SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C.  20549
                                ________________

                                    FORM 10-K

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

                   For the fiscal year ended January 31, 2005
                        Commission file number:  0-21968

                         BRAZAURO RESOURCES CORPORATION
                     (formerly Jaguar Resources Corporation)
             (Exact Name of Registrant as Specified in Its Charter)

            BRITISH COLUMBIA                        76-0195574
    (State or Other Jurisdiction of   (I.R.S. Employer Identification No.)
     Incorporation or Organization)

                         1500 - 701 West Georgia Street
                          Vancouver, BC, Canada V7Y 1C6
          (Address of Principal Executive Offices, including Zip Code)
                                 (604) 689-1832
              (Registrant's Telephone Number, Including Area Code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

          TITLE OF EACH CLASS     NAME OF EXCHANGE ON WHICH REGISTERED
          -------------------     ------------------------------------
                 None                            None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                               TITLE OF EACH CLASS
                               -------------------
                                  COMMON STOCK

     Indicate  by  check mark whether the registrant:  (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes  X   No

     Indicate  by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form  10-K.  X

     As  of  April  15, 2005, the aggregate market value of voting stock held by
non-affiliates of the Registrant, based on the closing price of the Common Stock
of the Registrant quoted on the TSX Venture Exchange was $48,791,833 (Canadian).
For purposes of calculating this amount, only directors, officers and beneficial
owners  of  5%  or  more of the capital stock of the Registrant have been deemed
affiliates.

Number of shares of Registrant's Common Stock outstanding as of April 15, 2005:
                                   45,514,351
               Documents  incorporated  by  reference:  None.
<PAGE>

<TABLE>
<CAPTION>


                         BRAZAURO RESOURCES CORPORATION
                                    FORM 10-K
                                TABLE OF CONTENTS
ITEM                                                                      PAGE
NUMBER                                                                  NUMBER
------                                                                  ------

PART I
<S>                                                                          <C>
Item 1.     Business. . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
Item 2.     Properties. . . . . . . . . . . . . . . . . . . . . . . . . . .   3
Item 3.     Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . .   6
Item 4.     Submission of Matters to a Vote of Security Holders . . . . . .   6

PART II

Item 5.     Market for Registrant's Common Stock and
              Related Stockholder Matters . . . . . . . . . . . . . . . . .   6
Item 6.     Selected Financial Data . . . . . . . . . . . . . . . . . . . .  11
Item 7.     Management's Discussion and Analysis of Financial Condition and
              Results of Operations . . . . . . . . . . . . . . . . . . . .  12
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk. . .  16
Item 8.     Financial Statements and Supplementary Data . . . . . . . . . .  16
Item 9.     Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure. . . . . . . . . . . . . . . . . . . . .  16
Item 9A.    Controls and Procedures . . . . . . . . . . . . . . . . . . . .  16

PART III

Item 10.    Directors and Executive Officers of the Registrant. . . . . . .  16
Item 11.    Executive Compensation. . . . . . . . . . . . . . . . . . . . .  17
Item 12.    Security Ownership of Certain Beneficial Owners and Management.  19
Item 13.    Certain Relationships and Related Transactions. . . . . . . . .  20
Item 14.    Principal Accounting Services and Fees. . . . . . . . . . . . .  20


PART IV

Item 15.    Exhibits, Financial Statement Schedules, and Reports on 8-K . .  21

</TABLE>
                                      i
<PAGE>


ITEM  1.     BUSINESS
             --------

GENERAL  INFORMATION

     Brazauro  Resources  Corporation,  formerly  Jaguar  Resources Corporation,
("the  Company")  is engaged in the business of exploring for and, if warranted,
developing  mineral  properties and is concentrating its current acquisition and
exploration  efforts  on  those properties which the Company believes have large
scale  gold potential.  The Company holds interests in properties located in the
Tapajos  Gold  District  of  Brazil's  northerly  Para  State  (collectively the
"Properties").

     The  Company  has two wholly-owned subsidiaries; Jaguar Resources do Brasil
Ltda.,  a  Brazilian  corporation,  and  Star  U.S. Inc., a Delaware corporation
("Star").  Star  in  turn  owns 100% of the stock of three corporations, Diamond
Exploration,  Inc.  and  Continental  Diamonds, Inc., both of which are Arkansas
corporations  ("DEI"  and  "CDI", respectively), and Diamond Operations, Inc., a
Delaware  corporation ("DOI").  All references to the Company herein include its
subsidiaries  unless  otherwise  noted.  The  Company's  Consolidated  Financial
Statements  referred  to  herein  also  include its subsidiaries.  The Company's
fiscal  year  ends  January  31.

     The  Company's principal office is located at 1500-701 West Georgia Street,
Vancouver,  B.C., Canada V7Y 1C6.  The Company had three (3) full-time employees
at  January  31,  2005;  however,  the  Company retains consultants, independent
contractors and part-time employees on an as-needed basis in connection with its
exploration  and  development  activities.

     The  Company  was  incorporated under the Company Act (British Columbia) on
March  12, 1986.  The authorized capital of the Company consists of an unlimited
amount  of  shares  of  common  stock without par value (the "Common Stock"), of
which  45,514,351  shares were issued and outstanding as of April 15, 2005.  The
Common  Stock  of  the  Company ranks equally as to dividends, voting rights and
participation  in assets and is traded under the symbol "BZO" on the TSX Venture
Exchange.

     Unless  otherwise  stated  herein,  all  monetary  amounts are expressed in
Canadian dollars.  At April 19, 2005, the exchange rate for conversion to United
States  dollars was $1.00 (Canadian) = U.S. $ 0.8059.  Historical exchange rates
for  the  last  five  years  are  set  forth  in  Item  6  at  page  12.

     The  Company  is  subject  to substantial risks with respect to exploration
activities  and  will  seek  additional  capital  during  fiscal 2006 to conduct
additional  property  exploration  activities  and  to  fund  general  and
administrative expenses. See "Certain Risk Factors" and "Management's Discussion
and  Analysis  of  Financial  Condition  and  Results  of  Operations".

OPERATING  HISTORY  AND  DEVELOPMENT

     The  Company  became  a public company in January 1988 when it undertook an
initial  public  offering  of  its  Common Stock in British Columbia, Canada and
became  listed on the Vancouver Stock Exchange, a predecessor to the TSX Venture
Exchange.  From  inception  and  prior  to 1988 the Company had limited business
activities  and  through 1993 explored and abandoned several mineral properties.
During  fiscal  1993, the Company elected to pursue prospects with the potential
for  commercial  diamond  production.

     The Company completed three acquisitions in fiscal 1993 consistent with its
focus  on diamond exploration prospects, including acquisitions of the "Arkansas
Properties"  (defined  below).  During  fiscal  1995  through  2003, the Company
completed  additional  acquisitions  in Arkansas and directly managed and funded
exploration  efforts on certain Arkansas Properties.  In fiscal 2003 the Company
decided  to  cease  exploration  efforts  in  Arkansas  due  to  disappointing
exploration  results,  and  began  to  pursue  mineral  exploration  prospects,
particularly  gold  prospects  in South America.  During fiscal 2004 the Company
acquired  the  mineral rights to two properties in Brazil, the Tocantinzinho and
Mamoal Properties, as described below.  In fiscal 2005, the Company extended its
holdings in the Tocantinzinho Properties and conducted exploration activities on
both  the  Tocantinzinho  and  Mamoal  properties.  Additionally,  the  Company
acquired  the  Batalha  Property,  a  gold  prospect also located in Para State,
Brazil.  The  Company  will  continue  to  pursue mineral exploration prospects,
focusing on the Tapajos and on a worldwide basis as opportunities arise, subject
to  adequate  acquisition  and  exploration  funding.

                                        1
<PAGE>

     Since its inception, the Company has no revenues from operations other than
rental  income  from the Company's Diamond Recovery Plant ("the Plant") totaling
$1,079,000,  which  was received during the three fiscal years ended January 31,
1999.  In  March  2003  the Company sold the Plant to a third party for $350,000
(U.S.).

CERTAIN  RISK  FACTORS

     The  Company's  business  plan to acquire additional exploration prospects,
continue  exploration  activities  on  its  current projects, and, if warranted,
undertake  development  and  mining  operations is subject to numerous risks and
uncertainties,  including  the  following:

     LACK  OF  PROVEN  PROPERTIES  AND  INSUFFICIENT EXPLORATION AND DEVELOPMENT
FUNDS.  At  this  point, all of the Company's exploration prospects and property
interests  (collectively  the "Properties") are gold prospects in Brazil.  While
the  Company  has  sufficient  funds to complete the exploration phase currently
underway,  additional funds will be necessary in order for the Company to pursue
further  exploration  on  its  existing  properties  and  to acquire and develop
additional exploration prospects.  Certain of the Company's planned expenditures
are  discretionary  and may be increased or decreased based upon funds available
to  the  Company.

     As of January 31, 2005, the Company had sufficient cash to fund general and
administrative expenses anticipated during fiscal 2006.  As discussed above, the
Company  will be required to raise additional capital for additional exploration
activity on its existing properties and acquisition of new exploration prospects
during  fiscal  2006.  There  can  be  no assurance that additional funds can be
raised.  See  "Item  7.  Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations"  (hereinafter referred to as "MD & A").

     ENVIRONMENTAL  LAWS.  The exploration programs conducted by the Company are
subject  to  national,  state  and/or  local regulations regarding environmental
considerations  in  the  jurisdiction  where  they are located.  Most operations
involving  exploration or production activities are subject to existing laws and
regulations  relating  to exploration and mining procedures, reclamation, safety
precautions,  employee  health  and  safety, air quality standards, pollution of
stream  and  fresh  water  sources,  odor,  noise, dust, and other environmental
protection controls adopted by federal, state and local governmental authorities
as well as the rights of adjoining property owners.  The Company may be required
to prepare and present to federal, state or local authorities data pertaining to
the effect or impact that any proposed exploration or production of minerals may
have upon the environment.  All requirements imposed by any such authorities may
be  costly,  time  consuming,  and  may  delay  commencement  or continuation of
exploration  or  production  operations.  However,  at this time, the Company is
exploring  its Properties and does not anticipate preparing environmental impact
statements or assessments until such time as the Company believes one or more of
its  Properties  will  prove  to  be  commercially  feasible.

     LIMITED  EXPLORATION  PROSPECTS.  The Company's existing properties are all
gold  prospects in Brazil.  Accordingly, the Company does not have a diversified
portfolio  of exploration prospects either geographically or by mineral targets.
The  Company's  operations  could  be  significantly  affected by changes in the
market  price  of  gold,  as the economic viability of the Company's projects is
heavily  dependent  upon  the market price of gold.  Additionally, the Company's
projects are subject to the laws of Brazil and can be negatively impacted by the
existing  laws  and  regulations  of  that  country,  as  they  apply to mineral
exploration,  land  ownership,  royalty  interests  and  taxation,  and  by  any
potential  changes  of  such  laws  and  regulations.

     TITLE  TO  PROPERTIES.  The  Company  cannot  guarantee title to all of its
Properties  as the Properties may be subject to prior unregistered agreements or
transfers  or  native  land  claims,  and  title  may  be affected by undetected
defects.  The  Company  does  not  maintain  title  insurance on its properties.

                                        2
<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     Certain  statements  in  this  Form 10-K under "Item 1. Business", "Item 2.
Properties", "Item 3. Legal Proceedings", and "Item 7. MD & A" and other factors
may  cause  the actual results, performance or achievements of the Company to be
materially  different  from  any  future  results,  performance  or achievements
expressed  or implied by such forward-looking statements.  Such factors include,
among  others,  the  following:  general  economic  and  business  conditions;
competition;  success  of  operating  initiatives;  the success of the Company's
exploration  and development operations on its Properties; the Company's ability
to  raise  capital  and  the  terms  thereof;  the  acquisition  of  additional
properties;  the continuity, experience and quality of the Company's management;
changes  in  or  failure  to  comply  with government regulations or the lack of
government  authorization  to continue the Company's projects; and other factors
referenced  in  this  Form  10-K.  The  use  in  this Form 10-K of such words as
"believes", "plans", "anticipates", "expects", "intends" and similar expressions
are  intended  to identify forward-looking statements, but are not the exclusive
means  of  identifying such statements.  The success of the Company is dependent
on  the  efforts of the Company, its employees and many other factors including,
primarily, its ability to raise additional capital and establishing the economic
viability  of  its  exploration  Properties.

ITEM  2.          PROPERTIES
                  ----------

     Currently,  all of the Company's Properties are located in the Tapajos Gold
District  of  Brazil's  northerly  Para State.  The  general  location  of  the
Company's  Brazilian  Properties is shown on the map provided below.  The map is
followed  by  a description of the Company's rights and interests in each of the
Properties,  including  those  Properties  in  the  State  of Arkansas where the
Company's  rights  and  interests  have  expired.

                             (map)

                                        3
<PAGE>

BRAZILIAN  PROPERTIES

Tocantinzinho  Properties

In  August 2003 the Company entered into an option to acquire exploration rights
to a total of 28,275 hectares in the Tapajos gold district in Para State, Brazil
under  an  option agreement with two individuals.  The option agreement entitles
the  Company  to  acquire a 100% interest in the exploration rights to such area
(referred  to  herein as the "Tocantinzinho Properties") over a four-year period
in  consideration  for  the staged payment of US$465,000, the staged issuance of
2,600,000  shares  of  the  Company  and the expenditure of $1,000,000 (U.S.) on
exploration  ($300,000  (U.S.) by July 31, 2004).  The Company received approval
for  the  acquisition  from the TSX Venture Exchange in August 2003 and made the
initial payment required by the option agreement to the optionors, consisting of
1,100,000 common shares of the Company and $75,000 (U.S.).  The Company made the
second  option  payment,  consisting of 200,000 common shares of the Company and
$30,000  (U.S.),  in  February 2004.  In August 2004, the Company made the third
option  payment  of  200,000  common  shares  of the Company and $40,000 (U.S.).

As  of  January  31,  2005,  the  total  commitment  remaining  under the option
agreement  is as follows (all amounts are in U.S. dollars):  $40,000 and 200,000
common shares of the Company, $130,000 and 200,000 common shares of the Company,
and  $150,000  and  700,000  common shares of the Company for the 2006, 2007 and
2008  fiscal  years,  respectively.

Additionally,  the  option agreement requires the Company to assume all existing
obligations  of  the  optionors  to  the  owners  of  the  mineral rights of the
Tocantinzinho  Properties  (the  "Underlying  Agreements")  totaling  $1,600,000
(U.S.)  over  a  four-year  period.  At  January 31, 2005, the remaining payment
commitments  under  the Underlying Agreements are as follows (all amounts are in
U.S. dollars):  $120,000, $160,000 and $1,205,000 in fiscal years 2006, 2007 and
2008,  respectively.  The  Company  made  payments  totaling  $35,000 (U.S.) and
$80,000  (U.S.)  in  respect of the Underlying Agreements during fiscal 2004 and
2005,  respectively.  One  of  the optionors entered into a consulting agreement
with  the  Company  for  an 18-month period at a rate of $7,000 (U.S.) per month
which  expired during fiscal 2005.  The payments under the option agreement, the
Underlying  Agreements  and the consulting agreement are considered expenditures
for  purposes  of  meeting the required total and initial annual expenditures of
$1,000,000  (U.S.)  and  $300,000 (U.S.), respectively, discussed above.  During
fiscal 2005 the Company met the requirement under the option agreement to expend
a  total  of $300,000 (U.S.) and met the requirement to expend $1,000,000 (U.S.)
on exploration.  The Company has met its first year commitments under the option
agreement, and the option agreement is cancelable by the Company without further
obligations.

The  optionors  are  entitled  to a sliding scale gross revenues royalty ranging
from 2.5% for gold prices below $400 (U.S.) per ounce to 3.5% for gold prices in
excess  of  $500  (U.S.)  per  ounce.  The  Company  has  filed applications for
exploration  licenses with the regulatory authorities in Brazil and has received
final  approval on several claim areas.  The Company anticipates it will receive
final  approval  on  the  remaining  claim  areas  in  fiscal  2006.

In May 2004 the Company applied for exploration permits for an additional 16,000
hectares adjacent to the above Tocantinzinho Properties.  The Company has agreed
to  make  payments  totaling $300,000 (U.S.) over a period of approximately four
years  to  an  individual  as  a  finder's  fee  related  to this 16,000 hectare
property.  This  additional  property is not subject to the option agreement and
therefore  is  not  subject  to  the  royalty.

The  Company  completed  a  20  hole  diamond  drill program (approximately 4000
meters)  at  the  Tocantinzinho  Properties during fiscal 2005 in which 19 of 20
holes  encountered  mineralization and which outlined a mineralized body that is
at  least  500  meters  in strike length, with a true width of approximately 110
meters,  and  open  at  290  meters  vertical depth.  Drill programs planned for
fiscal  2006  are  designed  to  ascertain  if  the  known  dimensions  of  this
mineralization  can  be  expanded.  Additionally,  the  Company completed both a
ground  magnetic  survey  and metallurgical testing of drill core samples of the
Tocantinzinho Properties during fiscal 2005 and the first quarter of fiscal 2006
and  was  encouraged  by  the  results.  Detailed  results of the above testing,
including  maps  of  the  ground  magnetics  and  drill hole mineralization, are
located  at  the  company's  website,  www.brazauroresources.com.

                                        4
<PAGE>

Mamoal  Property

The  Company  entered  into  an  option agreement under which it may acquire the
exploration license to the 10,000 hectare Mamoal Property, located 30 kilometers
southeast  of  the  Company's  Tocantinzinho  Properties, in December 2003.  The
Company  has an option to earn 100% of the Mamoal Property by payment of a total
of $300,000 (U.S.) over three and one half years.  The Company may terminate the
option  agreement  at  any  time without further obligation.  An initial $10,000
(U.S.)  payment  was  made  by the Company in December 2003, and the exploration
research  license  has  been  transferred  to  Jaguar  Resources do Brasil Ltda.
During  fiscal  2005,  the  Company  made  payments  under  the option agreement
totaling  $25,000  (U.S.).  The  remaining  option  payments are as follows (all
amounts  are  in  U.S. dollars):  $45,000, $65,000, and $155,000 in fiscal years
ending  January  31, 2006, 2007 and 2008, respectively.  The Company may acquire
the  Mamoal  Property  at  any  time  by  accelerating the option payments.  The
Company  has  received  the  exploration  license  from the Brazilian regulatory
authority.

