marvin,  Peter S. Daley,
                    Jay Lutsky,  Starlight Acquisitions,  Inc. and Toucan Mining
                    Limited  (incorporated  by reference from the Current Report
                    on Form 8-K dated May 13, 1996, Exhibit 10.2).

10.6                Letter of Intent, dated August 23, 1996, by and among Toucan
                    Gold  Corporation,  Toucan Mining  Limited,  HRC Development
                    Corporation and Eldorado Gold Corporation (Schedule A to the
                    Letter of Intent has been omitted pursuant to Item 601(b)(2)
                    of  Regulation  S-B)  (incorporated  by  reference  from the
                    Current Report on form 8-K , dated August 23, 1996,  Exhibit
                    10).

10.7                Agreement with Yorkton  Securities,  Inc., dated October 17,
                    1996  (incorporated  by reference from the Current Report on
                    form 8-K, dated October 21,1 996, Exhibit 10).

10.8                Amendment to the Agreement  with Yorkton  Securities,  Inc.,
                    dated October 23, 1996  (incorporated  by reference from the
                    Current Report on Form 8-K, dated October 29, 1996,  Exhibit
                    10.2).

16.1                Statement from Comiskey & Company,  P.C. regarding change in
                    certifying  accountants  (incorporated by reference from the
                    Current Report on Form 8-K dated May 13, 1996, Exhibit 16).

16.2                Statement  from  Deloitte  &  Touche   regarding  change  in
                    certifying  accountants  (incorporated by reference from the
                    Current  Report on Form 8-K  dated  July 29,  1996,  Exhibit
                    16-1).

21*                 Subsidiaries of the Company.

22.1*               Notice and Proxy Statement dated July 16, 1996.

22.2*               Form of Proxy Supplement,  dated July 19, 1996 to Notice and
                    Proxy Statement, dated July 16, 1996.

27*                 Financial Data Schedule.

*Filed herewith

CORPDAL:64048.5  29976-00001
                                     INDEX-1