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UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549

Form 20-F

[  ] Registration Statement pursuant to Section 12(b) or
  12)(g) of the Securities Exchange Act of 1934

Or

[ x ] Annual Report pursuant to Section 13 or 15(d) of the Securities
  Exchange Act of 1934
  For the fiscal year ended June 30, 2007

Or

[  ] Transaction Report pursuant to Section 13 or 15(d) of
  the Securities Exchange Act of 1934 
  For the transition period from __________________to ____________________

Or

[  ] Shell company report pursuant to Section 13 or 15(d)
  of the Securities Exchange Act of 1934 
  Date of event requiring this shell company report _____________________

Commission file number 000-51236

DEVONSHIRE RESOURCES LTD.(formerly Ripple Lake Diamonds Inc.)(Exact name of registrant as specified in its charter)

British Columbia, Canada(Jurisdiction of incorporation or organization)

#1500, 701 West Georgia Street
  Vancouver, British Columbia, V7Y 1C6(Address of principal executive offices)

Securities to be registered pursuant to section 12 (b) of the
  Act: None

Securities to be registered pursuant to section 12(g) of the Act:
  Common Shares, no par value (Title of Class)

Securities for which there is a reporting obligation pursuant
  to section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the Companys
  classes of capital or common stock as of the close of the period covered by
  the annual report.

|Title of Each Class         | Outstanding at June 30, 2007
|--------------------------- | ----------------------------
|Common Shares, no par value | 36,515,682                  

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Indicate by check mark if the registrant is a well-known seasoned
  issuer, as defined in Rule 405 of the Securities Act.

[  ] Yes [ x ] No

If this report is an annual or transition report, indicate by
  check mark if the registrant is not required to file reports pursuant to Section
  13 or 15(d) of the Securities Exchange Act of 1934.

[ x ] Yes [  ] No

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 1934during 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 whether the registrant is a large accelerated
  file, an accelerated filer, or a non-accelerated filer.

Large accelerated filer [  ] Accelerated filer [ 
  ] Non-accelerated filer [ x ]

Indicate by check mark which financial statement item the registrant
  has elected to follow.

[ x ] Item 17 [  ] Item 18

If this is an annual report, indicate by check mark whether the
  registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
  Yes No

[  ] Yes [ x ] No

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TABLE OF CONTENTS

|Part | Item | Page
|---- | ---- | ----

|    | Forward-Looking Statements | 4                                                                            
|--- | -------------------------- | -----------------------------------------------------------------------------
|I   | 1                          | Identity of Directors, Senior
      Management and Advisors                  
|    | 2                          | Offer Statistics and Expected Timetable                                      
|    | 3                          | Key Information                                                              
|    | 4                          | Information on the Company                                                   
|    | 5                          | Operating and Financial
      Review and Prospects                           
|    | 6                          | Directors, Senior Management and Employees                                   
|    | 7                          | Major Shareholders and Related
      Party Transactions                      
|    | 8                          | Financial Information                                                        
|    | 9                          | The Offer and Listing                                                        
|    | 10                         | Additional Information                                                       
|    | 11                         | Quantitative and Qualitative
      Disclosure about Market Risk              
|    | 12                         | Description of Securities Other than Equity
      Securities                 
|II  | 13                         | Default, Dividend Arrearages
      and Delinquencies                         
|    | 14                         | Material Modifications to the Rights of
      Security Holders               
|    | 15                         | Controls and Procedures                                                      
|    | 16A                        | Audit committee Financial Expert                                             
|    | 16B                        | Code of Ethics                                                               
|    | 16C                        | Principal Accountant Fees and Services                                       
|    | 16D                        | Exemptions from the Listing
      Standards for Audit Committees             
|    | 16E                        | Purchasers of Equity Securities by the Issuer
      and Affiliated Purchasers
|III | 17                         | Financial Statements                                                         
|    | 18                         | Financial Statements                                                         
|    | 19                         | Exhibits                                                                     
|    | Signatures                 | 54                                                                           
|    | Financial Statements       | F-1                                                                          

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INTRODUCTION

As used herein, except as the context otherwise requires, the
  term we refers to Devonshire Resources Ltd., a corporation
  organized under the laws of the Province of British Columbia, Canada.

We publish our financial statements expressed in Canadian Dollars
  and prepare a compilation statement to comply with U.S. GAAP. In this document,
  references to "US dollars" or "US$" are to the currency of the
  United States of America. Otherwise our Financial Statements and disclosure
  are in Canadian Dollars.

Our fiscal year ends on June 30 of each year. References in this
  document to a particular year are to the fiscal year unless otherwise indicated.

FORWARD-LOOKING INFORMATION

This Annual Report on Form 20-F contains forward-looking statements
  and information, within the meaning of Section 21E of the Exchange Act, relating
  to Devonshire Resources Ltd.that are based on the beliefs and estimates
  of management as well as assumptions made by and information currently available
  to us. When used in this document, any statements that express or involve discussions
  with respect to predictions, beliefs, plans, projections, objectives, assumptions
  or future events of performance often but not always using words or phrases
  such as anticipate, believe, estimate,
  expect, intend, plan,
  strategy, goals, objectives,
  project, potential or variations thereof
  or stating that certain actions, events, or results may,
  could, would, might
  or will be taken, occur, or be achieved, or the negative
  or any of these terms and similar expressions, as they relate to our company
  or management, are intended to identify forward-looking statements.

Such statements reflect our current views with respect to future
  events and are subject to certain known and unknown risks, uncertainties and
  assumptions. Many factors could cause actual results, performance or achievements
  to be materially different from any future results, performance or achievements
  that may be expressed or implied by such forward-looking statements, including,
  among others:

- risks relating to our ability to finance the exploration and development
    of our mineral properties;
- permitting risks relating to the exploration and development of our mineral
    properties and business activities;
- risks and uncertainties relating to the interpretation of exploration results,
    geology, grade and continuity of our mineral deposits;
- commodity price fluctuations (particularly gold and silver commodities);
- currency fluctuations;
- risks related to governmental regulations, including environmental regulations;
- risks related to possible reclamation activities on our properties;
- our ability to attract and retain qualified management and our dependence
    upon such management in the development of our mineral properties;
- increased competition in the exploration industry;
- our lack of infrastructure;
- our history of losses and expectation of future losses.

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Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described herein. This list is not exhaustive of
the factors that may affect any of our forward-looking statements.
Forward-looking statements are statements about the future and are inherently
uncertain, and our actual achievements or other future events or conditions may
differ materially from those reflected in the forward-looking statements due to
a variety of risks, uncertainties and other factors, including without
limitation, those referred to in this document, under the heading
Risk Factors and elsewhere. Our
forward-looking statements are based on the beliefs, expectations and opinions
of management on the date the statements are made, and we do not assume any
obligation to update forward-looking statements if circumstances or managements
beliefs, expectations or opinions should change.

For the reasons set forth above, investors should
not attribute undue certainty to or place undue reliance on forward-looking
statements.

|      
|------
|PART I

|ITEM 1. | IDENTITY OF DIRECTORS, SENIOR
      MANAGEMENT AND ADVISORS
|------- | -----------------------------------------------------------

Not applicable. Refer to Item 6 - Directors, Senior Management and Employees - Directors and
Senior Management" herein.

|ITEM 2. | OFFER STATISTICS AND EXPECTED
      TIMETABLE
|------- | ---------------------------------------------

Not applicable.

|ITEM 3. | KEY INFORMATION
|------- | ---------------

Selected Financial
Data

The summary financial information set forth below
should be read in conjunction with, and is qualified in its entirety by
reference to, our financial statements as of and for the years ended June 30,
2007 and June 30, 2006, together with the notes thereto, which appear elsewhere
in this annual report. Our financial statements as of and for the years ended
June 30, 2007 and June 30, 2006 have been audited by James Stafford, Inc.,
Chartered Accountants.

Our financial statements are presented in Canadian
dollars and have been prepared in accordance with generally accepted accounting
principles in Canada. Our financial statements presented in this registration
statement have been reconciled to generally accepted accounting principals in
the United States of America ("U.S. GAAP").

The selected financial data set forth in the
following tables is expressed in Canadian dollars (Cdn$).

Fiscal years
      endedJune 30, 2007
    
    
    June 30, 2006Revenues
      (Interest Income)
    $
    3,745
    
    $
    1,990Net Loss
    
    288,041
    
    
    467,636Deficit,
      beginning of period
    
    1,406,977
    
    
    939,341Deficit, end of period
    
    1,695,018
    
    
    1,406,977Loss per
      share
    
    0.01
    
    
    0.02


|1. | Diluted loss per share has not been presented as the
      effect on basic loss per share would be anti-dilutive.                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                          
|2. | Under United States GAAP, all mineral exploration and
      development expenditures are expensed in the year incurred in an
      exploration stage company until there is substantial evidence that a
      commercial body of ore has been located. The amounts in the table
      are

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expressed under Canadian
GAAP, which allows resource exploration and development property expenditures to
be deferred during this process.

The weighted average outstanding shares used to
calculate income (loss) per share for the following fiscal periods are:
36,347,901 for the year ended June 30, 2007, and 26,783,013 for the year ended
June 30, 2006.

To date, we have not generated any cash flow from
our activities to fund ongoing activities and cash commitments. We have financed
our operations principally through the sale of our equity securities. We believe
we have sufficient financial resources to fund our ongoing overhead expenses for
the next six months. In the future, we may need to raise additional capital
through the sale of our equity securities to fund further exploration
activities. See "Item 5. Operating and Financial Review
and Prospects - Liquidity and Capital Resources." We may
not be able to raise the necessary funds, if any, and may not be able to raise
such funds at terms which are acceptable to us. In the event we are unable to
raise adequate finances to fund the proposed activities, we will need to
reassess our alternatives and may have to abandon one or more of our property
interests as a result.

Balance Sheet Information for the year ended
June 30, 2007

Fiscal years endedJune 30, 2007
    
    
    June 30, 2006Current Assets
    $
    103,475
    
    $
    387,622Mineral Exploration Properties
    
    5,002,997
    
    
    4,881,420Total Assets
    
    5,106,472
    
    
    5,269,042Current/Total Liabilities
    
    125,433
    
    
    47,962Net Working
      Capital (Deficit)
    
    (21,958
    )
    
    339,660Shareholders Equity
    
    4,981,039
    
    
    5,221,080


The above financial information is presented in
accordance with Canadian GAAP, which are different in some respects from US
GAAP. The effect of these differences on our financial performance is summarized
in the following table.

Reconciliation of total assets,
liabilities, and shareholder equity to U.S. GAAP:

2007
    2006$
    $Total assets under Canadian GAAP
    5,106,472
    5,269,042AdjustmentsExpenses of advances for future exploration costs
    -
    -Expense of mineral exploration
      properties costs
    (5,002,997)
    (4,401,820)Total assets under US GAAP
    103,475
    867,222Total liabilities under Canadian GAAP
    125,433
    47,962Adjustments
    -
    -Total liabilities under US GAAP
    125,433
    47,962Total stockholders
      equity under Canadian GAAP
    4,981,039
    5,221,080Adjustments


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2007
      
      
      2006$
      
      
      $Expenses of advances for future exploration
        costs
      
      -
      
      
      -Expenses of mineral exploration properties costs
      
      (5,002,997
      )
      
      (4,401,820
      )Total equity under US GAAP
      
      21,958
      
      
      819,260Total liabilities and equity under US GAAP
      
      103,475
      
      
      867,222


Exchange Rates

We maintain our books of account in Canadian
dollars. Our audited financial statements are prepared in accordance with
generally accepted auditing standards in Canada. All references to the dollar
herein are to the lawful currency of Canada unless designated as
US$.

The following table sets forth, for the periods
indicated, certain exchange rates based on the noon buying rate with the Federal
Reserve Bank of New York for cable transfers in Canadian dollars. Such rates are
the number of United States dollars per one (1) Canadian dollar. On November 30,
2007, the exchange rate was US$1.00 per Cdn$1.0007. The high and low exchange
rates for each month during the previous six months were as follows:

High
    LowNovember 2007
    1.0007
    0.9168October 2007
    1.0002
    0.9496September 2007
    1.0560
    0.9959August 2007
    1.0754
    1.0497July 2007
    1.0689
    1.0372June 2007
    1.0727
    1.0579


The average exchange rate is based on the average
of the exchange rates on the last day of each month during such periods.

Year Ended June
      302007
    2006Rate at end of
      Period
    0.9496
    1.1150Average Rate during
      Period
    1.1051
    1.1627Low
    0.9496
    1.0989High
    1.1852
    1.2437


Capitalization and
Indebtedness

Not applicable.

Reason for the Offer and Use of
Proceeds

Not applicable.

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Risk Factors

An investment in our securities involves
significant risks, including the following:

|                                 
|---------------------------------
|Risks Associated with Exploration

Our principal business is the exploration and
development of mineral properties. Given the nature of the mining business, the
limited extent of our assets and the present stage of exploration, the following
risks factors, among others, should be considered.

We have no known reserves on our properties.

We have no mineral producing properties and have
never generated any revenue from our operations. The majority of exploration
projects do not result in the discovery of commercially mineable deposits of
ore. Only those mineral deposits that we can economically and legally extract or
produce, based on a comprehensive evaluation of cost, grade, recovery and other
factors, are considered resources or reserves. We have
no known bodies of commercial ore or economic deposits and have not defined or
delineated any proven or probable reserves or resources on any of our
properties. We may never discover any gold, silver or other minerals from
mineralized material in commercially exploitable quantities and any identified
mineralized deposit may never qualify as a commercially mineable (or viable)
reserve. In addition, we are in the early stages of exploration and substantial
additional work will be required in order to determine if any economic deposits
exist on our properties. Substantial expenditures are required to establish ore
reserves through drilling and metallurgical and other testing techniques. No
assurance can be given that any level of recovery of the ore reserves will be
realized or that any identified mineral deposit will ever qualify as a
commercial mineable ore body which can be legally and economically exploited.
Even in the event commercial quantities of minerals are discovered, the mining
properties might not be brought into a state of commercial production. Estimates
of mineral resources are inherently imprecise and depend to some extent on
statistical inferences drawn from limited drilling, which may prove unreliable.
Fluctuations in the market prices of minerals may render reserves and deposits
containing relatively lower grades of mineralization uneconomic. Material
changes in mineralized material, grades or recovery rates may affect the
economic viability of projects. Finding mineral deposits is dependent on a
number of factors, not the least of which are the technical skills of
exploration personnel involved. The commercial viability of a mineral deposit
once discovered is also dependent on a number of factors, some of which are
particular attributes of the deposit, such as size, grade and proximity to
infrastructure and resource markets, as well as factors independent of the
attributes of the deposit, such as government regulations and metal prices. Most
of these factors are beyond the control of the entity conducting such mineral
exploration. Moreover, short-term operating factors relating to mineral
resources, such as the need for orderly development of the deposits or the
processing of new or different grades, may cause mining operations, if any, to
be unprofitable in any particular period. These risks may limit or prevent us
from making a profit from the exploration and development of our mineral
properties and could negatively affect the value of our equity.

We face risks related to exploration and
development, if warranted, of our properties.

Our level of profitability, if any, in future
years will depend to a great degree on gold and silver prices and whether any of
our exploration stage properties can be brought into production. The exploration
for and development of mineral deposits involves significant risks. It is
impossible to ensure that the current and future exploration programs and/or
feasibility studies on our existing mineral properties will establish reserves.
Whether an ore body will be commercially viable depends on a number of factors,
including, but not limited to: the particular attributes of the deposit, such as
size, grade and proximity to infrastructure; metal prices, which cannot be
predicted and which have been highly volatile in the past; mining, processing
and transportation costs; perceived levels of political risk and the willingness
of lenders and investors to provide project financing; labour costs and possible
labour strikes; and governmental regulations, including, without limitation,
regulations

-8-

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relating to prices, taxes, royalties, land tenure,
land use, importing and exporting materials, foreign exchange, environmental
protection, employment, worker safety, transportation, and reclamation and
closure obligations.

We are subject to the risks normally encountered
in the mining industry, such as:

- unusual or unexpected geological formations;
- fires, floods, earthquakes, volcanic eruptions, and other
  natural disasters;
- power outages and water shortages;
- cave-ins, land slides, and other similar mining
  hazards;
- labour disruptions and labour disputes;
- inability to obtain suitable or adequate machinery,
  equipment, or labour;
- liability for pollution or other hazards; and
- other known and unknown risks involved in the operation of
  mines and the conduct of exploration.

The development of mineral properties is affected
by many factors, including, but not limited to: the cost of operations,
variations in the grade of ore, fluctuations in metal markets, costs of
extraction and processing equipment, availability of equipment and labour,
labour costs and possible labour strikes, and government regulations, including
without limitation, regulations relating to taxes, royalties, allowable
production, importing and exporting of minerals, foreign exchange, employment,
worker safety, transportation, and environmental protection. Depending on the
price of minerals, we may determine that it is impractical to commence, or, if
commenced, continue, commercial production. Such a decision would negatively
affect our profits and may affect the value of our equity.

The ownership of our KMD Project in Nunavat
is uncertain as a result of a dispute with the optionor.

We face uncertainty in regard to our status on the
Option Agreement and our acquisition of the Brown Lake property. On October
19th, 2007, we launched
proceedings in the British Columbia Supreme Court seeking an order of specific
performance, to require KM Diamond to transfer the Properties to us, along with
certain contiguous properties, as well as for damages, costs, and other relief.
If we are unsuccessful in our legal proceedings and we lose our right to the KMD
Project then our assets would be reduced by over 50%.

We may not have access to all of the
supplies and materials for our exploration activities which could cause us to
delay or suspend operations.

Competition and unforeseen limited sources of
supplies in the industry could result in occasional spot shortages of supplies,
such as dynamite, and certain equipment such as bulldozers and excavators that
we might need to conduct exploration. We have not attempted to locate or
negotiate with any suppliers of products, equipment or materials. Our
exploration efforts will be continued on the receipt of further funding. Once
further funding is obtained we will attempt to locate products, equipment and
materials. If we cannot find the products and equipment we need we will have to
suspend our exploration plans until we do find the products and equipment we
need.

Our properties may be subject to
unregistered agreements, transfers or claims and title may be adversely affected
by undetected defects.

We have not conducted a legal survey of the
boundaries of any of our properties, and therefore, in accordance with the laws
of the jurisdictions in which these properties are situated, their existence and
area could be in doubt. We have not obtained formal title reports on any of our
properties and title may be in doubt. Our properties may be subject to
unregistered agreements, transfers or claims and title may be adversely affected
by such undetected defects. If title is disputed, we may have to defend our
ownership through the courts, and we cannot guarantee that a favorable judgment
will be obtained. Any litigation could be extremely costly to us and could limit
the available capital for use in other exploration and development activities.
We may require

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additional financing to cover the costs of any
litigation necessary to establish title. In the event of an adverse judgment, we
could lose our property rights and may be required to cease our exploration and
development activities on our properties.

Mineral operations are subject to government
regulations.

Our primary exploration properties are located in
Ontario and Nunavut. The federal government of Canada and the Provinces of
Ontario and Territory of Nunavut regulate mining operations and require mining
permits and licenses. There can be no guarantee that we will be able to obtain
all necessary permits and approvals from various federal, provincial, and local
government authorities that may be required in order to undertake exploration
activities or commence construction or operation of mine facilities on our
properties. Further, there is no guarantee that the federal, provincial, and
local governments will not change the terms and conditions of these permits and
licenses, adversely affecting us, or that such governments will completely
revoke these licenses, terminating our property rights and requiring us to cease
exploration and development activities on our properties. If we are unable to
obtain and maintain any necessary permits, we may be forced to abandon all or a
portion of our properties.

Mining operations are subject to a wide range of
government regulations including, but not limited to: restrictions on production
and production methods, price controls, tax increases, expropriation of
property, import and export control, employment laws, worker safety regulations,
environmental protection, protection of agricultural territory or changes in
conditions under which minerals may be marketed. Mining operations may also be
affected by claims of native peoples, any of which could have the effect of
reducing or preventing us from exploiting any possible mineral reserves on our
properties.

Mineral operations are subject to market
forces outside of our control.

The marketability of minerals is affected by
numerous factors beyond the control of the entity involved in their mining and
processing. These factors include, but are not limited to, market fluctuations,
government regulations relating to prices, taxes, royalties, allowable
production, import restrictions applicable to equipment and supplies, export
controls and supply and demand. One or more of these risk elements could have an
impact on costs of an operation and, if significant enough, reduce the
profitability of our operation and threaten our continuation.

The mining industry is highly competitive.

The business of the acquisition, exploration, and
development of mineral properties is intensely competitive. We will be required
to compete, in the future, directly with other corporations that may have better
access to potential mineral resources, more developed infrastructure, more
available capital, better access to necessary financing, and more knowledgeable
and available employees than us. We may encounter competition in acquiring
mineral properties, hiring mining professionals, obtaining mining resources,
such as manpower, drill rigs, and other mining equipment. Such corporations
could outbid us for potential projects or produce minerals at lower costs.
Increased competition could also affect our ability to attract necessary capital
funding or acquire suitable producing properties or prospects for mineral
exploration in the future.

Mining and mineral exploration have
substantial operational risks which are uninsured or uninsurable risks.

Exploration, development and mining operations
involve various hazards, including environmental hazards, industrial accidents,
metallurgical and other processing problems, unusual or unexpected rock
formations, structural cave-ins or slides, flooding, fires, metal losses and
periodic interruptions due to inclement or hazardous weather conditions. These
risks could result in damage to or destruction of mineral properties, facilities
or other property, personal injury, environmental damage, delays in operations,
increased cost of operations, monetary losses and possible legal liability. We
may not be able to obtain insurance to cover these

-10-

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risks at economically feasible premiums or at all.
We may elect not to insure where premium costs are disproportionate to our
perception of the relevant risks. The payment of such insurance premiums and of
such liabilities would reduce the funds available for exploration and production
activities.

Environmental Regulatory Requirements

In connection with our operations and properties,
we are subject to extensive and changing environmental legislation, regulation
and actions. We cannot predict what environmental legislation, regulation or
policy will be enacted or adopted in the future or how future laws and
regulations will be administered or interpreted. The recent trend in
environmental legislation and regulation, generally, is toward stricter
standards and this trend is likely to continue in the future. This recent trend
includes, without limitation, laws and regulations relating to air and water
quality, mine reclamation, waste handling and disposal, the protection of
certain species and the preservation of certain lands. These regulations may
require the acquisition of permits or other authorizations for certain
activities. These laws and regulations may also limit or prohibit activities on
certain lands. Compliance with more stringent laws and regulations, as well as
potentially more vigorous enforcement policies or stricter interpretation of
existing laws, may necessitate significant capital outlays, may materially
affect our results of operations and business, or may cause material changes or
delays in our intended activities.

Our operations may require additional analysis in
the future including environmental and social impact and other related studies.
Certain activities require the submission and approval of environmental impact
assessments. Environmental assessments of proposed projects carry a heightened
degree of responsibility for companies and directors, officers, and employees.
There can be no assurance that we will be able to obtain or maintain all
necessary permits that may be required to continue our operation or the
exploration of our properties or, if feasible, to commence development,
construction or operation of mining facilities at such properties on terms which
enable operations to be conducted at economically justifiable costs.

Other Regulatory Requirements

Our activities are subject to extensive
regulations governing various matters, including management and use of toxic
substances and explosives, management of natural resources, exploration,
development of mines, production and post-closure reclamation, exports, price
controls, taxation, regulations concerning business dealings with indigenous
peoples, labour standards on occupational health and safety, including mine
safety, and historic and cultural preservation. Failure to comply with
applicable laws and regulations may result in civil or criminal fines or
penalties, enforcement actions thereunder, including orders issued by regulatory
or judicial authorities causing operations to cease or be curtailed, and may
include corrective measures requiring capital expenditures, installation of
additional equipment, or remedial actions, any of which could result in our
incurring significant expenditures. We may also be required to compensate those
suffering loss or damage by reason of a breach of such laws, regulations or
permitting requirements. It is also possible that future laws and regulations,
or more stringent enforcement of current laws and regulations by governmental
authorities, could cause additional expense, capital expenditures, restrictions
on or suspension of our operations and delays in the exploration and development
of our properties.

|                               
|-------------------------------
|Risks Associated with Financing

We have a history of losses and no revenues.

We are a mineral exploration company without
operations and have historically incurred losses. To date, we have not recorded
any revenues from our operations nor have we commenced commercial production on
any of our properties. We do not expect to receive revenues from operations in
the foreseeable future, if at all. We expect to continue to incur losses unless
and until such time as properties enter into commercial production and generate
sufficient revenues to fund our continuing operations.

-11-

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Until such time, we will be dependent upon future
financing in order to meet our capital requirements and continue our plan of
operations. Although we have raised additional private placement financing
during fiscal 2007, these funds may not be sufficient to undertake all of our
planned acquisition, exploration, and development programs. We cannot guarantee
that we will obtain necessary financing. The development of our properties will
require the commitment of substantial resources to conduct the time consuming
exploration and development of properties. The amounts and timing of
expenditures will depend on the progress of on-going exploration, assessment,
and development, the results of consultants analyses and recommendations, the
rate at which operating losses are incurred, the execution of any joint venture
agreements with strategic partners, our acquisition of additional properties and
other factors, many of which are beyond our control. We may never generate any
revenues or achieve profitability.

We may require additional capital to meet
our capital requirements for future fiscal years.

We have raised additional private placement
financing during fiscal 2007, but may not have sufficient financial resources to
undertake all planned acquisition, exploration and development programs. In the
future, our ability to continue our exploration, assessment, and development
activities depends in part on our ability to commence operations and generate
revenues or to obtain financing through joint ventures, debt financing, equity
financing, production sharing arrangements or some combination of these or other
means. There can be no assurance that option arrangements will be exercised and
the associated funding obtained. There can be no assurance that we will commence
operations and generate sufficient revenues to meet our obligations as they
become due or will obtain necessary financing on acceptable terms, if at all.
Our failure to meet our ongoing obligations on a timely basis could result in
the loss or substantial dilution of our interests (as existing or as proposed to
be acquired) in our properties. In addition, should we incur significant losses
in future periods, we may be unable to continue as a going concern, and
realization of assets and settlement of liabilities in other than the normal
course of business may be at amounts significantly different from those in the
financial statements included in this Annual Report.

The prices of precious and base minerals and
metals fluctuate widely and may not produce enough revenue to cover our costs.

Even if commercial quantities of mineral deposits
are discovered, there is no guarantee that a profitable market will exist for
the sale of the metals produced. Our long-term viability and profitability
depend, in large part, upon the market price of metals which have experienced
significant movement over short periods of time, and are affected by numerous
factors beyond our control, including international economic and political
trends, expectations of inflation, currency exchange fluctuations, interest
rates and global or regional consumption patterns, speculative activities and
increased production due to improved mining and production methods. The supply
of and demand for metals are affected by various factors, including political
events, economic conditions and production costs in major producing regions.
There can be no assurance that the price of any minerals produced from our
properties will be such that any such deposits can be mined at a profit.

We are dependent upon key management
employees.