During  fiscal  2005,  the  Company conducted geological mapping, rock sampling,
mapping  of old garimpeiro pit workings and approximately 2,400 auger holes to a
depth  of  approximately  one  meter.  In  the first quarter of fiscal 2006, the
Company  announced  positive  sampling results from its work during fiscal 2005.
Additional  soil  sampling  and  drilling are planned for fiscal 2006.  Detailed
results  of  the  sampling  program  may  be  found  at  the  Company's website,
www.brazauroresources.com.

Batalha  Property

In  September,  2004  the Company applied for an exploration license to the 9800
hectare  Batalha  Property,  located  in  the  Tapajos gold province in northern
Brazil.  The property, host to a well known "garimpo" or artisanal mine, lies at
the  western  end  of  the  Tocantinzinho  trend.

The  Company has agreed to pay the original holder of artisanal mining rights of
Batalha,  who  controls over 1,700 hectares lying within the exploration license
and  directly  over  the  Batalha  zone, the equivalent of approximately $91,000
Canadian dollars in Brazilian reals over a 42 month period with a buyout after 4
years  of $250,000 (U.S.) (if the project is deemed economic by the Company) and
an  additional  sum  based  on  the  number  of ounces of gold in the proven and
probable  (or  measured  and  indicated)  categories  at Batalha as set out in a
pre-feasibility  or feasibility study.  The per ounce payment amount ranges in a
sliding  scale  from  US$1  per ounce for the first one million ounces up to $10
(U.S.)  per  ounce  for  each ounce over four million ounces.  The 9,800 hectare
exploration  license  lies  over top of this area, covering extensions to north,
south  and  west.  If after four years the Company, in its sole opinion, has not
found  an economic ore body, the area and all collected data will be returned to
the  vendor.

ARKANSAS  PROPERTIES

The  Company  maintained  interests  in  several  Arkansas Properties during the
period  from  fiscal 1993 through fiscal 2003.  In December 2002, based upon the
cumulative  exploration results obtained on the Arkansas Properties, the Company
made  the  decision  to  cease  operations  in  Arkansas.

American  Mine  Property

Pursuant  to  an  agreement  dated November 4, 1992, DEI was granted a permit to
explore  a  mineral  property  located  in Pike County, Arkansas.  The Company's
Plant  was located on this leased property.  The Company leased the property and
conducted  exploration activities during certain periods from 1992 to 2002.  The
lease  payment of $47,500 (U.S.) on the American Property, due November 1, 2002,
was  not  made  by  the  Company.

In  March  2003 the Company sold the Plant to a third party for $350,000 (U.S.).
In  conjunction  with  the sale, the third party paid the lessor of the American
Mine  Property  $47,500  (U.S.)  on behalf of the Company in order to extend the
Company's  lease on the property through October 31, 2003.  The Company recorded
a  retirement obligation for leasehold reclamation costs during fiscal year 2004
of  approximately  $150,000,  representing  the estimated costs of the Company's
obligation  to restore the Arkansas properties to their original condition prior
to  lease  expiration  and  to  perform  reclamation  activities  as required by
Arkansas  regulatory  authorities.  The  Company  allowed  the  lease  to expire
effective  November  1,  2003.

                                        5
<PAGE>

ITEM  3.     LEGAL  PROCEEDINGS
             ------------------

     Except  as  described in Note 12 of the Notes to the Company's Consolidated
Financial  Statements  incorporated  by  reference  into Part II. Item 8 hereof,
there  are  no material pending legal proceedings to which the Company or any of
its  subsidiaries  is a party or to which any of their property is subject.  The
Company  is involved from time to time in claims arising in the normal course of
business.

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

     None.

ITEM  5.     MARKET  FOR  REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
             --------------------------------------------------------------
             MATTERS
             -------

     The  Company's  Common  Stock  is  listed on the TSX Venture Exchange ("the
TSX")  in  British  Columbia,  Canada  under  the  symbol  "BZO"  ("JRS" through
September  3, 2004).  The Company's Common Stock is not traded on an exchange or
market  in  the  United  States.  The  high  and  low  sales prices (in Canadian
dollars) as quoted on the TSX for the below referenced quarterly periods were as
follows:

<TABLE>
<CAPTION>
                             Price Range of Common Stock
                             Fiscal Year Ended January 31
                                  2005        2004
                             ----------------------------
<S>                            <C>    <C>    <C>    <C>
Fiscal Quarter Ended           High   Low    High   Low
--------------------           ----   ----   ----   ----
April 30 . . . . . .           1.80   0.35   0.25   0.07
July 31. . . . . . .           1.58   0.73   0.35   0.20
October 31 . . . . .           1.05   0.78   0.47   0.25
January 31 . . . . .           1.39   0.80   0.54   0.35
</TABLE>

     The  closing price of the Company's Common Stock was $1.17 (Canadian) as of
April  15,  2005  on  the  TSX  Venture  Exchange.

     At March 31, 2005, there were 137 holders of record of the Company's Common
Stock including 103 in the United States who collectively held 26,662,627 shares
representing  59%  of  the  total  number of issued and outstanding shares.  The
Company  believes  it has in excess of 300 beneficial owners of its Common Stock
residing  in  the United States and Canada based on the number of record holders
and  individual  participants  in  security  position  listings.

DIVIDEND  POLICY

     The  Company has never declared or paid cash dividends on its Common Stock.
The  Company  presently intends to retain cash for the operation and development
of its business and does not anticipate paying cash dividends in the foreseeable
future.  A  future determination as to the payment of dividends will depend on a
number  of  factors,  including  future  earnings,  capital  requirements,  the
financial  condition  and prospects of the Company and such other factors as the
Board  of  Directors  of  the  Company  deems  relevant.

                                        6
<PAGE>

PASSIVE  FOREIGN  INVESTMENT  COMPANY  RULES

     For U.S. federal income tax purposes, the Corporation likely was classified
as  a passive foreign investment company ("PFIC") under section 1297 of the Code
for  its  taxable  year  ending  January  31  2005, and likely will be a PFIC in
subsequent  taxable years until it has significant operating income.  A non-U.S.
corporation  generally  is  classified  as  a  PFIC  for U.S. federal income tax
purposes  in any taxable year if, either (a) at least 75% of its gross income is
"passive"  income  (the  "income  test"),  or (b) on average at least 50% of the
gross  value of its assets is attributable to assets that produce passive income
or  are  held  for  the  production  of  passive income (the "asset test").  For
purposes  of  the income test and the asset test, if a non-U.S. corporation owns
directly  or  indirectly  at  least  25%  (by  value)  of  the  stock of another
corporation,  the  non-U.S.  corporation  will  be  treated  as  if  it held its
proportionate  share  of  the  assets  of  the  latter  corporation and received
directly  its  proportionate  share  of  the  income of that latter corporation.
Passive  income  generally  includes  dividends,  interest,  royalties and rents
(other  than  rents  and  royalties  derived in the active conduct of a trade or
business  and  not  derived  from  a  related  person).

     For  any taxable year in which the Corporation is a PFIC, U.S. Holders will
be subject to U.S. federal income tax in respect of the Securities in accordance
with  the  special  rules  applicable  to  investments in PFICs.  Under the PFIC
rules,  as  discussed  further below in this section "Passive Foreign Investment
Company  Rules",  the  U.S.  federal income tax consequences of the ownership of
Securities will be governed by the so-called "non-qualified fund" regime, unless
either  (a)  a  U.S.  Holder  elects  to  treat the Corporation as a "qualifying
electing  fund"  ("QEF"), and the Corporation annually supplies its U.S. Holders
with  the information necessary for compliance with the QEF election, or (b) the
Securities  constitute "marketable stock", within the meaning of section 1296 of
the  Code, and the U.S. Holder elects to mark the Securities to market as of the
end  of  each  taxable  year.

U.S.  HOLDERS  ARE  STRONGLY ADVISED TO CONSULT THEIR OWN TAX ADVISORS ABOUT THE
POSSIBLE  CHARACTERIZATION  OF  THE  CORPORATION  AS  A  PFIC  AS  WELL  AS  THE
ADVISABILITY  OF  MAKING  A  QEF  ELECTION  OR  A  MARK-TO-MARKET  ELECTION.

Non-Qualifying  Fund

     In general, if a QEF election or a mark-to-market election is not made by a
U.S.  Holder,  any  gain  on a sale or other disposition of Securities by such a
U.S.  Holder would be treated as ordinary income and would be subject to special
tax rules.  Under these special tax rules, (a) the amount of any such gain would
be  allocated  ratably over the U.S. Holder's holding period for the Securities,
(b)  the  amount of ordinary income allocated to years prior to the year of sale
or  other  disposition  would  be  subject  to tax at the highest statutory rate
applicable  to such U.S. Holder for each such year (determined without regard to
other  income,  losses or deductions of the U.S. Holder for such years), and (c)
the tax for such prior years would be subject to an interest charge, computed at
the  rate  applicable  to  underpayments  of  tax.  Under proposed U.S. Treasury
regulations, a "disposition" may include, under certain circumstances, transfers
at  death, gifts, pledges of shares and other transactions with respect to which
gain  is not ordinarily recognized.  In addition, the adjustment ordinarily made
to  the tax basis of stock owned by a decedent may not be available with respect
to  the  Securities.  Rules  similar  to  those  applicable to dispositions will
generally  apply  to  distributions in respect of Securities that exceed 125% of
the  average  amount  of  distributions in respect of such Securities during the
preceding  three  years,  or, if shorter, during the preceding years in the U.S.
Holder's  holding  period  ("excess  distributions").

     Each  U.S.  Holder would be required to annually file IRS Form 8621 (Return
by  a  Shareholder of a Passive Foreign Investment Company or Qualified Electing
Fund)  with  such  U.S. Holder's timely filed U.S. federal income tax return (or
with  the  U.S.  Internal  Revenue Service Center, P.O. Box 21086, Philadelphia,
Pennsylvania  19114,  if  the  U.S.  Holder  is  not required to file a return).

                                        7
<PAGE>

QEF  Election

     If  a U.S. Holder makes a valid and timely-filed QEF election in connection
with  a  purchase  of  Securities,  and  provided  that the Corporation annually
supplies  the  information  necessary  to  comply  with  such election, then the
electing  U.S.  Holder  will  be  required  each  taxable  year to recognize, as
ordinary  income,  a  pro  rata  share  of  the  Corporation's  earnings, and to
recognize,  as  capital  gain, a pro rata share of the Corporation's net capital
gain,  in  each  case  without regard to whether distributions are received with
respect  to  the Securities for such year.  The QEF election, once made, applies
to  all subsequent taxable years of the U.S. Holder in which it holds Securities
until  the  Corporation ceases to be a PFIC.  If the Corporation is again a PFIC
in any taxable year following a year in which the Corporation was not treated as
a  PFIC,  the original QEF election continues to be effective.  Accordingly, for
any  taxable  year  in which the Corporation is a PFIC and does not have any net
income,  a  U.S.  Holder would not have any income exclusions as a result of the
QEF  election.  The  Corporation  will  provide  the  information  necessary for
complying  with  the  QEF election.  Amounts included in a U.S. Holder's taxable
income  under  the QEF regime would increase such U.S. Holder's tax basis in the
Securities, and subsequent distributions by the Corporation would not be taxable
to  the U.S. Holder, and instead would reduce the U.S. Holder's tax basis in the
Securities  to  the  extent  that  the  U.S.  Holder  could demonstrate that the
distributions  were  attributable  to  previously-taxed  income.  A  U.S. Holder
generally  would recognize capital gain or loss upon a disposition of Securities
that  were  subject  to  a  QEF  election at all times during such U.S. Holder's
holding period.  Special rules would apply if a U.S. Holder makes a QEF election
later  than  the  first  taxable year in which Securities are owned (which could
result  in  the  U.S. Holder remaining subject to the non-qualifying fund regime
described  above).

Mark-to-Market  Election

     If  a  U.S.  Holder makes a valid and timely-filed mark-to-market election,
and  provided  that  the  Securities  constitute  "marketable  stock" within the
meaning  of  section 1296 of the Code, then in any year in which the Corporation
is  a  PFIC  the U.S. Holder annually would be required to report any unrealized
gain  with respect to its Securities as an item of ordinary income, and would be
permitted  to  deduct any unrealized loss, as an ordinary loss, to the extent of
previous  inclusions of ordinary income.  Any gain subsequently realized by such
electing  U.S.  Holder upon a disposition of Securities also would be treated as
ordinary  income,  rather  than  capital gain, but such U.S. Holder would not be
subject  to  an  interest  charge  on  the  resulting tax liability as under the
non-qualifying  fund  regime.  A U.S. Holder who makes a mark-to-market election
would  still  be  taxed  on distributions from the Corporation when received, as
described  under  "Dividends".

     For  purposes  of  the  mark-to-market election, marketable stock generally
includes  stock  that  is  regularly  traded  on  certain established securities
markets  within  the  United States, or on any exchange or other market that the
IRS  determines  has  trading,  listing,  financial  disclosure, and other rules
adequate  to carry out the purposes of the mark-to-market election.  The Toronto
Stock  Exchange  and  the  Alternative  Investment  Market  of  the London Stock
Exchange  may  qualify as such an exchange.  Each U.S. Holder should consult its
own  advisor as to whether the mark-to-market election is available with respect
to  the  Securities.  Special  rules  would  apply  to  a  U.S. Holder that held
Securities prior to the first taxable year for which the mark-to-market election
was  effective,  which could result in an interest charge for such first taxable
year,  as  under  the  non-qualifying  fund  regime  described  above.

     A  U.S.  Holder  choosing  to  make a mark-to-market election must make the
election  on  Form  8621 for the taxable year of election and must annually file
Form 8621 with such U.S. Holder's timely filed U.S. federal income tax return or
with  the  IRS.  Once made, a mark-to-market election would be effective for all
subsequent  taxable years of such U.S. Holder unless revoked with the consent of
the  Secretary  of the Treasury or unless the Securities cease to be marketable.

DIVIDENDS

     For  purposes  of  this  section  "Dividends",  it  is  assumed  that  the
Corporation  is a PFIC.  To the extent that distributions paid on the Securities
are  not treated as excess distributions received by a non-electing U.S. Holder,
and to the extent the distribution exceeds the previously-taxed income of a U.S.
Holder  that  makes  a  QEF  election,  such distributions (before reduction for
Canadian  withholding  taxes)  will be taxable as dividends to the extent of the
Corporation's  current  or  accumulated  earnings and profits, as determined for
U.S.  federal  income  tax  purposes,  and will be includable in a U.S. Holder's
ordinary income when received.  Dividends on the Securities will not be eligible
for  the  dividends-received  deduction  generally allowed to U.S. corporations.

                                        8
<PAGE>

     The  amount  of  any  dividend paid in Canadian dollars will equal the U.S.
dollar  value  of  the  Canadian dollars received calculated by reference to the
exchange  rate  in  effect on the date the dividend is received by a U.S. Holder
regardless  of whether the Canadian dollars are converted into U.S. dollars.  If
the  Canadian dollars received as a dividend are not converted into U.S. dollars
at  the date of receipt, a U.S. Holder will have a basis in the Canadian dollars
equal  to  the  U.S.  dollar  value  on  the  date of receipt.  Any gain or loss
realized on a subsequent conversion or other disposition of the Canadian dollars
will be treated as ordinary income or loss, and generally will be income or loss
from  sources  within  the  United  States for U.S. foreign tax credit purposes.

     A U.S. Holder may be entitled to deduct, or claim a U.S. foreign tax credit
for,  Canadian  taxes  that are withheld on dividends received by a U.S. Holder,
subject  to  applicable  limitations in the Code.  Dividends will be income from
sources  outside the United States and for tax years beginning before January 1,
2007, generally will be "passive income" or "financial services income", and for
tax years beginning after December 31, 2006, generally will be "passive category
income"  or "general category income" for purposes of computing the U.S. foreign
tax credit allowable to a U.S. Holder.  The rules governing the U.S. foreign tax
credit  are  complex,  and  investors  are  urged  to consult their tax advisors
regarding the availability of the U.S. foreign tax credit under their particular
circumstances.

     To the extent that the amount of any distribution exceeds the Corporation's
current  and  accumulated  earnings  and  profits  for  a  taxable  year,  the
distribution will first be treated as a tax-free return of capital to the extent
of  a U.S. Holder's basis, and any excess will be treated as capital gain.  Such
capital  gain  would  not  give  rise  to income from sources outside the United
States,  and  accordingly a U.S. Holder may need other non-U.S. source income in
order  to  claim  a  tax  credit  for Canadian withholding taxes imposed on such
distribution.

FOREIGN  CONTROLS

     The  Company  is  not aware of governmental laws, decrees or regulations in
Canada  restricting  the import or export of capital or affecting the remittance
to  the  United  States of interest, dividends or other payments to non-resident
holders  of  the  Company's  Common Stock.  However, the payment or crediting of
interest  or  dividends  to United States residents may be subject to applicable
withholding  taxes  at  a  rate  prescribed  by  the  Income Tax Act (Canada) as
modified  by  the provisions of the Canada-United States Income Tax Act (Canada)
and as further modified by the provisions of the Canada-United States Income Tax
Convention,  1980  (see  "Taxation"  below).

     Except  as  provided in the Investment Canada Act (the "ICA"), there are no
limitations under the laws of Canada, the Province of British Columbia or in the
charter  and organizational documents of the Company on the right of nonresident
or  foreigner  owners  to  hold  and/or  vote  the  shares  of  the  Company.

     The  ICA  applies  when a "non-Canadian" individual or entity or controlled
group  of  entities  as  defined  in  the  ICA proposes to make an investment to
acquire  control  of  a  Canadian  business  enterprise,  either  directly  or
indirectly,  and  by  way  of  purchase  of voting shares of a corporation or of
substantially  all  of  the assets used in the Canadian business enterprise.  An
investment  in  voting shares of a corporation is deemed to be an acquisition of
control  where  more than 50% of the voting shares are acquired.  An acquisition
of less than one-third of the voting shares of a corporation is deemed not to be
an  acquisition  of control and an acquisition of between one-third and one-half
of  the  voting  shares  of  a  corporation  is presumed to be an acquisition of
control  unless  it  can  be  established  that the acquisition does not in fact
result  in  control  of  the  corporation  by  the  investor.

     An  investment  to  acquire  control of a Canadian business enterprise, the
gross  assets  of which exceed certain thresholds, must be reviewed and approved
under  the  ICA  before  implementation.  An  investment to acquire control of a
Canadian  business  enterprise, the gross asset value of which falls below these
threshold  amounts,  is one in respect of which notification must be given under
the  ICA  although  approval  is  not  required  prior  to implementation of the
investment.   NAFTA  Investors,  (i.e.)  investors who are nationals, other than
Canadian,  as  defined  in  the  North  American  Free  Trade Agreement, are not
considered  for  the  purposes  of  the  ICA  to  be  "non-Canadian".