The success of our operations will depend upon
numerous factors, many of which are beyond our control, including (i) our
ability to enter into strategic alliances through a combination of one or more
joint ventures, mergers or acquisition transactions; and (ii) our ability to
attract and retain additional key personnel in sales, marketing, technical
support and finance. These and other factors will require the use of outside
suppliers as well as the talents and efforts of our management. There can be no
assurance of success with any or all of these factors on which our operations
will depend. We have relied and may continue to rely, upon consultants and
others for operating expertise.

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Our growth will require new personnel, which
we will be required to recruit, hire, train and retain.

We expect significant growth in the number of our
employees if we determine that a mine at any of our properties is commercially
feasible, we are able to raise sufficient funding and we elect to develop the
property. This growth will place substantial demands on us and our management.
Our ability to assimilate new personnel will be critical to our performance. We
will be required to recruit additional personnel and to train, motivate and
manage employees. We will also have to adopt and implement new systems in all
aspects of our operations. This will be particularly critical in the event we
decide not to use contract miners at any of our properties. We have no assurance
that we will be able to recruit the personnel required to execute our programs
or to manage these changes successfully.

We have limited experience with development
stage mining operations.

We have limited experience in placing resource
properties into production, and our ability to do so will be dependent upon
using the services of appropriately experienced personnel or entering into
agreements with other major resource companies that can provide such expertise.
There can be no assurance that we will have available, the necessary expertise
when and if we place our resource properties into production.

Certain of our directors and officers are
also directors and/or officers and/or shareholder with potential competitors,
giving rise to potential conflicts of interest.

Several of our directors are also directors,
officers or shareholders of other companies. Some of the directors and officers
are engaged and will continue to be engaged in the search for additional
business opportunities on behalf of other corporations, and situations may arise
where these directors and officers will be in direct competition with us. Such
associations may give rise to conflicts of interest from time to time. Such a
conflict poses the risk that we may enter into a transaction on terms which
could place us in a worse position than if no conflict existed. Conflicts, if
any, will be dealt with in accordance with the relevant provisions of theBusiness Corporations Act(British Columbia) (the "BCBCA").
Our directors are required by law to act honestly and in good faith with a view
to our best interests and to disclose any interest which they many have in any
project or opportunity for us. However, each director has a similar obligation
to other companies for which such director serves as an officer or director. In
order to avoid the possible conflict of interest which may arise between the
directors' duties to us and their duties to the other companies on whose boards
they serve, our directors and officers have agreed to the following:

|(a) | participation in other business ventures
        offered to the directors will be allocated between the various companies
        and on the basis of prudent business judgment and the relative financial
        abilities and needs of the companies to participate;    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                            
|(b) | no commissions or other extraordinary
        consideration will be paid to such directors and officers; and                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                            
|(c) | business opportunities formulated by
        or through other companies in which the directors and officers are involved
        will not be offered to us except on the same or better terms than the
        basis on which they are offered to third party participants.

|                                                     
|-----------------------------------------------------
|Risks Associated with an Investment in Our Securities

Stock market price and volume volatility.

The market for our common shares may be highly
volatile for reasons both related to our performance or events pertaining to the
industry (ie, mineral price fluctuation/high production costs/accidents) as well
as factors unrelated to us or our industry. In particular, market demand for
products incorporating minerals in their manufacture fluctuates from one
business cycle to the next, resulting in change of demand for the mineral and

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an attendant change in the price for the mineral.
Our common shares can be expected to be subject to volatility in both price and
volume arising from market expectations, announcements and press releases
regarding our business, and changes in estimates and evaluations by securities
analysts or other events or factors. In recent years the securities markets in
the United States and Canada have experienced a high level of price and volume
volatility, and the market price of securities of many companies, particularly
small-capitalization companies such as ours, have experienced wide fluctuations
that have not necessarily been related to the operations, performances,
underlying asset values, or prospects of such companies. For these reasons, the
price of our common shares can also be expected to be subject to volatility
resulting from purely market forces over which we will have no control. Further,
despite the existence of a market for trading in our common shares in Canada,
our stockholders may be unable to sell significant quantities of common shares
in the public trading markets without a significant reduction in the price of
the stock.

Dilution through the granting of options.

Because our success of is highly dependent upon
our employees, we may in the future grant to some or all of our key employees,
directors and consultants options to purchase our common shares as non-cash
incentives. Those options may be granted at exercise prices below those for the
common shares prevailing in the public trading market at the time or may be
granted at exercise prices equal to market prices at times when the public
market is depressed. To the extent that significant numbers of such options may
be granted and exercised, the interests of our other stockholders may be
diluted.

New legislation, including the
Sarbanes-Oxley Act of 2002, may make it difficult for us to retain or attract
officers and directors.

We may be unable to attract and retain qualified
officers, directors and members of board committees required to provide for
effective management as a result of the recent and currently proposed changes in
the rules and regulations that govern publicly-held companies. TheSarbanes- Oxley Act of 2002has
resulted in a series of rules and regulations by the Securities and Exchange
Commission that increase responsibilities and liabilities of directors and
executive officers. The perceived increased personal risk associated with these
recent changes may deter qualified individuals from accepting these roles.

While we believe we have adequate internal control
over financial reporting, we are required to evaluate our internal controls
under Section 404 of theSarbanes-Oxley Act of
2002. Any adverse results from such evaluation could
result in a loss of investor confidence in our financial reports and have an
adverse effect on the price of our shares of common stock.

Pursuant to Section 404 of theSarbanes-Oxley Act of 2002, as a small business
issuer, we expect that beginning in our annual report for the year ended June
30, 2007, we will be required to furnish a report by management on our internal
controls over financial reporting. Such report will contain among other matters,
an assessment of the effectiveness of our internal control over financial
reporting, including a statement as to whether or not our internal control over
financial reporting is effective. This assessment must include disclosure of any
material weaknesses in our internal control over financial reporting identified
by our management. Starting with our annual report for the year ended June 30,
2008, such report must also contain a statement that our auditors have issued an
attestation report on our managements assessment of such internal controls.
Public Company Accounting Oversight Board Auditing Standard No. 2 provides the
professional standards and related performance guidance for auditors to attest
to, and report on, our managements assessment of the effectiveness of internal
control over financial reporting under Section 404.

While we believe our internal control over
financial reporting is effective, we cannot be certain that we will be able to
complete our evaluation, testing and any required remediation in a timely
fashion in order to comply with Section 404 of theSarbanes-Oxley Act of 2002. During the evaluation
and testing process, if we identify one or more material weaknesses in our
internal control over financial reporting, we will be unable to assert that

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such internal control is effective. If we are
unable to assert that our internal control over financial reporting is effective
as of June 30, 2007 (or if our auditors are unable to attest that our
managements report is fairly stated or they are unable to express an opinion on
the effectiveness of our internal controls), we could lose investor confidence
in the accuracy and completeness of our financial reports, which would have a
material adverse effect on our stock price.

Failure to comply with the new rules may make it
more difficult for us to obtain certain types of insurance, including director
and officer liability insurance, and we may be forced to accept reduced policy
limits and coverage and/or incur substantially higher costs to obtain the same
or similar coverage. The impact of these events could also make it more
difficult for us to attract and retain qualified persons to serve on our board
of directors, on committees of our board of directors, or as executive officers.

Because all of our assets and our officers
and directors are located outside the United States of America, it may be
difficult for an investor to enforce within the United States any judgments
obtained against us or any of our officers and directors.

All of our assets are located outside of the
United States and we do not currently maintain a permanent place of business
within the United States. In addition, our directors and officers are nationals
and/or residents of countries other than the United States, and all or a
substantial portion of such persons' assets are located outside the United
States. As a result, it may be difficult for an investor to effect service of
process or enforce within the United States any judgments obtained against us or
our officers or directors, including judgments predicated upon the civil
liability provisions of the securities laws of the United States or any state
thereof. In addition, there is uncertainty as to whether the courts of Canada
and other jurisdictions would recognize or enforce judgments of United States
courts obtained against us or our directors and officers predicated upon the
civil liability provisions of the securities laws of the United States or any
state thereof, or be competent to hear original actions brought in Canada or
other jurisdictions against us or our directors and officers predicated upon the
securities laws of the United States or any state thereof.

We may issue additional shares of common
stock in public offerings or private placements so your ownership interest in us
may be diluted.

Because we may issue shares of common stock in
public offerings or private placements in order to raise capital for our
operations, your ownership interest may be diluted which results in your
percentage of ownership in us decreasing.

We may be a passive foreign investment
company, which may result in material adverse U.S. federal income tax
consequences to U.S. investors.

Investors in our common shares that are U.S.
taxpayers should be aware that we may be a passive foreign investment company
under Section 1297(a) of theU.S. Internal Revenue
Code(a PFIC). If we are or become a PFIC, generally any gain recognized on the sale
of our common shares and any excess distributions (as specifically defined),
paid on our common shares must be ratably allocated to each day in a U.S.
taxpayers holding period for our common shares. The amount of any such gain or
excess distribution allocated to prior years of such U.S. taxpayers holding
period for our common shares generally will be subject to U.S. federal income
tax at the highest tax applicable to ordinary income in each such prior year,
and the U.S. taxpayer will be required to pay interest on the resulting tax
liability for each such prior year, calculated as if such tax liability had been
due in each such prior year.

Alternatively, a U.S. taxpayer that makes a
Qualified Electing Fund (a QEF)
election with respect to their investment generally will be subject to U.S.
federal income tax on such U.S. taxpayers pro rata share of our net capital
gain and ordinary earnings (as specifically defined and calculated under U.S.
federal income tax rules), regardless of whether such amounts are actually
distributed by us. U.S. taxpayers should be aware, however,

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that there can be no assurance that we will
satisfy record keeping requirements under the QEF rules or that we will supply
U.S. taxpayers with required information under the QEF rules, in the event that
we are a PFIC and a U.S. taxpayer wishes to make a QEF election. As a second
alternative, a U.S. taxpayer may make a mark-to-market election if we are a PFIC
and our common shares are marketable stock (as specifically defined). A U.S.
taxpayer that makes a mark-to-market election generally will include in gross
income, for each taxable year in which we are a PFIC, an amount equal to the
excess, if any, of (a) the fair market value of our common shares as of the
close of such taxable year over (b) such U.S. taxpayers adjusted tax basis in
our common shares.

Broker-Dealers may be discouraged from
effecting transactions in our common shares because they are considered Penny
Stocks and are subject to the Penny Stock Rules.

Rules 15g-1 through 15g-9 promulgated under the
Exchange Act impose sales practice and disclosure requirements on certain
broker-dealers who engage in certain transactions involving a penny stock". Subject to certain exceptions, a
penny stock generally includes any non-NASDAQ equity security that has a market
price of less than $5.00 per share. The market price of our shares over the year
ended June 30, 2006 was consistently below $5.00 and our shares are deemed penny
stock for the purposes of the Exchange Act. The additional sales practice and
disclosure requirements imposed upon broker-dealers may discourage
broker-dealers from effecting transactions in our shares, which could severely
limit the market liquidity of the shares and impede the sale of such shares in
the secondary market.

Under the penny stock regulations, a broker-dealer
selling penny stock to anyone other than an established customer or
"accredited investor" (generally,
an individual with net worth in excess of US$1,000,000 or an annual income
exceeding US$200,000, or US$300,000 together with his or her spouse) must make a
special suitability determination for the purchaser and must receive the
purchaser's written consent to the transaction prior to sale, unless the
broker-dealer or the transaction is otherwise exempt.

In addition, the penny stock regulations require
the broker-dealer to deliver, prior to any transaction involving a penny stock,
a disclosure schedule prepared by the US Securities and Exchange Commission
relating to the penny stock market, unless the broker-dealer or the transaction
is otherwise exempt. A broker-dealer is also required to disclose commissions
payable to the broker-dealer and the registered representative and current
quotations for the securities. Finally, a broker-dealer is required to send
monthly statements disclosing recent price information with respect to the penny
stock held in a customer's account and information with respect to the limited
market in penny stocks.

We do not intend to pay cash dividends and
there is no assurance that we will ever declare cash dividends.

We intend to retain any future earnings to finance
our business and operations and any future growth. Therefore, we do not
anticipate paying any cash dividends in the foreseeable future.

|ITEM 4. | INFORMATION ON THE
      COMPANY
|------- | --------------------------------

History and Development of the
Company

Our registered office in British Columbia is
located at 595 Howe Street, 10thFloor, Vancouver, British Columbia, Canada V6C 2T5. Our head office and
principal office is located at Suite 1500, 701 West Georgia Street, Vancouver,
British Columbia, Canada V7Y 1C6. Our telephone number is (604) 696.6672. We pay
rent of $1,400 per month for office space.

We were incorporated under the name,TCH Minerals Inc.on February 6,
2004, by registration of our Memorandum and Articles under theCompany Actof British Columbia. Our name was
changed toRipple Lake Minerals Inc.on May 13, 2004, and toRipple Lake Diamonds
Inc.on July 26, 2004.

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At a special meeting of shareholders held on
August 16th, 2007, the
shareholders approved a special resolution to consolidate our share capital on
the basis of one new common share for every ten existing common shares
outstanding, and to concurrently change the name of our company to Devonshire
Resources Ltd. The proposed share consolidation and change of name was effected
on October 10th, 2007 and we
commenced trading on the TSX Venture Exchange under the trading symbol
DSH.

We do not have any subsidiaries. Further, we have
no plans to change our business activities or to combine with another business,
and are not aware of any events or circumstances that might cause our plans to
change.

On January 7, 2005, we completed our initial
Canadian public offering of shares for gross proceeds of $1,600,000. Our shares
of common stock began trading on the TSX Venture Exchange on January 7, 2005
under the symbolRLD. A total of
4,000,000 shares were issued in the offering at a price of $0.40 per
share.

During the year ended June 30, 2006 we completed
three private placement offerings to raise an aggregate of $2,539,359, as
follows:

On September 27, 2005, we completed a non-brokered
private placement of 622,466 units at a price of $0.45 per unit. Each unit
consisted of one flow-through common share and one-half a share purchase warrant
to purchase a non-flow through common share, exercisable until September 27,
2006 at a price of $0.50 per share.

On January 24, 2006, we completed a non-brokered
private placement of 5,482,667 units at $0.15 per unit. Each unit consisted of
one common share and one share purchase warrant. 2,116,667 of the units
consisted of flow-through common shares and warrants to purchase non-flow
through common shares. Each whole warrant entitles the holder to acquire an
additional common share of the Company at a price of $0.20 per share,
exercisable until January 24, 2008.

During May and June 2006, we completed a brokered
and non-brokered placement of 6,385,999 units at $0.225 per unit. Each unit
consisted of one common share and one share purchase warrant. 1,627,778 of the
units consisted of flow-through common shares and warrants to purchase non-flow
through common shares. Each whole warrant entitles the holder to acquire an
additional common share at a price of $0.30 per share, exercisable for a period
of two years from closing.

Business Objectives

Our principal business carried on and intended to
be carried on by us is the acquisition and exploration of natural resource
properties. Our objective is to locate and develop economic diamond deposits. We
intend on expending our existing cash resources to carry out exploration on our
mineral properties, to pay for administrative costs during the fiscal year
ending June 30, 2008, and for working capital. We may decide to acquire other
property interests in addition to mineral property interests currently held by
us.

Business Overview

Since our inception in 2004, we have been in the
business of acquiring, exploring and evaluating interests in mineral properties.
Our current property interests are held for the purposes of exploration for
diamonds.

Our properties are the TCH Project in Ontario and
the KMD Property in Nunavut. We are an exploration stage corporation. An
exploration stage corporation is one engaged in the search for mineral deposits
or reserves which are not in either the development or production stage. We
intend to conduct exploration activities on our properties.

We are an exploration stage company and there is
no assurance that a commercially viable mineral deposit exists on any of the
property, and further exploration will be required before a final evaluation as
to the

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economic and legal feasibility is
determined.

|                    
|--------------------
|TCH Project, Ontario

We entered into option agreements to earn a 100%
interest in certain mineral claims, representing 129 units or 2,064 hectacres,
located in the Walsh, Foxtrap Lake and Killala Townships in the Province of
Ontario (the Options), known as
the TCH Project. During the year ended June 30, 2007 we made cash payments
totaling $31,000 and issued 40,000 common shares, valued at $6,000, under the
Options

The future annual payments of cash and shares
required under these Options are as follows:

Year Ended
    
    CommonJune 30
    Cash
    Shares2007
    27,000
    65,0002008
    110,000
    85,0002009
    30,000
    20,000167,000
    170,000


We are also required to make all expenditures
required to maintain the mineral claims in good standing and to pay the
optionors 2% of net smelter returns from the properties upon commercial
production.

We have staked an additional 5,862 units or
approximately 86,600 ha in an area that is contiguous to the optioned
properties, for a cost of $449,087. As at June 30, 2007, our interest in the TCH
Project totals approximately 93,972 ha.

To maintain the above claims in good standing, we
are required to spend a minimum of $400 per unit on assessment work during the
first two years after staking and $400 per unit per year thereafter. The claims
are currently in good standing until dates ranging from December 23, 2007
through October 29, 2009. We intend to focus on only the most promising priority
target areas and, thus, some of the claims will lapse.

In addition to the above described properties, we
entered into a property sharing agreement dated July 1, 2004 with Phoenix
Matachewan Mines Inc., the holder of 18 mineral claims containing 189 units to
the west of the TCH Project whereby we were granted the right to explore for
mineralized material on Phoenixs property and to acquire any part of the same
by issuing 300,000 shares to Phoenix and granting to Phoenix a net returns
royalty equal to 1% of the gross proceeds received by us if we prepare a
feasibility study which incorporates reserves on such part of the Phoenix
property. That agreement has now lapsed and the claims have expired.

We entered into two option agreements to acquire
51 additional claims within our TCH claim block in the Lake Superior area of
Ontario with the right to extend the options by cash payments and share
issuances on each of April 30, 2006 (total of $20,000 and 40,000 shares, which
was paid), April 30, 2007 (total of $20,000 and 40,000 shares) , and April 30,
2008 (total of $40,000 and 40,000 shares). The two option agreements were
cancelled and the payment for April 30, 2007 was not made.

During the year ended June 30, 2006, we abandoned
our rights under an agreement with Nuinsco Resources Limited whereby we had the
right to explore for diamonds on Nuinscos nine claims within the boundary of
our TCH Project.

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|                     
|---------------------
|KMD Property, Nunavut

Pursuant to an agreement dated May 11, 2004 with
KM Diamond Exploration Ltd. (the Optionor), we were granted an option,
hereinafter called the "KMD Option," to purchase an 80% interest in certain mineral claims (approximately
32,300 acres) located near Parker Lake and Brown Lake, Nunavut (the
KMD Project).

We have the right to earn the initial 80% interest
in the KMD Project from the Optionor subject to certain terms including:

|(a) | payment of the sum of $20,000 on the
        execution of the KMD Option, which has been paid;                                                                                                                                                                         
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                        
|(b) | payment of the sum of $150,000 and the
        issuance of 200,000 of our common shares, which has been paid;                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                        
|(c) | the issuance of 150,000 common shares
        to the Optionor on or before February 14, 2005, which shares have been
        issued, and an additional 150,000 common shares to the Optionor on or
        before February 14, 2006, which shares have been issued; and
|    |                                                                                                                                                                                                                                                                        
|(d) | the issuance of 200,000 common shares
        at the time we exercise the option or at any time prior to December 31,
        2007 (see below regarding issuance of these shares).                                                                                     

The Optionor staked additional mineral claims on
our behalf in an area that is contiguous to the KMD Project, which claims are
100% owned by us. The cost incurred to June 30, 2006 to stake these claims was
$195,371, for which the Optionor was fully reimbursed. As of June 30, 2007, our
interest in the KMD Project totalled approximately 151,000 acres.

A minimum expenditure of $4.00 per acre is
required during the first two years to maintain the claims in good standing.
However, the first filing of work need only be submitted on or before the second
anniversary date of each claim. If the claims are to be kept in good standing
beyond the two-year period, a total of $2.00 per acre per year will have to be
expended. In addition, there is a $0.10 per acre fee for filing work on the
claims. The claims forming KMD Project are now subject to legal proceedings as
more particularly set forth below.

The Optionor is entitled to a royalty equal to 3%
of gross revenue from the sale of diamonds mined from the property (the
3% Royalty). We may, at a time
within three years after the exercise of the Option, purchase 1/3 of the 3%
Royalty for a purchase price of $1,000,000, and may purchase an additional 1/3
of the 3% Royalty for an additional $1,000,000.

We have the right to purchase the remaining 20%
interest in the KMD Property at any time prior to the expiration of the three
year period following the date of the exercise of the Option by issuing to KMD
an additional 200,000 common shares.

On June 1, 2004 we entered into a consulting
agreement with a geologist for a three year term, whereby we agreed to pay a
$1,000 per day consulting fee to the geologist, with a minimum of one consulting
day per month. However, in December 2006 the geologist, who is also the sole
principal of the Optionor, gave notice of a disagreement with respect to the
terms of the KMD Option Agreement.

In November 2006, the Optionor gave notice of
default to us with respect to the Option Agreement, alleging that we had failed
to carry out required work programs on the Properties. We denied the alleged
default. We gave notice to the Optionor on or about December 11, 2006 that we
were exercising our option and acquiring 100% of the Properties, subject to a
royalty in favour of KM Diamond equal to 3% of gross revenue received from the
sale of diamonds from the Properties as stipulated in the Option Agreement. At
that time, we forwarded 400,000 common shares (pre-consolidation) valued at
$42,000 to the Optionor, which we consider constituted

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full payment to the Optionor for the right to
exercise the option for 100% of the KMD Project (taken in conjunction with
other, previous payments). However, the Optionor returned these shares, which
are at present held in trust by our solicitors, and asserted that the exercise
of the option by us was invalid. The Optionor has not transferred the Properties
to us and has taken the position that the Option Agreement has terminated
without proper exercise by us. Our position is that we had completed, under the
explicit direction and supervision of the Optionors sole principal, the work
programs required to satisfy the Option Agreement. We have therefore earned a
100% interest in the KMD Project, subject to a royalty equal to 3% of gross
revenue from the sale of diamonds mined from the property.

On October 19th, 2007, we launched proceedings in the
British Columbia Supreme Court seeking an order of specific performance, to
require KM Diamond to transfer the Properties to us, along with certain
contiguous properties, as well as for damages, costs, and other relief.

OUR PROPERTIES

|                    
|--------------------
|TCH Project, Ontario

Summary

We have staked multiple properties in the Marathon
area of north-central Ontario that have potential for diamond deposits. These
100% owned properties, together with certain optioned claims included within the
contiguous claim block are comprised of a total of 143,300 ha and are
collectively known as theTCH Project.

The TCH Project is located in north-central
Ontario west of the town of Marathon. The Trans Canada Highway, the CPR mainline
and two Ontario Hydro high voltage power lines pass through the TCH Project in
the south part of the area. The town of Marathon lies 30 km to the east on the
Trans Canada Highway and the major city of Thunder Bay is 270km to the west.
Access into the northern part of the area is afforded by an extensive network of
logging roads.

Property Description and
Location

The TCH Project is located in north-central
Ontario in the Thunder Bay Mining Division on NTS maps 42D15 and 42E2 to the
west and northwest of the town of Marathon. They lie in a 45km by 30km area
centered at 87o45 W
longitude and 45o45 N
latitude that stretches north from the north shore of Lake Superior.

Certain limited areas of the TCH Project are crown
grants or patented claims where the surface rights or both the surface rights
and mineral rights are reserved. Where only the surface rights are held, access
cannot be denied to the holder of the mineral rights without due cause.

To maintain the above claims in good standing, we
are required to spend a minimum of $400 per unit on assessment work during the
first two years after staking and $400 per unit per year thereafter.

There are no known pre-existing liabilities,
environmental or otherwise, in the area for which we can be held responsible.
There are no unusual permit requirements for mineral exploration other than
standard permitting for any issues related to water crossings where installation
of a bridge is required.

Accessibility, Climate, Local Resources,
Infrastructure and Physiography

The TCH Project lies approximately 30 km west of
Marathon, Ontario. Marathon lies on Highway 17, the Trans Canada Highway, which
provides all weather road access to the major centres of Thunder Bay to the west
and Sault Ste. Marie to the east. Marathon has a small airport, serviced by
regional airlines, which provide passenger and freight service from the larger
centers of the Province of Ontario.

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Access to the TCH Project is gained via the Trans
Canada Highway, which passes the southern part of the Ripple Lake Claim Block.
An extensive network of logging roads, which originate off the TCH Project
provide reasonable vehicle access to the northern claim blocks. During
exploration, access to the remoter parts of the properties might require a
helicopter from Marathon. For drilling purposes the terrain and vegetation
permits the construction of temporary drill roads.

The Canadian Pacific Railway mainline passes
through the Ripple Lake Claim Block, as do two Ontario Hydro high voltage power
lines. All essential services, such as food and lodging, are available in the
town of Marathon. Marathon is the local logistical center of the three gold
mines operating in the Hemlo area a further 30 km to the east. In addition to
the comprehensive infrastructure, north-central Ontario features a
resource-based economy attuned to mining exploration and development.

The topography in the area consists of low rolling
to rugged hills with numerous lakes and swamp filled valleys typical of the
Canadian Shield. The terrain is particularly rugged along the shore of Lake
Superior on the Ripple Lake Claim Block, but becomes more subdued away for Lake
Superior with distance to the north. Elevations range from 600 feet at Lake
Superior to 1,500 feet at the hilltops. The average elevation is approximately
1,000 feet above sea level, with a maximum relief of not more than 500 feet.
Glaciolacustrene deposits are generally restricted to low areas and may reach
considerable depth in some of the larger drainage basins, but overburden is
generally thin in most areas.

The vegetation in the area is boreal forest. On
the higher ground the vegetation is predominantly spruce, birch and poplar with
alder and maple undergrowth. Thick cedar swamps are characteristic of the low
wet areas located throughout project area. All creeks and river systems drain
southerly toward Lake Superior.

Climate is moderately dry summers with
temperatures as high as 340C
and snowy winters with temperatures as low as 400C. Exploration is possible year round with
short hiatuses during the spring thaw and winter freeze up and is sometimes more
efficient in the winter months when the water courses and swamps are
frozen.

History

There was no previous diamond exploration activity
on our property prior to our acquisition of the TCH Project.

Geology

The TCH Project lies at the junction of the Wawa
and Quetico subprovinces of the Superior Structural Province of the Canadian
Shield. The rocks comprise east-west trending interbedded Archean
meta-sedimentary and meta-volcanic rocks intruded by granitic and mafic
intrusive rocks. Younger Proterozoic intrusions include the Marathon diabase
dyke swarm and alkalic intrusions, of the Coldwell and Prairie Lake
alkalic-carbonatite complexes and lamprophyre dykes. The large number of dykes
mapped in the area is clearly evident in the airborne magnetic survey as long
linear anomalies with a variety of strikes. Included are some distinct magnetic
lows which appear to reflect a north-northeast set of lamprophyre dykes.

The Trans-Superior Tectonic Zone or
TSTZ extends north-northeast
through the area and appears to be the locus of the considerable intrusive
activity present. The TSTZ is similar to other tectonic features in the Canadian
Shield.

Mineral Resources and Mineral
Reserves

The TCH Project is in the exploration stage and
there are no known mineral resources.

-21-

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Exploration and
Development

We completed our phase I exploration of the TCH
Project during the fall of 2004 at a cost of approximately $530,000. We did not
find an ore body; however, based upon our exploration, we decided to move on to
Phase II, which consisted of airborne geophysics and detailed
sampling.

During the year ended June 30, 2005 we expended an
aggregate of $1,029,897 in deferred exploration and acquisition costs on the TCH
Project.

Following the 2004 Phase I program, we completed a
2005 Phase II heavy mineral sampling program, a remote sensing program, and a
2,695.6 km Aeroquest frequency time domain helicopter electromagnetic and high
sensitivity cesium vapour magnetometer survey. The 2005 exploration program also
included a comprehensive airborne geophysical survey and the discovery of a
kimberlite fragment on the original land package.

In addition to mineral sampling by the Ontario
Geological Survey, the TCH Project was covered by a high-resolution helicopter
magnetic and electromagnetic geophysical survey. This survey outlined a number
of circular anomalies which look similar to the signature of kimberlite pipes
found the world over. The TCH Project covers a number of these anomalies and is
strategically located to incorporate as many anomalies as possible.

In November 2003, material collected from the
diatreme yielded three micro-diamonds from a 19.83 kg sample. This was the first
direct indication of primary diamond mineralization in the area, which led us to
acquire a land position in the area. We also carried out a number of ground
geophysical surveys in 2004 to verify a selection of airborne geophysical
targets on the TCH Project. Several other, not readily accessible, geophysical
targets on the TCH Project were examined by prospecting to determine their
causes.

We completed the analysis of the 401samples
collected in 2004 during January 2005. On April 11, 2005 we announced results of
the analysis of the 2004 sampling program. Kimberlite indicator minerals, or
KIM (pyrope, picroilmenite,
chrome spinel, olivine and chrome-diopside) were identified in 60% of the
samples collected during the 2004 exploration program. Picroilmenite is the
predominant KIM and pyrope is the second most abundant. By the chemical
composition, six pyrope grains of the 99 that were analyzed belong to the
diamond association (G10) group, and about ten are close to the diamond
association. Among the seven analyzed kimberlitic chrome spinel grains, one
belongs to the diamond field. This suggests that some diamondiferous kimberlites
may be among the clastic material suppliers for Quaternary sediments in the
Ripple Lake property.

Eight dispersion haloes of the kimberlitic,
short-transit associations (KIM-1) were identified in 2004 in the TCH area.
Among them, there are three first-priority prospective areas, showing the
highest promise for finding primary sources of the KIM haloes within their
boundaries, and five other local areas that are also of exploration interest.
The OGS pyropes are also located in the recently identified priority areas of
interest.

Based on these encouraging results, we acquired
through staking, new claim blocks to the west, north and east of the existing
claim block area. In addition to the 2004 mineral sampling, we completed, during
the second quarter of 2005, an Aeroquest high-resolution helicopter magnetic and
electromagnetic geophysical survey over the northern half of the TCH Diamond
Project.

During the year ended June 30, 2006, we engaged
Condor Consulting Inc. of Colorado to complete a geophysical interpretation of
the existing 1999 Ontario Geological Surveys airborne magnetic and
electromagnetic data, and integrate that information with the results of the
2005 Aeroquest helicopter airborne geophysical survey in order to identify
kimberlite-pipe-like anomalies.

During the year ended June 30, 2007 we expended
$46,067 in deferred exploration and acquisition costs on the

-22-

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TCH Project, compared with $1,161,938 during the
previous year. The major deferred expenses during fiscal 2007 were property
acquisition and staking costs of $37,000 and geological costs of $8,752.

During the 2005 field season, 546 new samples for
diamond and diamond indicator minerals were collected and panned in the field in
the TCH claim block. The samples were collected throughout the claim block from
till sediments (231 samples), lake sediments (111 samples), alluvial sediments
(62 samples), glaciofluvial sediments (135 samples), and colluvial and other
sediments (seven samples), with each sample consisting of approximately 20
litres (30 kilograms) of material.

Detailed sampling was organized within eight local
areas that had demonstrated high concentrations of kimberlite indicator minerals
or KIM grains, based on the results of sampling in 2004 in areas that also
included magnetic or EM anomalies outlined in the recent airborne geophysical
interpretation.

During the course of the detailed sampling,
picroilmenite halos composed of large (two to three millimetres in size) grains
were established in the northeastern part of the area. In one of the samples
from this area, a kimberlite-like rock fragment, 20 by 15 by nine millimetres in
size, was found. The kimberlitic-like sample shows a combination of
characteristic features typical of kimberlites, lamproites and ultramafic
lamprophyres, and therefore is of kimberlite-lamproite composition.

The sample concentrates were delivered to the
KMD/Institute of Diamonds Laboratory in Moscow to be processed and for
mineralogical analysis. They were treated with heavy liquids, by magnetic and
paramagnetic separation, and studied for the presence of KIMs: pyrope garnet,
picroilmenite, chrome spinel, chrome-diopside and magnesian olivine.

At the end of October 2006, we received the final
report KM Diamond Exploration Ltd. summarizing the results of the 2005 sampling.
More than 11,900 kimberlite indicator mineral (KIM) grains were identified in
the samples including 85 pyrope grains, 9,150 picroilmenite grains, 595 chrome
spinel grains, 496 clinopyroxene grains and 1591 olivine grains. All the pyrope
grains have kimberlitic, short transported origin: they are angular, with relics
of magmatic surfaces. Approximately 5 % of pyrope grains belong to the diamond
association (G10 pyropes); the rest are lherzolitic (G9) pyropes.

Most of picroilmenite grains have no erosion marks
of transportation and in addition, many picroilmenite grains are coarser than 1
mm (up to 10-12 mm) in size, bear films of kimberliticlike material on their
surfaces, leucoxene and perovskite rims. These picroilmenite grains are similar
in mineral chemistry to kimberlitic picroilmenite. According to conclusions of
Dr. Felix Kaminsky, of KM Diamond Exploration Ltd., these grains were
transported for only a few hundred meters from their primary source(s) which may
be diamondiferous Group-1 kimberlite(s).

The pyrope and picroilmenite grains as well as
other non-rounded, short-transit KIMs (chrome spinel, chrome-diopside and
magnesian olivine) form a linear dispersion halo elongated in NNE direction
(approximately 20 km x 1 km in size). Judging by the morphology of the KIMs,
their kimberlitic source(s) are located within this halo.

In addition, there is a significantly higher than
average picroilmenite concentration and the presence of pyrope grains trending
into the new RLD claims acquired last year which might reflex a new promising
KIM dispersion halo extending northward.

Besides the short-transit KIM association, there
are a number of single, well-rounded grains of picroilmenite and chrome spinel
which are kimberlitic by their composition. These KIMs may belong to remote
kimberlitic source(s), possibly located within the major tectonic zone tracing
NNE and within the expanded RLD claim group. In this case, the KIM haloes
identified within the area explored in 2004-2005 may represent only the
southernmost part of a new kimberlitic province.

-23-

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As at the date hereof we have not located
mineralized material and we do not have an ore body. There is no assurance that
we will ever find mineralized material or that the TCH Project contains an ore
body.

|                     
|---------------------
|KMD Property, Nunavut

We were granted an option to purchase a 80%
interest in certain mineral claims containing approximately 32,300 acres located
near Parker Lake and Brown Lake, Nunavut and we acquired by staking additional
contiguous mineral claims, which claims are 100% owned by us, for a total of
approximately 151,000 acres (the the KMD
Property). The KMD Property is located approximately
960 km east-northeast of Yellowknife, NWT and approximately 770 km east of
Canadas first producing diamond mine, the Ekati mine, operated by BHP Minerals.

Summary

The property lies within the Western Churchill
Craton, Hearne Province, and is underlain by metasediments and gneisses of the
MacQuiod belt and the Cross Bay plutonic complex, both of which are early
Proterozoic in age.

Property Description and
Location

The KMD Property is located in Nunavut,
approximately 120 km NW of Rankin Inlet, and is defined by geographical
co-ordinates: 63o39 N in
the south and 63o45N in the
north, and 94o05 W in the
west and 93o50W in the
east, within topo-sheets 55M9 and 55N12. All of the claims are unsurveyed and
unpatented.

A minimum expenditure of $4.00 per acre is
required during the first two years to maintain the claims in good standing.
However, the first filing of work need only be submitted on or before the second
anniversary date of each claim. If the claims are to be kept in good standing
beyond the two-year period, a total of $2.00 per acre per year will have to be
expended. In addition, there is a $0.10 per acre fee for filing work on the
claims.

Accessibility, Climate, Local Resources,
Infrastructure and Physiography

Access to the area is by ski or float equipped
aircraft or helicopter only, with the closest base being the float plane base
located at Rankin Inlet, approximately 150 kilometres to the southeast. A
charter helicopter is often based in Rankin Inlet and can be utilized on a
casual basis. Fly camp style fieldwork can be completed using the Rankin
helicopter, but a charter helicopter will need to be positioned on the KMD
Property for full time work. There are several eskers in the area and some can
be used as natural airstrips for tundra tire equipped twin otter fixed wing
aircraft to position camp equipment, mobilize crews and provide other support
services. As well, float equipped fixed wing aircraft can land in many of the
lakes throughout the area.

Rankin Inlet is serviced by commercial airline
passenger service from points to the south including Yellowknife NWT and
Winnipeg Manitoba, as well as Iqaluit to the east. Food, accommodation and
expediting support services are available in Rankin Inlet.

The KMD Property is located in the barren lands,
approximately 15 kilometers south of tidewater in Chesterfield Inlet off Hudson
Bay. Small stunted trees and shrubs with moss and lichen comprise the dominant
vegetation types. The climate is sub-arctic and experiences long, cold winters
with temperatures dropping to -50C. Summers are short and temperatures can reach
+25C. Daylight hours are long in the summer as the project area is in the far
northern portion of Canada. Elevations for the property vary from 250 metres to
410 metres above sea level. Abundant lakes, bogs and swamps with low relief
characterize the region.

It is possible to conduct exploration activities
year-round with the exception of spring break-up and winter freeze-up. During
the winter months diamond drilling would be the only type of exploration
reasonably possible and it would be hampered by the cold weather. Both airborne
and ground geophysical surveys can be

-24-

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completed during the spring and fall on the snow
as long as there is enough light to work. Winter surface sampling and mapping is
virtually impossible due to snow cover and frozen ground conditions. Water is
extremely abundant and is available in sufficient quantities to supply virtually
any mining need. Power will need to be obtained via diesel generator, as there
is no power infrastructure whatsoever in this part of Canada. The KMD Property
covers a large area with plenty of space for the building of infrastructure for
any advanced exploration or development.

The Inuit of Nunavut has selected approximately
350,000 km2of the area of
Nunavut for ownership of surface rights hereinafter called the Surface IOL as part of the 1993 Nunavut Lands
Claims Agreement (NLCA).
Additionally, approximately 38,000 km2of land or 2% of the area of Nunavut, also
includes the rights to all subsurface minerals hereinafter called the
Subsurface IOL. As a result,
there are essentially three levels of land ownership within Nunavut, as defined
by Article 19 of the NCLA:

|1. | Inuit Owned Lands (IOL) Surface and Subsurface Rights
        - (mineral rights included Subsurface IOL);                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                     
|2. | IOL Surface Rights Only (mineral rights
        that are administered by Federal Government through DIAND  Surface
        IOL; and
|   |                                                                                                                                     
|3. | Crown (Public) Lands (mineral rights
        that are administered by Federal Government - DIAND).                                  

History

No previous diamond exploration activity has been
conducted on the KMD Property.

Geological
Setting

The KMD Property lies in a portion of the northern
Hearne domain, western Churchill Province. The Hearne province consists of
Archean rocks of the Hearne Craton and overlying supracrustal rocks that were
intensely reworked during the 1.8 1.9 Ga Trans-Hudson Orogen. South of the
Snowbird Tectonic Zone, the northern Hearne domain is predominantly composed of
Archean juvenile crust which is interpreted to be underlain by continental crust
of the Rae domain.

There are two theories regarding the tectonic
nature of Snowbird Tectonic Zone (STZ). According to one theory, the STZ has
been interpreted as an Early Proterozoic (Paleoproterozoic) suture between two
Archean continents, the Rae and Hearne. However, other geological and
geophysical interpretations represent the STZ as an Early Proterozoic intraplate
fault, while geochronological data indicate that it is an Archean structure. The
most recent data obtained suggests a more complicated picture for this tectonic
zone. Baldwin et al. conclude that there is an important 1.9 Ga high PT
metamorphic event in the Snowbird tectonic zone that overprints an earlier
Archean metamorphism (c. 2.52 2.55 Ga).

The KMD Property area includes the eastern part of
the Archean MacQuoid supracrustal belt and the Cross Bay plutonic complex. The
MacQuoid supracrustal belt is divided into a southern, predominantly
metasedimentary homocline with panels of gneissic tonalite, flanked to the north
by a predominantly volcanic belt intruded by tonalite-granodiorite plutons. The
oval Cross Bay plutonic complex is principally composed of tonalitic and
dioritic gneiss units and granite mostly of Archean intrusions. Along its
southern margin, the plutonic complex is separated from the supracrustal belt by
the approximately east-trending, strike-slip, mylonitic Big Lake shear zone.
Folding and boudinage of east-trending mafic dykes indicates that significant
Paleoproterozoic deformation occurred in the Cross Bay complex.

-25-

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Property Geology

The KMD property geology has not been mapped in
detail other than specified above in regional geology.

Mineral Resources and Mineral
Reserves

The KMD Property is at the exploration stage with
no mineral resource or mineral reserve.

Exploration and
Development

We completed a Phase I exploration program on the
KMD Property during the fall of 2004.which consisted of taking mineral samples
from the surface of the KMD property and concentrating them by hand panning and
sending them to a laboratory for analysis for kimberlite indicator minerals. We
spent approximately $430,000 on Phase I. The result of that process was that an
ore body was not discovered; however, we determined that further exploration is
warranted.

During the fiscal year ended June 30, 2005, we
completed a study of the nickel thermometry of some of the collected G-9 pyrope
grains, using a highly sophisticated exploration technique recently developed in
South Africa and determined that the temperature and pressure conditions at the
KMD Property were correct for the formation of diamondiferous kimberlites and
that a significant portion of the G-9 grains analyzed fall inside the diamond
stability field.

During the fourth fiscal quarter of 2005 we
completed an airborne geophysical (magnetic and electromagnetic) survey of the
KMD Property. The survey was undertaken in order to further delineate possible
sources (drill targets) of thousands of pyrope and other kimberlite indicator
mineral grains, recovered from the samples collected in 2004.

An extensive follow-up sampling program was
carried out for us by KM Diamond Exploration Ltd. and a preliminary report of
the summer 2005 field work was received by us on September 20, 2005. That report
contains sample location information and some preliminary geological discussions
for the 752 samples collected in 2005. Full analytic results will be available
following completion of laboratory analysis of the samples, which will be
available to us several months following payment of laboratory costs of the
analytical work. We will require further financing to fund such work.

During the year ended June 30, 2007, we expended
$75,510 in deferred exploration and acquisition costs related to the KMD
Property, compared with $534,082 during the previous year. The major deferred
expenses during fiscal 2007 were property acquisition and staking costs of
$42,000, assessment fees of $18,525 and geological costs in the amount of
$14,985.

Kimberlite indicator minerals (KIMs); pyrope,
chrome spinel, chrome-diopside and olivine) were found in 156 of the submitted
samples. Pyrope is the most abundant (more than 4,400 grains were found in 127
samples), whereas chrome spinel, chrome-diopside and olivine were observed but
less abundant. Based on mineralogical criteria, all pyrope grains from Brown
Lake area panned samples were classified asP1group short-transit pyrope grains characterized by a
predominance of angular grains, often with fragments of Type I primary magmatic
surface and sometimes with relics of kelyphitic rim. Based on the results of the
analysis, all pyropes were low-Cr and medium-Cr G9 pyrope grains; no G10 pyropes
were present. According to the 2004 Ni-thermometry conducted by Mineral Services
Canada Inc., a high proportion of the pyropes tested would fall inside the
diamond stability field, so the lack of G10 garnets is not a concern.

Pyrope-bearing samples form a broad NW-trending
zone (halo) between Brown Lake
and Camp Lake. Based on the analysis of KIM distribution in the KMD property,
the head and middle parts of
the main pyrope halo in the Brown Lake area have been outlined from all sides
(NW, SW and NE). The main pyrope halo is clearly

-26-

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bounded by numerous barren (KIM-free) panning samples on the NW, SW
and NE, which significantly restricts the area of probable localization for the
inferred primary source(s) of the pyrope aureole.

Within the large halo are a number of areas of
intense concentrations of pyrope grains, in total 12 local areas were sampled in
detail. The bulk of the identified pyrope grains (more than 4,000 grains) were
found within local areas. In these areas, pyrope concentration is as high as
several hundreds of grains per standard 20-litre sample. Within some local
areas, pyrope anomalies are associated with the airborne geophysical (magnetic
and electromagnetic) anomalies generated from the 2005 geophysical survey
completed by Fugro.

LeBel Geophysics, of Vancouver, British Columbia,
completed an additional geophysical interpretation of the Fugro survey results
and integrated the Fugro airborne results with the companys heavy mineral
anomalies. Coincident airborne and heavy mineral sampling anomalies were noted
in a number of areas that will require additional follow-up which should include
prospecting, ground geophysics and drilling.

As of the date hereof, we have not located
mineralized material and we do not have an ore body. There is no assurance that
we will ever find mineralized material or that our property contains an ore
body.

Competitive factors

The mining industry is fragmented. We are a start
up venture and compete with other exploration companies looking for mineralized
material. We are one of the smaller exploration companies in existence. While we
compete with other exploration companies, there is no competition for the
exploration or removal of minerals from our properties. Readily available
markets exist in Canada and around the world for the sale of diamonds. However
the saleability of diamonds depends upon their size, clarity and other
characteristics and we may not be able to economically sell any diamonds that we
are able to recover.

Regulations

Our mineral tenure in Nunavut is subject to theTerritorial Lands Actsof Canada
and the relatedTerritorial Land Use
Regulations. This Act and these Regulations forth rules
for

|(a) | locating claims;         
|--- | -------------------------
|    |                          
|(b) | posting claims;          
|    |                          
|(c) | working claims; and      
|    |                          
|(d) | reporting work performed.

In Ontario the rules governing those matters are
contained in theMining Act
Ontario. We must comply with these laws to operate our business. Compliance with
these rules and regulations will not adversely affect our operations.

Environmental law

We will become subject to theCanadian Environmental Assessment Actif economic
quantities of mineralized material were to be found and a mine was to be
developed. This Act deals with environmental matters including matters relating
to the exploration and development of mining properties. Its goals are to
protect the environment through a series of regulations affecting:

|1. | Health and Safety;
|-- | ------------------

-27-

---

|2. | Archaeological Sites; and
|-- | -------------------------
|   |                          
|3. | Exploration Access.      

However, we are an exploration company and will
not be required to conduct an environmental assessment unless a mine is
ultimately developed on our properties.

Exploration stage companies have no specific
environmental requirements. The only costs of compliance with environmental
regulations in each of Ontario and Nunavut are the costs of returning the
surface to its previous condition upon abandonment of the properties. Normally
those exploration reclaimation costs do not represent a significant expenditure.
We cannot speculate on those costs in light of our ongoing plans for
exploration.

Permits

In Ontario there is no regulatory requirement
which is required to be undertaken before conducting exploration on a mineral
claim by the claim holder. The KMD property is located in a geographical area in
Nunavut which is under the control of the Kivalliq Inuit Association pursuant to
the Nunavut Land Claims Agreement with the Government of Canada. In order to
carry out mineral exploration in the Kivalliq administered area a land use
license must be obtained. On June 26, 2002 Felix Kaminsky obtained Land Use
License No. KVL 102B259 which authorizes prospecting to be carried out on the
KMD property.

Labor

Initially, we intend to use the services of
subcontractors for manual labor exploration work on our properties. Our only
technical assistants will be our officers and directors.

Employees and employment
agreements

We entered into two year employment contracts
effective July 1, 2006 with Robert Lipsett and Foo Chan, pursuant to which Mr.
Lipsett receives $6,000 per month as our President and Chief Executive Officer
and Foo Chan receives $2,500 per month as our Chief Financial Officer. The
employment contracts terminated upon the resignation of Robert Lipsett as Chief
Executive Officer and President and the resignation of Foo Chan as Chief
Financial Officer, effective December 20th, 2006.

We entered into a consulting agreement with Felix
Kaminsky, our exploration manager, dated June 1, 2004, which contract was
terminated by Dr. Kaminsky effective December 20th, 2006.

We are committed under management contracts with
Timothy Crowhurst, our President, for $5,000 per month and with Ming Wong, our
CFO, for $3,000 per month to December 2007.

We presently do not have pension, health, annuity,
insurance, stock options, profit sharing or similar benefit plans; however, we
may adopt plans in the future.

Private Placements

During the year ended June 30, 2007 we did not
carry out any private placement offerings.

Subsequent to the year ended June 30, 2007 we announced
  that we were proposing to carry out a private placement of 6,000,000 (post-consolidation)
  units at a price of $0.21 per unit, for total proceeds of $1,260,000. Each unit
  will consist of one common share and one share purchase warrant, entitling the
  holder thereof to purchase one additional common share at a price of $0.28,
  exercisable for a period of two years. A finders fee of 7% of the gross proceeds
  will be payable in shares. The private placement is subject to the approval
  of the TSX Venture Exchange.

-28-

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Organizational Structure

Not applicable.

Property, Plants and
Equipment

We are engaged in the exploration for diamonds and
have two active diamond exploration projects; the TCH Diamond Project in Ontario
and the KMD Project in Nunavut. Our objective is to locate and develop economic
diamond deposits.

Our TCH Project comprises approximately 143,300
hectares located in the Province of Ontario. The TCH Project is located in
north-central Ontario west of the town of Marathon, in the Walsh, Foxtrap Lake
and Killala Townships.

Our KMD Property comprises approximately 151,000
acres in an area undergoing active exploration by leading diamond exploration
companies. The KMD Property is located approximately 960 km east-northeast of
Yellowknife, NWT and approximately 770 km east of Canadas first producing
diamond mine, the Ekati mine, operated by BHP Minerals.

|ITEM 5. | OPERATING AND FINANCIAL REVIEW
      AND PROSPECTS
|------- | --------------------------------------------------

Managements Discussion and Analysis of
Financial Condition and Results of Operations

Results of Operations

We are a start-up, exploration stage company and
have not yet generated or realized any revenues from our business operations.

For the year ended June 30, 2007, we reported
interest income of $3,745 as compared to $1,990 for the period ended June 30,
2006. The interest was earned on our cash and cash equivalents held during the
year.

For the year ended June 30, 2007, we had net
losses of $288,041 ($0.01 per share) compared to net losses of $467,636 ($0.02
per share) for the year ended June 30, 2006. The loss in 2006 was primarily
attributable to stock-based compensation, filing fees, management fees,
professional fees and public and shareholder relations expenses, which was
offset by future income tax recovery in the amount of $121,164. The loss in 2007
was primarily attributable to professional fees, management fees, shareholder
communications and office and miscellaneous expenses.

During the fiscal year ended June 30, 2007 no
stock options were granted, and a total of 700,000 options expired. During the
fiscal year ended June 30, 2006 a total of 1,480,000 stock options were granted
to directors, officers and consultants, with exercise prices ranging between
$0.22 and $0.40 per share, with expiry of five years from the date of granting.
No options were exercised as of the year ended June 30, 2007 and June 30, 2006.

During the fiscal year ended no share purchase
warrants were issued, and a total of 1,644,567 warrants expired. During the
fiscal year ended June 30, 2006, 12,179,899 share purchase warrants were issued
as part of three private placements, with exercise prices ranging between $0.20
and $0.50 per share, with expiry dates ranging from September 27, 2006 and June
8, 2008. No share purchase warrants were exercised as of the year ended June 30,
2007 and June 30, 2006.

-29-

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Expenses for the fiscal year ended June 30, 2007
consisted of professional fees, management fees, shareholder communications,
office and miscellaneous, transfer agent fees and filing fees, interest and
other expenses that support our daily operations. Expenses for the year ended
June 30, 2007 were $291,786, being a decrease of $299,004, compared to general
and administrative expenses of $590,790 during the year ended June 30, 2006. The
major difference in the expenses for 2007 compared to 2006 was $183,750 in
stock-based compensation for the year ended June 30, 2006 and none for the
current year ended June 30, 2007.

The major expenses for the year ended June 30,
2007 were $106,987 for professional fees (2006: $119,839), management fees of
$68,360 (2006: $84,500), shareholder communications of $45,320 (2006: $87,118),
office and miscellaneous of $33,438 (2006: 50,012), transfer agent fees of
$13,716 (2006: $12,967), interest of $10,663 (2006: $Nil), filing fees of $8,890
(2006: $29,475), and travel and entertainment of $4,059 (2006: $5,608). The
reduced expenses in fiscal 2007 are all a result of our undergoing a transition
from the changes in management and a refocusing in our exploration projects.

Financing Activities

During the fiscal year ended June 30, 2007 we did
not carry out any financing activities. Subsequent to the year ended June 30,
2007 we announced a $1,260,000 private placement of 6,000,000
(post-consolidation) units at a price of $0.21 per unit. The private placement
is subject to the approval of the TSX Venture Exchange.

During the fiscal year ended June 30, 2006, we
completed several share offerings as follows:

On September 27, 2005, we completed a non-brokered
private placement of 622,466 units at $0.45 per unit. Each unit consisted of one
flow-through common share and one-half a share purchase warrant to purchase a
non-flow through common share until September 27, 2006 at $0.50 per share.

On January 24, 2006, we completed a non-brokered
private placement of 5,482,667 units at $0.15 per unit. Each unit consisted of
one common share and one share purchase warrant. 2,116,667 of the units
consisted of flow-through common shares and warrants to purchase non-flow
through common shares. Each whole warrant entitles the holder to acquire an
additional common share at a price of $0.20 per share until January 24, 2008.

During May and June 2006, we completed a brokered
and non-brokered placement of 6,385,999 units at $0.225 per unit. Each unit
consisted of one common share and one share purchase warrant. 1,627,778 of the
units consisted of flow-through common shares and warrants to purchase non-flow
through common shares. Each whole warrant entitles the holder to acquire an
additional common share at a price of $0.30 per share for a period of two years
from closing.

Operating Results

We recorded a net loss of $288,041 ($0.01 loss per
share) in 2007 compared to a net loss of $467,636 ($0.02 loss per share) in
2006. The loss in 2007 was primarily attributable to professional fees and
management fees, filing fees, and public and shareholder relations expenses.

We recorded a net loss of $467,636 ($0.02 loss per
share) in 2006 compared to a net loss of $921,040 ($0.05 loss per share) in
2005. The loss in 2006 was attributable to stock-based compensation, filing
fees, management fees, professional fees and public and shareholder relations
expenses.