                                        9
<PAGE>

TAXATION

     Dividends.  Generally,  dividends  paid  by  a  Canadian  corporation  to
non-resident  shareholders  are,  under the Income Tax Act (Canada) (the "ITA"),
subject  to  a withholding tax of 25%.  However, paragraph 2 of Article X of the
Canada-United  States  Income  Tax Convention (1980) (the "Treaty") provides for
the  following  maximum  withholding  tax  rates:

     a)     10%  of the gross amount of the dividends if the beneficial owner of
such  dividends is a U.S. resident company which owns at least 10% of the voting
stock  of  the  corporation  paying  the  dividends;  and
     b)  15%  of  the  gross  amount  of  the  dividends  in  all  other  cases.

     Subject  to  certain limitations and exceptions, U.S. resident shareholders
of  a  Canadian  corporation may be entitled to a credit for all or a portion of
such  withholding taxes in computing their U.S. federal and possibly their state
income  tax  liability.

     Dividends paid by a Canadian corporation to shareholders resident in Canada
will  not  be  subject to withholding tax.  Any dividends received by a Canadian
resident  on shares of the Company will be treated for tax purposes as dividends
from  a taxable Canadian corporation.  Accordingly, where a dividend is received
by  an individual resident in Canada, the individual will be entitled to claim a
federal  dividend  tax  credit,  equal  to  16  2/3% of the dividend.  Where the
dividend  is  received  by  a  corporation resident in Canada, the dividend will
normally be free of tax under Part I of the ITA but may be subject to refundable
tax  under  Part  IV  of  the  ITA.

     Disposition  of  Capital  Property.  If  shares  of  a  Canadian  public
     ----------------------------------
corporation  held  by  a non-resident shareholder constitute capital property to
that  shareholder,  the  disposition  of  such shares will not be subject to tax
under  the  ITA  unless the shares constitute "taxable Canadian property" to the
vendor.  Where  a non-resident shareholder or persons with whom the non-resident
shareholder does not deal at arm's length have, at any time during the five year
period  immediately  preceding  the  disposition, owned not less than 25% of the
issued  shares  of any class of the capital stock of the public corporation, the
shares  so  disposed  of will constitute "taxable Canadian property".  Under the
ITA, a disposition of shares that constitute taxable Canadian property will give
rise  to  a  capital  gain  (or a capital loss) equal to the amount by which the
proceeds  of disposition of such shares, net of any cost of disposition, exceeds
(or  is  less  than)  the  adjusted  cost basis of such shares to that investor.
Generally,  three-quarters  of  any  capital  gain  realized by an investor on a
disposition  or  a  deemed  disposition  of  such  a  shares must be included in
computing  his  Canadian  income  for  that  year  as  a  taxable  capital gain.
Three-quarters  of  any capital loss realized by an investor on a disposition or
deemed  disposition  of such a share in a taxable year may generally be deducted
from  his  Canadian  taxable  capital  gains  for  that  year.

     Any  gains  realized  by a non-resident shareholder from the disposition of
shares  which are taxable Canadian property may be exempt from tax under the ITA
by  virtue  of  Article XIII of the Treaty if, at the time of the disposition of
the  subject  shares,  the  value thereof was derived principally from something
other  than  direct  or  indirect  real  property  interests situated in Canada.

     Under  the  ITA,  the disposition of a share by an investor may occur or be
deemed to occur in a number of circumstances including on a sale or gift of such
share  or  upon  the  death  of  that  investor.

     The  initial  adjusted cost base of a share to an investor will be the cost
to  him of that share.  Under the ITA, certain addition or reduction adjustments
may  be required to be made to the cost base of a share.  The adjusted cost base
of  each  common  share  of a corporation owned by an investor at any particular
time  will be the average adjusted cost base to him of all common shares of that
corporation  owned  at  that  time.

     Subject  to  certain limitations and exceptions, U.S. resident shareholders
of  a  Canadian  corporation may be entitled to a credit for all or a portion of
any  capital  gain  taxation  in computing their U.S. federal and possibly their
state  income  tax  liability.

                                       10
<PAGE>

     In  general,  the  disposition  by  a shareholder resident in Canada of the
capital  stock  in  a  Canadian  corporation  will be subject to Canadian income
taxation  in  the same manner as rules described above relating to a disposition
of  share which constitute taxable Canadian property.  A shareholder resident in
Canada  may,  however,  be  entitled  to  a  capital  gains  exemption.  The ITA
provides,  for  residents of Canada, a cumulative lifetime exemption from income
tax  of  $100,000  of  qualifying  net  capital  gains.

     Disposition  of  Non-Capital  Property.  If the shares of a Canadian public
     ---------------------------------------
corporation  held  by  a non-resident do not constitute capital property to that
shareholder,  any  gains  realized  from  the  disposition thereof will be fully
taxable  under  the  ITA if their disposition arises in the course of a business
carried  on  by the shareholder in Canada.  Under the ITA, a shareholder will be
deemed  to  carry  on  business  in Canada in respect of particular shares if he
offers  them  for  sale  in  Canada  through an agent, including the TSX Venture
Exchange.  Under  the  Treaty,  any  business profits derived by a U.S. resident
shareholder of a Canadian public corporation from the disposition of the subject
corporation's  shares  will  only  be  taxable in Canada to the extent that such
profits  are  attributable  to  a  permanent establishment of the shareholder in
Canada.

     The  foregoing  discussion is a summary of certain tax considerations which
may  be  relevant  to  stockholders  of the Company, but it is not intended as a
substitute  for  personal  tax  planning  and  professional  tax  advice.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     For  a  discussion  of  the  recent  sale of unregistered securities by the
Company,  see"  MD  &  A  -  Liquidity  and  Capital  Resources".

ITEM  6.     SELECTED  CONSOLIDATED  FINANCIAL  INFORMATION
             ----------------------------------------------

     The selected consolidated financial information set forth below for each of
the  five  years  ended  January 31, 2005 has been derived from the Consolidated
Financial  Statements  of  the  Company  prepared  in  accordance with generally
accepted  accounting  principles  in  Canada.  These  principles  are  also  in
conformity,  in  all  material  respects,  with  generally  accepted  accounting
principles  in  the United States except as described in Note 16 of the Notes to
Consolidated  Financial  Statements.  The  selected  consolidated  financial
information  should  be read in conjunction with the MD & A discussion below and
the  Consolidated  Financial  Statements  and  related notes thereto included on
pages 23 to 42 herein.  References in this Annual Report on Form 10-K to "Notes"
are  intended  to  refer  to  the Notes to the Consolidated Financial Statements
included  herein.

     Since  its  formation, the Company's activities have consisted primarily of
acquiring  interests  in mineral properties, exploration of those properties and
acquiring  financing for such purposes.  Consequently, the Selected Consolidated
Financial  Information  may  not  indicate  the  Company's  future  financial
performance.  The  weighted  average number of common shares outstanding and the
net  loss  per common share for the fiscal year ending January 31, 2001 has been
restated to reflect the consolidation of the Company's common shares outstanding
on  a  seven  for  one  basis  effective  November  27,  2001.













             (This portion of the page is intentionally left blank.)
                                       11
<PAGE>

                   SELECTED CONSOLIDATED FINANCIAL INFORMATION
                   -------------------------------------------
<TABLE>
<CAPTION>
                                                               Fiscal Year Ended January 31
                                                               ----------------------------
                                                     2005       2004        2003       2002        2001
                                                  ---------  ----------  ---------  ---------  ----------
                                                             *Restated   *Restated
                                                                     (In Canadian dollars)
                                                      (000's except for net loss per common share data)
<S>                                                <C>       <C>         <C>        <C>         <C>
Writedown and abandonment of properties, plant
  and equipment . . . . . . . . . . . . . . . . .         -           -      3,142         86           -
Net loss for the year . . . . . . . . . . . . . .    (3,741)     (1,199)    (4,468)    (1,961)     (1,695)
Basic and diluted net loss per common share . . .     (0.10)      (0.06)     (0.27)     (0.21)      (0.20)
Weighted average common shares outstanding. . . .    38,950      21,350     16,439      9,142       8,388
Working capital (deficit) . . . . . . . . . . . .     3,296       1,722        (63)       376         379
Total assets. . . . . . . . . . . . . . . . . . .     6,482       2,819         96      3,516       3,132
Long-term debentures payable. . . . . . . . . . .         -          -       1,279      1,279           -
Deficit                                         .   (37,534)    (33,793)   (32,594)   (28,125)    (26,165)
Total shareholders' equity (deficit). . . . . . .     6,133       2,450     (1,557)     1,983       2,492
</TABLE>

*Restated  to  reflect  the  Company's  change  in  accounting  for  stock-based
compensation  -  please  see  Note  2  to the consolidated financial statements.

EXCHANGE  RATES

     On  April  19,  2005,  the  noon  buying  rate  in  New York City for cable
transfers  in Canadian dollars, as certified for customs purposes by the Federal
Reserve  Bank  of  New York, was $1.00 (Canadian) = U.S. $0.8059.  The following
table  sets  forth, for each of the years indicated, additional information with
respect  to the noon buying rate for $1.00 (Canadian).  Such rates are set forth
as  U.S.  dollars per Canadian. $1.00 and are based upon the rates quoted by the
Federal  Reserve  Bank  of  New  York.

<TABLE>
<CAPTION>

<S>          <C>     <C>     <C>     <C>     <C>
Rate. . . .    2004    2003    2002    2001    2000
             ------  ------  ------  ------  ------
Last Day. .  0.8310  0.7539  0.6542  0.6279  0.6669
Average (1)  0.7745  0.7289  0.6386  0.6446  0.6727
High. . . .  0.8493  0.7880  0.6619  0.6697  0.6936
Low . . . .  0.7177  0.6530  0.6200  0.6241  0.6410
</TABLE>

(1)  The average rate means the average of the exchange rates on the last day of
each  month  during  the  year.

ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
             -------------------------------------------------------------------
             RESULTS  OF  OPERATIONS
             -----------------------

Results  of  Operations.

For  the  Years  Ended  January  31,  2005,  2004  and  2003

     The  Company is engaged in the business of exploring for and, if warranted,
developing  mineral  properties and is concentrating its current acquisition and
exploration  efforts  on  those properties which the Company believes have large
scale gold potential.  The Company leases interests in properties located in the
Tapajos  Gold  District  of  Brazil's  northerly  Para  State  (collectively the
"Properties").

                                       12
<PAGE>

     The  Company  has  had  no  significant revenues from operations other than
rental  income  related  to  the  Diamond Recovery Plant, totaling approximately
$1,079,000  from inception through March 2003, when the Plant was sold.  None of
its  Properties  have  proven  to  be  commercially developable to date and as a
result  the  Company  has  not generated any revenue from these activities.  The
Company's existing Properties are gold prospects in Brazil, as discussed in Note
4,  which  were  acquired  during fiscal 2004 and 2005.  The Company capitalizes
expenditures  associated with the direct acquisition, evaluation and exploration
of  mineral properties.  When an area is disproved or abandoned, the acquisition
costs  and  related  deferred expenditures are written-off.  The net capitalized
cost  of  each  mineral  property  is  periodically  compared  to  management's
estimation  of  the net realizable value and a write-down is recorded if the net
realizable  value  is  less  than  the  cumulative  net  capitalized  costs.  As
discussed in Note 4, during fiscal 2003 the Company decided to cease exploration
activities  in  Arkansas due to disappointing exploration results, and the total
of  $3,141,726  of  accumulated capitalized costs related to the Arkansas leases
were  written  off.

     The  Company's  mineral  properties  and deferred expenditures increased to
$2,817,746  at January 31, 2005 from $714,283 at January 31, 2004 as a result of
acquisition  costs  totaling  $555,069 and exploration costs totaling $1,548,394
related  to  the  activities  on  the  Company's Brazilian Properties as further
described  in  Note  4.  Similarly,  the  total  increase  during fiscal 2004 in
mineral  properties  and deferred expenditures of $714,283 represented the total
of  acquisition  costs  of $540,495 and exploration costs of $173,788 related to
the  activities  on  the  Company's Brazilian Properties as further described in
Note  4.  The  increases  were  primarily due to the acquisition and exploration
costs  totaling  $1,943,729  and  $701,133  during  fiscal  2005  and  2004,
respectively,  related to the Company's project at the Tocantinzinho Properties.

     The  Company  completed a 20 hole diamond drill program (approximately 4000
meters)  at  the  Tocantinzinho  Properties during fiscal 2005 in which 19 of 20
holes  encountered  mineralization and which outlined a mineralized body that is
at  least  500  meters  in strike length, with a true width of approximately 110
meters,  and  open  at  290  meters  vertical depth.  Drill programs planned for
fiscal  2006  are  designed to significantly expand the known dimensions of this
mineralization.  Additionally,  the  Company  completed  both  a ground magnetic
survey  and  metallurgical  testing  of  drill core samples of the Tocantinzinho
Properties  during  fiscal  2005  and  the  first quarter of fiscal 2006 and was
encouraged  by  the  results.  Detailed  results of the above testing, including
maps  of  the ground magnetics and drill hole mineralization, are located at the
company's  website,  www.brazauroresources.com.

     The  Company's  revenues during fiscal 2004 were primarily comprised of the
gain  from  the sale of the Diamond Recovery Plant ("the Plant").  The Plant was
sold to a third party for $350,000 (U.S.) and was fully depreciated at disposal.
As  discussed  in  Note  4, the Plant was located on the American Mine Property.
The  Company  recorded  a  retirement  obligation  for  leasehold reclamation of
approximately  $142,000,  which  represents  the  estimated  costs to return the
leased  property  to  its  original  condition  and  to  complete  environmental
reclamation  as  required  by  the  Arkansas regulatory authorities.  During the
years  ended  January  31,  2005  and 2003 the Company's revenues were comprised
entirely of interest income on proceeds received from prior financings and gains
on  sales  of  equipment.  The Company has not received any revenues from mining
operations  since  inception.

     General and administrative expenses totaled approximately $3,747,000 during
fiscal  2005  as  compared  to  approximately  $1,405,000  during  fiscal  2004,
representing  an  increase  of  approximately  $2,343,000  or 167%.  Included in
general  and  administrative expenses for fiscal 2005 and 2004 was approximately
$2,123,000  and  $462,000,  respectively, of stock compensation expense recorded
using  the  fair value method, which was an increase of approximately $1,661,000
from  fiscal  2004  to  fiscal  2005.  The  remaining  increase  in  general and
administrative  expenses  was  primarily  related  to  the  increased activities
surrounding  the  exploration  program  underway  in  Brazil during fiscal 2005.
After  excluding the effect of the stock compensation expense recorded in fiscal
2005  and  2004, in comparison to fiscal 2004, salaries in fiscal 2005 increased
by  approximately  $274,000  as  additional  personnel were added in Brazil, and
consulting,  promotional  and  professional  fees  related  to  the  Brazilian
exploration  program  increased  by approximately $269,000 during fiscal 2005 as
compared  to  fiscal  2004.

     General and administrative expenses increased by approximately $226,000, or
19%,  from  fiscal  2003  to fiscal 2004.  As discussed above and in Note 8, the
company  recorded  stock  compensation  expense  using  the fair value method of
approximately  $462,000 during fiscal 2004 as compared to approximately $158,000
for  fiscal  2003.  Salaries,  professional  and  consulting  fees  totaling
approximately  $1,081,000 were incurred during 2004 as the Company commenced the
evaluation  of  several mineral prospects, principally gold prospects in Brazil.
In particular, the Company hired a new president and retained the services of an
exploration  project  manager  and an administrator for the Brazilian Properties
during fiscal 2004.  During fiscal 2003, the general and administrative expenses

                                       13
<PAGE>

incurred  by  the  Company  primarily  represented  costs  associated  with  the
exploration  activities  on  the  Arkansas  Properties,  including  salaries  of
approximately  $582,000  and  repairs and maintenance of approximately $127,000.

     The  Company  anticipates  that  general and administrative expenses during
fiscal  2006  will  increase  from  the  level experienced in fiscal 2005 as the
Company incurs additional consulting and exploration expenditures related to the
Brazilian  Properties.

FINANCIAL  CONDITION;  LIQUIDITY  AND  CAPITAL  RESOURCES.

     As  of  January  31, 2005, the Company had working capital of $3,296,092 as
compared  to  working capital of $1,722,290 at January 31, 2004.  At January 31,
2005, the Company had current assets of $3,644,657, including $3,557,214 in cash
and  $87,443  in  accounts  receivable  compared to total current liabilities of
$348,565.

     In  the first quarter of fiscal 2002, the Company completed the issuance of
$1,278,595  principal  amount  of  10%  secured  convertible  debentures  ("the
Debentures").  The  Debentures  were  convertible  into units at the rate of one
unit  for each $2.87 principal amount of the Debentures until February 16, 2003.
Each  unit  was  to  consist  of  one  common share of the Company and one share
purchase warrant with an exercise price of $3.15, exercisable through August 16,
2003.  The  conversion  and share purchase warrant prices above were adjusted to
reflect  the  Company's  seven for one share consolidation on November 27, 2001.

     On  February 11, 2003, the holders of the Debentures approved the amendment
of  the conversion price of the units to $0.30 and the extension of the maturity
date  of the Debentures to February 16, 2004.  As amended, each of the 4,261,983
units  would  consist  of one common share of the Company and one share purchase
warrant  with an exercise price of $0.30, exercisable through February 16, 2004.
Additionally,  the  terms  of  the Debenture were amended to include a mandatory
conversion  provision  which  will  require  conversion  of  all  Debentures and
exercise  of  all related warrants within 30 days after the closing price of the
Company's  common  shares  has exceeded $0.375 for ten consecutive trading days.

     Interest  at the rate of 10% was payable on conversion or maturity in cash,
or  at  the  election  of  the  Company, in common shares valued at the weighted
average  trading  price  of the common shares of the Company for the ten trading
days  preceding  the  interest  payment  date.  The Debentures were secured by a
general  security interest in the Company's current and future assets and by the
stock of Star U.S., Inc. ("Star"), a wholly owned subsidiary of the Company, and
a  wholly-owned  subsidiary  of  Star.

     During  fiscal 2004, several holders of the Debentures elected to convert a
total  of  $197,000  principal  amount  and  received  656,666 common shares and
656,666  common  share  purchase  warrants  with  exercise  prices  of  $0.30.
Additionally, during the third quarter of fiscal 2004, a director of the Company
elected to convert $97,000 principal amount and received 323,333 common shares.