During the year ended June 30, 2007, we increased
the carrying value of our mineral exploration properties in Canada to $5,002,997
from $4,881,420, representing an increase of $121,577. The fiscal 2007 major
exploration activities compared to fiscal 2006 were property acquisition and
staking costs in the amount of $79,000, compared to $584,187; assessment fees of
$18,525, compared to $Nil; geological costs in the amount

-30-

---

of $23,737, compared to $389,722; and supplies of
$315, compared to $1,500. During fiscal 2006, we incurred the following
additional expenses: camp costs in the amount of $25,252; data analysis in the
amount of $405,783; geophysics in the amount of $226,427; mapping in the amount
of $47,149; and mobilization and demobilization in the amount of
$16,000.

Liquidity and Capital Resources

Our operations consist of acquisition, maintenance
and exploration of mining properties, including actively seeking joint venture
partners to assist with exploration funding. We have no known mineral resources
and are not in commercial production on any of our properties and accordingly,
we do not generate cash from operations. Our financial success will be dependent
in the extent to which it can discover new mineral deposits. We finance
development and exploration activities by raising capital from equity markets
from time to time. We will require additional equity investment in the near
future to fund our exploration activities and for working capital.

As of September 30, 2007 we had a working capital
deficit of $58,879. Our 2008 exploration programs on our properties have yet to
be determined. We currently have sufficient funding to cover our basic
administrative costs for a period of four months. If we undertake any additional
exploration activities on our properties or acquire additional properties in the
future we may have to seek financing, most likely through the issuance of equity
securities.

Subsequent to the year ended June 30, 2007 we
announced that we were proposing to carry out a private placement of 6,000,000
(post-consolidation) units at a price of $0.21 per unit, for total proceeds of
$1,260,000. Each unit will consist of one common share and one share purchase
warrant, entitling the holder thereof to purchase one additional common share at
a price of $0.28, exercisable for a period of two years. A finders fee of 7% of
the gross proceeds will be payable in shares. The proceeds from the private
placement will be used to pursue exploration activities, retirement of debts and
working capital. Upon completion of the proposed private placement, we will have
sufficient funding to cover our basic administrative costs for over 12 months.
The private placement is subject to the approval of the TSX Venture Exchange.

As at June 30, 2007 we had cash, receivables and
prepaid expenses of $103,475, compared with 387,622 at June 30, 2006 and total
assets of $5,106,472 (2006: $5,269,042) and $125,433 (2005: $47,962) in payables
and accruals. We have no long-term debt.

During the year ended June 30, 2007 we did not
carry out any private placement financings. During the year ended June 30, 2006
we completed three private placements to raise an aggregate of $2,539,359. Our
cash position decreased from $373,721 at June 30, 2006 to $96,409 at June 30,
2007 as a result of administrative expenses and costs of our exploration
programs during fiscal 2007.

Related Party
Transactions

During the year ended June 30, 2007, we incurred
$100,160 (2006 - $96,500; 2005 - $114,000) in management and consulting services
rendered to certain officers and directors and $9,960 (2006 - $52,614; 2005 -
$33,632) in deferred mineral property expenditures to a company controlled by a
director and officer.

These transactions are in the normal course of
operations and are measured at the exchange amounts established and agreed to by
the related parties.

Outstanding Share
Data

On August 16, 2007 we received shareholder
approval by way of a special resolution for the consolidation of our share
capital on the basis of one new common share for every ten existing common
shares outstanding. As a

-31-

---

result, as at December 6, 2007 we had 3,651,568
post-consolidated common shares outstanding. We also had 198,000 incentive stock
options that are exercisable into an equivalent number of consolidated common
shares. In addition, there are 1,186,866 warrants outstanding that are
exercisable into an equivalent number of consolidated common shares.

Research and Development, Patents and
Licences, etc.

Not applicable.

Trend Information

Not applicable.

Off-Balance Sheet
Arrangements

We do not have any material off balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources.

Contractual
Obligations

Not applicable.

Safe Harbor

Not applicable.

|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT
      AND EMPLOYEES
|------- | ------------------------------------------------

Directors and Senior
Management

Our officers and directors are as follows:

Name
    Age
    PositionTimothy Crowhurst
      41
      President and Chief
        Executive OfficerGeorge Cavey, P.Geo.
    52
    Vice President of Exploration and
      DirectorWilliam Schmidt
      66
      DirectorMing Wong
    60
    Chief Financial Officer


|(1) | Robert Lipsett resigned as President and Chief Executive
      Officer and Foo Chan resigned as Chief Financial Officer on December
      20th, 2006.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

Each director holds office until our next annual
general meeting of shareholders or until his successor is duly elected or
appointed, unless his office is earlier vacated in accordance with our articles
or he becomes disqualified to act as a director. Officers serve at the
discretion of the board and as a practice are appointed each year at a board
meeting held following the annual general meeting.

Officers and
Directors

Our officers and directors are:

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Timothy Crowhurst, President and Chief Executive Officer.Mr. Crowhurst graduated from the Universit de Nice, France, with a Certificat pratique de langue
  francaise in 1986. Mr. Crowhurst is President of Sea Level Communications Ltd., a strategic planning and issue management consultancy. Prior to establishing Sea Level Communications Ltd. in 1993, he served as a senior policy and communications
  advisor to several Canadian Cabinet Ministers. Mr. Crowhurst is a senior-level business and public policy communicator in the areas of international trade and political affairs, environmental issues management, product branding, and the development
  and implementation of strategic communications initiatives. He will spend approximately 25% of his time on our affairs.

George Cavey, P.Geo., Director, Vice-President Exploration.  Mr. Cavey graduated from the University of British Columbia with a Bachelor of Science in 1976.  He is the President of OreQuest Consultants Ltd., a
  Vancouver geological consulting company established in 1982. Mr. Cavey serves on the Canadian Securities Administrators Mining Advisory Committee and has been a councillor of the Association of Professional Engineers and Geoscientists of British
  Columbia. He is the former President of the Canadian Council of Professional Geologists. He will spend approximately 20% of his time on our affairs.

William Schmidt, Director. Mr. Schmidt is a Barrister and Solicitor with the firm of Hemsworth Schmidt in Vancouver, BC since 1971 (his principal business) and has practiced securities law since 1972. He is a
  director of Lignol Energy Corp., Exchequer Resource Corp., Bold Ventures Inc. and San Marco Resources Inc., Secretary of Equus Energy Corp. and CFO of Carat Exploration Inc. and Academy Ventures Inc.; former Chief Financial Officer and director of
  Storm Cat Energy Corp., former director of Vault Minerals Inc.  He is a former director and officer of several other public companies since 1971. He has a Bachelor of Arts Degree (1966) and Bachelor of Law Degree (1969) from the University of
  British Columbia. Mr. Schmidt will spend approximately 5% of his time on our business.

Ming Wong, Chief Financial Officer. Mr. Wong holds a Ph.D. (Biochemistry) obtained from the University of British Columbia in 1973 and a B.Sc. in Biological Chemistry (1969) from Simon Fraser University. Mr.
  Wong has been with Zoloto Resources Ltd. (TSXV  ZR), involved in the exploration of mineral properties in British Columbia and the acquisition and development of gold prospects in the Chukotka and Irkutsk regions of Russia, as administrator
  since December 2003. He has also been the administrator for Saturn Minerals Inc. (TSXV  SMI), involved in exploring a number of mineral properties in British Columbia, since August, 2001 and has been a director and the chief financial officer
  since December 1, 2005 for Westminster Resources Ltd. Mr. Wong will spend approximately 15% of his time on our business.

Pursuant to the provisions of theBusiness Corporations Act(British Columbia), we are required to have an audit committee.  The general functions of the audit committee are to review the
  overall audit plan and our system of internal controls, to review the results of the external audit and to resolve any potential dispute with our auditors. Our audit committee currently consists of Timothy Crowhurst, George Cavey and William
  Schmidt.  The Board of Directors has not appointed a compensation committee.

Conflicts Of Interest

Our directors and officers are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors of conflicts of interest and we will rely upon such laws
  in respect of any directors' and officers' conflicts of interest or in respect of any breaches of duty by any of our directors or officers.  All suchconflicts will be disclosed by such directors or
  officers in accordance with the British ColumbiaBusiness
    Corporations Act(BCBCA), and they will govern themselves in
      respect thereof to the best of their ability in accordance with the obligations
  imposed upon them by law.

All of our directors are also directors, officers
  or shareholders of other companies that are engaged in the business of
  acquiring, developing and exploiting natural resource properties including
  properties in countries where we are conducting our operations. Such
  associations may give rise to conflicts of interest from time to

-33-

---

time. Such a conflict poses the risk that we may
enter into a transaction on terms which place us in a worse position than if no
conflict existed. Our directors are required by law to act honestly and in good
faith with a view to our best interests and to disclose any interest which they
may have in any project or opportunity of the company. However, each director
has a similar obligation to other companies for which such director serves as an
officer or director. We have no specific internal policy governing conflicts of
interest.

The following table identifies, as of December 6,
2007, the name of each officer and director and any company (i) which employs
such officer or director, (ii) for which such officer or director currently
serves as an officer or director, or (iii) which is affiliated with such officer
or director:

Name
    CompanyTimothy Crowhurst
    Lignol Energy CorporationGeorge Cavey
    Icon Industries LimitedOrex Ventures Inc.Orko Gold CorporationPrimary Metals Inc.Staccato Gold Resources
      Ltd.Superior Mining International
      CorporationTri-Gold Resources Corp.William Schmidt
    Academy Ventures Inc.Bold Ventures Inc.Carat Exploration Ltd.Equus Energy CorporationExchequer Resource Corp.Lignol Energy CorporationSan Marco Resources Inc.Ming Wong
    Swift Resources Inc.Westminster Resources Ltd.


Executive Compensation

The following table sets forth the compensation
paid by us during the year ended June 30, 2007 to each of our officers and
directors. This information includes the dollar value of base salaries, bonus
awards and number of stock options granted. Except as set out below, during the
year ended June 30, 2007, no payments have been made, directly or indirectly, by
us to our directors and officers or any parties related to them.

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---

Summary Compensation Table

|                       |         |  | Annual Compensation |  |            |  | Long Term Compensation |  |            | 
|---------------------- | ------- |  | ------------------- |  | ---------- |  | ---------------------- |  | ---------- | 
|                       |         |  |                     |  |            |  |                        |  |            | 
|                       |         |  |                     |  |            |  |                        |  | Awards     | 
|                       |         |  |                     |  |            |  |                        |  | Securities | 
|                       |         |  |                     |  |            |  |                        |  | Under      | 
|                       |         |  |                     |  |            |  | Other                  |  | Options/   | 
|                       |         |  |                     |  |            |  | Annual                 |  | SARs       | 
|Name and Principal     | Year    |  | Salary              |  | **Bonus**  |  | Compensation           |  | Granted    | 
|And Position           | Ended   |  | (CDN$)              |  | **(CDN$)** |  | (CDN$)                 |  | (#) (2)    | 
|                       |         |  |                     |  |            |  |                        |  |            | 
|Timothy Crowhurst      | 6/30/07 |  | $30,000             |  | Nil        |  | Nil                    |  | Nil        | 
|Director               | 6/30/06 |  | -0-                 |  | Nil        |  | Nil                    |  | Nil        | 
|                       | 6/30/05 |  | -0-                 |  | Nil        |  | Nil                    |  | 30,000     | 
|                       |         |  |                     |  |            |  |                        |  |            | 
|George Cavey           | 6/30/07 |  | -0-                 |  | Nil        |  | Nil                    |  | Nil        | 
|Vice-President and     | 6/30/06 |  | -0-                 |  | Nil        |  | Nil                    |  | 5,000      | 
|Director               | 6/30/05 |  | -0-                 |  | Nil        |  | Nil                    |  | 10,000     | 
|                       |         |  |                     |  |            |  |                        |  |            | 
|William Schmidt        | 6/30/07 |  | -0-                 |  | Nil        |  | Nil                    |  | Nil        | 
|Director               | 6/30/06 |  | N/A                 |  | N/A        |  | N/A                    |  | N/A        | 
|                       | 6/30/05 |  | N/A                 |  | N/A        |  | N/A                    |  | N/A        | 
|                       |         |  |                     |  |            |  |                        |  |            | 
|Ming Wong              | 6/30/07 |  | $19,160             |  | Nil        |  | Nil                    |  | Nil        | 
|CFO                    | 6/30/06 |  | N/A                 |  | N/A        |  | N/A                    |  | N/A        | 
|                       | 6/30/05 |  | N/A                 |  | N/A        |  | N/A                    |  | N/A        | 
|                       |         |  |                     |  |            |  |                        |  |            | 
|Robert Lipsett (1)     | 6/30/07 |  | $36,000             |  | Nil        |  | Nil                    |  | Nil        | 
|Former President and   | 6/30/06 |  | $72,000             |  | Nil        |  | Nil                    |  | 8,000      | 
|Director               | 6/30/05 |  | $72,000             |  | Nil        |  | Nil                    |  | 30,000     | 
|                       |         |  |                     |  |            |  |                        |  |            | 
|Foo Chan (1)           | 6/30/07 |  | $15,000             |  | Nil        |  | Nil                    |  | Nil        | 
|Former CFO             | 6/30/06 |  | $12,000             |  | Nil        |  | Nil                    |  | 20,000     | 
|                       | 6/30/05 |  | $12,000             |  | Nil        |  | Nil                    |  | 10,000     | 
|                       |         |  |                     |  |            |  |                        |  |            | 
|Dr. Felix Kaminsky (1) | 6/30/07 |  | -0-                 |  | Nil        |  | Nil                    |  | Nil        | 
|Former Exploration     | 6/30/06 |  | -0-                 |  | Nil        |  | Nil                    |  | Nil        | 
|Manager                | 6/30/05 |  | -0-                 |  | Nil        |  | Nil                    |  | 25,000     | 

|(1) | Robert Lipsett resigned as President
        and Chief Executive Officer and Foo Chan resigned as Chief Financial Officer
        on December 20, 2006. Dr. Felix Kaminsky resigned as Exploration Manager
        effective December 20, 2006.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                
|(2) | Post-consolidation on the basis of one
        new share for ten old shares.                                                                                                                                                                   

On July 1, 2006, we entered into employment
contracts with each of Robert Lipsett and Foo Chan, whereby Mr. Lipsett is paid
$6,000 per month as our President and Chief Executive Officer and Mr. Chan is
paid $2,500 per month as our Chief Financial Officer. Both employment contracts
terminated on December 20th,
2006 when Mr. Lipsett resigned as President and Chief Executive Officer and Foo
Chan resigned as Chief Financial Officer.

We are committed under management contracts with
Timothy Crowhurst, our President, for $5,000 per month and with Ming Wong, our
CFO, for $3,000 per month to December 2007.

George Cavey is the principal of Orequest
Consultants Ltd. Orequest Consultants Ltd. was paid a total of $9,960 during the
year ended June 30, 2007.

Long-term Incentive Plans

Other than through the grant of incentive stock
options and management contracts, we do not have a long-term incentive plan for
compensating our directors or officers.

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Pension Plan

We do not provide retirement benefits for our
directors or executive officers.

Options and Stock Appreciation Rights
(SARs)

There were no options granted to the named
executive officers and directors during the year ended June 30, 2007 or
subsequent thereto to the date of this report:

Aggregate Option/SAR Exercises During the
Most Recently Completed Financial Year and Financial Year Option/SAR Values

During the most recently completed year ended June
30, 2007, no stock options were exercised by the executive officers.

Termination of Employment or Change of
Control

We did not have a plan or arrangement for
compensation received or that may be received by either Mr. Crowhurst or Mr.
Wong in the financial year ended June 30, 2007 or in the current financial year
to compensate them in the event of the termination of employment (resignation,
retirement, change of control) or in the event of a change in responsibilities
following a change in control.

Compensation of Directors

Since our inception, our directors have not
received fees for attendance of board meetings or other cash compensation in
their capacity as directors. The directors may be reimbursed for actual expenses
reasonably incurred in connection with the performance of their duties as
directors. Directors are also eligible to receive incentive stock options to
purchase common shares.

Board Practices

Our Board of Directors is elected at the annual
general meetings of our shareholders. Each director elected will hold office
until the next annual meeting, or until his successor is duly elected or
appointed, unless his office is earlier vacated in accordance with theBusiness Corporations Act(British Columbia).

We have no director's service
contracts.

Audit Committee

Our audit committee is comprised of Timothy
Crowhurst, George Cavey, and William Schmidt. Members of the audit committee
oversee our accounting and financial reporting process and the audits of our
financial statements. The audit committee also receives and addresses complaints
regarding accounting, internal controls, and auditing issues. No complaints have
been received by the audit committee as of the date hereof. Further, the audit
committee provides protection for whistle blowers. No whistle blowing issues
have presented themselves as of the date hereof. The audit committee functions
in a collective manner with respect to all issues that come before it.

At their first meeting following each annual
general meeting, the directors must elect an audit committee consisting of no
fewer than three directors, of whom a majority must not be officers or
employees, to hold office until the next annual general meeting.

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Before a financial statement that is to be
submitted to an annual general meeting is considered by the directors, it must
be submitted to the audit committee for review with the auditor, and the report
of the audit committee on the financial statements must be submitted to the
directors thereafter.

Employees

We have no employees other than our officers and
directors.

Share Ownership

The following table sets forth the common share
ownership of each of our officers and directors. Each person has sole voting and
investment power with respect to the shares of common stock shown, and all
ownership is of record and beneficial.

|                         | Number of    |                              | Percentage of     
|------------------------ | ------------ | ---------------------------- | ------------------
|                         | Common       |                              | Outstanding Common
|Name                     | Shares Owned | Positions                    | Shares[1]         
|Timothy Crowhurst[2]     | 247,000      | President and
      Director | 6.66%             
|George Cavey[3]          | 123,500      | Vice-President and Director  | 3.33%             
|William Schmidt          | Nil          | Director                     | N/A               
|Ming Wong                | Nil          | Chief Financial Officer      | N/A               
|ALL DIRECTORS AND        |              |                              |                   
|SENIOR OFFICERS AS
    A | 370,500      |                              | 9.99%             
|GROUP (4 persons)        |              |                              |                   

|[1] | Based on post-consolidation issued and outstanding share
      capital of 3,651,568 as of December 6, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|[2] | Included in Timothy Crowhursts
        shareholdings is an incentive stock option to purchase up to 30,000 common
        shares at a price of $4.00 per share, exercisable on or before September
        21, 2009.                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|[3] | Included in George Caveys shareholdings
        is: (i) an incentive stock option to purchase up to 10,000 common shares
        at a price of $4.00 per share, exercisable on or before September 21,
        2009; (ii) an incentive stock option to purchase up to 5,000 common shares
        at a price of $2.50 per share, exercisable on or before January 25, 2011;
        and (iii) 10,000 share purchase warrants to purchase 10,000 common shares
        at a price of $3.00 per share, exercisable on or before April 25, 2008.

Options and Other Rights to Purchase
Securities

We are permitted to grant up to 10% of our issued
and outstanding shares for issuance to directors, senior officers and key
employees and consultants at prices set in accordance with the policies of the
TSX Venture Exchange pursuant to our 2006 Stock Option Plan. At our last annual
meeting of shareholders held on December 20th, 2006, the shareholders approved our 2006
Stock Option Plan. Pursuant to the policies of the TSX Venture Exchange, we must
seek shareholder approval to our plan at each annual meeting. Options are
typically exercisable for a period of up to 5 years and terminate within 90 days
of the optionee ceasing to be in a qualifying relationship with the
company.

As of June 30, 2007, we had issued 1,980,000
(pre-consolidation) incentive stock options to purchase shares of our common
stock as follows:

|                                   |                           | No. of Securities | Exercise  |                
|---------------------------------- | ------------------------- | ----------------- | --------- | ---------------
|                                   | Designation of Securities | to be Acquired    | Price Per |                
|Option Holders                     | Under Option              | Upon Exercise     | Share     | Expiry Date    
|                                   |                           |                   |           |                
|Executive Officers (three persons) | Common Shares             | 500,000           | $0.40     | January 6, 2010

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|                                 |                           | No. of Securities   | Exercise  |                         
|-------------------------------- | ------------------------- | ------------------- | --------- | ------------------------
|                                 | Designation of Securities | to be Acquired      | Price Per |                         
|Option
      Holders             | Under
      Option        | Upon
      Exercise | Share     | Expiry
      Date       
|                                 |                           | 150,000             | $0.40     | September 21, 2010      
|                                 |                           | 180,000             | $0.25     | January
      25, 2011  
|Directors who are not Executive  | Common Shares             | 300,000             | $0.40     | January 6, 2010         
|Officers                         |                           |                     |           |                         
|                                 |                           | 300,000             | $0.25     | January 25, 2011        
|All other employees or past      |                           |                     |           |                         
|employees as a
      group       | Common Shares             | Nil                 | $0.00     | N/A                     
|All consultants
      as a group | Common
      Shares       | 250,000             | $0.40     | January
      6, 2010   
|                                 |                           | 150,000             | $0.40     | March 15, 2010          
|                                 |                           | 150,000             | $0.40     | September
      21, 2010

Escrowed Securities

As of June 30, 2007, Pacific Corporate Trust
Company (the "Escrow Agent")
holds 300,000 of our (post-consolidation) common shares in escrow pursuant to
the terms and conditions of an escrow agreement dated June 16, 2004 (the
"Escrow Agreement"). The escrow
restrictions provide that the Escrowed Securities may not be traded in, dealt
with in any manner whatsoever or released, nor may we, our transfer agent or the
escrow holders make any transfer or record any trading of the Escrowed
Securities without the consent of the TSX Venture Exchange.

|Designation of Class | Number of Securities Held in Escrow | Percentage of Class(1)
|-------------------- | ----------------------------------- | ----------------------
|Common Shares        | 300,000                             | 8.22%                 

|[1] | Based on an issued and outstanding share capital of
      3,651,568 as of the date of December 6, 2007.
|--- | -------------------------------------------------------------------------------------------------------
|    |                                                                                                        
|[2] | The Escrowed Securities are held as follows:                                                           

|Name                | No. of Shares Held in Escrow | Percentage of Escrow
|------------------- | ---------------------------- | --------------------
|Robert Lipsett      | 177,000                      | 59.0%               
|Christopher Pollard | 30,000                       | 10.0%               
|George Cavey        | 30,000                       | 10.0%               
|Timothy Crowhurst   | 30,000                       | 10.0%               
|Foo Chan            | 4,500                        | 1.5%                
|Bud Kanke           | 4,500                        | 1.5%                
|Steve Stares        | 9,000                        | 3.0%                
|Greg Hryhorchuk     | 9,000                        | 3.0%                
|Gordon Smith        | 6,000                        | 2.0%                

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Under National Policy 46  201 Escrow for Initial Public Offerings, securities
held by Principals (as defined below) are required to be held in escrow in
accordance with the national escrow regime applicable to initial public
distributions. Equity securities owned or controlled by Principals are subject
to the escrow requirements.

A Principal is defined as:

|(a) | our directors and senior officers or
        of any of our material operating subsidiary of us, as listed in our prospectus;                                                                                                                                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                        
|(b) | our promoters during the two years preceding
        our offering;                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                        
|(c) | those who own and/or control more than
        10% of our voting securities immediately before and immediately after
        completion of our offering if they also have elected or appointed or have
        the right to elect or appoint a director or senior officer of us or of
        a material operating subsidiary of ours;
|    |                                                                                                                                                                                                                                                                                                                                        
|(d) | those who own and/or control more than
        20% of our voting securities immediately before and immediately after
        completion of our offering; and                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                        
|(e) | associates and affiliates of any of
        the above.                                                                                                                                                                                                                                                                                 

Our principals are our directors and senior
officers or former directors and senior officers.

Pursuant to the Escrow Agreement, the Principals
agreed to deposit in escrow their Escrowed Securities with the Escrow Agent. The
Escrow Agreement provides that the Escrowed Securities will be released from
escrow in equal tranches at six month intervals over the 36 months following the
issue of the final receipt for our prospectus (that is 15% of each Principals
holdings being released in each tranche with an initial 10% tranche being
released on the date our securities are listed on the TSX Venture Exchange,
being January 7, 2005).

We are an emerging
issuer as defined in Canadian National Policy 46 - 201
and if we achieve established issuer status during the term of the Escrow Agreement, we will
graduate resulting in a
catch-up release and an accelerated release of any securities remaining in
escrow under the 18 month schedule applicable to established issuers as if we
had originally been classified as an established issuer.

Pursuant to the terms of the Escrow Agreement, the
securities held in escrow may not be transferred or otherwise dealt with during
the term of the Escrow Agreement unless the transfers or dealings with escrow
are:

|(a) | transfers to continuing or, upon their
        appointment, incoming directors and senior officers of us or of a material
        operating subsidiary, with approval of our board of directors;                                                                                                                                                                                                                                                                                                                     
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(b) | transfers to an RRSP or similar trustee
        plan provided that the only beneficiaries are the transferor or the transferors
        spouse or children;                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(c) | transfers upon bankruptcy to the trustee in bankruptcy;
      and                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(d) | pledges to a financial institution as
        collateral for a bona fide loan, provided that upon a realization the
        securities remain subject to escrow. Tenders of Escrowed Securities to
        a take-over bid are permitted provided that, if the tenderer is a Principal
        of our successor upon completion of the take-over bid, securities received
        in exchange for tendered Escrowed Securities are substituted in escrow
        on the basis of our successor escrow classification.

-39-

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The TSX Venture Exchange
  may approve an accelerated release schedule if we, after listing, meet Tier
  1 issuer listing requirements. Escrow agreements, in the form prescribed by
  the TSX Venture Exchange, restrict the sale, assignment, hypothecation and transfer
  of all escrowed shares without the prior written consent of the TSX Venture
  Exchange. TSX Venture Exchange policy provides that it will generally only permit
  a transfer of our escrowed shares to incoming principals. In the event of the
  bankruptcy or death of a holder of Escrowed Securities, the Escrow Agent, with
  written notification to the TSX Venture Exchange, may transmit such holders
  Escrowed Securities to the trustee in bankruptcy, executor, administrator or
  such other person as is legally entitled to become the registered owner of the
  Escrowed Securities. Escrowed Securities that are transferred to a trustee in
  bankruptcy will remain in escrow subject to the applicable Escrow Agreement.
  Escrowed Securities transferred upon death will be released from escrow to the
  applicable legal representative unless the TSX Venture Exchange objects.

Warrants

As of June 30, 2007, the following transferable
(pre-consolidation) common share purchase warrants were outstanding:

|(a) | 5,482,667 warrants to purchase up to
        5,482,667 common shares at a price of $0.20 per share, exercisable on
        or before January 24, 2008, issued as part of a non-brokered private placement
        of 5,482,667 units issued at a price of $0.15 per unit;       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                 
|(b) | 5,585,999 warrants to purchase up to
        5,585,999 common shares at a price of $0.30 per share, exercisable on
        or before May 18, 2008, issued as part of a brokered and non-brokered
        private placement of 6,385,999 units at a price of $0.225 per unit; and
|    |                                                                                                                                                                                                                                                                                 
|(c) | 800,000 warrants to purchase up to 800,000
        common shares at a price of $0.30 per share, exercisable on or before
        June 8, 2008, issued as part of a brokered and non-brokered private placement
        of 6,385,999 units at a price of $0.225 per unit.        