     Effective  October  31,  2003  a  total  of  $984,595  principal  amount of
Debentures  were  automatically converted into 3,281,977 units of the Company in
accordance  with  the  February  11,  2003  amendments  discussed  in  the third
preceding  paragraph.  Each  unit  consisted  of one common share and one common
share purchase warrant with an exercise price of $0.30.  Additionally, under the
terms of the mandatory conversion provision, the expiration date of all warrants
issued  upon  conversion  of the Debentures was established as December 1, 2003.
During  the  fourth  quarter  of  fiscal  2004,  the Company received a total of
$937,593,  representing  the  exercise  price  of 3,125,311 warrants, and issued
3,125,311  common  shares.  A  total  of  813,332  common share warrants expired
unused  on  December  1,  2003.

     During  fiscal  2004,  a  total  of  $335,075  of  interest  accrued on the
principal  amounts converted in fiscal 2004 was paid via the issuance of a total
of  1,129,522  shares,  representing  the  conversion of the interest amounts at
weighted  average  prices  from  $0.17  to  $0.33  per  share.

                                       14
<PAGE>

     The  Company  received  approximately  $1,138,000  during  fiscal  2002
representing  subscriptions  for  a  private  placement  of the Company's common
shares.  A  total  of  5,691,376 units were issued at a price of $0.20 per unit,
each  unit to consist of one common share and one share purchase warrant with an
exercise  price  of  $0.25.  The  share  purchase  warrants  originally  had  an
expiration  date  of  January 29, 2003, and that date was extended during fiscal
2003  to  January  29,  2004.  A  total  of 5,669,101 warrants were exercised in
January 2004, and the Company received total exercise proceeds of $1,417,275.  A
total  of  22,275  warrants  expired  unused  on  January  29,  2004.

     In  September, 2002, the Company completed a private placement of 2,819,774
units at a price of $0.20 per unit, each unit consisting of one common share and
one  share purchase warrant with an exercise price of $0.25 per unit.  The share
purchase  warrants  had  an  expiration date of September 18, 2004.  The Company
received  a  total of $563,955 during fiscal 2003 representing subscriptions for
the  private  placement.  During  fiscal  year  2005, all 2,819,774 common share
warrants  were  exercised,  and  the Company received total exercise proceeds of
$704,943.

     In  November  2004,  the Company completed a private placement of 2,112,500
common shares of the Company at a price of $0.85 per share and received proceeds
totaling  $1,795,625.  In  consideration  for  assistance  with  the  private
placement,  the Company paid finders' fees of $96,950 in cash and issued 113,000
share  purchase warrants entitling the finders to purchase 113,000 common shares
of  the  Company  at  $1.05 per share until November 2, 2005.  In March, 2005, a
holder  of  the  share purchase warrants elected to exercise 44,635 warrants and
the  Company  received  proceeds  of  approximately  $47,000.

     In  December  2004,  the Company completed a private placement of 2,150,000
common shares of the Company at a price of $1.00 per share and received proceeds
of  $2,150,000.

     During  fiscal  2005,  2004  and 2003 the Company received cash proceeds of
$477,577,  $424,919  and  $153,457  representing  the  exercise  of  1,638,571,
1,884,376  and  570,000  stock  options,  respectively,  by officers, directors,
employees  and  consultants  at  exercise  prices  from  $0.10  to  $0.49.

     All  financings  described  herein  were  private  placements and were made
pursuant  to the private placement laws of Canada and pursuant to the exemptions
provided by Section 4(2) and Regulation S under the United States Securities Act
of  1933.  The  Debentures  were  offered  to  a  limited  number  of accredited
investors  in  the United States and Canada pursuant to Rule 506 of Regulation D
and  Regulation  S.

     The  Company  has  no  properties  that  have  proven  to  be  commercially
developable  and  has  no significant revenues from mining operations other than
the rentals received from the Plant and the proceeds from the sales of the Plant
and  related  equipment.  The  rights and interests in the Tocantinzinho, Mamoal
and  Batalha  Properties  in  Brazil  constitute  the  Company's current mineral
holdings.  The  Company  cannot estimate with any degree of certainty either the
time  or  the  amount  of  funds  that  will  be required to acquire and conduct
additional exploration activities on new prospects.  The Company intends to seek
additional equity financing during fiscal 2006, including the potential exercise
of  outstanding  options.  The  inability of the Company to raise further equity
financing  will  adversely  affect  the  Company's  business plan, including its
ability  to  acquire additional properties and perform exploration activities on
existing  properties.  If  additional  equity  is not available, the Company may
seek additional debt financing or seek exploration partners to assist in funding
acquisition  or exploration efforts.  Historically, the Company has been able to
successfully  raise  capital  as  required  for  its business needs; however, no
assurances  are made by the Company that it can continue to raise debt or equity
capital  for  a  number  of reasons including its history of losses and property
writedowns,  the  decline in the price of its common stock, the number of shares
outstanding  and the Company's limited and speculative asset base of exploration
properties  and  prospects

IMPACT  OF  INFLATION.

     As  the  Company  is  not  anticipating  recording  sales and revenues from
operations  in  the  short  term,  a  discussion  of the effect of inflation and
changing  prices  on  its  operations  is  not  relevant.

                                       15
<PAGE>

DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES

     At  the  present  stage of the Company's business development, there are no
significant  differences  between  Canadian and United States generally accepted
accounting  principles  that  impact  the  Consolidated  Balance  Sheets,  the
Consolidated  Statements  of  Operations,  the  Consolidated  Statements  of
Shareholders'  Equity  (Deficit)  and  the Consolidated Statements of Cash Flows
except  for  the  capitalization of mineral properties and deferred expenditures
and the treatment of warrants issued as finders' fees as discussed in Note 16 to
Notes  to  Consolidated  Financial  Statements.

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK.
           -----------------------------------------------------------------

     None.

ITEM  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA
             -----------------------------------------------

     The  Consolidated  Financial  Statements of the Company included as part of
this  Annual  Report  on  Form  10-K  (pages  23 through 42) are incorporated by
reference  in  response  to this Item 8.  An index to the Consolidated Financial
Statements  is  included  in  Item  14.

     The  Company  is  not  required to provide the selected quarterly financial
data  specified  in  Item  302 of Regulation S-K because it does not satisfy the
tests  outlined  therein.

ITEM  9.     CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
             -------------------------------------------------------------------
             FINANCIAL  DISCLOSURE.
             ----------------------

     None.

ITEM  9A.     CONTROLS  AND  PROCEDURES.
              --------------------------
     (a)  Evaluation  of  disclosure  controls  and  procedures.

               The  term  "disclosure  controls  and procedures" (defined in SEC
               rule  13a-14(c)) refers to the controls and other procedures of a
               company  that are designed to ensure that information required to
               be  disclosed by a company in the reports that it files under the
               Securities Exchange Act of 1934 (the "Exchange Act") is recorded,
               processed,  summarized and reported within required time periods.
               The  Company's  Chairman,  who  also  serves  as  the  Company's
               principal  financial  officer, has evaluated the effectiveness of
               the  Company's  disclosure  controls  and procedures as of a date
               within  90  days  before the filing of this annual report, and he
               concluded  that,  as  of  such  date,  the Company's controls and
               procedures  were  effective.

     (b)  Changes  in  internal  controls.

               The  Company  maintains  a system of internal accounting controls
               that  are designed to provide reasonable assurance that its books
               and  records  accurately  reflect  its  transactions  and  that
               established  policies  and procedures are followed. There were no
               significant  changes  to  the  Company's  internal controls or in
               other  factors  that  could  significantly  affect  its  internal
               controls  subsequent  to  such  evaluation.

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT
           --------------------------------------------------------

     The directors and executive officers of the Company, their ages and term of
continuous  service  are  as  follows:

                                       16
<PAGE>

<TABLE>
<CAPTION>
<S>                                  <C>     <C>                          <C>
                                             POSITION WITH                SERVED AS A DIRECTOR
NAME. . . . . . . . . . .            AGE       REGISTRANT                 AND/ OR OFFICER SINCE
Patrick L. Glazier. . . .             47       Director                       July 8, 1998
Brian C. Irwin. . . . . .             65       Director                       October 3, 1995
Mark E. Jones, III. . . .             65       Director, Chairman & CEO       March 12, 1986
Leendert G. Krol. . . . .             65       Director, President            March 6, 2003
Daniel B. Leonard . . . .             68       Director                       October 20, 1999
Dr. Roger Howard Mitchell             63       Director                       June 14, 1993
Dr. Roger David Morton. .             69       Director                       June 14, 1993
</TABLE>

     PATRICK L. GLAZIER.  Mr. Glazier has served as the President of East Fraser
Fiber Co. Ltd. based in Prince George, British Columbia for the past five years.

     BRIAN  C. IRWIN.  For the past five years, Mr. Irwin's principal occupation
has  been  the  practice  of  law  as  a partner of DuMoulin Black in Vancouver,
British  Columbia.

     MARK  E.  JONES,  III.  Mr.  Jones has served as a Director of the Board of
Crown  Resources  Corporation  since January 1987.  Crown Resources Corporation,
based  in  Denver, Colorado, is publicly traded on the OTC Bulletin Board and is
engaged  in  the  exploration  and  development of mineral properties, primarily
gold.  Mr.  Jones  served as the President of the Company from 1986 to June 1990
and from July 2001 to the March 2003.  Mr. Jones is also a director of Solitario
Resources  Corporation.  In  his capacity as Chairman of the Board of Directors,
Mr.  Jones  is  the  chief  executive  officer  of  the  Company.

     LEENDERT  G.  KROL.  Until his retirement in April 2001, Mr. Krol had spent
15  years  with  Newmont  Mining  Corporation  including  the  last  10  years,
successively,  as  Director of Foreign Operation, Vice President Exploration and
Vice  President  International  Exploration.

     DAN  LEONARD.  Mr.  Leonard  served as Senior Vice President of INVESCO for
twenty-four years until his retirement in January 1999.  Mr. Leonard also serves
as  a  Director  of  Solitario  Resources  Corporation.

     DR. ROGER HOWARD MITCHELL.  For the past six years, Dr. Mitchell has served
as  a  Professor  of Geology at Lakehead University, Thunder Bay, Ontario.   Dr.
Mitchell  received his B.Sc. from the University of Manchester, 1964; M.Sc. from
Manchester,  1966;  Ph.D from McMaster University, 1969; and a D.Sc in 1978 from
the  University of Manchester.   He was elected a Fellow of the Royal Society of
Canada  in  1994.

     DR.  ROGER  DAVID  MORTON.  For  the  past  five years, Dr. Morton has been
Professor  Emeritus  in  Geology  with  the  Department of Earth and Atmospheric
Sciences  at the University of Alberta.  He also serves as Chairman of the Board
for  Mindoro  Resources Inc., and is President of Muskox Minerals Corp.  He is a
member  of  the  Board  of Directors of Uruguay Mineral Resources and Black Swan
Resources.  Dr.  Morton  obtained his B.Sc. (Hons. 1st class) in Geology and his
Ph.D.  in  Geology  from  the  University  of  Nottingham,  England.

     All of the directors are residents of Canada except for Messrs. Jones, Krol
and  Leonard,  who  reside  in  the  United  States.  All  directors are elected
annually  by  the  shareholders and hold office until the next Annual Meeting of
Shareholders.  Each  officer  of the Company holds office at the pleasure of the
Board  of  Directors.  No  director  or  officer  of  the Company has any family
relationship  with any other officer or director of the Company.  Messrs. Jones,
Irwin and Mitchell are members of the Company's audit committee.  Messrs. Morton
and  Mitchell  are  members of the Company's Environmental Committee and Messrs.
Morton  and  Jones  serve  as  members  of the Company's Compensation Committee.
Operating  within the guidance provided by the Company's Board of Directors, the
Compensation  Committee's  role  is  to  assure  that  the  Company's  executive
compensation strategy is aligned with the interests of the shareholders, and the
Company's  compensation structure will allow for fair and reasonable base salary
levels  and  the  opportunity  for executives to earn compensation that reflects
both  Company  and  individual  performance.

                                       17
<PAGE>

CERTAIN  SIGNIFICANT  EMPLOYEES  OR  CONSULTANTS

     The  Company has consulting relationships with other geologists and persons
that  are  included  in  its  projects and properties from time to time, none of
which  are  currently  material  to  the  Company.

ITEM  11.  EXECUTIVE  COMPENSATION
           -----------------------

OFFICERS

     The  Company  has  no long-term incentive plans.  However stock options are
awarded  from  time-to-time  in the discretion of the Board of Directors and the
Compensation Committee.  The following tables set forth all annual and long-term
compensation  for services in all capacities to the Company and its subsidiaries
for  the  three  most  recently completed financial years, including information
regarding  stock  option  awards  made  under  the  Company's Stock Option Plan.

                                        SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                          Annual  Compensation                   Long  Term  Compensation
                                  ---------------------------------------   ---------------------------------
                                                                                     Awards          Payouts
                                                                            ----------------------  ---------
<S>                    <C>        <C>           <C>        <C>              <C>         <C>         <C>        <C>
                                                                            Securities
     Name . . ..  . . . .                                                      Under                           All other
     and. . . ..  . . . .                                   Other Annual      Options   Restricted    LTIP     Compensa-
   Principal. . .     .  Fiscal     Salary        Bonus     Compensation      Granted     Shares    Payouts    tion (2)
   Position . . .  . . .  Year        ($)         ($)              ($)          (#)          ($)       ($)        ($)
---------------------  ---------  ------------  ---------  --------------   ----------  ----------  ---------  ---------
Mark E. Jones, III       2005      US$120,000    $ 8,000               -     1,114,434           -          -   US$7,800
Chairman                 2004       US$65,000          -               -       775,000           -          -   US$7,800
 .                       2003       US$60,000          -               -       130,888           -          -   US$7,800

Leendert G. Krol         2005      US$120,000   $ 10,000               -       857,829           -          -          -
President (1)            2004       US$64,000          -               -     1,387,501           -          -          -
</TABLE>

(1)  Mr.  Krol  began  serving  as  the  Company's  President  in  March  2003.
(2)  Car  allowance.

          OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FISCAL YEAR
<TABLE>
<CAPTION>
                           (1)                                         Market Value
                       Securities     % of Total                      of Securities
                      Under Option      Options       Exercise or      Underlying
                        Granted        Granted to     Base Price       Options on
                                      Employees in                    Date of Grant
   Name                   (#)         Fiscal Year     ($/Security)    ($/Security)      Expiration Date
------------------    ------------    ------------    ------------    -------------    ------------------
<S>                   <C>             <C>             <C>             <C>              <C>

Mark E. Jones, III       207,059          5.5%           $0.92            $0.92        June 11, 2009

Mark E. Jones, III       771,875         20.7%           $1.02            $1.02        July 29, 2009

Mark E. Jones, III       135,500          3.6%           $1.10            $1.10        November 19, 2009

Leendert G. Krol .       251,328          6.7%            $0.92           $0.92        June 11, 2009

Leendert G. Krol .       470,001         12.6%            $1.02           $1.02        July 29, 2009

Leendert G. Krol .       136,500          3.7%            $1.10           $1.10        November 19, 2009

</TABLE>

(1)  The  options  are subject to vesting requirements (25% on the date of grant
and  12.5%  on  each  quarter  end  thereafter).

                                       18
<PAGE>

                               OPTION EXERCISES IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
                                                         Unexercised            Value of Unexercised
                                                           Options                   In-the-Money
                       Securities    Aggregate            at Fiscal                    Options
                        Acquired       Value               Year-End              at Fiscal Year-End
                      on Exercise    Realized                (#)                        ($)
                                                         Exercisable/                Exercisable/
        Name              (#)           ($)             Unexercisable               Unexercisable
------------------    -----------    ----------    -----------------------    ------------------------
<S>                   <C>            <C>           <C>                        <C>
Mark E. Jones, III. . .   417,559    US$193,694. .  812,033 - Exercisable      $460,852 - Exercisable
                                                   687,967 - Unexercisable    $295,565 - Unexercisable

Leendert G. Krol. .       457,828    US$227,344     952,586 - Exercisable       $798,081 - Exercisable
                                                   547,415 - Unexercisable     $230,867 - Unexercisable

</TABLE>

DIRECTORS

     During fiscal 2005, in addition to the cash bonuses disclosed above for Mr.
Jones and Mr. Krol, the remaining Directors of the Company received cash bonuses
as  follows:  Mr. Glazier, $5,000; Mr. Leonard, $3,000; Mr. Irwin, Mr. Mitchell,
and Mr. Morton, $2,500.  In fiscal 2005, in addition to the option awards to Mr.
Jones  and  Mr.  Krol  discussed above, Mr. Glazier, Mr. Irwin, Mr. Leonard, Mr.
Mitchell  and Mr. Morton received 317,870, 397,381, 317,682, 244,611 and 262,256
options  to purchase common stock, respectively, for their services on the Board
of  Directors.  The  common share options granted during fiscal 2005 are subject
to  vesting requirements (25% on the date of grant and 12.5% on each quarter end
thereafter).  Information  regarding  individual awards to directors is included
in the footnotes to Item 12. Security Ownership of Certain Beneficial Owners and
Management  below.  The Company maintains no pension, profit sharing, retirement
or  other  plan  providing  benefits  to  its  officers  and  directors.

ITEM  12.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT
              ------------------------------------------------------------------

     The  following table sets forth, as of April 15, 2005, the number of Common
Stock  and the corresponding percentage ownership of (i) each person who held of
record,  or was known by the Company to own beneficially, more than five percent
of  the  Company's Common Stock, (ii) each director and executive officer of the
Company,  and  (iii)  all  directors  and executive officers of the Company as a
group.  Unless  otherwise  indicated, the Company believes the following persons
have  sole  voting and investment power with respect to the number of shares set
forth  opposite  their  names.

<TABLE>
<CAPTION>
                                                  NUMBER  OF
NAME  AND  ADDRESS  OF  BENEFICIAL  OWNER          SHARES          PERCENT  OF  CLASS
<S>                                               <C>              <C>
Cede & Co.
P.O. Box 20, Bowling Green Station
New York, New York 10274 . . . . . . . . . . . .  21,234,055 (1)         46.7%
CDS & Co.
P. O. Box 1038, Station A, 25 The Esplanade
Toronto, Ontario M5W 1G5 . . . . . . . . . . . .  17,075,963 (1)        37.5 %
Patrick L. Glazier (3) . . . . . . . . . . . . .   1,948,132 (2)         4.2 %
Brian C. Irwin . . . . . . . . . . . . . . . . .     500,000 (2)         1.1 %
Mark E. Jones, III . . . . . . . . . . . . . . .   2,973,752 (2)         6.3 %
Leendert G. Krol . . . . . . . . . . . . . . . .   1,500,000 (2)         3.2 %
Daniel B. Leonard. . . . . . . . . . . . . . . .   1,479,124 (2)         3.2 %
Dr. Roger Howard Mitchell. . . . . . . . . . . .     405,494 (2)           * %
Dr. Roger David Morton . . . . . . . . . . . . .     405,428 (2)           * %
Officer and Directors of the Company as a group
  (7 persons). . . . . . . . . . . . . . . . . .   9,211,930 (2)        18.1 %
</TABLE>
                                       19
<PAGE>

*  Less  than  1%.

     (1)  It  is  the  understanding of the Company that all of these shares are
held  by  the  record  shareholder  in  a nominal, fiduciary, trustee or similar
capacity.  The  Company is unaware of the identities of the beneficial owners of
these  shares,  with  the  exception of shares held by the Company's officers or
directors  included  in  such  share  positions.
     (2)  A director of the Company.  Address is 800 Bering, Suite 208, Houston,
TX  77057.  Include  options  to purchase 448,421 common shares at $0.10 through
March  6, 2008 for Mr. Krol.  Include options to purchase common shares at $0.30
through  August 14, 2008 (242,130 for Mr. Glazier, 40,119 for Mr. Irwin, 125,000
for  Mr. Jones, 142,318 for Mr. Leonard, 115,389 for Mr. Mitchell and 97,744 for
Mr. Morton).  Include options to purchase common shares at $0.40 through October
21,  2008  (40,000  for  Mr.  Glazier, Mr. Leonard, Mr. Mitchell and Mr. Morton,
62,500  for Mr. Irwin, 260,566 for Mr. Jones, and 50,000 for Mr. Krol).  Include
143,750 options to purchase common shares at $0.49 through November 26, 2008 for
Mr.  Krol.  Include  options to purchase common shares at $0.92 through June 11,
2009  (120,995  for  Mr.  Glazier,  69,131 for Mr. Irwin, 207,059 for Mr. Jones,
251,328 for Mr. Krol, 78,807 for Mr. Leonard, 64,736 for Mr. Mitchell and 59,006
for  Mr.  Morton).  Include  options  to purchase common shares at $1.02 through
July  29,  2009 (141,875 for Mr. Glazier, 281,250 for Mr. Irwin, 771,875 for Mr.
Jones,  470,001  for Mr. Krol, 191,875 for Mr. Leonard, 141,875 for Mr. Mitchell
and 166,250 for Mr. Morton).  Include options to purchase common shares at $1.10
through November 19, 2009 (55,000 for Mr. Glazier, 47,000 for Mr. Irwin, 135,500
for  Mr.  Jones,  136,500  for  Mr. Krol, 47,000 for Mr. Leonard, 38,000 for Mr.
Mitchell  and  37,000  for  Mr.  Morton)
     (3)  The beneficial owner has sole ownership, with the exception of a total
of  124,285  shares,  where  ownership  is  shared.

ITEM  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
              --------------------------------------------------

     Accounts  receivable  at  January  31,  2005  and  2004 include $55,900 and
$105,758 receivable from Mr. Jones, respectively.  Amounts totaling $147,683 and
$121,957  were paid by the Company during fiscal 2005 and 2004, respectively, to
a  law  firm  in  which Mr. Irwin is a partner.  In January 2004, Mr. Jones, Mr.
Glazier  and  Mr.  Leonard  exercised  warrants  to  purchase common stock at an
exercise  price  of  $0.25  per  share and acquired 477,750, 225,000 and 238,875
common shares, respectively.  In September, 2004, Mr. Jones, Mr. Glazier and Mr.
Leonard  exercised  warrants  to  purchase common shares at an exercise price of
$0.25  per  share  and  received  286,200,  100,000,  and  40,000 common shares,
respectively.

Shares  of  Jaguar do Brasil, Ltd. are held beneficially for the Company through
three  representatives  of  the Company, including a director of the Company and
two  directors  of  Jaguar  do  Brasil,  Ltd.

ITEM  14.  PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES
           ------------------------------------------

     Audit  and Tax Fees.  The fees billed for professional services rendered by
Morgan  & Company in connection with the audit of the Company's annual financial
statements  for  the  years  ended  January  31,  2004  and 2003 included in the
Company's  annual  report  on Form 10-K totaled approximately $9,625 and $6,400,
respectively.  The  above  fees  included  the professional services rendered by
Morgan  &  Company  in  connection  with tax compliance for the two years ending
January  31,  2004.

                                       20
<PAGE>

     Audit  Committee.  The Audit Committee makes recommendations concerning the
engagement  of  public  accountants,  reviews the scope and results of the audit
engagement,  considers  the  range  of  audit and non-audit fees and reviews the
adequacy  of  internal  controls.

ITEM  15.     EXHIBITS,  FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
              ------------------------------------------------------------------

(a)     Financial  Statements  and  Schedules.

     (1)  The  following  is  a  list of and index to the Consolidated Financial
Statements  filed  as  part  of  this  Registration  Statement:

                          BRAZURO RESOURCES CORPORATION
                  Index  to  Consolidated  Financial  Statements
                                                                            Page

Auditor's Report  -  Morgan  &  Company                                       23
Consolidated  Financial  Statements:
     Consolidated  Balance  Sheets  -  January  31,  2005  and  2004          24
     Consolidated  Statements  of  Operations
          for  each  of  the  years ended January 31, 2005, 2004 and 2003     25
     Consolidated  Statements  of  Shareholders'  Equity  (Deficit)
          for  each  of  the  years ended January 31, 2005, 2004 and 2003     26
     Consolidated  Statements  of  Cash  Flows  for  each  of  the  years
         ended  January  31,  2005,  2004  and  2003                          27
     Notes  to  Consolidated  Financial  Statements                           28

     (2)  All  other  schedules  for  which  provision is made in the applicable
accounting  regulations of the Securities and Exchange Commission are either not
required  under the related instructions, are not applicable, or the information
required thereby is set forth in the Company's Consolidated Financial Statements
or  the  Notes  thereto.

     (3)  Exhibits  Filed  as  Part  of  this  Registration  Statement.

     See  Index  to  Exhibits.



















                                       21
<PAGE>

                                   SIGNATURES

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

May  1,  2005                     BRAZAURO  RESOURCES  CORPORATION
                                  (Registrant)

                                  By:  /s/  Mark  E.  Jones,  III
                                       --------------------------
                                  MARK  E.  JONES,  III
                                  Chief  Executive  Officer  and  Director

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

<TABLE>
<CAPTION>
           SIGNATURE                              TITLE                      DATE
  ---------------------------     -----------------------------------     -----------
<S>                               <C>                                     <C>
/s/ Mark E. Jones, III
-----------------------           Chief Executive Office and Director     May 1, 2005
Mark E. Jones, III*
_____________________. . . . . . .          .  Director                   May 1, 2005
Patrick L. Glazier* .
_____________________. . . . . . .          .  Director                   May 1, 2005
Brian C. Irwin*
_____________________. . . . . . .     President and Director             May 1, 2005
Leendert G. Krol*
____________________. . . . . . .          .  Director                    May 1, 2005
Daniel B. Leonard*
_____________________. . . . . . .          . Director                    May 1, 2005
Dr. Roger Howard Mitchell*
______________________. . . . . . .           Director                    May 1, 2005
Dr. Roger David Morton*

By:  /s/ Mark E. Jones, III
----------------------------
 Mark E. Jones, III
 Attorney-in-fact
 For persons indicated *
</TABLE>

                                       22
<PAGE>
                                                             Morgan  &  Company

                                AUDITORS' REPORT


To  the  Shareholders  of
Brazauro  Resources  Corporation  (Formerly  Jaguar  Resources  Corporation)

We  have  audited  the  consolidated  balance  sheets  of  Brazauro  Resources
Corporation  (formerly  Jaguar Resources Corporation) as at January 31, 2005 and
2004,  and  the  consolidated  statements  of  operations,  shareholders' equity
(deficit),  and cash flows for the years ended January 31, 2005, 2004, and 2003.
These  consolidated financial statements are the responsibility of the Company's
management.  Our  responsibility  is to express an opinion on these consolidated
financial  statements  based  on  our  audits.

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

The Company is not required to have, nor were we engaged to perform, an audit of
its  internal  control  over  financial  reporting.  Our  audits  included
consideration  of  internal  control  over  financial  reporting  as a basis for
designing  audit  procedures  that are appropriate in the circumstances, but not
for  the  purpose of expressing an opinion on the effectiveness of the Company's
internal  control  over  financial  reporting.  Accordingly,  we express no such
opinion.

In  our  opinion, these consolidated financial statements present fairly, in all
material  respects, the financial position of the Company as at January 31, 2005
and 2004, and the results of its operations, shareholders' equity (deficit), and
cash  flows  for the years ended January 31, 2005, 2004, and 2003, in accordance
with  Canadian  generally  accepted  accounting  principles.


Vancouver,  B.C.                                            "Morgan  &  Company"
April  28,  2005                                          Chartered  Accountants

     COMMENTS  BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCES

In  the  United States, reporting standards for auditors require the addition of
an  explanatory  paragraph  (following the opinion paragraph) when the financial
statements  are affected by conditions and events that cast substantial doubt on
the  Company's ability to continue as a going concern such as those described in
Note  1  of  the  consolidated  financial  statements.  Our  report  to  the
shareholders,  dated  April  28,  2005, is expressed in accordance with Canadian
reporting  standards  which  do  not  permit  a  reference  to  such  events and
conditions  in  the  Auditors' Report when these are adequately disclosed in the
financial  statements.

In the United States, reporting standards for auditors also require the addition
of  an  explanatory  paragraph (following the opinion paragraph) when there is a
change  in accounting principles that has a material effect on the comparability
of the Company's financial statements, such as the change described in Note 2 to
the financial statements.  Our report to the shareholders, dated April 28, 2005,
is  expressed  in  accordance  with  Canadian  reporting  standards which do not
require  a  reference to such a change in accounting principles in the auditors'
report when the change is properly accounted for and adequately disclosed in the
financial  statements.


Vancouver,  B.C.                                            "Morgan  &  Company"
April  28,  2005                                          Chartered  Accountants


                                       23
<PAGE>


<TABLE>
<CAPTION>

                                    BRAZAURO RESOURCES CORPORATION
                                (FORMERLY JAGUAR RESOURCES CORPORATION)
                                      CONSOLIDATED BALANCE SHEETS

                                                        January 31, 2005     January 31, 2004
                                                        ----------------     ----------------
                                                                             Restated (Note 2)
                                                                (In Canadian Dollars)
<S>                                                       <C>                <C>
ASSETS
Current assets:
   Cash and cash equivalents . . . . . . . . . .           $  3,557,214         $  1,982,536
   Accounts receivable . . . . . . . . . . . . .                 87,443              109,468
                                                          --------------     ----------------
Total current assets . . . . . . . . . . . . . .              3,644,657            2,092,004
                                                          --------------     ----------------
Property and equipment, at cost:
  Mineral properties and deferred
     expenditures (Note 4) . . . . . . . . . . .              2,817,746              714,283
  Equipment and other. . . . . . . . . . . . . .                 80,887               68,788
  Accumulated depreciation . . . . . . . . . . .                (70,561)             (63,472)
                                                          --------------     ----------------
Total property and equipment, at cost. . . . . .              2,828,072              719,599
                                                          --------------     ----------------

Other assets . . . . . . . . . . . . . . . . . .                  8,874                7,826
                                                          --------------     ----------------
Total assets . . . . . . . . . . . . . . . . . .           $  6,481,603         $  2,819,429
                                                          ==============     ================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued liabilities. . .             $  206,011           $  369,714
   Asset retirement obligations (Notes 3 and 4).                142,554                    -
                                                          --------------     ----------------
Total current liabilities. . . . . . . . . . . .                348,565              369,714
                                                          --------------     ----------------

Commitments and contingencies (Note 12)

Shareholders' equity
   Common share capital, no par value:
     Authorized shares - unlimited
     Issued and outstanding shares - 44,869,716
       (35,748,871 at January 31, 2004) (Note 6)             41,536,205           35,819,799
  Contributed surplus (Note 8) . . . . . . . . .              2,131,304              423,232
  Deficit. . . . . . . . . . . . . . . . . . . .            (37,534,471)         (33,793,316)
                                                          --------------     ----------------
Total shareholders' equity . . . . . . . . . . .              6,133,038            2,449,715
                                                          --------------     ----------------
Total liabilities and shareholders' equity . . .           $  6,481,603         $  2,819,429
                                                          ==============     ================

Approved by the Board of Directors.. . . . . . .           Director: "Mark E. Jones, III"
                                                           Director: "Brian C. Irwin"
See accompanying notes.
</TABLE>

                                       24
<PAGE>

<TABLE>
<CAPTION>

                                 BRAZAURO RESOURCES CORPORATION
                            (FORMERLY JAGUAR RESOURCES CORPORATION)
                             CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                 Year Ended January 31,
                                                            2005          2004         2003
                                                       ------------   ------------   ------------
                                                                         Restated      Restated
                                                                         (Note 2)      (Note 2)
                                                                   (In Canadian Dollars)
<S>                                                    <C>            <C>            <C>
Revenues:
  Interest income . . . . . . . . . . . . . . . . . .  $    12,145     $    1,259     $    1,618
  Gains on sales of plant and equipment (Note 4). . .            -        351,272         10,740
                                                       ------------   ------------   ------------
                                                            12,145        352,531         12,358
                                                       ------------   ------------   ------------
Expenses:
  General and administrative (Note 13). . . . . . . .    3,747,476      1,404,649      1,179,086
  Finance charges . . . . . . . . . . . . . . . . . .       42,329         80,579         22,396
  Write-down of mineral properties (Note 4) . . . . .            -              -      3,141,726
  Interest expense. . . . . . . . . . . . . . . . . .            -         84,961        127,510
  Foreign exchange translation (gains) losses . . . .      (36,505)       (18,252)        10,132
                                                       ------------   ------------   ------------
                                                         3,753,300      1,551,937      4,480,850
                                                       ------------   ------------   ------------
Net loss before provision for income taxes. . . . . .   (3,741,155)    (1,199,406)    (4,468,492)
Provision for income taxes (Note 9) . . . . . . . . .            -              -              -
                                                       ------------   ------------   ------------
Net loss for the year . . . . . . . . . . . . . . . .  $(3,741,155)   $(1,199,406)   $(4,468,492)
                                                       ============   ============   ============

Basic and diluted net loss per common share . . . . .  $     (0.10)    $    (0.06)    $    (0.27)
                                                       ============   ============   ============

Weighted-average number of common shares outstanding.   38,949,937     21,349,766     16,439,454


See accompanying notes.
                                       25
<PAGE>


</TABLE>

<TABLE>
<CAPTION>

                                                 BRAZAURO RESOURCES CORPORATION
                                            (FORMERLY JAGUAR RESOURCES CORPORATION)
                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                                                     (In Canadian Dollars)
<S>                                       <C>             <C>             <C>             <C>             <C>
                                                                                                                Total
                                                    Common Shares          Contributed                      Shareholders'
                                                Number        Amount         Surplus          Deficit      Equity (Deficit)
                                          --------------  --------------  --------------  --------------  ------------------
                                                                                                           Restated (Note 2)
Balance at February 1, 2002. . . . . . .     14,862,935    $ 30,108,507      $        -   $ (28,125,418)      $ 1,983,089
Issued for services. . . . . . . . . . .        218,750          52,500               -               -            52,500
Stock-based compensation . . . . . . . .              -               -         158,357               -           158,357
Issued on exercise of stock options. . .        570,000         153,457               -               -           153,457
Issued for cash. . . . . . . . . . . . .      2,819,774         563,955               -               -           563,955
Net loss for the year. . . . . .. .                   -               -               -      (4,468,492)       (4,468,492)
                                          --------------  --------------  --------------  --------------  ------------------
Balance at January 31, 2003. . .             18,471,459      30,878,419         158,357     (32,593,910)       (1,557,134)
Issued for conversion of convertible
  debentures . . . . . . . . . . . . . .      4,261,976       1,278,595               -               -         1,278,595
Issued for interest on convertible debt.      1,129,522         335,075               -               -           335,075
Issued for debt payment. . . . . . . . .        107,126          20,917               -               -            20,917
Issued for property acquisition. . . . .      1,100,000         330,000               -               -           330,000
Issued on exercise of warrants . . . . .      8,794,412       2,354,868               -               -         2,354,868
Stock-based compensation . . . . . . . .              -               -         461,881               -           461,881
Issued on exercise of stock options. .        1,884,376         621,925        (197,006)              -           424,919
Net loss for the year. . . . . . . . . .              -               -               -      (1,199,406)       (1,199,406)
                                          --------------  --------------  --------------  --------------  -----------------
Balance at January 31, 2004. . . . . .       35,748,871      35,819,799         423,232     (33,793,316)        2,449,715
Issued for cash, net of share issue cost      4,262,500       3,848,675               -               -         3,848,675
Issued for property acquisition. . . . .        400,000         270,000               -               -           270,000
Issued on exercise of warrants . . . . .      2,819,774         704,943               -               -           704,943
Stock-based compensation . . . . . . . .              -               -       2,123,283               -         2,123,283
Issued on exercise of stock options. . .      1,638,571         892,788        (415,211)              -           477,577
Net loss for the year. . . . . . .                    -               -               -      (3,741,155)       (3,741,155)
                                          --------------  --------------  --------------  --------------  ------------------
Balance at January 31, 2005. . . . .         44,869,716    $ 41,536,205     $ 2,131,304   $ (37,534,471)      $ 6,133,038
                                          ==============  ==============  ==============  ==============  ==================

See accompanying notes.
</TABLE>

                                       26
<PAGE>

<TABLE>
<CAPTION>



                                 BRAZAURO RESOURCES CORPORATION
                            (FORMERLY JAGUAR RESOURCES CORPORATION)
                             CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                Year ended January 31,
                                                           2005           2004         2003
                                                       ------------  ------------  ------------
                                                                        Restated     Restated
                                                                        (Note 2)     (Note 2)
                                                                (In Canadian Dollars)
<S>                                                    <C>           <C>           <C>
Operating activities:
  Net loss for the year . . . . . . . . . . . . . . .  $(3,741,155)  $(1,199,406)  $(4,468,492)
  Items not affecting cash:
    Depreciation. . . . . . . . . . . . . . . . . . .        7,089        18,277        28,924
    Gains on sales of plant and equipment (Note 4). .            -      (351,272)            -
    Stock based compensation (Note 8) . . . . . . . .    2,123,283       461,881       158,357
    Write-down of mineral properties. . . . . . . . .            -             -     3,141,726
    Interest expense. . . . . . . . . . . . . . . . .            -        84,961       127,510
    Other . . . . . . . . . . . . . . . . . . . . . .            -             -         4,275
                                                       ------------  ------------  ------------
                                                        (1,610,783)     (985,559)   (1,007,700)
                                                       ------------  ------------  ------------
Changes in noncash working capital:
    Accounts receivable . . . . . . . . . . . . . . .       14,675       (77,356)      (25,274)
    Accounts payable and accrued liabilities. . . . .       (1,255)      121,565        47,073
                                                       ------------  ------------  ------------
                                                            13,420        44,509        21,799
                                                       ------------  ------------  ------------
Net cash used in operating activities . . . . . . . .   (1,597,363)     (941,050)     (985,901)
Investing activities:
  Mineral properties acquisition and exploration. . .   (1,833,463)     (384,283)     (199,640)
  Equipment and other . . . . . . . . . . . . . . . .      (12,099)            -        (1,613)
                                                       ------------  ------------  ------------
Net cash used in investing activities . . . . . . . .   (1,845,562)     (384,283)     (201,253)
                                                       ------------  ------------  ------------
Financing activities:
  Proceeds from issuances of common shares. . . . . .    5,031,195     2,779,784       717,412
  Proceeds from sales of plant and equipment (Note 4)            -       521,978             -
                                                       ------------  ------------  ------------
Net cash provided by financing activities . . . . . .    5,031,195     3,301,762       717,412
Effect of exchange rate changes on cash . . . . . . .      (13,592)      (16,627)         (829)
                                                       ------------  ------------  ------------
Net increase (decrease) in cash and cash equivalents.    1,574,678     1,959,802      (470,571)
Cash and cash equivalents, beginning of year. . . . .    1,982,536        22,734       493,305
                                                       ------------  ------------  ------------
Cash and cash equivalents, end of year. . . . . . . .  $ 3,557,214   $ 1,982,536   $    22,734
                                                       ============  ============  ============

See accompanying notes.
See Note 14 for supplemental cash flow disclosure and non-cash investing and financing activities.
</TABLE>

                                       27
<PAGE>
                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              (IN CANADIAN DOLLARS)

                         JANUARY 31, 2005, 2004 AND 2003

1.  OPERATIONS

Brazauro  Resources Corporation, formerly known as Jaguar Resources Corporation,
("the  Company")  was  incorporated in 1986 in British Columbia, Canada, and has
been  engaged  in the acquisition and exploration of mineral properties with the
potential  for  economically  recoverable reserves.  During fiscal 2005 and 2004
the  Company  pursued  gold  exploration  opportunities  that  have  large scale
potential,  with  prospects  in  South  America  as the primary focus.  Prior to
fiscal  2004,  the  Company  had  concentrated  its  efforts  primarily  on  the
acquisition  and  exploration  of  mineral  properties  with  the  potential for
economically  recoverable  diamonds.  See  Note  4 for further discussion of the
Company's  mineral  property  interests.