As of December 6, 2007, our directors and
officers, as a group (4 persons), held warrants to purchase 10,000
(post-consolidation) shares of our common stock.

There are no assurances that the option or
warrants described above will be exercised in whole or in part.

|ITEM 7. | MAJOR SHAREHOLDERS AND RELATED
      PARTY TRANSACTIONS
|------- | -------------------------------------------------------

As of the date of this report, there are no
persons known to us that have direct or indirect beneficial ownership of,
control or direction over, or a combination of direct or indirect beneficial
ownership of and control or direction over, voting securities that will
constitute more than 10% of any class of such securities except for Robert
Lipsett, our former President and Chief Executive Officer, who holds 435,000
(post-consolidation) common shares, being 11.23% of the shares
outstanding.

The following table sets forth the common share
ownership of each person known by us to be the beneficial owner of five percent
or more of our common shares. Each person has sole voting and investment power
with respect to the shares of common stock shown, and all ownership is of record
and beneficial.

-40-

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|                                        |                   |                                          |                   
|--------------------------------------- | ----------------- | ---------------------------------------- | ------------------
|Name of Shareholder                     | **Number** **of** | Position                                 | **% of Class** (1)
|                                        | Shares            |                                          |                   
|Robert Lipsett(2)(3)                    | 435,000           | Former President, CEO and
      Director | 11.23%            
|Richard Genovese(4)                     | 346,833           | 5% shareholder                           | 8.95%             
|Timothy Crowhurst(5)                    | 247,000           | President and Director                   | 6.38%             
|Firebird Global Master Fund,
      Ltd. | 222,223           | 5% shareholder                           | 5.73%             

|(1) | Based on a post-consolidation issued
        and outstanding share capital of 3,651,568 as of the date of December
        6, 2007.                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                 
|(2) | Robert Lipsett resigned as President
        and Chief Executive Officer on December 20, 2006.                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                 
|(3) | Included in Robert Lipsetts shareholdings
        is: (i) 25,000 share purchase warrants to purchase 25,000 common shares
        at a price of $2.00 per share, exercisable on or before January 25, 2008;
        and (ii) 100,000 share purchase warrants to purchase 100,000 common shares
        at a price of $3.00 per share on or before May 18, 2008.
|    |                                                                                                                                                                                                                                                                                                                                                                 
|(4) | Included in Richard Genoveses
        shareholdings is 66,666 share purchase warrants to purchase 66,666 common
        shares at a price of $2.00per share, exercisable on or before January
        25, 2008.                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                 
|(5) | Included in Timothy Crowhursts
        shareholdings is an incentive stock option to purchase up to 30,000 common
        shares at a price of $4.00 per share, exercisable on or before September
        21, 2009.                                                                                                                                           

All of our shares, both issued and unissued, are
common shares of the same class and rank equally as to dividends, voting powers
and participation of powers. Accordingly, there are no special voting powers
held by our major shareholders.

As of the date of this registration statement, the
aggregate number of shares of common stock beneficially owned, directly or
indirectly, by our directors and senior officers as a group is 1,985,000 common
shares, representing 5.44% of our total issued and outstanding common shares.
Beneficial ownership means sole
or shared power to vote or direct the voting of the common shares, or the sole
or shared power to dispose, or direct a disposition, of the common shares. More
than one person may be deemed to have beneficial ownership of the same
securities.

Change of Control

As of the date of this Form 20-F Annual Report,
there are no arrangements known to us which may at a subsequent date result in a
change of control.

Related Party
Transactions

Other than as disclosed herein, our officers,
directors and principal shareholders, or any of our associates or affiliates,
have not participated in and have no other interest, direct or indirect, in any
material transactions in which we have participated, or in any proposed
transaction which has materially affected or will materially affect our company
during the year ended June 30, 2007.

Pursuant to an agreement dated as of the
11thof May, 2004, with KMD,
we were granted the KMD Option to purchase a 100% interest in the KMD Property.
KMD is a company wholly-owned by Felix Kaminsky who was appointed as our
exploration manager and subsequently resigned effective December
20th, 2006.

We were organized to acquire and exploit the
diamond property interests. Incidental to such acquisition two of our directors
advanced loans totaling $71,620, which loans were repaid without interest during
January 2005.

-41-

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During the year ended June 30, 2007 we incurred
$100,160 (2006: $96,500; 2005: $114,000) in management and consulting services
rendered by directors and officers and $9,960 (2006: $52,614; 2005: $33,632) in
deferred mineral property expenditures to a company controlled by an officer and
director.

These transactions are in the normal course of
operations and are measured at the exchange amounts established and agreed to by
the related parties.

There are no additional interests of management in
transactions involving our company except for those stated in the Notes to the
Financial Statements.

Indebtedness of Directors, Officers,
Promoters and Other Management

During the fiscal years ended June 30, 2007, 2006,
2005, none of the following were indebted to us:

|(a) | enterprises that directly or indirectly
        through one or more intermediaries, control or are controlled by, or are
        under common control with, the company;                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                       
|(b) | associates;                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                       
|(c) | individuals owning, directly or indirectly,
        an interest in the voting power of the company that gives them significant
        influence over the company, and close members of any such individuals'
        family;         
|    |                                                                                                                                                                                                                                       
|(d) | key management personnel and close members
        of such individuals' families; or                                                                                                                                                  
|    |                                                                                                                                                                                                                                       
|(e) | enterprises in which a substantial interest
        in the voting power is owned, directly or indirectly, by any person described
        in (c) or (d) or over which such a person is able to exercise significant
        influence.

Interests of Experts and
Counsel

Not applicable

|ITEM 8. | FINANCIAL
      INFORMATION
|------- | ---------------------------

Statements and Other Financial
Information

See Item 17.

Legal Proceedings

In November 2006, the Optionor of the KMD Property
gave notice of default to us with respect to the Option Agreement, alleging that
we had failed to carry out required work programs on the KMD Property. We denied
the alleged default. We gave notice to the Optionor on or about December 11,
2006 that we were exercising our option and acquiring 100% of the KMD Property,
subject to a royalty in favour of the Optionor equal to 3% of gross revenue
received from the sale of diamonds from the KMD Property as stipulated in the
Option Agreement. At that time, we forwarded 400,000 common shares
(pre-consolidation) to the Optionor, which we consider constituted full payment
to the Optionor for the right to exercise the option for 100% of the KMD Project
(taken in conjunction with other, previous payments). However, the Optionor
returned these shares, which are at present held in trust by our solicitors, and
asserted that the exercise of the option by us was invalid. The Optionor has not
transferred the KMD Property to us and has taken the position that the Option
Agreement has terminated without proper exercise by us. Our position is that we
had completed, under the explicit direction and supervision of the Optionors
sole principal, the work programs required to satisfy the Option
Agreement

-42-

---

In October 2007 we initiated legal proceedings in
BC Supreme Court seeking an order of specific performance, to require the
Optionor of the KMD Project to transfer the Properties to us, along with certain
contiguous properties, as well as for damages, costs, and other relief.

Except for the foregoing, no material legal
proceedings to which we are a party are pending nor are any known to be
contemplated and we know of no legal proceedings pending or threatened, or
judgments entered against, any of our officers or directors in their capacities
as such.

Dividends

No dividend has been paid on our common shares
since inception, and none is contemplated in the foreseeable future.

Significant Changes

There have been no significant changes since the
date of our annual financial statements or since the date of our most recent
interim financial statements.

|ITEM 9. | THE OFFER AND
      LISTING
|------- | ---------------------------

Listing Details

Our shares began trading on the TSX Venture
Exchange under the symbol RLD
on January 7, 2005. Effective October 11, 2007 we commenced trading on a
post-consolidation basis under the trading symbol DSH. The following table discloses the annual
high and low sales prices in Canadian dollars for our common shares for the most
recent financial year as traded on the TSX Venture Exchange:

|Year | High | Low 
|---- | ---- | ----
|     | $    | $   
|2007 | 0.32 | 0.08
|2006 | 0.35 | 0.26
|2005 | 0.45 | 0.18

The following table discloses the high and low
sales prices in Canadian dollars for our common shares for each quarterly period
during the past fiscal year:

Quarter Ended
      High
      Low$
      $June 30, 2007
      0.15
      0.08March 30, 2007
      0.19
      0.11December 31, 2006
      0.15
      0.10September 30, 2006
      0.19
      0.105June 30, 2006
      0.32
      0.175March 30, 2006
      0.42
      0.20December 31, 2005
      0.38
      0.17September 30, 2005
      0.45
      0.30June 30, 2005
      0.75
      0.40


-43-

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The following table discloses the monthly high and
low sales prices in Canadian dollars for our common shares for the most recent
six months as traded on the TSX Venture Exchange:

|Month           | High    | Low     
|--------------- | ------- | --------
|                | $       | $       
|November 2007   | 0.65(1) | 0.415(1)
|October 2007(1) | 0.80(1) | 0.035   
|September 2007  | 0.05    | 0.045   
|August 2007     | 0.06    | 0.045   
|July 2007       | 0.08    | 0.05    
|June 2007       | 0.10    | 0.08    

|(1) | Post-consolidation, whereby our common
      share capital was consolidated on the basis of one new share for every ten
      common shares, effective October 10, 2007.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The source for the above information is the TSX
Venture Exchange. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions.

The following table discloses the monthly high and
low sales prices in US dollars for our common shares for the most recent six
months as traded on the OTC BB:

|Month          | High      | Low      
|-------------- | --------- | ---------
|               | $         | $        
|November 2007  | 0.201(1)  | 0.20(1)  
|October 2007   | 0.60(1)   | $0.40    
|September 2007 | No trades | No trades
|August 2007    | $0.55     | $0.55    
|July 2007      | $0.71     | $0.50    
|June 2007      | $1.00     | $0.90    

|(1) | Post-consolidation, whereby our common share capital was
      consolidated on the basis of one new share for every ten common shares,
      effective October 10, 2007.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Holders

As of December 6, 2007, there were 3,651,568
shares of our common stock (without par value) issued and outstanding. Our
stockholder list as provided by Pacific Corporate Trust Company, our registrar
and transfer agent, indicated that we had 51 registered stockholders owning our
common stock, of which 5 (9.80%) of these registered stockholders are residents
of the United States, owning 235,030 (6.44%) of the shares issued and
outstanding.

Markets

Our common shares are listed on the TSX Venture
Exchange under the trading symbol DSH. There are currently no restrictions on the transferability of these
shares under Canadian securities laws. We also trade on the OTC BB under the
trading symbol DSHRF.

-44-

---

As a foreign private issuer, we will not be
subject to the reporting obligations of the proxy rules of the Section 14 of theSecurities Exchange Act of 1934or the insider short-swing profit rules of Section 16 of theSecurities Exchange Act of 1934.

Selling Shareholders

Not applicable.

Dilution

Not applicable

Expenses of the Issue

Not applicable

|ITEM 10. | ADDITIONAL
      INFORMATION
|-------- | ----------------------------

Share Capital

Not applicable.

Memorandum and Articles of
Incorporation

Our Articles are incorporated by reference to the
information in our registration statement on Form 20-F filed with the Securities
and Exchange Commission, in Washington, D.C. on April 4, 2004, to which our
Memorandum and Articles were filed as exhibits.

On March 29, 2004, theCompany Act(British Columbia) (the
Corporation Act) was replaced
by theBusiness Corporations Act(British Columbia) (the BCBCA). Accordingly, we are now subject to the BCBCA and are no longer
governed by the Company Act. There are a number of differences under the BCBCA,
which differences are designed to provide greater flexibility and efficiency for
British Columbia companies.

Under the BCBCA, every company incorporated under
the Company Act must complete a mandatory transition rollover under the BCBCA to
substitute a Notice of Articles for its Memorandum within two years of March 29,
2004. The only information contained in the Notice of Articles is the authorized
share structure of the company, the name of the company, the address of the
registered and records office of the company, and the names and addresses of the
directors of the company. A copy of the Transition Application and Notice of
Articles as filed with the Registrar of Companies for British Columbia is
attached to this Form 20-F as Exhibit 1.2.

As a pre-existing Corporation under the
Corporation Act, we are subject to provisions contained in the BCBCA known as
the Pre-Existing Corporation Provisions. The Pre-Existing Corporation Provisions are statutory provisions
intended to preserve certain provisions of the Company Act to companies
incorporated under the Company Act. Under the BCBCA, we have the option to
replace the Pre-Existing Corporation Provisions with a new form of Articles to
take advantage of the benefits of the BCBCA, provided the shareholders approve
the change.

As a public company the only significant provision
of the Pre-Existing Corporation Provisions that would apply to us is the
requirement under the Company Act that three-quarters of the votes cast at a
general meeting must vote in favour of a proposed special resolution in order
for the resolution to be passed. Under the BCBCA, the level of approval for
special resolutions is reduced to two-thirds of the votes cast at a general
meeting, which is

-45-

---

consistent with the corporate statutes in other
Canadian jurisdictions. Management considers the two-thirds approval threshold
to be appropriate for fundamental changes requiring approval by special
resolution.

Accordingly, at our annual meeting held on
February 8, 2006, our shareholders approved a special resolution to alter the
Notice of Articles to remove the application of the Pre-Existing Corporation
Provisions. A copy of the Notice of Alteration is attached to this Form 20-F as
Exhibit 1.3.

In addition to deleting the Pre-Existing
Corporation Provisions, our Board of Directors were also of the view that it
would be in our best interest to adopt a new set of Articles (the
New Articles) to replace our
Articles (the Old Articles).
The New Articles reflect the flexibility and efficiency permitted under the
BCBCA, while maintaining a significant portion of the existing governing
provisions. As a result, most of the changes in the New Articles are minor in
nature, and are not substantive changes.

Material Contracts

There are no material contracts except as
discussed in this registration statement. The following material contracts and
all engineering or geological reports referred to in this registration statement
may be inspected at our office at Suite 1500, 701 West Georgia Street,
Vancouver, British Columbia, Canada V7Y 1C6, during normal business
hours.

|Exhibit No. | Description                                                                                                                                                                                                                                                                 
|----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1         | Option agreement
      with Russell Renner, James Bond and Rudolph Wahl dated as of the 18th
      of March, 2004;                                                                                                                                                          
|4.2         | Option agreement with John E.
      Ternowesky, Eugene Belisle and Noel Belisle dated as of the 19th
      of March, 2004;                                                                                                                                                  
|4.3         | Option Agreement
      with James Bond and Russell Renner dated as of the 18th of March,
      2004;                                                                                                                                                                        
|4.4         | Option Agreement with William
      Maurice Michano, John Grant Michano dated as of the 17th of March, 2004;                                                                                                                                                                
|4.5         | Option Agreement
      with KM Diamond Exploration Ltd. dated as of the 11th of May, 2004;                                                                                                                                                                                  
|4.6         | Joint Exploration Agreement with
      Phoenix Matachewan Mines Inc. dated as of July 1, 2004;                                                                                                                                                                              
|4.10        | Escrow Agreement
      among Pacific Corporate Trust Company, Ripple Lake Minerals Inc.,
      Robert Lipsett, Christopher Pollard, George Cavey,
      Timothy Crowhurst, Bud Kanke, Stephen Stares, Gregory
      Hryhorchuk and Gordon Smith dated the 16thof June, 2004.
|4.11        | Private Placement Agreement with
      Canaccord Capital Corporation dated June 13, 2005.                                                                                                                                                                                   
|4.12        | Option Agreement
      with Nuinsco Resources Limited dated June 22nd, 2005                                                                                                                                                                                                 
|4.13        | Option Agreement with Rudolf Wahl
      and Deric Ewen dated April 25th, 2005                                                                                                                                                                                               
|4.14        | Option Agreement
      with Rudolf Wahl, Russel Renner and James Bond dated April
      25th, 2005                                                                                                                                                                          

Exchange Controls

There are no governmental laws, decrees, regulations
  or other legislation, including foreign exchange controls, in Canada which may
  affect the export or import of capital or that may affect the remittance of
  dividends, interest or other payments to non-resident holders of our securities.
  Any such remittances to United States residents, however, are subject to a withholding
  tax pursuant to theCanada  U.S. Income tax Convention(1980) (the Treaty), as amended.

-46-

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There is no limitation imposed by Canadian law or
  by our articles or other charter documents on the right of a non-resident to
  hold or vote common shares or preference shares with voting rights (the Voting
  Shares), other than as provided in theInvestment
  Canada Act(the ICA). The
  ICA requires a non-Canadian making an investment which would result in the acquisition
  of control of a Canadian business (i.e. the gross value of the assets of which
  exceed a certain monetary threshold) or an investment to establish a new Canadian
  business, to identify, notify, or file an application for review with the Investment
  Review Division of Industry Canada (IRD).

The notification procedure involves a brief
statement of information about the investment on a prescribed form which is
required to be filed with the IRD by the investor at any time up to 30 days
following implementation of the investment. It is intended that investments
requiring only notification will proceed without government intervention unless
the investment is in a specific type of business activity related to Canadas
cultural heritage and national identity.

If an investment is reviewable under the ICA, an
application for review in the form prescribed is normally required to be filed
with the IRD prior to the investment taking place and the investment may not be
implemented until the review has been completed and the Minister of Industry
(Minister) (the Minister
responsible for Investment Canada) is satisfied that the investment is likely to
be of net benefit to Canada. The Minister has up to 75 days to make this
determination. If the Minister is not satisfied that the investment is likely to
be of net benefit to Canada, the non-Canadian must not implement the investment
or, if the investment has been implemented, may be required to divest himself of
control of the business that is the subject of the investment.

Taxation

Canadian Income Tax Consequences

The following summary discusses only the Canadian
federal income tax considerations generally applicable to a holder (a
"Holder") of one or more of our
common shares who, for the purposes of theIncome Tax Act(Canada) (the"Tax
Act") is a non-resident of Canada who holds common
shares as capital property. The summary deals with the provisions of theTax Actin force on February 28,
2005. It discusses all material matters; but might not discuss all the tax
consequences that may be relevant to particular holders in light of their
circumstances or to holders subject to special rules. Holders and prospective
holders are urged to consult with their own tax advisers with respect to their
particular circumstances.

Dividends

A Holder will be subject to Canadian withholding
tax ("Part XIII Tax") equal to
25%, or such lower rate as may be available under an applicable tax treaty, of
the gross amount of any dividend paid or deemed to be paid on common shares.
Under the Canada-U.S. Income Tax Convention (1980) as amended by the Protocols
signed on 6/14/1983, 3/28/1984, 3/17/1995, and 7/29/1997 (the "Treaty"), the rate of Part XIII Tax applicable to
a dividend on common shares paid to a Holder who is a resident of the United
States and who is the beneficial owner of the dividend, is 5%. If the Holder is
a company that owns at least 10% of the voting stock of the company paying the
dividend, and, in all other cases, the tax rate is 15% of the gross amount of
the dividend. The company will be required to withhold the applicable amount of
Part XIII Tax from each dividend so paid and remit the withheld amount directly
to the Receiver General for Canada for the account of the Holder.

Disposition of Common Shares

A Holder who disposes of a common share, including
by deemed disposition on death, will not normally be subject to Canadian tax on
any capital gain (or capital loss) thereby realized unless the common share

-47-

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constituted "taxable
Canadian property" as defined by theTax Act. Generally, a common share of a public
corporation will not constitute taxable Canadian property of a Holder if the
share is listed on a prescribed stock exchange unless the Holder or persons with
whom the Holder did not deal at arm's length alone or together held or held
options to acquire, at any time within the five years preceding the disposition,
25% or more of the shares of any class of the capital stock of the company. The
TSX Venture Exchange is a prescribed stock exchange under the Tax Act. A Holder
who is a resident of the United States and realizes a capital gain on a
disposition of a common share that was taxable Canadian property will
nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax
thereon unless (a) more than 50% of the value of the common shares is derived
from, or from an interest in, Canadian real estate, including Canadian mineral
resource properties, (b) the common share formed part of the business property
of a permanent establishment that the Holder has or had in Canada within the 12
month period preceding the disposition, or (c) the Holder is an individual who
(i) was a resident of Canada at any time during the 10 years immediately
preceding the disposition, and for a total of 120 months during any period of 20
consecutive years, preceding the disposition, and (ii) owned the common share
when he ceased to be resident in Canada.

A Holder who is subject to Canadian tax in respect
of a capital gain realized on a disposition of a common share must include three
quarters of the capital gain (taxable capital gain) in computing the Holder's
taxable income earned in Canada. The Holder may, subject to certain limitations,
deduct three-quarters of any capital loss (allowable capital loss) arising on a
disposition of taxable Canadian property from taxable capital gains realized in
the year of disposition in respect to taxable Canadian property and, to the
extent not so deductible, from such taxable capital gains realized in any of the
three preceding years or any subsequent year.

United States Federal Income Taxation
Considerations

For federal income tax purposes, an individual who
is a citizen or resident of the United States or a domestic corporation
("U.S. Taxpayer") will recognize
a gain or loss on the sale of the company's common shares equal to the
difference between the proceeds from such sale and the adjusted tax basis of the
common shares. The gain or loss will be a capital gain or capital loss if the
company's common shares are a capital asset in U.S. Taxpayer's hands.

For federal income tax purposes, a U.S. Taxpayer
will be required to include in gross income dividends received on the company's
common shares. A U.S. Taxpayer who pays Canadian tax on a dividend on common
shares will be entitled, subject to certain limitations, to a credit (or
alternatively, a deduction) against federal income tax liability. A domestic
corporation that owns at least 10% of the voting shares should consult its tax
advisor as to applicability of the deemed paid foreign tax credit with respect
to dividends paid on the company's common shares.

Under a number of circumstances, United States
Investor acquiring shares of the company may be required to file an information
return with the Internal Revenue Service Center where they are required to file
their tax returns with a duplicate copy to the Internal Revenue Service Center,
Philadelphia, PA 19255. In particular, any United States Investor who becomes
the owner, directly or indirectly, of 10% or more of the shares of the company
will be required to file such a return. Other filing requirements may apply, and
United States Investors should consult their own tax advisors concerning these
requirements.

The US Internal Revenue Code provides special
anti-deferral rules regarding certain distributions received by US persons with
respect to, and sales and other dispositions (including pledges) of stock of, a
passive foreign investment company. A foreign corporation, such as the company,
will be treated as a passive foreign investment company if 75% or more of its
gross income is passive income for a taxable year or if the average percentage
of its assets (by value) that produce, or are held for the production of,
passive income is at least 50% for a taxable year. We believe that we were not a
passive foreign investment company for the taxable year ended June 30, 2007 and,
furthermore, expect to conduct our affairs in such a manner so that we will not
meet the criteria to be considered passive foreign investment company in the
foreseeable future.

-48-

---

The tax consequences to any particular holder of
common stock will vary according to the status of that holder as an individual,
trust, corporation or member of a partnership, the jurisdiction in which that
holder is subject to taxation, the place where that holder is resident and,
generally, according to that holders particular circumstances. This summary is
applicable only to holders who are resident in the United States, have never
been resident in Canada, deal at arms length with us, hold their common stock
as capital property and who will not use or hold the common stock in carrying on
business in Canada. Special rules, which are not discussed in this summary, may
apply to a United States holder that is an issuer that carries on business in
Canada and elsewhere.

This summary is based upon the provisions of theIncome
Tax Act of Canadaand the regulations issued thereunder
(collectively, the Tax Actor
ITA) and the Canada-United
States Tax Convention (the Tax
Convention) as at the date of the registration
statement and the current administrative practices of Canada Customs and Revenue
Agency. This summary does not take into account provincial income tax
consequences.

We urge each holder to consult his own tax advisor
with respect to the income tax consequences applicable to him in his own
particular circumstances.

Dividends and Paying
Agents

Not applicable

Statement by Experts

Our auditor for our financial statements for the
year ended June 30, 2007 was James Stafford, Inc., Chartered Accountants, of
Suite 350, 1111 Melville Street, Vancouver, British Columbia, V6E 3V6. Their
audit report for the fiscal years ended June 30, 2007, 2006 and 2005 are
included with the related financial statements in this Form 20-F Annual Report
statement with their consent.

A change of auditor was effected on September 21,
2007. Our former auditors for our financial statements for the years ended June
30, 2006, June 30, 2005 and June 30, 2004 was Amisano Hanson, Chartered
Accountants, of #604, 750 West Pender Street, Vancouver, British Columbia, V6C
2T7, Canada.

Documents on Display

All material documents referred to herein have
been filed as exhibits to this Form 20-F or at our office at Suite 1500, 701
West Georgia Street, Vancouver, British Columbia, Canada V7Y 1C6 and our
telephone number is (604) 669.6672

We filed a registration statement on Form 20-F
with the Securities and Exchange Commission in Washington, D.C. (Registration
No. 000-30084) on April 4, 2004. The Registration Statement contains exhibits
and schedules. Any statement in this annual report about any of our contracts or
other documents is not necessarily complete. If the contract or document is
filed as an exhibit to the Registration Statement, the contract or document is
deemed to modify the description contained in this annual report. The exhibits
must be reviewed by themselves for a complete description of the contract or
documents.

Our registration statements may be inspected and
copied, including exhibits and schedules, and the reports and other information
as filed with the Securities and Exchange Commission in accordance with theSecurities Exchange Act of 1934at the public reference facilities maintained by the Securities and Exchange
Commission at 100 F Street, N.E., Washington, D.C., 20549. Copies of such
material may also be obtained from the Public Reference Section of the
Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C.,
20549, at prescribed rates. Information may be obtained regarding the Washington
D.C. Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330 or by contacting the Securities and Exchange Commission over the
Internet at its website at http://www.sec.gov.

-49-

---

Subsidiary
Information

Not applicable

|ITEM 11. | QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------------

We are a small business issuer as defined in Rule
405 of theSecurities Act of 1933, as amended, and Rule 12b-2 of theSecurities
Exchange Act of 1934, as amended, and therefore need not
provide the information requested by this item.

|ITEM 12. | DESCRIPTION OF SECURITIES OTHER
      THAN EQUITY SECURITIES
|-------- | ------------------------------------------------------------

Not applicable.

|       
|-------
|PART II

|ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES
      AND DELINQUENCIES
|-------- | -----------------------------------------------------

Not applicable.

|ITEM 14. | MATERIAL MODIFICATIONS TO THE
      RIGHTS OF SECURITY HOLDERS AND USE OF
      PROCEEDS
|-------- | ----------------------------------------------------------------------------------------

On October 10th, 2007 we effected a consolidation of our
share capital on the basis of one new share for every ten old shares and
concurrently changed our name from Ripple Lake Diamonds
Inc. to Devonshire Resources
Ltd..

Other than the foregoing, there have no material
modifications to the rights of security holders since the adoption of new
Articles on February 8, 2006.

|ITEM 15. | CONTROLS AND
      PROCEDURES
|-------- | -----------------------------

We carried out an evaluation, under the
supervision and with the participation of our management, including the our
president, of the effectiveness of the design and operation of our
disclosure controls and procedures [as defined in the Exchange Act Rule 13a-15(e)] as of the end of the
period covered by this report. Based upon that evaluation, our president
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information relating to our company required to be
included in our periodic SEC filings, and that information is recorded,
processed, summarized and reported as and when required.