The  nature  of the Company's operations results in significant expenditures for
the acquisition and exploration of properties.  None of the Company's properties
have  economically  recoverable reserves or proven reserves at the current stage
of  exploration.  The recoverability of the carrying value of mineral properties
and  deferred  expenditures  is dependent upon a number of factors including the
existence  of  recoverable  reserves,  the  ability  of  the  Company  to obtain
financing  to  renew  leases  and  continue  exploration and development and the
discovery  of  economically  recoverable  reserves.

GOING  CONCERN

The  accompanying  consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company anticipates that
cash  and  cash equivalents as of January 31, 2005 will be sufficient to satisfy
the  Company's  cash needs for general and administrative expenses during fiscal
2006.  The  Company  has  incurred  operating losses and will require additional
cash  to  obtain  new leases and fund exploration activities during fiscal 2006.
If  continued  financial support or additional financing is not available, there
would  be  doubt  about  the  Company's  ability to continue as a going concern.
These  consolidated financial statements do not include any adjustments that may
be  required  in  the event that the Company is unable to realize its assets and
settle  its  liabilities  in  the  normal  course  of  operations.

All  amounts  are  in  Canadian  dollars  unless  noted  otherwise.

2.  CHANGE  IN  ACCOUNTING  POLICY

The  Company  adopted  the  fair  value  recognition  provisions of the Canadian
Institute  of  Chartered Accountants ("CICA") Handbook Section 3870 "Stock-Based
Compensation  and  Other  Stock-Based  Payments",  for  stock-based compensation
awards  granted  to  employees.  This  accounting  policy,  adopted for the 2005
fiscal  year,  was  applied retroactively with restatement for all stock options
granted  after  February  1,  2002.  As  a  result of the adoptions, Contributed
Surplus  increased  from amounts previously reported by $158,357 and $368,829 as
of  January  31,  2003  and  2004,  respectively.  Additionally,  General  and
Administrative  Expenses  and Deficit increased by $158,357 and $407,478 for the
years ended January 31, 2003 and 2004, respectively, for a cumulative adjustment
of  $565,835.

3.  SIGNIFICANT  ACCOUNTING  POLICIES

The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in Canada and comply in all material respects with
United  States  generally  accepted accounting principles except as discussed in
Note  16.

                                       28
<PAGE>
                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (IN CANADIAN DOLLARS)

                         JANUARY 31, 2005, 2004 AND 2003

3.  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

PRINCIPLES  OF  CONSOLIDATION

The  consolidated  financial statements include the accounts of the Company, its
wholly  owned  subsidiary  Jaguar  Resources  do  Brasil  Ltda.,  a  Brazilian
corporation,  and  its  wholly  owned  United  States subsidiary, Star U.S. Inc.
("Star"),  and  the three wholly-owned subsidiaries of Star, Diamond Operations,
Inc.  ("DOI"),  Diamond Exploration, Inc. ("DEI") and Continental Diamonds, Inc.
("CDI")  from  their  respective dates of acquisition.  Significant intercompany
balances  and  transactions  have  been  eliminated.

FOREIGN  CURRENCY  TRANSLATION

Transactions  denominated  in  United States dollars or other foreign currencies
during  a  year  are  translated at exchange rates prevailing at the date of the
transaction.  Exchange  gains  or  losses  resulting  from such translations are
included  in  the  determination of net loss.  Translation adjustments resulting
from the process of translating monetary assets and liabilities of United States
and  Brazilian  wholly  owned subsidiaries into Canadian dollars are included in
the  determination of net loss.  Property and equipment of the United States and
Brazilian  wholly  owned  subsidiaries  are  translated into Canadian dollars at
exchange  rates  prevailing  at  the  date  of  the  expenditure.

CASH  AND  CASH  EQUIVALENTS

Cash  and  cash equivalents includes money market instruments with a maturity of
three  months  or  less.

FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

As  of  January  31, 2005 and 2004, the fair value of cash and cash equivalents,
accounts  receivable  and  accounts  payable  and  accrued liabilities including
amounts  due to and from related parties approximates carrying values because of
the  short  term  of  these  instruments.

MINERAL  PROPERTIES  AND  DEFERRED  EXPENDITURES

Direct  acquisitions,  evaluation  and exploration expenditures are capitalized,
reduced  by  related sundry income, to be amortized over the recoverable mineral
reserves  if a property is commercially developed.  When an area is disproved or
abandoned,  the  acquisition costs and related deferred expenditures are written
off.  Interest  is  capitalized  on  properties  upon the commencement of active
evaluation  and preproduction activities, if significant.  During the three-year
period  ended  January  31,  2005,  no  interest  was  capitalized.

The  net  capitalized  cost of each mineral property is periodically compared to
management's estimation of the net realizable value and a write-down is recorded
if  the  net realizable value is less than the cumulative net capitalized costs.
Write-downs  totaling  $3,141,726  were  recorded  in  fiscal  2003.

OTHER  PROPERTY,  PLANT  AND  EQUIPMENT

Buildings,  equipment  and  other  are depreciated on a straight-line basis over
useful  lives  ranging  from  3  to  25  years.  The diamond recovery plant (the
"Plant"),  sold  during  fiscal 2004, became fully operational in April 1994 and
was depreciated on a straight-line basis over its estimated useful life of seven
years.

                                       29
<PAGE>

                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (IN CANADIAN DOLLARS)

                         JANUARY 31, 2005, 2004 AND 2003

3.  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

ASSET  RETIREMENT  OBLIGATIONS

Effective  February  1,  2004,  the  Company  adopted  the recommendations under
Section  3110,  Asset  Retirement  Obligations,  of  the  Canadian  Institute of
Chartered  Accountants Handbook ("Section 3110").  Section 3110 applies to legal
obligations associated with the retirement of long-lived assets that result from
the acquisition, construction, development and/or normal operation of the asset.

These  recommendations  require  that the fair value of a liability for an asset
retirement  obligation  be recorded in the period in which it is incurred.  When
the  liability  is initially recorded, the cost is capitalized by increasing the
carrying  amount  of  the long-lived asset.  Upon settlement of the liability, a
gain  or  loss  is recorded.  This differs from the prior practice that involved
accruing  for the estimated reclamation and closure liability through charges to
the  statement  of  operations  over  the  life  of  the  asset.

The  adoption  of  this  section  had  no  material  impact  on  these financial
statements.  An  amount of $142,554 previously recorded for reclamation reserves
has  been  reclassified  from  accounts  payable to asset retirement obligations
(Note  4).

INCOME  TAXES

The  Company  files a separate Canadian income tax return.  The Company's United
States subsidiaries file a consolidated United States income tax return.  Income
taxes  are  calculated  using  the  liability  method  of accounting.  Temporary
differences  arising  from  the  difference between the tax basis of an asset or
liability  and  its  carrying  amount on the balance sheet are used to calculate
future  income  tax liabilities or assets.  The future income tax liabilities or
assets  are  measured  using tax rates and laws expected to apply in the periods
that  the  temporary  differences are expected to reverse.  Valuation allowances
are  provided where net future income tax assets are not more likely than not to
be  realized.

LOSS  PER  COMMON  SHARE

Basic  loss  per share is calculated using the weighted average number of shares
issued  and outstanding during the year.  The Company follows the treasury stock
method  in  the  calculation of diluted loss per share.  No shares were added to
the  weighted average number of common shares outstanding during the years ended
January  31,  2005,  2004,  or  2003  for  the dilutive effect of employee stock
options  and  warrants  as  they  were  all  anti-dilutive.

STOCK  BASED  COMPENSATION

The  Company  has a stock-based compensation plan, which is described in Note 8.
The  Company  uses  the  fair-value  based method to account for all stock-based
payments  to  employees  and  non-employees  granted  after  February 1, 2002 by
measuring  the  compensation  cost  of  the  stock-based  payments  using  the
Black-Scholes  option-pricing  model.  The  fair  value  of  the  stock-based
compensation is recorded as a charge to net earnings based on the vesting period
with  a  credit  to  contributed  surplus.  Upon  exercise of the stock options,
consideration  paid  by  the  option holder, together with the amount previously
recognized  in contributed surplus, is recorded as an increase to share capital.

                                       30
<PAGE>
                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (IN CANADIAN DOLLARS)

                         JANUARY 31, 2005, 2004 AND 2003

3.  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

USE  OF  ESTIMATES

The  preparation  of  financial statements in conformity with generally accepted
accounting  principles  requires  the Company's management to make estimates and
assumptions  that  affect  the  amounts  reported  in the consolidated financial
statements  and  related notes to the consolidated financial statements.  Actual
results  may  differ  from  those  estimates.

COMPARATIVE  AMOUNTS

Certain  comparative amounts have been reclassified to conform with presentation
for  the  current  year.

4.  MINERAL  PROPERTIES  AND  DEFERRED  EXPENDITURES

The  Company  cannot  guarantee title to all of its Properties as the Properties
may  be  subject  to  prior  unregistered agreements or transfers or native land
claims,  and  title may be affected by undetected defects.  The Company does not
maintain  title  insurance  on  its  properties.

BRAZIL  PROPERTIES

Tocantinzinho  Properties

In  August 2003 the Company entered into an option to acquire exploration rights
to a total of 28,275 hectares in the Tapaj s gold district in Para State, Brazil
under  an  option agreement with two individuals.  The option agreement entitles
the  Company  to  acquire a 100% interest in the exploration rights to such area
(referred  to  herein as the "Tocantinzinho Properties") over a four-year period
in  consideration  for  the staged payment of US$465,000, the staged issuance of
2,600,000  shares  of  the  Company  and the expenditure of $1,000,000 (U.S.) on
exploration  ($300,000  (U.S.) by July 31, 2004).  The Company received approval
for  the  acquisition  from the TSX Venture Exchange in August 2003 and made the
initial payment required by the option agreement to the optionors, consisting of
1,100,000 common shares of the Company and $75,000 (U.S.).  The Company made the
second  option  payment,  consisting of 200,000 common shares of the Company and
$30,000  (U.S.),  in  February 2004.  In August 2004, the Company made the third
option  payment  of  200,000  common  shares  of the Company and $40,000 (U.S.).

As  of  January  31,  2005,  the  total  commitment  remaining  under the option
agreement  is as follows (all amounts are in U.S. dollars):  $40,000 and 200,000
common shares of the Company, $130,000 and 200,000 common shares of the Company,
and  $150,000  and  700,000  common shares of the Company for the 2006, 2007 and
2008  fiscal  years,  respectively.

Additionally,  the  option agreement requires the Company to assume all existing
obligations  of  the  optionors  to  the  owners  of  the  mineral rights of the
Tocantinzinho  Properties  (the  "Underlying  Agreements")  totaling  $1,600,000
(U.S.)  over  a  four-year  period.  At  January 31, 2005, the remaining payment
commitments  under  the Underlying Agreements are as follows (all amounts are in
U.S. dollars):  $120,000, $160,000 and $1,205,000 in fiscal years 2006, 2007 and
2008,  respectively.  The  Company  made  payments  totaling  $35,000 (U.S.) and
$80,000  (U.S.)  in  respect of the Underlying Agreements during fiscal 2004 and
2005,  respectively.  One  of  the optionors entered into a consulting agreement
with  the  Company  for  an 18-month period at a rate of $7,000 (U.S.) per month
which  expired during fiscal 2005.  The payments under the option agreement, the
Underlying  Agreements  and the consulting agreement are considered expenditures
for  purposes  of  meeting the required total and initial annual expenditures of
$1,000,000  (U.S.)  and  $300,000 (U.S.), respectively, discussed above.  During

                                       31
<PAGE>
                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (IN CANADIAN DOLLARS)

                         JANUARY 31, 2005, 2004 AND 2003

4.  MINERAL PROPERTIES AND DEFERRED EXPENDITURES (CONTINUED)

fiscal 2005 the Company met the requirement under the option agreement to expend
a  total  of $300,000 (U.S.) and met the requirement to expend $1,000,000 (U.S.)
on exploration.  The Company has met its first year commitments under the option
agreement, and the option agreement is cancelable by the Company without further
obligations.

The  optionors  are  entitled  to a sliding scale gross revenues royalty ranging
from 2.5% for gold prices below $400 (U.S.) per ounce to 3.5% for gold prices in
excess  of  $500  (U.S.)  per  ounce.  The  Company  has  filed applications for
exploration  licenses with the regulatory authorities in Brazil and has received
final  approval on several claim areas.  The Company anticipates it will receive
final  approval  on  the  remaining  claim  areas  in  fiscal  2006.

In May 2004 the Company applied for exploration permits for an additional 16,000
hectares adjacent to the above Tocantinzinho Properties.  The Company has agreed
to  make  payments  totaling $300,000 (U.S.) over a period of approximately four
years  to  an  individual  as  a  finder's  fee  related  to this 16,000 hectare
property.  This  additional  property is not subject to the option agreement and
therefore  is  not  subject  to  the  royalty.

Mamoal  Property

The  Company  entered  into  an  option agreement under which it may acquire the
exploration license to the 10,000 hectare Mamoal Property, located 30 kilometers
southeast  of  the  Company's  Tocantinzinho  Properties, in December 2003.  The
Company  has an option to earn 100% of the Mamoal Property by payment of a total
of $300,000 (U.S.) over three and one half years.  The Company may terminate the
option  agreement  at  any  time without further obligation.  An initial $10,000
(U.S.)  payment  was  made  by the Company in December 2003, and the exploration
research  license  has  been  transferred  to  Jaguar  Resources do Brasil Ltda.
During  fiscal  2005,  the  Company  made  payments  under  the option agreement
totaling  $25,000  (U.S.).  The  remaining  option  payments are as follows (all
amounts  are  in  U.S. dollars):  $45,000, $65,000, and $155,000 in fiscal years
ending  January  31, 2006, 2007 and 2008, respectively.  The Company may acquire
the  Mamoal  Property  at  any  time  by  accelerating the option payments.  The
Company  has  received  the  exploration  license  from the Brazilian regulatory
authority.

Batalha  Property

In  September,  2004  the Company applied for an exploration license to the 9800
hectare  Batalha  Property,  located  in  the  Tapaj s gold province in northern
Brazil.  The property, host to a well known "garimpo" or artisanal mine, lies at
the  western  end  of  the  Tocantinzinho  trend.

The  Company has agreed to pay the original holder of artisanal mining rights of
Batalha,  who  controls over 1,700 hectares lying within the exploration license
and  directly  over  the  Batalha  zone, the equivalent of approximately $91,000
Canadian dollars in Brazilian reals over a 42 month period with a buyout after 4
years  of $250,000 (U.S.) (if the project is deemed economic by the Company) and
an  additional  sum  based  on  the  number  of ounces of gold in the proven and
probable  (or  measured  and  indicated)  categories  at Batalha as set out in a
pre-feasibility  or feasibility study.  The per ounce payment amount ranges in a
sliding  scale  from  US$1  per ounce for the first one million ounces up to $10
(U.S.)  per  ounce  for  each ounce over four million ounces.  The 9,800 hectare
exploration  license  lies  over top of this area, covering extensions to north,
south  and  west.  If after four years the Company, in its sole opinion, has not
found  an economic ore body, the area and all collected data will be returned to
the  vendor.

                                       32
<PAGE>
                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (IN CANADIAN DOLLARS)

                         JANUARY 31, 2005, 2004 AND 2003

4.  MINERAL PROPERTIES AND DEFERRED EXPENDITURES (CONTINUED)

ARKANSAS  PROPERTIES

The  Company  maintained  interests  in  several  Arkansas Properties during the
period  from  fiscal 1993 through fiscal 2003.  In December 2002, based upon the
cumulative  exploration results obtained on the Arkansas Properties, the Company
made  the  decision  to  cease  operations  in  Arkansas.
American  Mine  Property

Pursuant  to  an  agreement  dated November 4, 1992, DEI was granted a permit to
explore  a  mineral  property  located  in Pike County, Arkansas.  The Company's
Plant  was located on this leased property.  The Company leased the property and
conducted  exploration activities during certain periods from 1992 to 2002.  The
lease  payment of $47,500 (U.S.) on the American Property, due November 1, 2002,
was  not  made  by  the  Company.

In  March  2003 the Company sold the Plant to a third party for $350,000 (U.S.).
In  conjunction  with  the sale, the third party paid the lessor of the American
Mine  Property  $47,500  (U.S.)  on behalf of the Company in order to extend the
Company's  lease  on the property through October 31, 2003.  The Company allowed
the lease to expire effective November 1, 2003.  The Plant was dismantled by the
third  party  and  removed  from  the  American  Lease  during  fiscal  2004.

The  Company  recorded  a  reserve  for  leasehold  reclamation costs during the
quarter  ended  April  30,  2003  of  approximately  $70,000,  representing  the
estimated  costs  of the Company's obligation to restore the Arkansas properties
to their original condition prior to lease expiration and to perform reclamation
activities  as  required  by  Arkansas  regulatory authorities.  The reserve for
leasehold  reclamation  was adjusted during the fourth quarter of fiscal 2004 to
$142,554  representing  the  estimated net present value of the recognized asset
retirement  obligation  at January 31, 2005 based on a total future liability of
$150,000.   The  Company expects to complete the restoration during fiscal 2006.
The  Company  used  a  credit adjusted risk free rate of 3% to calculate the net
present  value  of  the  asset  retirement  obligation.

Mineral  properties  and  deferred  expenditures  were  as  follows:
<TABLE>
<CAPTION>
                                          BALANCE AT                          BALANCE AT
                                          JANUARY 31   IMPAIRED               JANUARY 31
                                             2003     ADDITIONS   WRITE-OFFS    2004
<S>                                       <C>         <C>         <C>         <C>
                                          ----------  ----------  ----------  ----------
Brazilian Properties
   Tocantinzinho Properties
        Acquisition costs . . . . . . .       $   -   $ 527,345      $    -   $ 527,345
        Exploration costs:
           Drilling . . . . . . . . .        .    -      40,422           -      40,422
           Field expenses . . . . . . .           -      76,045           -      76,045
           Geological . . . . . . . . .           -      57,321           -      57,321
                                          ----------  ----------  ----------  ----------
         Total exploration costs. . . .           -     173,788           -     173,788
                                          ----------  ----------  ----------  ----------
         Total Tocantinzinho Properties           -     701,133           -     701,133

   Mamoal Property:
        Acquisition costs . . . . . .        .    -      13,150           -      13,150
        Exploration costs . . . . . .        .    -           -           -           -
                                          ----------  ----------  ----------  ----------
        Total Mamoal Property . . . . .           -      13,150           -      13,150
                                          ----------  ----------  ----------  ----------
Total acquisition costs . . . . . . .        .    -     540,495           -     540,495
Total exploration costs . . . . . . .        .    -     173,788           -     173,788
                                          ----------  ----------  ----------  ----------
Total costs . . . . . . . . . . . . . .       $   -   $ 714,283       $   -   $ 714,283
                                          ==========  ==========  ==========  ==========
</TABLE>

                                       33
<PAGE>
                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (IN CANADIAN DOLLARS)

                         JANUARY 31, 2005, 2004 AND 2003

4.  MINERAL PROPERTIES AND DEFERRED EXPENDITURES (CONTINUED)

<TABLE>
<CAPTION>
                                           BALANCE AT                                BALANCE AT
                                           JANUARY 31                  IMPAIRED      JANUARY 31
                                              2004       ADDITIONS     WRITE-OFFS       2005
                                          ------------  ------------  ------------  ------------
<S>                                       <C>           <C>           <C>           <C>
Brazilian Properties
   Tocantinzinho Properties:
        Acquisition costs . . . . .      .  $ 527,345     $ 515,632        $    -   $ 1,042,977
        Exploration costs:
           Drilling . . . . . . . . . .        40,422       566,912             -       607,334
           Field expenses . . . .     . . .    76,045       625,191             -       701,236
           Geological . . . . . . . .          57,321       124,124             -       181,445
           Assay. . . . . . . . . . . .             -       111,870             -       111,870
                                          ------------  ------------  ------------  ------------
         Total exploration costs. . . .       173,788     1,428,097             -     1,601,885
                                          ------------  ------------  ------------  ------------
         Total Tocantinzinho Properties       701,133     1,943,729             -     2,644,862

   Mamoal Property:
        Acquisition costs . . . . .            13,150        32,138             -        45,288
        Exploration costs:
           Field expenses . . . . . . .             -       105,258             -       105,258
           Geological . . . . . . . . .             -        10,901             -        10,901
           Assay. . . . . . . . .     . . .         -         4,138             -         4,138
                                          ------------  ------------  ------------  ------------
         Total exploration costs. . . .             -       120,297             -       120,297
                                          ------------  ------------  ------------  ------------
         Total Mamoal Property. . . . .        13,150       152,435             -       165,585

   Batalha Property
        Acquisition costs . . . . . . .             -         7,299             -         7,299
        Exploration costs . . .     . . . .         -             -             -             -
                                          ------------  ------------  ------------  ------------
                                                    -         7,299             -         7,299
                                          ------------  ------------  ------------  ------------
Total acquisition costs . . . . . . . .       540,495       555,069             -     1,095,564
Total exploration costs . . . .     . . . .   173,788     1,548,394             -     1,722,182
                                          ------------  ------------  ------------  ------------
Total costs . . . . . . . . . . . .  .      $ 714,283   $ 2,103,463         $   -   $ 2,817,746
                                          ============  ============  ============  ============

</TABLE>

5.  DEBENTURES

In  fiscal  2002,  the  Company  completed  the issuance of $1,278,595 principal
amount of 10% secured convertible debentures ("the Debentures").  The Debentures
were  convertible  into  units  at the rate of one unit for each $2.87 principal
amount  of  the Debentures until February 16, 2003.  Each unit was to consist of
one  common share of the Company and one share purchase warrant with an exercise
price  of  $3.15, exercisable through August 16, 2003.  The conversion and share
purchase  warrant  prices above were adjusted to reflect the Company's seven for
one  share  consolidation  on  November  27,  2001.

On  February  11,  2003, the holders of the Debentures approved the amendment of
the  conversion  price  of  the units to $0.30 and the extension of the maturity
date  of the Debentures to February 16, 2004.  As amended, each of the 4,261,976
units  consisted  of  one  common  share  of  the Company and one share purchase
warrant  with an exercise price of $0.30, exercisable through February 16, 2004.
Additionally,  the  terms  of  the Debenture were amended to include a mandatory
conversion  provision  of  all  Debentures  and exercise of all related warrants
within  30  days  after  the  closing  price  of the Company's common shares has
exceeded  $0.375  for  ten  consecutive  trading  days.
                                       34
<PAGE>

                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (In Canadian Dollars)

                        JANUARY 31, 2005, 2004, AND 2003

5.  DEBENTURES  (CONTINUED)

Interest at the rate of 10% was payable on conversion or maturity in cash, or at
the  election  of  the  Company, in common shares valued at the weighted average
trading  price  of  the  common  shares  of the Company for the ten trading days
preceding  the  interest payment date.  The Debentures were secured by a general
security interest in the Company's current and future assets and by the stock of
Star  U.S.,  Inc.  ("Star"),  a  wholly  owned  subsidiary of the Company, and a
wholly-owned  subsidiary  of  Star.

During fiscal 2004, several holders of the Debentures elected to convert a total
of  $197,000  principal  amount  and  received 656,666 common shares and 656,666
common  share  purchase  warrants  with exercise prices of $0.30.  Additionally,
during  the  third  quarter of fiscal 2004, a director of the Company elected to
convert  $97,000  principal  amount  and  received  323,333  common  shares.

Effective  October  31,  2003 a total of $984,595 principal amount of Debentures
were  automatically  converted into 3,281,977 units of the Company in accordance
with  the  February  11,  2003  amendments  discussed  in  the  third  preceding
paragraph.  Each  unit  consisted  of  one  common  share  and  one common share
purchase  warrant  with  exercise prices of $0.30.  Additionally, under terms of
the  mandatory  conversion provision, the expiration date of all warrants issued
upon  conversion  of the Debentures was established as December 1, 2003.  During
the  fourth  quarter  of  fiscal 2004, the Company received a total of $937,593,
representing  the  exercise  price  of  3,125,311 warrants, and issued 3,125,311
common  shares.  A  total  of  813,332  common  share warrants expired unused on
December  1,  2003.

During  fiscal  2004,  a  total of $335,075 of interest accrued on the principal
amounts  converted  during  fiscal  2004 was paid via the issuance of a total of
1,129,522  shares,  representing  the  conversion  of  the  interest  amounts at
weighted  average  prices  from  $0.17  to  $0.33  per  share.

6.  SHARE  CAPITAL

Effective  September  8,  2004 the Company increased its authorized capital from
100,000,000  common  shares  without  par value to an unlimited number of common
shares  without  par  value.

On January 29, 2002 the Company completed a private placement of 5,691,376 units
at  a  price of $0.20 per unit, each unit to consist of one common share and one
share  purchase  warrant  with  an  exercise price of $0.25 per unit.  The share
purchase warrants had an expiration date of January 29, 2003, which was extended
during  fiscal  2003  to  January  29, 2004.  A total of 5,669,101 warrants were
exercised  in  January 2004, and the Company received total exercise proceeds of
$1,417,275.  A  total  of  22,275  warrants  expired unused on January 29, 2004.

On  September  18,  2002, the Company completed a private placement of 2,819,774
units at a price of $0.20 per unit, each unit consisting of one common share and
one  share purchase warrant with an exercise price of $0.25 per unit.  The share
purchase  warrants  had  an  expiration date of September 18, 2004.  The Company
received  a  total of $563,955 during fiscal 2003 representing subscriptions for
the  private  placement.  Included  in  that  amount  was  a  total  of  $85,240
representing  subscriptions  for  426,200  units  by  three  of  the  Company's
directors.  During  fiscal  year  2005, all 2,819,774 common share warrants were
exercised,  and  the  Company  received  total  exercise  proceeds  of $704,943.

In  November 2004, the Company completed a private placement of 2,112,500 common
shares  of  the  Company  at  a  price  of $0.85 per share and received proceeds
totaling  $1,795,625.  In  consideration  for  assistance  with  the  private
placement,  the Company paid finders' fees of $96,950 in cash and issued 113,000
share  purchase warrants entitling the finders to purchase 113,000 common shares
of  the  Company  at  $1.05 per share until November 2, 2005.  In March, 2005, a

                                       35
<PAGE>

                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (In Canadian Dollars)

                        JANUARY 31, 2005, 2004, AND 2003

6.  SHARE CAPITAL  (CONTINUED)

holder  of  the  share purchase warrants elected to exercise 44,635 warrants and
the  Company  received  proceeds  of  approximately  $47,000.

In  December 2004, the Company completed a private placement of 2,150,000 common
shares  of  the  Company  at a price of $1.00 per share and received proceeds of
$2,150,000.

7.  STOCK  OPTION  PLAN

The  Company  maintains  a  stock  option  plan  for its directors, officers and
employees  and  may  issue up to 7,000,000 options.  In July, 2004 the Company's
shareholders  approved  an  amendment  to  its stock option plan to increase the
number  of  shares reserved for issuance from 4,000,000 to 7,000,000.  Under the
terms  of  the plan, the exercise price of each option equals the closing market
price  of  the  Company's stock on the date of grant.  Any consideration paid by
the  optionee  on the exercise of options is credited to share capital.  Through
July  2002 all options were immediately vested and generally have a term of five
years.  The  options  granted  subsequent  to  July  2002 are subject to vesting
requirements  (25%  on  the  date  of  grant  and  12.5%  on  each  quarter  end
thereafter).

The  activity  in  common  stock  option  grants outstanding for the prior three
fiscal  years  is  as  follows:

<TABLE>
<CAPTION>
                                  2005                2004                 2003
                          -------------------  -------------------  -------------------
                                     Weighted             Weighted             Weighted
                                     Average              Average              Average
                                     Exercise             Exercise             Exercise
                            Number    Price      Number    Price     Number     Price
                          ---------  --------  ---------  --------  ---------  --------
<S>                       <C>        <C>       <C>        <C>       <C>        <C>
Outstanding, beginning
  of year. . . . . . . .  4,449,053    $0.31   1,946,429    $0.24   1,475,000    $0.26
Granted. . . . . . . . .  3,807,376     1.01   4,387,000     0.30   1,145,000     0.22
Exercised. . . . . . . .  1,638,571     0.29   1,884,376     0.23     570,000     0.27
Expired. . . . . . . . .     14,286     0.24           -        -     103,571     0.24
                          ---------  --------  ---------  --------  ---------  --------
Outstanding, end of year  6,603,572    $0.72   4,449,053    $0.31   1,946,429    $0.24
                          =========  ========  =========  ========  =========  ========
Exercisable, end of year  4,051,822    $0.61   1,796,241    $0.28   1,946,429    $0.24
                          =========  ========  =========  ========  =========  ========
</TABLE>

The  following  table  summarizes information about stock options outstanding at
January  31,  2005:

<TABLE>
<CAPTION>

 NUMBER OUTSTANDING
 AT JANUARY 31,2005      ISSUE DATE          EXPIRATION DATE     EXERCISE PRICE
<S>                 <C>                    <C>                   <C>
       2,857             May 4, 2000. . . .    May 4, 2005            0.24
      14,286        September 27, 2000     September 27, 2005         0.24
      14,286            May 11, 2001 . . .     May 11, 2006           0.24
      47,143         January 31, 2002 .     January 31, 2007          0.28
      78,375        September 26, 2002     September 26, 2007         0.18
     448,421           March 6, 2003. . .     March 6, 2008           0.10
     897,012          August 14, 2003. .     August 14, 2008          0.30
     700,066         October 21, 2003 .      October 21, 2008         0.40
     143,750         November 26, 2003.     November 26, 2008         0.49
     450,000         December 17, 2003.     December 17, 2008         0.42
     950,000           June 11, 2004. . .     June 11, 2009           0.92
   2,327,376           July 29, 2004. . .     July 29, 2009           1.02
     530,000         November 19, 2004.     November 19, 2009         1.10

</TABLE>
                                       36
<PAGE>

                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (In Canadian Dollars)

                         JANUARY 31, 2005, 2004 AND 2003

8.  STOCK  BASED  COMPENSATION

Stock-based  compensation  related  to  options  granted  to  employees  and
non-employees  increased  the  following  expenses in the consolidated financial
statements  (as  restated)  of  the  Company  in  2005,  2004  and  2003:

<TABLE>
<CAPTION>
                           2005        2004       2003
                        ----------   --------   --------

<S>                     <C>          <C>        <C>
Consulting              $  131,367   $ 54,403   $      -
Salary . .               1,991,916    407,478    158,357
                        ----------   --------   --------
                        $2,123,283   $461,881   $158,357
                        ==========   ========   ========
</TABLE>

These  amounts  have  also  been  recorded as contributed surplus on the balance
sheet.

The fair value of each option granted has been estimated as of the date of grant
using  the  Black-Scholes  option-pricing  model with the following assumptions:

<TABLE>
<CAPTION>
                                     2005        2004         2003
<S>                                <C>          <C>          <C>
Expected dividend yield . .           0%           0%           0%
Expected volatility . . . .          160%         161%         141%
Risk-free interest rate . .          4.00%        3.00%        5.25%
Expected life . . . . . . .        3.5 years    3.5 years    3.5 years
Weighted average fair value
  of options granted. . . .         $ 0.75       $ 0.26       $ 0.19

</TABLE>
9.  INCOME  TAXES

A reconciliation of the combined Canadian federal and provincial income taxes at
statutory  rates and the Company's effective income tax expense (recovery) is as
follows:

<TABLE>
<CAPTION>
                                                  YEARS ENDED JANUARY
                                           2005          2004          2003
                                       ------------  ------------  ------------
<S>                                    <C>           <C>           <C>
Statutory rates . . . . . . . . . . .        35.62%        37.62%        39.62%
Net loss for the year . . . . . . . .  $(3,741,155)  $(1,199,406)  $(4,468,492)

Income tax at statutory rates . . . .   (1,333,000)     (451,000)   (1,770,000)
Increase (decrease) in taxes from:
     Non-deductible items . . . . . .      770,000       174,000        63,000
     Differences in foreign tax rates      225,000       525,000       142,000
     Effect of change in tax rate . .       56,000        53,000       133,000
     Benefit of losses not recognized      282,000      (301,000)    1,432,000
                                       ------------  ------------  ------------
                                       $         -   $         -   $         -
                                       ============  ============  ============
</TABLE>

Future income taxes reflect the net effects of temporary differences between the
carrying  amounts of assets and liabilities for financial reporting purposes and
the  amounts  used  for  income tax purposes.  The significant components of the
Company's  future  tax  assets  as  of  January  31  are  as  follows:

                                       37
<PAGE>
                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (In Canadian Dollars)

                         JANUARY 31, 2005, 2004 AND 2003

9.  INCOME TAXES (CONTINUED)

<TABLE>
<CAPTION>

                                                    JANUARY 31
                                               2005           2004
                                           -------------  ------------
<S>                                        <C>            <C>
FUTURE INCOME TAX ASSETS
Operating loss carryforwards. . . . . . .  $ 10,119,000   $ 9,650,000
Property and equipment. . . . . . . . . .       174,000       193,000
Share issue cost. . . . . . . . . . . . .        28,000             -
Valuation allowance for future tax assets   (10,321,000)   (9,843,000)
                                           -------------  ------------
                                           $          -   $         -
                                           =============  ============

</TABLE>

The  Company  has  available losses for income tax purposes of approximately $30
million,  which may be carried forward and applied against future taxable income
when  earned.  Brazilian  losses  are  offset  by  up  to 30% of fiscal profits.
United  States  net operating losses may be limited if more than a 50% ownership
change  has  occurred  with  respect to any Company included in the consolidated
group.  If  an  ownership  change  has  occurred,  such losses are limited on an
annual  basis  to  the  value  of  the  respective Company on the date of change
multiplied  by  the  U.S.  federal  long-term, tax-exempt rate in effect for the
period.  In  addition,  some  U.S.  net operating losses may be subject to other
limitations  based  on  taxable  income  from  wholly  owned  subsidiaries  on a
stand-alone  basis.