There are inherent limitations to the
effectiveness of any system of disclosure controls and procedures, including the
possibility of human error and the circumvention or overriding of the controls
and procedures. Accordingly, even effective disclosure controls and procedures
can only provide reasonable assurance of achieving their control objectives.

There was no significant change in our internal
control over financial reporting that occurred during our most recently
completed fiscal year ended June 30, 2007 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting. Nor were there any significant deficiencies or material weaknesses in
our internal controls requiring corrective actions.

-50-

---

Managements annual report on internal control
over financial reporting

We are currently considered a non-accelerated
filer pursuant to Rule 12b-2 of the Exchange Act. Therefore, we are not
currently required to make statements regarding the effectiveness of internal
control over financial reporting under Section 404 of theSarbanes-Oxley Act. However, our management,
including our Chief Executive Officer and Chief Financial Officer, recognize
that, as a small business issuer, we will likely be required to comply with
disclosure report requirements of Section 404 beginning with the fiscal year
ending June 30, 2007.

There were no changes in our internal control over
financial reporting or in other factors that could significantly affect our
internal control over financial reporting during 2007. Our management, including
our Chief Executive Officer and Chief Financial Officer, does not expect that
our disclosure controls and procedures or internal controls and procedures will
prevent all error and all fraud. A control system can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of
fraud, if any, have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns
can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of any system of
controls also is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Because of the
inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and not be detected.

|ITEM 16A. | AUDIT COMMITTEE FINANCIAL
      EXPERT
|--------- | --------------------------------------

We do not at this time have a financial expert on
our Audit Committee (as defined in Item 16A of Form 20-F). We are currently
actively seeking a financial expert to join our audit committee. Timothy
Crowhurst, George Cavey and William Schmidt have the industry experience
necessary to understand and analyze financial statements, as well as the
understanding of internal controls and procedures necessary for financial
reporting.

|ITEM 16B. | CODE OF ETHICS
|--------- | --------------

We have not adopted a Code of Ethics at this time.
We do not consider a Code of Ethics necessary due to the small size of our
exploration activities and the small number of persons comprising our Board of
Directors and management.

|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND
      SERVICES
|--------- | --------------------------------------------

The following table lists the aggregate fees
billed for each of the last two fiscal years for professional services rendered
by the principal accountant for the audit of our annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.

Year ended
    Year EndedJune 30, 2007
    June 30, 2006Cdn $
    Cdn $Audit
      fees
    15,688
    29,900Audit related fees
    Nil
    NilTax fees
    Nil
    NilAll other fees
    Nil
    NilTotal:
    15,688
    29,900


|ITEM 16D. | EXEMPTIONS FROM THE LISTING
      STANDARDS FOR AUDIT COMMITTEES
|--------- | ----------------------------------------------------------------

-51-

---

Not applicable.

|ITEM 16E. | PURCHASERS PURCHASERS OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
|--------- | -----------------------------------------------------------------------

We did not repurchase any of our shares in the
fiscal year ended June 30, 2007.

|        
|--------
|PART III

|ITEM 17. | FINANCIAL STATEMENTS
|-------- | --------------------

Our audited financial statements for the year
ended June 30, 2007 immediately follow:

|Report of Independent Registered
      Public Accounting Firm dated October 12, 2007                                            | F-2       
|------------------------------------------------------------------------------------------------------------------------------- | ----------
|                                                                                                                                |           
|FINANCIAL STATEMENTS                                                                                                            |           
|                                                                                                                                |           
|Balance Sheet for the years ended
      June 30, 2007, June 30, 2006 and June 30, 2005                                          | F-3       
|                                                                                                                                |           
|Statement of Operations and Deficit
      for the years ended June 30, 2007, June 30, 2006 and June 30, 2005                    | F-4       
|                                                                                                                                |           
|Statement of Cash Flows for the
      years ended June 30, 2007, June 30, 2006 and June 30, 2005                                | F-5       
|                                                                                                                                |           
|Statement of Changes in Stockholders
      Equity for the years ended June 30, 2007, June 30, 2006 and June
      30, 2005     | F-6       
|                                                                                                                                |           
|Schedule I  General and
      Administrative Expenses for the years ended June 30, 2007, June 30,
      2006 and June 30, 2005 | F-7       
|                                                                                                                                |           
|Notes to the Financial Statements
      for the years ended June 30, 2007, June 30, 2006 and June 30, 2005                      | F-8  F-30

|ITEM 18. | FINANCIAL STATEMENTS
|-------- | --------------------

We elected to provide financial statements
pursuant to Item 17.

|ITEM 19. | EXHIBITS
|-------- | --------

|Exhibit # | Document Description                                                                                        
|--------- | ------------------------------------------------------------------------------------------------------------
|1.1(1)    | Articles of Organization;                                                                                   
|1.2(5)    | Transition Application and Notice
      of Articles                                                         
|1.3(5)    | Notice of Articles
      to remove Pre-Existing Corporate Provisions                                        
|1.4(4)    | New Articles effective February 8,
      2006                                                               
|1.5       | Certificate of Name
      Change dated October 10, 2007                                                     
|4.1(1)    | Option agreement with Russell Renner,
      James Bond and Rudolph Wahl dated as of the 18th of March, 2004;

-52-

---

|Exhibit # | Document Description                                                                                                                                                                                                                                                                        
|--------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.2(1)    | Option
        agreement with John E. Ternowesky, Eugene Belisle and Noel Belisle dated
        as of the 19th of March, 2004;                                                                                                                                                              
|4.3(1)    | Option Agreement
        with James Bond and Russell Renner dated as of the 18th of March, 2004;                                                                                                                                                                                            
|4.4(1)    | Option
        Agreement with William Maurice Michano, John Grant Michano dated as of
        the 17th of March, 2004;                                                                                                                                                                      
|4.5(1)    | Option Agreement
        with KM Diamond Exploration Ltd. dated as of the 11th of May, 2004;                                                                                                                                                                                                
|4.6(1)    | Joint
        Exploration Agreement with Phoenix Matachewan Mines Inc. dated as of July
        1, 2004;                                                                                                                                                                                    
|4.10(1)   | Escrow Agreement
        among Pacific Corporate Trust Company, Ripple Lake Minerals Inc., Robert
        Lipsett, Christopher Pollard, George Cavey, Timothy Crowhurst, Bud
        Kanke, Stephen Stares, Gregory Hryhorchuk and Gordon
        Smith dated the 16thof
        June, 2004.
|4.11(2)   | Private
        Placement Agreement with Canaccord Capital Corporation dated June 13,
        2005.                                                                                                                                                                                         
|4.12(3)   | Option Agreement
        with Nuinsco Resources Limited dated June 22nd, 2005                                                                                                                                                                                                               
|4.13(3)   | Option
        Agreement with Rudolf Wahl and Deric Ewen dated April 25th, 2005                                                                                                                                                                                                             
|4.14(3)   | Option Agreement
        with Rudolf Wahl, Russel Renner and James Bond dated April 25th, 2005                                                                                                                                                                                              
|31.1      | Certification
        of the Chief Executive Officer Pursuant To Rule 13a-14 Or 15d-14 of theSecurities
        Exchange Act of 1934,as adopted
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                           
|31.2      | Certification
        of the Chief Financial Officer Pursuant To Rule 13a-14 Or 15d-14 of theSecurities Exchange Act of 1934,as
        adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                   
|32.1      | Certification
        of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted
        pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002                                                                                                                
|32.2      | Certification
        of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted
        pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002                                                                                                                

|(1) | Incorporated by reference from our Registration Statement
      on Form 20-F filed on April 3, 2005.                       
|--- | ---------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                            
|(2) | Incorporated by reference from our Amendment No. 1 to our
      Registration Statement on Form 20-F filed on July 14, 2005.
|    |                                                                                                                            
|(3) | Incorporated by reference from our Annual Report on Form
      20-F filed on December 30, 2005.                            
|    |                                                                                                                            
|(4) | Incorporated by reference from our Form 6-K filed on
      February 27, 2006.                                              
|    |                                                                                                                            
|(5) | Incorporated by reference from our Form 20-F Annual
      Report filed on December 29, 2006.                               

-53-

---

JAMES **STAFFORD**James Stafford, Inc.*Chartered Accountants*Suite 350  1111 Melville
        StreetVancouver, British ColumbiaCanada V6E 3V6Telephone +1 604 669 0711Facsimile +1 604 669 0754* Incorporated professional, James
        Stafford, Inc.








Devonshire Resources Ltd.(formerly Ripple Lake Diamonds Inc.)(An Exploration Stage Company)

Financial Statements 
  (Expressed in Canadian Dollars) 30 June 2007

---

JAMES STAFFORDJames Stafford, Inc.*Report of Independent Registered Public Accounting Firm
      Chartered Accountants*****Suite 350
         1111 Melville Street****
      ****Vancouver,
        British ColumbiaTo
        the Board of Directors and Shareholders of
      ****Canada V6E
        3V6Devonshire Resources Ltd.
      ****Telephone
        +1 604 669 0711(An
        Exploration Stage Company)
      ****Facsimile
        +1 604 669 0754***** Incorporated
        professional, James Stafford, Inc.


We have audited the balance sheet of Devonshire Resources
  Ltd.(the Company) (an exploration stage company) as at 30 June
  2007 and the related statements of operations and deficit, cash flows and changes
  in shareholders equity for the year ended 30 June 2007 and for the period
  from 6 February 2004 (Date of Inception) to 30 June 2007, except that we did
  not audit these financial statements for the period from the date of inception
  on 6 February 2004 to 30 June 2006; those statements were audited by other auditors
  whose report dated 18 October 2006 expressed an unqualified opinion on those
  statements. These financial statements are the responsibility of the Company's
  management. Our responsibility is to express an opinion on these financial statements
  based on our audit.

We conducted our audit in accordance with Canadian generally
  accepted auditing standards and the standards of the Public Company Accounting
  Oversight Board (United States of America). These 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. We believe that our audit provides a reasonable
  basis for our opinion.

In our opinion, these financial statements present fairly, in
  all material respects, the financial position of the Company as at 30 June 2007
  and the results of its operations, its cash flows, and its changes in shareholders
  equity for the year ended 30 June 2007 and for the period from 6 February 2004
  (Date of Inception) to 30 June 2007 in accordance with Canadian generally accepted
  accounting principles.

|                                    | /s/ James Stafford   
|----------------------------------- | ---------------------
|Vancouver, British Columbia, Canada | Chartered Accountants
|                                    |                      
|12 October 2007                     |                      

Comments by Independent Registered Chartered Accountants for
  United States of America Readers on Canada  United States of America Reporting
  Differences

The standards of the Public Company Accounting Oversight Board
  (United States of America) 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 to the financial
  statements. Although we conducted our audits in accordance with both Canadian
  generally accepted auditing standards and the standards of the Public Company
  Accounting Oversight Board (United States of America), our report to the Shareholders
  and Board of Directors dated 12 October 2007 is expressed in accordance with
  Canadian reporting standards, which do not permit a reference to such conditions
  and events in the report when these are adequately disclosed in the financial
  statements.

|                                    | /s/ James Stafford   
|----------------------------------- | ---------------------
|Vancouver, British Columbia, Canada | Chartered Accountants
|                                    |                      
|12 October 2007                     |                      

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Balance Sheets                      
|(Expressed in Canadian Dollars)     
|As at 30 June                       

|                                                                |  | 2007       |   |  | 2006       |  
|--------------------------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                                |  | $          |   |  | $          |  
|                                                                |  |            |   |  |            |  
|Assets                                                          |  |            |   |  |            |  
|                                                                |  |            |   |  |            |  
|Current                                                         |  |            |   |  |            |  
|Cash and cash equivalents (Note 3)                              |  | 96,409     |   |  | 373,721    |  
|Amounts receivable (Note 4)                                     |  | 7,066      |   |  | 6,401      |  
|Prepaid expenses                                                |  | -          |   |  | 7,500      |  
|                                                                |  |            |   |  |            |  
|                                                                |  | 103,475    |   |  | 387,622    |  
|                                                                |  |            |   |  |            |  
|Mineral properties and deferred exploration costs(Note
      5) |  | 5,002,997  |   |  | 4,881,420  |  
|                                                                |  |            |   |  |            |  
|                                                                |  | 5,106,472  |   |  | 5,269,042  |  
|                                                                |  |            |   |  |            |  
|Liabilities                                                     |  |            |   |  |            |  
|                                                                |  |            |   |  |            |  
|Current                                                         |  |            |   |  |            |  
|Accounts payable and accrued liabilities                        |  | 25,433     |   |  | 47,962     |  
|Loan payable (Note 6)                                           |  | 100,000    |   |  | -          |  
|                                                                |  |            |   |  |            |  
|                                                                |  | 125,433    |   |  | 47,962     |  
|                                                                |  |            |   |  |            |  
|Shareholders equity                                            |  |            |   |  |            |  
|Capital stock(Note 7)                                           |  |            |   |  |            |  
|Authorized                                                      |  |            |   |  |            |  
|unlimited common shares                                         |  |            |   |  |            |  
|Issued and outstanding                                          |  |            |   |  |            |  
|30 June 2007  36,515,682
      common shares                   |  |            |   |  |            |  
|30 June 2006  36,075,682 common shares                         |  | 5,881,307  |   |  | 5,833,307  |  
|Contributed surplus                                             |  | 794,750    |   |  | 794,750    |  
|Deficit, accumulated during the exploration stage               |  | (1,695,018 | ) |  | (1,406,977 | )
|                                                                |  |            |   |  |            |  
|                                                                |  | 4,981,039  |   |  | 5,221,080  |  
|                                                                |  |            |   |  |            |  
|                                                                |  | 5,106,472  |   |  | 5,269,042  |  

Nature and Continuance of Operations(Note 1), Commitments(Notes 5 and 10), Contingencies (Note 11) and Subsequent Events(Note 12)

Reconciliation of Canadian and United States Generally Accepted
  Accounting Principles (Note 14)

On behalf of the Board:

|Time Crowhurst | Director | William Schmidt | Director
|---------------- | -------- | ----------------- | --------
|Tim Crowhurst    |          | William Schmidt   |         

(1)

---

|Devonshire Resources Ltd.            
|-------------------------------------
|(formerly Ripple Lake Diamonds Inc.) 
|(An Exploration Stage Company)       
|Statements of Operations and Deficit 
|(Expressed in Canadian
      Dollars)

|                                        |  | For the period  |   |  |              |   |  |              |   |  |              |  
|--------------------------------------- |  | --------------- | - |  | ------------ | - |  | ------------ | - |  | ------------ | -
|                                        |  | from the date   |   |  |              |   |  |              |   |  |              |  
|                                        |  | of inception on |   |  |              |   |  |              |   |  |              |  
|                                        |  | 6 February      |   |  | For the      |   |  | For the      |   |  | For the      |  
|                                        |  | 2004 to         |   |  | year ended   |   |  | year ended   |   |  | year ended   |  
|                                        |  | 30 June 2007    |   |  | 30 June 2007 |   |  | 30 June 2006 |   |  | 30 June 2005 |  
|                                        |  | $               |   |  | $            |   |  | $            |   |  | $            |  
|                                        |  |                 |   |  |              |   |  |              |   |  |              |  
|Revenue                                 |  |                 |   |  |              |   |  |              |   |  |              |  
|Interest income                         |  | 7,991           |   |  | 3,745        |   |  | 1,990        |   |  | 2,256        |  
|                                        |  |                 |   |  |              |   |  |              |   |  |              |  
|Expenses                                |  |                 |   |  |              |   |  |              |   |  |              |  
|General and administrative (Schedule 1) |  | 1,887,173       |   |  | 291,786      |   |  | 590,790      |   |  | 986,296      |  
|                                        |  |                 |   |  |              |   |  |              |   |  |              |  
|Net loss before income taxes            |  | (1,879,182      | ) |  | (288,041     | ) |  | (588,800     | ) |  | (984,040     | )
|                                        |  |                 |   |  |              |   |  |              |   |  |              |  
|Future income tax recovery              |  | 184,164         |   |  | -            |   |  | 121,164      |   |  | 63,000       |  
|                                        |  |                 |   |  |              |   |  |              |   |  |              |  
|Net loss for the year                   |  | (1,695,018      | ) |  | (288,041     | ) |  | (467,636     | ) |  | (921,040     | )
|                                        |  |                 |   |  |              |   |  |              |   |  |              |  
|                                        |  |                 |   |  |              |   |  |              |   |  |              |  
|Basic and diluted loss per share        |  |                 |   |  | (0.01        | ) |  | (0.02        | ) |  | (0.05        | )
|                                        |  |                 |   |  |              |   |  |              |   |  |              |  
|Weighted average number of common       |  |                 |   |  |              |   |  |              |   |  |              |  
|shares outstanding                      |  |                 |   |  | 36,347,901   |   |  | 26,783,813   |   |  | 18,539,297   |  

(2)

---

|Devonshire Resources Ltd.            
|-------------------------------------
|(formerly Ripple Lake Diamonds Inc.) 
|(An Exploration Stage Company)       
|Statements of Cash Flows             
|(Expressed in Canadian
      Dollars)

|                                                     |  | For the period   |   |  |              |   |  |              |   |  |              |  
|---------------------------------------------------- |  | ---------------- | - |  | ------------ | - |  | ------------ | - |  | ------------ | -
|                                                     |  | from the date of |   |  |              |   |  |              |   |  |              |  
|                                                     |  | inception on 6   |   |  | For the      |   |  | For the      |   |  | For the      |  
|                                                     |  | February 2004 to |   |  | year ended   |   |  | year ended   |   |  | year ended   |  
|                                                     |  | 30 June 2007     |   |  | 30 June 2007 |   |  | 30 June 2006 |   |  | 30 June 2005 |  
|                                                     |  | $                |   |  | $            |   |  | $            |   |  | $            |  
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|Cash flows from operating activities                 |  |                  |   |  |              |   |  |              |   |  |              |  
|Net loss for the year                                |  | (1,695,018       | ) |  | (288,041     | ) |  | (467,636     | ) |  | (921,040     | )
|Adjustments to reconcile loss to net
      cash used |  |                  |   |  |              |   |  |              |   |  |              |  
|by operating activities                              |  |                  |   |  |              |   |  |              |   |  |              |  
|Amortization of
      property, plant and            |  |                  |   |  |              |   |  |              |   |  |              |  
|equipment                                            |  | 225              |   |  | -            |   |  | -            |   |  | 225          |  
|Future income tax
      recovery                     |  | (184,164         | ) |  | -            |   |  | (121,164     | ) |  | (63,000      | )
|Loss on sales of property, plant
      and           |  |                  |   |  |              |   |  |              |   |  |              |  
|equipment                                            |  | 313              |   |  | -            |   |  | 313          |   |  | -            |  
|Stock-based compensation                             |  | 794,750          |   |  | -            |   |  | 183,750      |   |  | 611,000      |  
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|                                                     |  | (1,083,894       | ) |  | (288,041     | ) |  | (404,737     | ) |  | (372,815     | )
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|Changes in operating assets and liabilities          |  |                  |   |  |              |   |  |              |   |  |              |  
|(Increase) decrease in amounts
      receivable      |  | (7,066           | ) |  | (665         | ) |  | 99,272       |   |  | (72,886      | )
|(Increase) decrease in prepaid expenses              |  | -                |   |  | 7,500        |   |  | (7,500       | ) |  | -            |  
|Increase (decrease) in accounts
      payable and    |  |                  |   |  |              |   |  |              |   |  |              |  
|accrued liabilities                                  |  | (15,274          | ) |  | (22,529      | ) |  | (37,460      | ) |  | 28,228       |  
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|                                                     |  | (1,106,234       | ) |  | (303,735     | ) |  | (350,425     | ) |  | (417,473     | )
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|Cash flows from investing activities                 |  |                  |   |  |              |   |  |              |   |  |              |  
|Purchase of property, plant and equipment            |  | (1,498           | ) |  | -            |   |  | -            |   |  | (1,498       | )
|Proceeds on sales of property, plant and equipment   |  | 960              |   |  | -            |   |  | 960          |   |  | -            |  
|Acquisition and exploration expenses (Note
      5)  |  | (4,722,190       | ) |  | (73,577      | ) |  | (2,015,276   | ) |  | (2,060,371   | )
|Deferred exploration and development costs           |  | -                |   |  | -            |   |  | -            |   |  | -            |  
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|                                                     |  | (4,722,728       | ) |  | (73,577      | ) |  | (2,014,316   | ) |  | (2,061,869   | )
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|Cash flows from financing activities                 |  |                  |   |  |              |   |  |              |   |  |              |  
|Loan payable (Note 6)                                |  | 100,000          |   |  | 100,000      |   |  | -            |   |  | (71,620      | )
|Shares issued for cash                               |  | 5,825,371        |   |  | -            |   |  | 2,455,728    |   |  | 2,594,043    |  
|Share subscriptions received in advance              |  | -                |   |  | -            |   |  | 20,000       |   |  | (20,000      | )
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|                                                     |  | 5,925,371        |   |  | 100,000      |   |  | 2,475,728    |   |  | 2,502,423    |  
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|Increase (decrease) in cash and cash equivalents     |  | 96,409           |   |  | (277,312     | ) |  | 110,987      |   |  | 23,081       |  
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|Cash and cash equivalents, beginning of
      year   |  | -                |   |  | 373,721      |   |  | 262,734      |   |  | 239,653      |  
|                                                     |  |                  |   |  |              |   |  |              |   |  |              |  
|Cash and cash equivalents, end of year               |  | 96,409           |   |  | 96,409       |   |  | 373,721      |   |  | 262,734      |  

Supplemental Disclosure with Respect to Cash Flows (Note
  13)

(3)

---

|Devonshire Resources Ltd.                    
|---------------------------------------------
|(formerly Ripple Lake Diamonds Inc.)         
|(An Exploration Stage Company)               
|Statements of Changes in Shareholders Equity
|(Expressed in Canadian
      Dollars)        

Deficitaccumulatedduring the
      
      
      TotalNumber of
      
      
      
      
      
      Contributed
      
      
      
      
      
      exploration
      
      
      Shareholdersshares issued
      
      
      Share capital
      
      
      surplus
      
      
      Warrants
      
      
      stage
      
      
      equity$
      
      
      $
      
      
      $
      
      
      $
      
      
      $Balance at 6 February 2004
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Shares issued  cash ($0.15 pershare)
      4,783,993
      
      
      717,599
      
      
      -
      
      
      -
      
      
      -
      
      
      717,599Escrow shares issued  cash($0.001 per share)
      10,000,000
      
      
      10,000
      
      
      -
      
      
      -
      
      
      -
      
      
      10,000Founders share
      1
      
      
      1
      
      
      -
      
      
      -
      
      
      -
      
      
      1Net loss for the year
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (18,301
      )
      
      (18,301
      )Balance at 30 June 2004
      14,783,994
      
      
      727,600
      
      
      -
      
      
      -
      
      
      (18,301
      )
      
      709,299Shares issued  cash ($0.15 pershare)
      1,678,333
      
      
      251,750
      
      
      -
      
      
      -
      
      
      -
      
      
      251,750Shares issued  cash ($0.40 pershare) (Note 7)
      4,000,000
      
      
      1,294,543
      
      
      -
      
      
      -
      
      
      -
      
      
      1,294,543Shares issued  cash ($0.45 pershare) (Note 7)
      2,222,223
      
      
      921,200
      
      
      -
      
      
      -
      
      
      -
      
      
      921,200Shares issued for mineral property($0.40 per share)
      405,000
      
      
      162,000
      
      
      -
      
      
      -
      
      
      -
      
      
      162,000Tax benefits renounced to flow-through share subscribers
      -
      
      
      (63,000
      )
      
      -
      
      
      -
      
      
      -
      
      
      (63,000
      )Share issued for agent servicesrendered ($0.40 per share)
      200,000
      
      
      80,000
      
      
      -
      
      
      -
      
      
      -
      
      
      80,000Price adjustment to escrow shares
      -
      
      
      46,550
      
      
      -
      
      
      -
      
      
      -
      
      
      46,550Stock-based compensation
      -
      
      
      -
      
      
      611,000
      
      
      -
      
      
      -
      
      
      611,000Net loss for the year
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (921,040
      )
      
      (921,040
      )Balance at 30 June 2005
      23,289,550
      
      
      3,420,643
      
      
      611,000
      
      
      -
      
      
      (939,341
      )
      
      3,092,302Shares issued  cash ($0.45
        pershare) (Note 7)
      622,466
      
      
      280,110
      
      
      -
      
      
      -
      
      
      -
      
      
      280,110Shares issued  cash ($0.15
        pershare) (Note 7)
      5,482,667
      
      
      822,400
      
      
      -
      
      
      -
      
      
      -
      
      
      822,400Shares issued  cash ($0.225
        pershare) (Note 7)
      6,385,999
      
      
      1,353,218
      
      
      -
      
      
      -
      
      
      -
      
      
      1,353,218Shares issued for mineral property($0.40 per share)
      105,000
      
      
      42,000
      
      
      -
      
      
      -
      
      
      -
      
      
      42,000Shares issued for mineral property($0.19 per share)
      190,000
      
      
      36,100
      
      
      -
      
      
      -
      
      
      -
      
      
      36,100Tax benefits renounced to flow-through share subscribers
      -
      
      
      (121,164
      )
      
      -
      
      
      -
      
      
      -
      
      
      (121,164
      )Stock-based compensation
      -
      
      
      -
      
      
      183,750
      
      
      -
      
      
      -
      
      
      183,750Net loss for the year
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (467,636
      )
      
      (467,636
      )Balance at 30 June 2006
      36,075,682
      
      
      5,833,307
      
      
      794,750
      
      
      -
      
      
      (1,406,977
      )
      
      5,221,080Shares issued for mineral property($0.15 per share) (Note 7)
      40,000
      
      
      6,000
      
      
      -
      
      
      -
      
      
      -
      
      
      6,000Shares issued for mineral property($0.105 per share) (Note 7)
      400,000
      
      
      42,000
      
      
      -
      
      
      -
      
      
      -
      
      
      42,000Net loss for the year
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (288,041
      )
      
      (288,041
      )Balance at 30 June 2007
      36,515,682
      
      
      5,881,307
      
      
      794,750
      
      
      -
      
      
      (1,695,018
      )
      
      4,981,039


(4)

---

|Devonshire Resources Ltd.                       
|------------------------------------------------
|(formerly Ripple Lake Diamonds Inc.)            
|(An Exploration Stage Company)                  
|Schedule 1  General and Administrative Expenses
|(Expressed in Canadian
      Dollars)           

|                           |  | For the period  |  |  |              |  |  |              |  |  |              | 
|-------------------------- |  | --------------- |  |  | ------------ |  |  | ------------ |  |  | ------------ | 
|                           |  | from the date   |  |  |              |  |  |              |  |  |              | 
|                           |  | of inception on |  |  |              |  |  |              |  |  |              | 
|                           |  | 6 February      |  |  | For the      |  |  | For the      |  |  | For the      | 
|                           |  | 2004 to         |  |  | year ended   |  |  | year ended   |  |  | year ended   | 
|                           |  | 30 June 2007    |  |  | 30 June 2007 |  |  | 30 June 2006 |  |  | 30 June 2005 | 
|                           |  | $               |  |  | $            |  |  | $            |  |  | $            | 
|                           |  |                 |  |  |              |  |  |              |  |  |              | 
|Amortization               |  | 225             |  |  | -            |  |  | -            |  |  | 225          | 
|Bank charges and interest  |  | 3,535           |  |  | 353          |  |  | 1,610        |  |  | 1,355        | 
|Filing fees                |  | 83,649          |  |  | 8,890        |  |  | 29,475       |  |  | 45,284       | 
|Interest                   |  | 10,663          |  |  | 10,663       |  |  | -            |  |  | -            | 
|Management fees            |  | 254,860         |  |  | 68,360       |  |  | 84,500       |  |  | 102,000      | 
|Office and miscellaneous   |  | 111,400         |  |  | 33,438       |  |  | 50,012       |  |  | 27,844       | 
|Professional fees          |  | 314,419         |  |  | 106,987      |  |  | 119,839      |  |  | 69,615       | 
|Property investigation     |  | 15,911          |  |  | -            |  |  | 15,911       |  |  | -            | 
|Shareholder communications |  | 239,656         |  |  | 45,320       |  |  | 87,118       |  |  | 107,218      | 
|Stock-based compensation   |  | 794,750         |  |  | -            |  |  | 183,750      |  |  | 611,000      | 
|Transfer agent fees        |  | 37,170          |  |  | 13,716       |  |  | 12,967       |  |  | 10,487       | 
|Travel and entertainment   |  | 20,935          |  |  | 4,059        |  |  | 5,608        |  |  | 11,268       | 
|                           |  |                 |  |  |              |  |  |              |  |  |              | 
|                           |  | 1,887,173       |  |  | 291,786      |  |  | 590,790      |  |  | 986,296      | 

(5)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

|1. | Nature and Continuance of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Devonshire Resources Ltd. (the Company)
        was incorporated on 6 February 2004 under the Business Corporations Act
        of British Columbia as TCH Minerals Inc. and changed its name to Ripple
        Lake Minerals Ltd. on 13 May 2004, to Ripple Lake Diamonds Inc. on 26
        July 2004 and to Devonshire Resources Ltd. on 16 August 2007. The Company
        is an exploration stage junior mining company engaged in the identification,
        acquisition, evaluation and exploration of diamond properties in Ontario
        and Nunavut, Canada. The Company completed its initial public offering
        (IPO) on 6 January 2005 and is listed for trading on the TSX
        Venture Exchange.                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Companys mineral properties are without a
        known body of commercial ore. The business of exploring for minerals and
        mining involves a high degree of risk. Few properties that are explored
        are ultimately developed into producing mines. Major expenses may be required
        to establish ore reserves, to develop metallurgical processes, to acquire
        construction and operating permits and to construct mining and processing
        facilities. The amounts shown as mineral property costs represent acquisition,
        holding and deferred exploration costs and do not necessarily represent
        present or future recoverable values. The recoverability of the amounts
        shown for mineral property costs is dependent upon the Company obtaining
        the necessary financing to complete the exploration and development of
        the properties, the discovery of economically recoverable reserves and
        future profitable operations. There can be no assurance that such additional
        financing will be available on terms acceptable to the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Although the Company has taken steps to verify title
        to mineral properties in which it has an interest in accordance with industry
        standards for the current state of exploration of such properties, these
        procedures do not guarantee the Companys title. Property title may
        be subject to unregistered prior agreements and non-compliance with regulatory
        requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | These financial statements have been prepared on the
        going concern basis, which assumes that the Company will continue operations
        for the foreseeable future and will be able to realize its assets and
        discharge its liabilities in the normal course of business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | At 30 June 2007 the Company had working capital deficit
        of $21,958 (2006  working capital of $339,660), which may not be
        sufficient to sustain operations over the next twelve months, and the
        Company expects to incur further losses from its operations, all of which
        casts substantial doubt about the Companys ability to continue as
        a going concern. These financial statements do not include any adjustments
        to the recoverability or classification of recorded asset amounts or the
        classification of liabilities that might be necessary should the Company
        be unable to continue as a going concern and therefore be required to
        realize on its assets and discharge its liabilities and commitments at
        amounts different from those reported in the financial statements.                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The following is a summary of significant accounting
        policies used in the preparation of these financial                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

(6)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

statements.

Basis of presentation

These financial statements have been
  prepared by the Company in accordance with Canadian generally accepted accounting
  principles and, except as described in Note 9, conform in all material respects
  with accounting principles generally accepted in the United States of America.
  In the opinion of the Companys management, these financial statements
  reflect all the adjustments necessary to fairly present the Companys financial
  position at 30 June 2007, and the results of operations and cash flow for the
  years ended 30 June 2007, 2006 and 2005.

Exploration stage company

The Company is an exploration stage company
  as defined in Securities and Exchange Commission (SEC) Act Guide
  7. The Company is devoting its present efforts to exploring and developing its
  mineral properties and none of its planned principal operations have commenced.
  All losses accumulated since inception have been considered as part of the Companys
  exploration stage activities.

Use of estimates

The preparation of financial statements
  in accordance with generally accepted accounting principles requires management
  to make estimates and assumptions that affect the reported amount of assets
  and liabilities, disclosure of contingent assets and liabilities at the date
  of the financial statements, and the reported amounts of revenues and expenses
  during the reporting period. These estimates are reviewed periodically and as
  adjustments become necessary, they are reported in operations in the period
  in which they became known. Actual results may differ from those estimates.

Mineral exploration properties

The Company defers the cost of acquiring,
  maintaining its interest, exploring and developing mineral properties until
  such time as the properties are placed into production, abandoned, sold or considered
  to be impaired in value. Costs of producing properties will be amortized on
  a unit of production basis and costs of abandoned properties are written off.
  Proceeds received on the sale of interests in mineral properties are credited
  to the carrying value of the mineral properties, with any excess included in
  operations. Write-downs due to impairment in value are charged to operations.

The Company is in the process of exploring
  and developing its mineral properties and has not yet determined the amount
  of reserves, if any, that are available. Management reviews the carrying value
  of mineral properties on a periodic basis and will recognize impairment in value
  based upon current exploration results, the prospect of further work being carried
  out by the Company, the assessment of future profitability of production revenues
  from the property or from the sale of property. Amounts shown for properties
  represent costs incurred net of write-downs and recoveries, and are not intended
  to represent present or future values.

Although the Company has taken steps
  to verify title to mineral properties in which it has an interest or potential
  interest, according to the usual industry standards for the stage of exploration
  of such properties, these procedures do not guarantee the Companys title.
  Such properties may be subject to prior agreements or

(7)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

transfers and title may be affected by
  undetected defects.

Reclamation costs

Reclamation activities are carried out
  to the extent practicable concurrently with property exploration activities
  and such costs are included in exploration costs during the period in which
  they are incurred. When properties are abandoned, any remaining reclamation
  costs are estimated and included as exploration costs in the period the property
  is abandoned.

Property, plant and equipment

The Company does not have any equipment
  at the present time. Amortization on equipment is normally calculated under
  the declining balance basis over the estimated useful life of the asset at 30%
  per annum. One-half of the rate is used in the year of addition and no amortization
  is claimed in the year of disposal.

Asset retirement obligations

The fair value of obligations associated
  with the retirement of tangible long-lived assets is recorded in the period
  the asset is put into use, with a corresponding increase to the carrying amount
  of the related asset. The obligations recognized are statutory, contractual
  or legal obligations. The liability is accreted over time for changes in the
  fair value of the liability through operations. The costs capitalized to the
  related assets are amortized in a manner consistent with the depletion and depreciation
  of the related asset. As at 30 June 2007, there are no asset retirement obligations.

Future income taxes

The Company accounts for income taxes
  using the asset and liability method. Under this method, future income taxes
  are recorded for the temporary differences between the financial reporting basis
  and tax basis of the Companys assets and liabilities. These future taxes
  are measured by the provisions of currently enacted tax laws. Management believes
  that it is not sufficiently likely that the Company will generate sufficient
  taxable income to allow the realization of all of its future tax assets and
  therefore the Company has made an impairment allowance against these assets.

Financial instruments

The financial instruments of the Company
  consist of cash and cash equivalents, accounts payables and accrued liabilities.
  The carrying value of the financial instruments approximates fair value due
  to their short term to maturity. Except for the Companys loan payable
  balance at 30 June 2007, it is managements opinion that the Company is
  not exposed to significant interest, currency or credit risk arising from these
  financial instruments.

(8)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

Stock-based compensation

The Company has a stock-based compensation
  plan as disclosed in Note 7, whereby stock options are granted in accordance
  with the policies of regulatory authorities. The fair value of all stock options
  are expensed over their vesting period with a corresponding increase to contributed
  surplus. Upon exercise of stock options, the consideration paid by the option
  holder, together with the amount previously recognized in contributed surplus,
  is recorded as an increase to share capital.

The Company uses the Black-Scholes option
  valuation model to calculate the fair value of stock options at the date of
  grant. Option pricing models require the input of highly subjective assumptions,
  including the expected price volatility. Changes in these assumptions can materially
  affect the fair value estimate and, therefore, the existing models do not necessarily
  provide a reliable single measure of the fair value of the Companys stock
  options.

Flow-through shares

The Canadian Institute of Chartered Accountants
  (CICA) has issued guidance on the accounting treatment for Canadian
  flow-through shares through its Emerging Issues Committee Abstract (EIC)
  No. 146 (the Abstract). All flow-through shares issued by the Company
  are accounted for in accordance with this Abstract. Accordingly, upon renunciation
  of exploration expenditures to the shareholders, the Company reduces share capital
  and recognizes a future income tax liability for the amount of tax reduction
  renounced to the shareholders. In instances where the Company has sufficient
  available tax loss carry forwards or other deductible temporary differences
  available to offset the renounced tax deduction and is more likely than not
  able to utilize either these tax losses or other deductible temporary differences
  before expiry, the Company recognizes future tax assets, with a corresponding
  credit to operations, for an amount equal to the future income tax liability.

Basic and diluted loss per share

Basic loss per share is computed by dividing
  the loss for the year by the weighted average number of common shares outstanding
  during the year. Diluted loss per share reflects the potential dilution that
  could occur if potentially dilutive securities were exercised or converted to
  common stock. The dilutive effect of options and warrants is computed by application
  of the treasury stock method and the effect of convertible securities by the
  if converted method. Fully diluted amounts are not presented when
  effects of the computations are anti-dilutive due to the losses incurred.

Diluted net loss per share reflects the
  potential dilution of securities that could result from the exercise of dilutive
  options and warrants. As at 30 June 2007, the Company had 1,980,000 (2006 
  2,680,000, 2005  1,700,000) stock options and 11,868,666 (2006 
  13,513,233, 2005  1,733,334) warrants outstanding which have not been
  included in the calculation of diluted net loss per share because their effect
  would have been anti-dilutive. Accordingly, there is no difference in the amounts
  presented for basic and diluted loss per share.

(9)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

|3. | Restricted Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | At 30 June 2007, the Company was required to maintain
        and restrict approximately $350,000 to the use of future expenditures
        on mineral property costs (Note 11).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4. | Amounts Receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Amounts receivable are non-interest bearing, unsecured
        and have settlement dates within one year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|5. | Mineral Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Environmental protection practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company is subject to laws and regulations relating
        to environmental matters in all jurisdictions in which it operates, including
        provisions relating to property reclamation, discharge of hazardous material
        and other matters. The Company may also be held liable should environmental
        problems be discovered that were caused by former owners and operators
        of its properties and properties in which it has previously had an interest.
        The Company is not aware of any existing environmental problems related
        to any of its current or former properties that may result in material
        liability to the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | TCH Diamond Project                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company has entered into option agreements to earn
        a 100% interest in certain mineral claims, representing 129 units or 2,064
        hectares, located in the Walsh, Foxtrap Lake and Killala Townships in
        the Province of Ontario known as the TCH Diamond Project (the Options).
        During the year ended 30 June 2007, the Company made cash payments totaling
        $31,000 and issued 40,000 common shares valued at $6,000 under these Options
        (Note 7 and 11).                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The future annual payments of cash and common shares
        required to be issued under these agreements are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | Year ended |  | Cash    |  |  | Common shares | 
| | ---------- |  | ------- |  |  | ------------- | 
| | 30 June    |  | $       |  |  | $             | 
| |            |  |         |  |  |               | 
| | 2007       |  | 27,000  |  |  | 65,000        | 
| | 2008       |  | 110,000 |  |  | 85,000        | 
| | 2009       |  | 30,000  |  |  | 20,000        | 
| |            |  |         |  |  |               | 
| |            |  | 167,000 |  |  | 170,000       | 

The Company is also required to make
  all expenditures required to maintain the mineral claims in good standing and
  to pay the optionors 2% of net smelter returns from the properties upon commercial
  production.

(10)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

The Company has staked an additional
  5,411 units or approximately 86,600 hectares in an area that is contiguous to
  the optioned properties. These additional claims are 100% owned by the Company.
  As at 30 June 2007, the Companys interest in the TCH Diamond Project now
  totals approximately 143,300 hectares.

To maintain the above claims in good
  standing, the Company is required to spend a minimum of $400 per unit on assessment
  work during the first two years after staking and $400 per unit per year thereafter.

Expenditures related to the TCH Diamond
  Project can be summarized as follows:

| |                                        |  | For the period   |  |  |              |  |  |              | 
| | -------------------------------------- |  | ---------------- |  |  | ------------ |  |  | ------------ | 
| |                                        |  | from the date of |  |  |              |  |  |              | 
| |                                        |  | inception on 6   |  |  | For the      |  |  | For the      | 
| |                                        |  | February 2004    |  |  | year ended   |  |  | year ended   | 
| |                                        |  | to 30 June 2007  |  |  | 30 June 2007 |  |  | 30 June 2006 | 
| |                                        |  | $                |  |  | $            |  |  | $            | 
| |                                        |  |                  |  |  |              |  |  |              | 
| | Balance, beginning of period           |  | -                |  |  | 2,440,008    |  |  | 1,278,070    | 
| |                                        |  |                  |  |  |              |  |  |              | 
| | Property acquisition and staking costs |  | 903,269          |  |  | 37,000       |  |  | 555,687      | 
| |                                        |  |                  |  |  |              |  |  |              | 
| | Exploration expenses                   |  |                  |  |  |              |  |  |              | 
| | Communication                          |  | 16,000           |  |  | -            |  |  | -            | 
| | Data analysis                          |  | 328,490          |  |  | -            |  |  | 149,455      | 
| | Equipment rental                       |  | 14,000           |  |  | -            |  |  | -            | 
| | Food and accommodation                 |  | 22,500           |  |  | -            |  |  | -            | 
| | Geological                             |  | 327,034          |  |  | 8,752        |  |  | 212,454      | 
| | Geophysics                             |  | 218,445          |  |  | -            |  |  | 192,220      | 
| | Ground magnetic                        |  | 21,635           |  |  | -            |  |  | -            | 
| | Helicopter fees                        |  | 64,579           |  |  | -            |  |  | -            | 
| | Lab fee                                |  | 1,388            |  |  | -            |  |  | -            | 
| | Line cutting                           |  | 21,470           |  |  | -            |  |  | -            | 
| | Management fee                         |  | 32,000           |  |  | -            |  |  | -            | 
| | Mapping                                |  | 36,122           |  |  | -            |  |  | 36,122       | 
| | Mobilization and demobilization        |  | 24,000           |  |  | -            |  |  | 16,000       | 
| | Sampling and processing                |  | 438,500          |  |  | -            |  |  | -            | 
| | Supplies                               |  | 16,643           |  |  | 315          |  |  | -            | 
| |                                        |  |                  |  |  |              |  |  |              | 
| |                                        |  | 1,582,806        |  |  | 9,067        |  |  | 606,251      | 
| |                                        |  |                  |  |  |              |  |  |              | 
| | Balance, end of period                 |  | 2,486,075        |  |  | 2,486,075    |  |  | 2,440,008    | 

(11)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

KMD Project

On 1 June 2004, the Company entered into
  a consulting agreement with a geologist for a three year term. The Company has
  agreed to pay the consultant $1,000 per day, with a minimum of one consulting
  day per month. However, in December 2006 the geologist, who is also the optionor
  of the KMD Project, has given notice to the Company of a disagreement in regards
  to the terms of the KMD Option Agreement. The Company has also issued to the
  consultant options to purchase 250,000 of the Companys common shares at
  $0.40 per share, which are exercisable until 7 January 2010 (Note 10).

The Company has an option to acquire
  an 80% interest in certain mineral claims known as the Brown Lake property,
  representing approximately 32,300 acres, located in the territories of Nunavut
  known as the KMD Project (the Option). As at 30 June 2007, management
  believes the Company has fulfilled all of the requirements of the Option and
  has attempted to exercise the Option by giving notice of exercise to the optionor
  and by concurrently issuing 400,000 common shares to the optionor valued at
  $42,000 (Note 7 and 11). The optionor has rejected the Companys notice
  and returned the 400,000 common shares which are at present held in trust by
  the Companys solicitors. The optionor has taken the position that there
  were defaults with respect to the Option Agreement and has given notice to the
  Company that the Option Agreement has terminated. The Companys position
  is that it has completed, under the explicit direction and supervision of the
  optionors sole principal, the work programs required to satisfy the Option
  Agreement. The Company has therefore earned a 100% interest in the Brown Lake
  property, subject to a royalty equal to 3% of gross revenue from the sale of
  diamonds mined from the property. The Company may, at any time within three
  years after the exercise of the Option, purchase one-third of the 3% royalty
  for a purchase price of $1,000,000 and may purchase an additional one-third
  of the royalty for an additional $1,000,000.

The optionor has staked additional mineral
  claims on behalf of the Company in an area that is contiguous to the optioned
  properties. These additional claims are 100% owned by the Company. As at 30
  June 2007, the Companys interest in the KMD Project now totals approximately
  151,000 acres.

The dispute between the Company and the
  Optionor in regards to the Option Agreement and the Brown Lake property is ongoing
  and attempts at resolving this matter are being explored by both parties involved.

(12)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

Expenditures related to the KMD Project
  can be summarized as follows:

| |                                        |  | For the period   |  |  |              |  |  |              | 
| | -------------------------------------- |  | ---------------- |  |  | ------------ |  |  | ------------ | 
| |                                        |  | from the date of |  |  |              |  |  |              | 
| |                                        |  | inception on 6   |  |  | For the      |  |  | For the      | 
| |                                        |  | February 2004    |  |  | year ended   |  |  | year ended   | 
| |                                        |  | to 30 June 2007  |  |  | 30 June 2007 |  |  | 30 June 2006 | 
| |                                        |  | $                |  |  | $            |  |  | $            | 
| |                                        |  |                  |  |  |              |  |  |              | 
| | Balance, beginning of period           |  | -                |  |  | 2,441,412    |  |  | 1,907,330    | 
| |                                        |  |                  |  |  |              |  |  |              | 
| | Property acquisition and staking costs |  | 575,872          |  |  | 42,000       |  |  | 28,500       | 
| |                                        |  |                  |  |  |              |  |  |              | 
| | Exploration expenses                   |  |                  |  |  |              |  |  |              | 
| | Assessment fee                         |  | 22,293           |  |  | 18,525       |  |  | -            | 
| | Camp                                   |  | 268,532          |  |  | -            |  |  | 25,252       | 
| | Communication                          |  | 3,981            |  |  | -            |  |  | -            | 
| | Data analysis                          |  | 300,547          |  |  | -            |  |  | 256,328      | 
| | Food and accommodation                 |  | 26,872           |  |  | -            |  |  | -            | 
| | Geological                             |  | 288,080          |  |  | 14,985       |  |  | 177,268      | 
| | Geophysics                             |  | 220,092          |  |  | -            |  |  | 34,207       | 
| | Helicopter fees                        |  | 161,232          |  |  | -            |  |  | -            | 
| | Management fees                        |  | 35,829           |  |  | -            |  |  | -            | 
| | Mapping                                |  | 11,027           |  |  | -            |  |  | 11,027       | 
| | Mobilization and demobilization        |  | 12,938           |  |  | -            |  |  | -            | 
| | Sampling and processing                |  | 581,160          |  |  | -            |  |  | -            | 
| | Supplies                               |  | 8,467            |  |  | -            |  |  | 1,500        | 
| |                                        |  |                  |  |  |              |  |  |              | 
| |                                        |  | 1,941,050        |  |  | 33,510       |  |  | 505,582      | 
| |                                        |  |                  |  |  |              |  |  |              | 
| | Balance, end of period                 |  | 2,516,922        |  |  | 2,516,922    |  |  | 2,441,412    | 

|6. | Loan Payable                                                                                                                                                 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                              
|   | The loan payable is non-interest bearing until the due
        date, unsecured and due on 1 June 2008 (interest is 10% per annum after
        the due date).

(13)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

|   |              
|-- | -------------
|7. | Capital Stock

On 7 January 2005, the Company completed
  its IPO of 4,000,000 shares at $0.40 per share. Pursuant to this financing,
  the Company paid an agents commission of 7.5% in cash totaling $120,000
  and issued 200,000 common shares and 400,000 share purchase warrants. Each warrant
  entitles the agent to acquire one common share of the Company at $0.40 per share
  until 6 January 2006. These share purchase warrants have expired unexercised.
  In addition, the Company paid $105,457 in share issuance costs to complete the
  IPO.

On 4 June 2005, the Company completed
  a brokered private placement of 2,222,223 units at $0.45 per unit. Pursuant
  to this financing, the Company paid the agent a commission of 7.5% in cash totaling
  $75,000 and issued 222,222 share purchase warrants. Each share purchase warrant
  entitled the agent to acquire one common share of the Company at $0.50 per share
  until 15 June 2007. These agent share purchase warrants have expired unexercised.
  In addition, the Company paid $3,800 in share issuance costs to complete the
  brokered private placement. Each unit of the brokered private placement is comprised
  of one common share and one-half of a share purchase warrant. Each full warrant
  entitles the holder to acquire an additional common share of the Company at
  a price of $0.50 per share until 15 June 2007. These share purchase warrants
  have expired unexercised.

During the year ended 30 June 2005, 950,000
  shares originally classified as escrow shares were re-priced by regulatory authorities
  due to the fact that the holders were not principals of the Company. As a result,
  the shares were reissued at $0.05 per share from $0.001 per share, resulting
  in additional proceeds to the Company of $46,550.

On 27 September 2005, the Company completed
  a non-brokered private placement of 622,466 units at $0.45 per unit. Each unit
  consisted of one flow-through common share and one-half of a share purchase
  warrant with each full warrant entitling the holder to purchase a non-flow-through
  common share until 27 September 2006 at $0.50 per share. These share purchase
  warrants have expired unexercised.

On 24 January 2006, the Company completed
  a non-brokered private placement of 5,482,667 units at $0.15 per unit. Each
  unit consisted of one common share and one share purchase warrant. 2,116,667
  of the units consisted of flow-through common shares and warrants to purchase
  non-flow-through common shares. Each full warrant entitles the holder to acquire
  a common share at a price of $0.20 per share until 24 January 2008.

On 11 April 2006, the Company changed
  its authorized capital to 100,000,000 common shares without par value.

During May and June 2006, the Company
  completed brokered and non-brokered private placements totaling 6,385,999 units
  at $0.225 per unit. Each unit consisted of one common share and one share purchase
  warrant. 1,627,778 of the units consisted of flow-through common shares and
  warrants to purchase non-flow-through common shares. Each share purchase warrant
  entitles the holder to acquire a common share of the Company at a price of $0.30
  per share for a period of two years from the closing date. A commission in the
  amount of $83,632 was paid to the agents upon completion of these private placements.

On 11 August 2006, the Company issued
  40,000 common shares valued at $6,000 for the acquisition of mineral

(14)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

properties (Note 5 and 13).

On 27 November 2006, the Company issued
  400,000 common shares valued at $42,000 for the acquisition of mineral properties
  (Note 5 and 13).

Escrow shares

As at 30 June 2007, there were 3,000,000
  shares held in escrow (2006  6,000,000, 2005  9,000,000), which
  are being released at a rate of 1,500,000 shares every six months.

Stock options

The Company has established a stock option
  plan in accordance with the policies of the TSX Venture Exchange under which
  it is authorized to grant share purchase options up to 10% of its outstanding
  shares. The exercise price of options granted equals the market price of the
  Companys stock on the date of the grant. Unless otherwise stated, the
  options vest when granted. The options are for a maximum term of five years.