The  losses  expire  as  follows:

<TABLE>
<CAPTION>
                      CANADA     UNITED STATES     BRAZIL       TOTAL
                    -----------  -------------  -----------  -----------
                                   (in Canadian dollars)
<S>                 <C>          <C>            <C>          <C>
2006 . . . . . . .  $   121,000  $   236,000    $         -  $   357,000
2007 . . . . . . .      383,000      290,000              -      673,000
2008 . . . . . . .      231,000      301,000              -      532,000
2009 . . . . . . .      134,000       25,000              -      159,000
2010 . . . . . . .      439,000      492,000              -      931,000
2011 . . . . . . .      273,000      164,000              -      437,000
2012 . . . . . . .      448,000    1,557,000              -    2,005,000
2013 . . . . . . .      358,000    4,865,000              -    5,223,000
From 2014 to 2022.            -   17,170,000              -   17,170,000
Indefinitely . . .            -            -      3,222,000    3,222,000
                    -----------  -----------    -----------  -----------
                      2,387,000  $25,100,000     $3,222,000  $30,709,000
                    ===========  ===========    ===========  ===========
</TABLE>

At  January  31,  2005,  the  Company  has  incurred  approximately  $488,000 of
exploration  and development costs which may be deducted against future Canadian
taxable  income  subject  to  certain  limitations.

10.  RELATED  PARTY  TRANSACTIONS

The  chairman  has  significant  share  ownership  of  the  Company.  Accounts
receivable  at  January  31,  2005  and  2004  includes  $55,900  and  $105,758,
respectively,  receivable  from  the chairman of the Company.  The chairman made
net  payments  to  the  Company  totaling approximately $49,000 during the first
quarter  of  fiscal  2006.  Amounts  totaling $147,683, $121,957 and $24,681were
paid  by  the  Company during fiscal 2005, 2004 and 2003, respectively, to a law
firm  in  which  a  director  is a partner.  As of January 31, 2005 an amount of
$4,781  (2004  -  $5,800,  2003  - $22,082) is due to that law firm.  In January
2004, three directors exercised warrants to purchase common stock at an exercise
price  of  $0.25  per  share  and  acquired  477,750, 225,000 and 238,875 common
shares, respectively.  In September, 2004, three directors exercised warrants to

                                       38
<PAGE>
                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (In Canadian Dollars)

                         JANUARY 31, 2005, 2004 AND 2003

10.  RELATED  PARTY  TRANSACTIONS  (CONTINUED)

purchase  common  shares  at  an  exercise price of $0.25 per share and received
286,200,  100,000,  and  40,000  common  shares,  respectively.

Shares  of  Jaguar do Brasil, Ltd. are held beneficially for the Company through
three  representatives  of  the Company, including a director of the Company and
two  directors  of  Jaguar  do  Brasil,  Ltd.

11.  SUBSEQUENT  EVENTS

In  the  first  quarter of fiscal 2006, the Company granted incentive options as
follows:

<TABLE>
<CAPTION>
               DATE OF         EXERCISE      EXPIRATION
 NUMBER         GRANT           PRICE           DATE
<C>        <S>                 <C>        <C>
100,000    February 15, 2005    $1.15     February 15, 2010
600,000     March 22, 2005. .    1.30      March 22, 2010
500,000     April 1, 2005 . .    1.30      April 1, 2010
</TABLE>

In  the  first  quarter  of  fiscal 2006, directors and employees of the Company
exercised  a total of 600,000 options at prices ranging from $0.10 to $0.40, and
the  Company  received  proceeds  of  $152,623.

12.  COMMITMENTS  AND  CONTINGENCIES

Except  as  described  below, there are no material pending legal proceedings to
which the Company or any of its subsidiaries is a party or to which any of their
property  is  subject.

On  May  15,  1998,  a  legal action styled James Cairns and Stewart Jackson vs.
                                            ------------------------------------
Texas  Star  Resources  Corporation  d/b/a  Diamond  Star, Inc. was filed in the
    -----------------------------------------------------------
215th Judicial District Court of Harris County, Texas, Cause No. 9822760 wherein
the Plaintiffs allege, among other things, that the Company breached contractual
agreements and committed fraud by not timely releasing or causing to be released
from an escrow account required by Canadian law certain shares of the Company to
which Plaintiffs allege that they were entitled to receive in calendar 1995 and,
as a result of the Company's alleged actions with respect to the release of such
shares,  the  Plaintiffs  sought  monetary  damages  for  losses in share value,
attorney's  fees,  court costs, expenses, interest and exemplary damages.  Texas
Star  Resources  Corporation  was  the name of the Company in 1998 and 1999.  In
1999,  the  litigation against the Company in Houston, Harris County, Texas, was
dismissed  by  the  court  with  prejudice,  leaving only the claims of James M.
Cairns,  Jr.  pending  in  British  Columbia which is generally described below.
The  legal  action  in  Texas is similar to one filed against the Company in the
Supreme  Court  of  British  Columbia,  Canada,  in August 1996 styled Cause No.
C96493;  James  M. Cairns, Jr. vs. Texas Star Resources Corporation.  In January
         ----------------------------------------------------------
1993,  the  Plaintiffs  were  issued common stock of the Company in escrow which
shares  were  to be released based on exploration expenditures by the Company on
certain  of its properties in Arkansas.  The escrow requirements were imposed by
the  Vancouver  Stock  Exchange.  Plaintiffs requested that all of the shares be
released  in  1995.  At  that time the Company believed that the release of said
shares  when  requested  by  the  Plaintiffs  was  inappropriate  due  to  legal
requirements  and regulatory concerns.  The shares were subsequently released to
the  Plaintiffs. The Company intends to vigorously defend the allegations of the
Plaintiffs  in  the  pending  litigation  for damages in British Columbia and in
Texas  (if  the  case  is  appealed  or refiled) and believes it has meritorious
defenses  to such claims.  No proceedings in the action in British Columbia have
been  taken  by the Plaintiff since March 30, 2000.  However, the Company cannot
provide  any  assurances  that  it will be successful, in whole or in part, with
respect  to  its defense of the claims of the Plaintiffs.  If the Company is not
successful,  any  judgment  obtained  by  Plaintiffs  could  have a material and
adverse  effect  on  its  financial  condition.

                                       39
<PAGE>

                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (In Canadian Dollars)

                         JANUARY 31, 2005, 2004 AND 2003

13.  GENERAL  AND  ADMINISTRATIVE  EXPENSES

General  and  administrative  expenses  consist  of  the  following:

<TABLE>
<CAPTION>
                              2005        2004        2003
                           ----------  ----------  ----------
<S>                        <C>         <C>         <C>
  Consulting fees . . . .  $  386,456  $  234,253  $  134,605
  Depreciation expense. .       7,089      18,277      28,924
  Entertainment . . . . .      79,831      29,716      31,884
  Insurance . . . . . . .       1,870         484       7,385
  Office expenses . . . .     181,789      70,587      61,639
  Professional fees . . .     194,247     110,674      68,767
  Rent. . . . . . . . . .      28,757      33,999      32,724
  Repairs and maintenance       2,243      21,400     126,856
  Salary. . . . . . . . .   2,594,363     736,134     582,159
  Shareholder relations .     161,749      51,192      30,126
  Travel. . . . . . . . .     109,082      92,783      41,393
  Utilities . . . . . . .           -       5,150      32,624
                           ----------  ----------  ----------

  Total . . . . . . . . .  $3,747,476  $1,404,649  $1,179,086
                           ==========  ==========  ==========

</TABLE>

14.  SUPPLEMENTAL  CASH  FLOW  AND  NON-CASH  INVESTING AND FINANCING DISCLOSURE

<TABLE>
<CAPTION>
                                                           2005        2004        2003
                                                        ----------  ----------  ----------
<S>                                                     <C>         <C>         <C>
Supplemental cash flow disclosure:
  Interest paid in cash. . . . . . . . . . . . . . . . .  $      -  $        -  $        -
  Income taxes paid. . . . . . . . . . . . . . . . . . .         -           -           -

Non-cash investing activities:
  Shares issued for mineral properties . . . . . . . .  $  270,000  $  330,000           -

Non-cash financing activities:
  Shares issued for debt . . . . . . . . . . . . . . . .         -  $   20,917           -
  Shares issued for conversion of convertible debentures         -  $1,278,595           -
  Shares issued for interest on convertible debentures .         -  $  335,075           -
  Shares issued for services . . . . . . . . . . . . . .         -           -  $   52,500
</TABLE>

15.  SEGMENT  INFORMATION

The  Company  acquires and explores mineral properties, and these activities are
focused  principally  in  North  and  South America.  Geographic segmentation of
capital  assets  is  provided  in  Note  4.

16.  DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
ACCOUNTING  PRINCIPLES  ("GAAP")

The  consolidated  financial  statements  have  been prepared in accordance with
Canadian  GAAP  which  differs  in  some  respects from United States GAAP.  The
material  differences  in respect to these financial statements between Canadian
and  United States GAAP, and their effect on the Company's financial statements,
are  summarized  below.

                                       40
<PAGE>

                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (In Canadian Dollars)

                         JANUARY 31, 2005, 2004 AND 2003

16.  DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP") (continued)

Mineral  Properties  and  Deferred  Expenditures

Under  Canadian  GAAP,  companies  have  the option to defer mineral exploration
expenditures  on prospective properties until such time as it is determined that
further  work  is  not warranted, at which point property costs would be written
off.  Under  United States GAAP, all exploration expenditures are expensed until
an  independent feasibility study has determined that the property is capable of
commercial  production.  At  this  stage,  the  Company  has  not yet identified
economically  recoverable  reserves on any of its properties. Accordingly, under
United  States  GAAP,  all  exploration  costs  incurred  are  expensed.

The  significant  differences in the consolidated statements of loss relative to
US  GAAP  were:

<TABLE>
<CAPTION>
                                                           2005          2004          2003
                                                       ------------  ------------  ------------
<S>                                                    <C>           <C>           <C>
Net loss in accordance with Canadian GAAP . . . . . .  $(3,741,155)  $(1,199,406)  $(4,468,492)
Deduct:
Deferred exploration expenditures capitalized
 during the period. . . . . . . . . . . . . . . . . .   (1,548,394)     (173,788)            -
Add:
Deferred exploration expenditures written off in the
 period that would have been expensed in a prior
 period.. . . . . . . . . . . . . . . . . . . . . . .            -             -     1,697,164
                                                       ------------  ------------  ------------
Net loss in accordance with United States GAAP. . . .  $(5,289,549)  $(1,373,194)  $(2,771,328)
                                                       ============  ============  ============
Basic and diluted net loss per share (United States
GAAP) . . . . . . . . . . . . . . . . . . . . . . . .  $     (0.14)  $     (0.06)  $     (0.17)
                                                       ============  ============  ============
Weighted average shares outstanding (United States
 GAAP). . . . . . . . . . . . . . . . . . . . . . . .   38,949,937    21,349,766    16,439,454
                                                       ============  ============  ============

</TABLE>

The  significant  differences  in  the consolidated balance sheet relative to US
GAAP  were:

<TABLE>
<CAPTION>
                                                              2005         2004
                                                          ------------  -----------
<S>                                                       <C>           <C>
Shareholders' equity - Canadian GAAP . . . . . . . . . .  $ 6,133,038   $2,449,715
Mineral properties and deferred exploration expenditures   (1,722,182)    (173,788)
                                                          ------------  -----------
Shareholders' equity - United States GAAP. . . . . . . .  $ 4,410,856   $2,275,927
                                                          ============  ===========

</TABLE>
                                       41
<PAGE>

                         BRAZAURO RESOURCES CORPORATION
                     (FORMERLY JAGUAR RESOURCES CORPORATION)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (In Canadian Dollars)

                         JANUARY 31, 2005, 2004 AND 2003

16.  DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP") (continued)

<TABLE>
<CAPTION>
                                                              2005         2004
                                                          ------------  -----------
<S>                                                       <C>           <C>
Mineral properties and deferred exploration expenditures
- Canadian GAAP. . . . . . . . . . . . . . . . . . . . .  $ 2,817,746   $ 714,283
Mineral properties and deferred exploration expenditures
 expensed per United States GAAP . . . . . . . . . . . .   (1,722,182)   (173,788)
                                                          ------------  -----------
Acquisition costs of mineral properties - United States
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 1,095,564   $ 540,495
                                                          ============  ===========

</TABLE>

The significant differences in the consolidated statement of cash flows relative
to  US  GAAP  were:

<TABLE>
<CAPTION>
                                                                   Years ended January 31,
                                                              2005          2004          2003
                                                          ------------  ------------  ------------
<S>                                                       <C>           <C>           <C>
NET CASH USED IN OPERATIONS
Canadian GAAP. . . . . . . . . . . . . . . . . . . . . .  $(1,597,363)  $  (941,050)  $  (985,901)
Mineral properties and deferred exploration expenditures   (1,548,394)     (173,788)     (197,374)
                                                          ------------  ------------  ------------
US GAAP. . . . . . . . . . . . . . . . . . . . . . . . .   (3,145,757)   (1,114,838)   (1,183,275)
                                                          ------------  ------------  ------------

NET CASH USED IN INVESTING ACTIVITIES
Canadian GAAP. . . . . . . . . . . . . . . . . . . . . .   (1,845,562)     (384,283)     (201,253)
Mineral properties and deferred exploration expenditures    1,548,394       173,788       197,374
                                                          ------------  ------------  ------------
US GAAP. . . . . . . . . . . . . . . . . . . . . . . . .     (297,168)     (210,495)       (3,879)
                                                          ------------  ------------  ------------

NET CASH USED IN INVESTING ACTIVITIES
Canadian GAAP and U.S. GAAP. . . . . . . . . . . . . . .    5,031,195     3,301,762       717,412
                                                          ------------  ------------  ------------

</TABLE>

Warrants  Issued

Under  United  States  GAAP,  the  fair  value of the 113,000 warrants issued to
brokers  related  to the private placement in November 2004 would be recorded as
Warrants  of  $33,000 in Shareholders' Equity as of January 31, 2005, and Common
Shares  would  be reduced by $33,000 to $41,664,174 as of January 31, 2005.  The
fair  value of the warrants was calculated using the Black-Scholes model and the
following  assumptions:  expected dividend yield, 0%, expected volatility, 115%;
risk-free  interest  rate,  2.9%.  expected  life  of  warrant,  1  year.





                                       42
<PAGE>
                                INDEX TO EXHIBITS

     3.1  Certificate of Incorporation, Memorandum and Articles of Texas Star
          Resources Corporation (the "Company") dated March 12, 1986. (a)
     3.1.1 Amendment to Certificate of Incorporation and Memorandum. (b)
     3.1.2 Certificate of Change of Name dated October 30, 1996.
     3.1.3 Amendment to the Company's Memorandum, effective November 27, 2001.
          (h)
     10.6 Agreement dated July 28, 1992, between the Company and certain royalty
          holders (as set forth therein). (a)
     10.7 Stock Purchase Agreement dated July 29, 1992, by and among the
          Company, DEI, James M. Cairns, Jr., Gandy Baugh and Stewart Jackson
          (such individuals being collectively referred to as the "DEI
          Shareholders"), and the Amendment thereto dated January 13, 1993. (a)
     10.11 Prospecting Permit and Option to Lease dated November 4, 1992,
          between DEI and various interest holders. (a)
     10.12 Agreement dated December 22, 1992, between the Company and certain
          royalty interest holders. (a)
     10.16 Royalty Interest Agreement dated January 13, 1993, by and between the
          Company and the DEI Shareholders relating to the properties of the
          Company and DEI in Arkansas. (a)
     10.40 Mining Lease between the Company and certain royalty interest holders
          dated November 4, 1996. (c)
     10.42 Amendment No. 1 to Mining Lease between the Company and certain
          royalty interest holders dated November 1997. (d)
     10.43 Mining Lease between the Company and ABJ Hammett Estate/ Trust dated
          September 11, 1997. (d)
     10.47 Mining Lease Agreement and Lease Modification and Escrow Agreement
          dated December 16, 1999. (e)
     10.48 Letter Agreement dated October 26, 2000 between the Company and
          McGeorge Contracting Co. (f)
     10.49 Stripping Agreement dated October 31, 2000 between the Company and
          McGeorge Contracting Co. (f)
     10.50     Lease  Confirmation Agreement dated effective March 16, 2000. (g)
     10.51 Mining Lease between the Company and ABJ Hammett Estate/ Trust dated
          November 15, 2000. (g)
     10.52 Trust Deed for Debentures dated February 16, 2001 between the Company
          and Montreal Trust Company of Canada. (g)
     10.53 Pledge Agreement for Shares of Star U.S., Inc. between the Company
          and Montreal Trust Company of Canada dated February 16, 2001. (g)
     10.54 Pledge Agreement for Shares of Diamond Operations, Inc. between the
          Company and Montreal Trust Company of Canada dated February 16, 2001.
          (g)
     10.55 Second Supplemental Indenture between the Company and Computershare
          Trust Company of Canada dated February 11, 2003. (i)
     10.56 Option Agreement, Tocantinzinho Project - Brazil dated July 31, 2003.
          (j)
     22     Subsidiaries  of  the  Registrant.  (k)
     23   Consent of Independent Auditors, Morgan & Company, dated April 30,
          2004. (k)
     24   Powers of Attorney dated April 23, 2004. (k)
     31.1 Certification of Chairman pursuant to Exchange Act Rules 13a-14. (k)
     32   Certification of Chairman pursuant to 18 U.S.C. Section 1350, as
          adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (k)
_________________

(a)     Filed  as  an  exhibit  to Registration Statement on Form 10 as filed on
June  23,  1993.
     (b)     Filed  as  an exhibit to Form 8 Amendment No. 1 to Form 10 as filed
on  October  4,  1993.
     (c)     Filed  as an exhibit to Form 10-K for the fiscal year ended January
31,  1997  as  filed  on  May  13,  1997.
(d)     Filed  as  an exhibit to Form 10-K for the fiscal year ended January 31,
1998  as  filed  on  April  29,  1998.
(e)     Filed  as  an exhibit to Form 10-K for the fiscal year ended January 31,
2000  as  filed  on  April  28,  2000.
(f)          Filed  as  an  exhibit  to  Form  10-Q for the fiscal quarter ended
October  31,  2000  as  filed  on  December  13,  2000.
(g)          Filed  as an exhibit to Form 10-K for the fiscal year ended January
31,  2001  as  filed  on  April  27,  2001.
(h)          Filed  as  an  exhibit  to  Form  10-Q for the fiscal quarter ended
October  31,  2001  as  filed  on  December  13,  2001.
(i)          Filed as an exhibit to Form 10-Q for the fiscal quarter ended April
30,  2003  as  filed  on  June  16,  2003.
(j)          Filed  as an exhibit to Form 10-Q for the fiscal quarter ended July
31,  2003  as  filed  on  September  15,  2003.
(k)          Filed  herewith.

     All  Exhibits referred to in (a) through (j) above were filed with previous
Securities and Exchange Commission filings of the Company (File No. 0-21968) and
are  incorporated  herein  by  reference.


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