A summary of stock options activities
  during the years ended 30 June 2007 and 2006 is as follows:

| |                                             |  |           |   |  | Weighted | 
| | ------------------------------------------- |  | --------- | - |  | -------- | 
| |                                             |  |           |   |  | average  | 
| |                                             |  | Number of |   |  | exercise | 
| |                                             |  | shares    |   |  | price    | 
| |                                             |  |           |   |  | $        | 
| |                                             |  |           |   |  |          | 
| | Outstanding and exercisable at 1 July 2005  |  | 1,700,000 |   |  | 0.40     | 
| |                                             |  |           |   |  |          | 
| | Granted                                     |  | 1,480,000 |   |  | 0.27     | 
| | Exercised                                   |  | -         |   |  | -        | 
| | Expired                                     |  | (500,000  | ) |  | 0.40     | 
| |                                             |  |           |   |  |          | 
| | Outstanding and exercisable at 30 June 2006 |  | 2,680,000 |   |  | 0.33     | 

(15)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

| |                                             |  |           |   |  | Weighted | 
| | ------------------------------------------- |  | --------- | - |  | -------- | 
| |                                             |  |           |   |  | average  | 
| |                                             |  | Number of |   |  | exercise | 
| |                                             |  | shares    |   |  | price    | 
| |                                             |  |           |   |  | $        | 
| |                                             |  |           |   |  |          | 
| | Outstanding and exercisable at 1 July 2006  |  | 2,680,000 |   |  | 0.33     | 
| |                                             |  |           |   |  |          | 
| | Granted                                     |  | -         |   |  | -        | 
| | Exercised                                   |  | -         |   |  | -        | 
| | Expired                                     |  | (700,000  | ) |  | 0.23     | 
| |                                             |  |           |   |  |          | 
| | Outstanding and exercisable at 30 June 2007 |  | 1,980,000 |   |  | 0.36     | 

Outstanding stock options at 30 June
  2007 are as follows:

| |         |  | Exercise |  |  | Number     |  |  | Remaining                | 
| | ------- |  | -------- |  |  | ---------- |  |  | ------------------------ | 
| |         |  | price    |  |  | of options |  |  | contractual life (years) | 
| |         |  | $        |  |  |            |  |  |                          | 
| |         |  |          |  |  |            |  |  |                          | 
| | Options |  | 0.40     |  |  | 1,050,000  |  |  | 2.53                     | 
| |         |  | 0.40     |  |  | 150,000    |  |  | 2.71                     | 
| |         |  | 0.40     |  |  | 300,000    |  |  | 3.22                     | 
| |         |  | 0.25     |  |  | 480,000    |  |  | 3.58                     | 
| |         |  |          |  |  |            |  |  |                          | 
| |         |  |          |  |  | 1,980,000  |  |  |                          | 

(16)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

Warrants

A summary of share warrant activities
  during the years ended 30 June 2007 and 2006 is as follows:

| |                                             |  |            |   |  | Weighted | 
| | ------------------------------------------- |  | ---------- | - |  | -------- | 
| |                                             |  |            |   |  | average  | 
| |                                             |  | Number of  |   |  | exercise | 
| |                                             |  | warrants   |   |  | price    | 
| |                                             |  |            |   |  | $        | 
| |                                             |  |            |   |  |          | 
| | Outstanding and exercisable at 1 July 2005  |  | 1,733,334  |   |  | 0.48     | 
| |                                             |  |            |   |  |          | 
| | Granted                                     |  | 12,179,899 |   |  | 0.26     | 
| | Exercised                                   |  | -          |   |  | -        | 
| | Expired                                     |  | (400,000   | ) |  | 0.40     | 
| |                                             |  |            |   |  |          | 
| | Outstanding and exercisable at 30 June 2006 |  | 13,513,233 |   |  | 0.28     | 

| |                                             |  |            |   |  | Weighted | 
| | ------------------------------------------- |  | ---------- | - |  | -------- | 
| |                                             |  |            |   |  | average  | 
| |                                             |  | Number of  |   |  | exercise | 
| |                                             |  | warrants   |   |  | price    | 
| |                                             |  |            |   |  | $        | 
| |                                             |  |            |   |  |          | 
| | Outstanding and exercisable at 1 July 2006  |  | 13,513,233 |   |  | 0.28     | 
| |                                             |  |            |   |  |          | 
| | Granted                                     |  | -          |   |  | -        | 
| | Exercised                                   |  | -          |   |  | -        | 
| | Expired                                     |  | (1,644,567 | ) |  | 0.50     | 
| |                                             |  |            |   |  |          | 
| | Outstanding and exercisable at 30 June 2007 |  | 11,868,666 |   |  | 0.25     | 

As at 30 June 2007, the following share
  purchase warrants were outstanding:

| |          |  | Exercise |  |  | Number      |  |  | Remaining                | 
| | -------- |  | -------- |  |  | ----------- |  |  | ------------------------ | 
| |          |  | price    |  |  | of warrants |  |  | contractual life (years) | 
| |          |  | $        |  |  |             |  |  |                          | 
| |          |  |          |  |  |             |  |  |                          | 
| | Warrants |  | 0.20     |  |  | 5,482,667   |  |  | 0.57                     | 
| |          |  | 0.30     |  |  | 5,585,999   |  |  | 0.88                     | 
| |          |  | 0.30     |  |  | 800,000     |  |  | 0.94                     | 
| |          |  |          |  |  |             |  |  |                          | 
| |          |  |          |  |  | 11,868,666  |  |  |                          | 

(17)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

|   | These warrants entitle the holders thereof the right
        to acquire one common share for each warrant held.                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                
|8. | Income Taxes                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                
|   | Provision for income taxes                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                
|   | The provision for (recovery of) income taxes differs
        from the amount that would have resulted by applying Canadian federal
        and provincial statutory tax rates of 34.12% (2006  34.12%, 2005
         35.62%).

| |                                                         |  | 2007     |   |  | 2006     |   |  | 2005     |  
| | ------------------------------------------------------- |  | -------- | - |  | -------- | - |  | -------- | -
| |                                                         |  | $        |   |  | $        |   |  | $        |  
| |                                                         |  |          |   |  |          |   |  |          |  
| | Net loss before income taxes                            |  | (288,041 | ) |  | (588,800 | ) |  | (984,040 | )
| |                                                         |  |          |   |  |          |   |  |          |  
| | Income tax recovery at statutory rates                  |  | (98,280  | ) |  | (200,899 | ) |  | (350,515 | )
| | Adjustments to benefits resulting from:                 |  |          |   |  |          |   |  |          |  
| | Net changes in valuation allowance
      for future tax |  |          |   |  |          |   |  |          |  
| | assets                                                  |  | 98,280   |   |  | 43,362   |   |  | 90,943   |  
| | Stock-based compensation not deductible
      for       |  |          |   |  |          |   |  |          |  
| | income tax purposes                                     |  | -        |   |  | 62,695   |   |  | 217,638  |  
| | Share issue costs                                       |  | -        |   |  | (31,928  | ) |  | (21,675  | )
| | Other                                                   |  | -        |   |  | 5,606    |   |  | 609      |  
| |                                                         |  |          |   |  |          |   |  |          |  
| | Future income tax recovery                              |  | -        |   |  | (121,164 | ) |  | (63,000  | )

Future tax balances

The tax effects of temporary differences
  that give rise to future income tax assets and liabilities are as follows:

| |                                                    |  | 2007     |   |  | 2006     |   |  | 2005     |  
| | -------------------------------------------------- |  | -------- | - |  | -------- | - |  | -------- | -
| |                                                    |  | $        |   |  | $        |   |  | $        |  
| |                                                    |  |          |   |  |          |   |  |          |  
| | Future tax assets:                                 |  |          |   |  |          |   |  |          |  
| | Mineral properties (net of future tax liabilities) |  | (222,582 | ) |  | (181,100 | ) |  | (63,000  | )
| | Non-capital loss carry forwards                    |  | 452,306  |   |  | 323,200  |   |  | 165,600  |  
| | Share issue costs                                  |  | -        |   |  | 101,500  |   |  | 109,500  |  
| |                                                    |  |          |   |  |          |   |  |          |  
| |                                                    |  | 229,724  |   |  | 243,600  |   |  | 212,100  |  
| | Less: valuation allowance                          |  | (229,724 | ) |  | (243,600 | ) |  | (212,100 | )
| |                                                    |  |          |   |  |          |   |  |          |  
| | Actual income taxes                                |  | -        |   |  | -        |   |  | -        |  

(18)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

As at 30 June 2007, the Company had available
  for deduction against future taxable income, non-capital losses of approximately
  $1,251,002. The potential income tax benefit of these losses has been offset
  by a full valuation allowance. These losses, if unutilized will expire as follows:

Year
      
      Amount$2014
      
      16,8212015
      
      448,0322016
      
      498,1082027
      
      288,0411,251,002


|    | Additionally, the Company has approximately
        $4,100,000 of Canadian development expenses and Canadian Exploration expenditures
        as at 30 June 2007 which, under certain circumstances, may be utilized
        to reduce taxable income of future years. The potential income tax benefits
        of these losses have been offset by a full valuation allowance.                                              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|9.  | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | During the year ended 30 June 2007, the Company
        incurred professional and management services rendered by certain directors
        and an officer in the amount of $100,160 (2006  $96,500, 2005 
        $114,000). The Company also incurred $9,960 (2006  $52,614, 2005
         $33,632) in deferred mineral property expenditures to a company
        controlled by an officer and director of the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | These transactions were entered into in the
        normal course of business and are measured at the exchange amount.                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|10. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | i.                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | ii.                                                                                                                                                                                                                                                                                                                                                                                                                           

(19)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

| | iii. | In July 2006, the Company entered into a two year lease
        of office premises at $2,000 monthly or $24,000 annually to 30 June 2008.
        Effective 1 January 2007, the Company entered into a one year lease at
        $1,400 monthly or $16,800 annually to 31 December 2007.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. | Contingencies
|--- | -------------
|    |              
|    | i.           
|    |              
|    | ii.          

|12. | Subsequent Events
|--- | -----------------
|    |                  
|    | i.               
|    |                  
|    | ii.              
|    |                  
|    | iii.             

|13. | Supplemental Disclosure with Respect to Cash Flow
|--- | -------------------------------------------------

| |                                              |  | For the      |  |  | For the      |  |  | For the      | 
| | -------------------------------------------- |  | ------------ |  |  | ------------ |  |  | ------------ | 
| |                                              |  | year ended   |  |  | year ended   |  |  | year ended   | 
| |                                              |  | 30 June 2007 |  |  | 30 June 2006 |  |  | 30 June 2005 | 
| |                                              |  | $            |  |  | $            |  |  | $            | 
| |                                              |  |              |  |  |              |  |  |              | 
| | Cash paid during the period for interest     |  | 353          |  |  | 1,610        |  |  | 1,355        | 
| | Cash paid during the period for income taxes |  | -            |  |  | -            |  |  | -            | 

(20)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

|    | On 11 August 2006, the Company issued 40,000 common
        shares valued at $6,000 for the acquisition of mineral properties (Note
        5 and 13).                                                                                                                                                                                                                                                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | On 27 November 2006, the Company issued 400,000 common
        shares valued at $42,000 for the acquisition of mineral properties (Note
        5 and 13).                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|14. | Reconciliation of Canadian and United States Generally
        Accepted Accounting Principles                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The financial statements of the Company have been prepared
        in accordance with Canadian generally accepted accounting principles (GAAP),
        which differ in certain material aspects from United States GAAP. Had
        the Company prepared the financial statements in accordance with United
        States GAAP, certain items on the balance sheets and statements of operations,
        deficit and cash flows would have been reported as follows:

| |                                              |  | 2007     |   |  | 2006       |   |  | 2005       |  
| | -------------------------------------------- |  | -------- | - |  | ---------- | - |  | ---------- | -
| |                                              |  | $        |   |  | $          |   |  | $          |  
| |                                              |  |          |   |  |            |   |  |            |  
| | Statement of loss                            |  |          |   |  |            |   |  |            |  
| |                                              |  |          |   |  |            |   |  |            |  
| | Net loss for the year based on Canadian      |  |          |   |  |            |   |  |            |  
| | GAAP                                         |  | (288,041 | ) |  | (467,636   | ) |  | (921,040   | )
| | Mineral exploration property costs           |  |          |   |  |            |   |  |            |  
| | expensed                                     |  | (121,597 | ) |  | (1,560,920 | ) |  | (2,572,727 | )
| |                                              |  |          |   |  |            |   |  |            |  
| | Net loss for the year based on United States |  |          |   |  |            |   |  |            |  
| | GAAP                                         |  | (409,638 | ) |  | (2,028,556 | ) |  | (3,493,767 | )
| |                                              |  |          |   |  |            |   |  |            |  
| | Comprehensive loss for the year based on     |  |          |   |  |            |   |  |            |  
| | United States GAAP                           |  | (409,638 | ) |  | (2,028,556 | ) |  | (3,493,767 | )
| |                                              |  |          |   |  |            |   |  |            |  
| | Loss per share, basic and diluted            |  | (0.01    | ) |  | (0.08      | ) |  | (0.19      | )
| |                                              |  |          |   |  |            |   |  |            |  
| | Comprehensive loss per share, basic and      |  |          |   |  |            |   |  |            |  
| | diluted                                      |  | (0.01    | ) |  | (0.08      | ) |  | (0.19      | )

(21)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

Balance sheet difference

| |                                    |  | 2007       |   |  | 2006       |   |  | 2005       |  
| | ---------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                    |  | $          |   |  | $          |   |  | $          |  
| | Assets                             |  |            |   |  |            |   |  |            |  
| |                                    |  |            |   |  |            |   |  |            |  
| | Canadian GAAP                      |  | 5,106,472  |   |  | 5,269,042  |   |  | 3,575,080  |  
| | Mineral property exploration costs |  |            |   |  |            |   |  |            |  
| | expensed                           |  | (5,002,997 | ) |  | (4,401,820 | ) |  | (2,840,900 | )
| |                                    |  |            |   |  |            |   |  |            |  
| | United States GAAP                 |  | 103,475    |   |  | 867,222    |   |  | 734,180    |  
| |                                    |  |            |   |  |            |   |  |            |  
| | Liabilities                        |  |            |   |  |            |   |  |            |  
| |                                    |  |            |   |  |            |   |  |            |  
| | Canadian GAAP                      |  | 125,433    |   |  | 47,962     |   |  | 482,778    |  
| |                                    |  |            |   |  |            |   |  |            |  
| | United States GAAP                 |  | 125,433    |   |  | 47,962     |   |  | 482,778    |  
| |                                    |  |            |   |  |            |   |  |            |  
| | Shareholders equity               |  |            |   |  |            |   |  |            |  
| |                                    |  |            |   |  |            |   |  |            |  
| | Canadian GAAP                      |  | 4,981,039  |   |  | 5,221,080  |   |  | 3,092,302  |  
| | Mineral property exploration costs |  |            |   |  |            |   |  |            |  
| | expensed                           |  | (5,002,997 | ) |  | (4,401,820 | ) |  | (2,840,900 | )
| |                                    |  |            |   |  |            |   |  |            |  
| | United States GAAP                 |  | 21,958     |   |  | 819,260    |   |  | 251,402    |  
| |                                    |  |            |   |  |            |   |  |            |  
| | United States GAAP                 |  | 103,475    |   |  | 867,222    |   |  | 734,180    |  

(22)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

Statement of cash flow difference

| |                                                                       |  | For the      |   |  | For the      |   |  | For the      |  
| | --------------------------------------------------------------------- |  | ------------ | - |  | ------------ | - |  | ------------ | -
| |                                                                       |  | year ended   |   |  | year ended   |   |  | year ended   |  
| |                                                                       |  | 30 June 2007 |   |  | 30 June 2006 |   |  | 30 June 2005 |  
| |                                                                       |  | $            |   |  | $            |   |  | $            |  
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Cash flows from operation activities                                  |  |              |   |  |              |   |  |              |  
| | Net loss for the year, Canadian GAAP                                  |  | (288,041     | ) |  | (467,636     | ) |  | (921,040     | )
| | Add: Mineral exploration property
      costs expensed                |  | (121,577     | ) |  | (1,560,920   | ) |  | (2,572,727   | )
| |                                                                       |  |              |   |  |              |   |  |              |  
| |                                                                       |  | (409,638     | ) |  | (2,028,556   | ) |  | (3,493,767   | )
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Adjustments to reconcile loss to net cash
      used by operating     |  |              |   |  |              |   |  |              |  
| | activities                                                            |  |              |   |  |              |   |  |              |  
| | Amortization of property,
      plant and equipment                   |  | -            |   |  | -            |   |  | 225          |  
| | Future income
      tax recovery                                      |  | -            |   |  | (121,164     | ) |  | (63,000      | )
| | Loss on sales of property,
      plant and equipment                  |  | -            |   |  | 313          |   |  | -            |  
| | Stock-based
      compensation                                        |  | -            |   |  | 183,750      |   |  | 611,000      |  
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Changes in operating assets and liabilities                           |  |              |   |  |              |   |  |              |  
| | (Increase) decrease in amounts receivable                             |  | (665         | ) |  | 99,272       |   |  | (72,887      | )
| | (Increase) decrease in prepaid
      expenses                         |  | 7,500        |   |  | (7,500       | ) |  | -            |  
| | Increase (decrease) in accounts payable and accrued
      liabilities |  | (22,529      | ) |  | (37,460      | ) |  | 28,228       |  
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Cash flows from operating activities, United States GAAP              |  | (425,332     | ) |  | (1,911,345   | ) |  | (2,990,201   | )
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Cash flows from investing activities, Canadian GAAP                   |  |              |   |  |              |   |  |              |  
| | Restricted cash and cash equivalents (Note
      3)                   |  | (344,577     | ) |  | (324,193     | ) |  | 130,667      |  
| | Purchase of property, plant and equipment                             |  | -            |   |  | -            |   |  | (1,498       | )
| | Proceeds on sales of property, plant and equipment                    |  | -            |   |  | 960          |   |  | -            |  
| | Acquisition of mineral properties                                     |  | -            |   |  | (2,015,276   | ) |  | (2,357,870   | )
| | Deferred exploration and development costs                            |  | -            |   |  | -            |   |  | 297,500      |  
| | Mineral exploration property costs expensed                           |  | 73,577       |   |  | 1,560,920    |   |  | 2,572,727    |  
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Cash flows from investing activities, United States GAAP              |  | (271,000     | ) |  | (777,589     | ) |  | 641,526      |  
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Cash flows from financing activities, Canadian GAAP                   |  |              |   |  |              |   |  |              |  
| | Loan payable (Note 6)                                                 |  | 100,000      |   |  | -            |   |  | (71,620      | )
| | Shares issued for cash                                                |  | -            |   |  | 2,455,728    |   |  | 2,594,043    |  
| | Share subscriptions received in advance                               |  | -            |   |  | 20,000       |   |  | (20,000      | )
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Cash flows from financing activities, United
      States GAAP        |  | 100,000      |   |  | 2,475,728    |   |  | 2,502,423    |  
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Increase (decrease) in cash and cash equivalents                      |  | (596,332     | ) |  | (213,206     | ) |  | 153,748      |  
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Cash and cash equivalents, beginning of
      year                    |  | 49,528       |   |  | 262,734      |   |  | 108,986      |  
| |                                                                       |  |              |   |  |              |   |  |              |  
| | Cash and cash equivalents, end of year(Note
      3)                  |  | (546,804     | ) |  | 49,428       |   |  | 262,734      |  

(23)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

Under United States GAAP, separate subtotals
  within cash flow from operating activities are not presented.

| | i.  | Flow-through shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | Flow-through shares are typically issued by Canadian
        Exploration Stage Companies. The flow-through shares permit the investor
        to claim deductions for tax purposes related to expenditures incurred
        by the issuer. The issuer explicitly renounces the right to claim these
        deductions. The investors tax base is reduced by the amount of deductions
        taken.                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | United States GAAP directs that when flow-through shares
        are issued, the proceeds should be allocated between the offering of shares
        and the sale of tax benefits. The allocation is made based on the difference
        between the quoted price of the existing shares and the amount the investor
        pays for the flow-through shares. A liability is recognized for this difference.
        The liability is reversed when tax benefits are renounced and a deferred
        tax liability is recognized at that time.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | During the year ended 30 June 2007, the Company issued
        Nil (2006  3,744,445, 2005  622,466) flow- through common
        shares for total proceeds of $Nil (2006  $683,750, 2005  $280,109)
        respectively. All of these amounts related to the year ended 30 June 2007
        were renounced to respective investors on 31 December 2006.                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ii. | Earnings (loss) per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | Under both Canadian and United States GAAP, basic earnings
        (loss) per share is computed by dividing the earnings (loss) to common
        shareholders by the weighted average number of shares outstanding during
        the year. For Canadian reporting purposes, fully diluted earnings per
        share is calculated under the assumption that any convertible notes are
        converted at the date issued, and stock options and warrants are exercised
        at the date of grant.                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | Under United States GAAP, diluted earnings per share
        takes into consideration the weighted average number of shares outstanding
        during the year and the potentially dilutive common shares. For the years
        ended 30 June 2007, 2006 and 2005, this calculation proved to be anti-dilutive.                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | Under United States GAAP, performance-based escrow shares
        are considered to be contingently issuable until the performance criteria
        has been satisfied and as such, the weighted average number of common
        shares outstanding excludes any shares that remain in escrow. The Companys
        escrow shares are not performance-based and therefore no adjustments have
        been made to the calculation of the earnings (loss) per share.                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | The weighted average number of common shares outstanding
        for calculating basic earnings (loss) per share under United States GAAP
        for the years ended 30 June 2007, 2006 and 2005 were 36,347,901, 26,783,813
        and 18,539,297, respectively. The calculation of diluted earnings per
        share for the years ended 30 June 2007, 2006 and 2005 proved to be anti-dilutive.                                                                                                                                            

(24)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

| | iii. | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | Statement of Financial Accounting Standard (SFAS)
        No. 130, Reporting Comprehensive Income, establishes
        standards for the reporting and display of comprehensive income and its
        components (revenues, expenses, gains, and losses). SFAS No. 130 requires
        that all items that are required to be recognized under accounting standards
        as components of comprehensive income be reported in the financial statements
        for the Company. For the year ended 30 June 2007, there is no difference
        between net loss and comprehensive loss.                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | iv.  | Mineral property expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | Mineral properties are accounted for in accordance
        with Canadian GAAP as discussed in Note 5. For US GAAP purposes, advances
        for future exploration costs, exploration expenditures as well as acquisition
        costs for properties, leases and permits, are expensed as incurred unless
        commercial feasibility is established. Effective 1 July 2004, the Company
        adopted the Emerging Issues Task Force (EITF) 04-2, Whether
        Mineral Rights Are Tangible or Intangible Assetsand as such,
        acquisition costs are considered tangible assets and are capitalized.            
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | v.   | Accounting for impairment of long-lived assets and for
        long-lived assets to be disposed of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | For United States reporting purposes, the Company has
        adopted SFAS No. 144, Accounting for the Impairment or Disposal
        of Long-Lived Assets. In the event that facts and circumstances
        indicate that the carrying amount of an asset may not be recoverable and
        an estimate of future and undiscounted cash flows is less than the carrying
        amount of the asset, an impairment loss will be recognized.                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | vi.  | Concentration of credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | The Company is exposed to credit losses in the event
        of non-performance by the counter-parties to the financial instruments
        but does not expect any counter-parties to fail to meet their obligations.
        The Company generally does not obtain collateral or other security to
        support financial instruments subject to credit risk, but monitors the
        credit standing of counter-parties.                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | vii. | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | In June 2001, the Financial Accounting Standards Board
        (FASB) issued SFAS No. 143  Accounting for
        Asset Retirement Obligations.SFAS No. 143, effective for financial
        statements issued for fiscal years beginning after 15 June 2002, is substantially
        consistent with CICA Handbook Section 3110, Asset Retirement
        Obligations,which is effective for fiscal years beginning on
        or after 1 January 2004. The Company adopted CICA 3110 for Canadian GAAP
        purposes effective 1 December 2004, and SFAS No. 143 for US GAAP purposes
        effective 1 December 2004.

(25)

---

|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

| | viii. | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | Under United States GAAP, deferred income tax assets
        and liabilities are revalued for all enacted changes in tax rates. Under
        Canadian GAAP, deferred income tax assets and liabilities are revalued
        for all enacted or substantially enacted changes in tax rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ix.   | Recent pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | In February 2006, the FASB issued SFAS No.
        155, Accounting for Certain Hybrid Financial Instruments-an amendment
        of FASB Statements No. 133 and 140, to simplify and make more
        consistent the accounting for certain financial instruments. SFAS No.
        155 amends SFAS No. 133, Accounting for Derivative Instruments
        and Hedging Activities, to permit fair value remeasurement for
        any hybrid financial instrument with an embedded derivative that otherwise
        would require bifurcation, provided that the whole instrument is accounted
        for on a fair value basis. SFAS No. 155 amends SFAS No. 140, Accounting
        for the Impairment or Disposal of Long-Lived Assets, to allow
        a qualifying special-purpose entity to hold a derivative financial instrument
        that pertains to a beneficial interest other than another derivative financial
        instrument. SFAS No. 155 applies to all financial instruments acquired
        or issued after the beginning of an entitys first fiscal year that
        begins after 14 September 2006, with earlier application allowed. This
        standard is not expected to have a significant effect on the Companys
        future reported financial position or results of operations.                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | In March 2006, the FASB issued SFAS No. 156, Accounting
        for Servicing of Financial Assets, an amendment of FASB Statement No.
        140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments
        of Liabilities. This statement requires all separately recognized
        servicing assets and servicing liabilities be initially measured at fair
        value, if practicable, and permits for subsequent measurement using either
        fair value measurement with changes in fair value reflected in earnings
        or the amortization and impairment requirements of Statement No. 140.
        The subsequent measurement of separately recognized servicing assets and
        servicing liabilities at fair value eliminates the necessity for entities
        that manage the risks inherent in servicing assets and servicing liabilities
        with derivatives to qualify for hedge accounting treatment and eliminates
        the characterization of declines in fair value as impairments or direct
        write-downs. SFAS No. 156 is effective for an entitys first fiscal
        year beginning after September 15, 2006. This adoption of this statement
        is not expected to have a significant effect on the Companys future
        reported financial position or results of operations.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | In September 2006, the FASB issued SFAS No. 157, Fair
        Value Measures. This Statement defines fair value, establishes
        a framework for measuring fair value in generally accepted accounting
        principles (GAAP), expands disclosures about fair value measurements,
        and applies under other accounting pronouncements that require or permit
        fair value measurements. SFAS No. 157 does not require any new fair value
        measurements. However, the FASB anticipates that for some entities, the
        application of SFAS No. 157 will change current practice. SFAS No. 157
        is effective for financial statements issued for fiscal years beginning
        after 15 November 2007, which for the Company would be the first fiscal
        year beginning 1 January 2008. The Company is currently evaluating the
        impact of SFAS No. 157 but does not expect that it will have a material
        impact on its financial statements.                                                                                                                                                                                                                                                                                                                                                                        

(26)

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|Devonshire Resources Ltd.           
|------------------------------------
|(formerly Ripple Lake Diamonds Inc.)
|(An Exploration Stage Company)      
|Notes to Financial Statements       
|(Expressed in Canadian Dollars)     
|30 June 2007                        

In September 2006, the FASB issued SFAS
  No. 158, Employers Accounting for Defined Benefit Pension and
  Other Postretirement Plans  an amendment of FASB Statements No. 87, 88,
  106 and 132(R). SFAS No. 158 requires an employer that sponsors one
  or more single-employer defined benefit plans to (a) recognize the overfunded
  or underfunded status of a benefit plan in its statement of financial position,
  (b) recognize as a component of other comprehensive income, net of tax, the
  gains or losses and prior service costs or credits that arise during the period
  but are not recognized as components of net periodic benefit cost pursuant to
  SFAS No. 87, Employers Accounting for Pensions, or
  SFAS No. 106, Employers Accounting for Postretirement Benefits
  Other Than Pensions, (c) measure defined benefit plan assets and obligations
  as of the date of the employers fiscal year-end, and (d) disclose in the
  notes to financial statements additional information about certain effects on
  net periodic benefit cost for the next fiscal year that arise from delayed recognition
  of the gains or losses, prior service costs or credits, and transition asset
  or obligation. SFAS No. 158 is effective for the Companys fiscal year
  ending 31 October 2007. The adoption of SFAS No. 158 is not expected to have
  a material impact on the Companys financial position, results of operations
  or cash flows.

In September 2006, the SEC issued Staff
  Accounting Bulletin (SAB) No. 108, Considering the Effects
  of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
  Statements.SAB No. 108 addresses how the effects of prior year
  uncorrected misstatements should be considered when quantifying misstatement
  in current year financial statements. SAB No. 108 requires companies to quantify
  misstatement using a balance sheet and income statement approach and to evaluate
  whether either approach results in quantifying an error that is material in
  light of relevant quantitative and qualitative factors. SAB No. 108 is effective
  for periods ending after 15 November 2006. The Company is currently evaluating
  the impact of adopting SAB No. 108 but does not expect that it will have a material
  effect on its financial statements.

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

(27)

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SIGNATURES

The registrant hereby certifies that it meets all
of the requirements for filing on Form 20-F and that it has duly caused and
authorized the undersigned to sign this annual report on its behalf.

Dated this 12thday of December, 2007.

DEVONSHIRE RESOURCES
LTD.

BY: /s/ Timothy
CrowhurstTimothy Crowhurst, President and Director

-54-

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