UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-K


(Mark
One)


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


For
the fiscal year ended November 30, 2008


OR


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


For the
transition period
from   ____________   to  ____________________




Texada
Ventures Inc.


(Exact
Name of Registrant as specified in its charter)





Nevada
                    000-51563
                    98-0431245(State
      or other jurisdiction of incorporation)
                    (Commission
      File  Number)
                    (IRS
      Employer Identification
No.)





11616
      E. Montgomery Drive, Suite #54, Spokane Valley, WA
                    99206(Address
      of principal executive offices)
                    (Zip
      Code)





Registrant's
telephone number, including area
code:                                            (509) 301-6635





Securities
Registered pursuant to Section 12 (g) of the
Act:               Common stock, Par Value
$0.001


(Title of Class)





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





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act.


[  ]
Yes   [X] 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 1934 during the
past 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past ninety (90) days.


Yes
[X]       No  [  ]





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [  ]





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.


Large
      accelerated filer  [  ]
            Accelerated
      filer [  ]Non-accelerated
      filer [  ]
            Smaller
      reporting company [X]





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)


Yes
[  ]       No  [X]





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of the last
business day of the registrant’s most recently completed second fiscal quarter:
$61,340,668 as of May 31,
2008, based on the last sales price of $1.01 per share of the Company’s
common stock on theNational Association of
Securities Dealers OTCBB.





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date:  60,733,335 shares of common stock as
of February 27, 2009




DOCUMENTS
INCORPORATED BY REFERENCE:




Not
Applicable







Texada
Ventures Inc.


FORM
10-K


November
30, 2008








TABLE
OF CONTENTS




PART
      I
                  4ITEM
      1.
                  BUSINESS
                  4ITEM
      1A.
                  RISK
      FACTORS
                  8ITEM
      1B.
                  UNRESOLVED
      STAFF COMMENTS
                  8ITEM
      2.
                  PROPERTIES
                  8ITEM
      3.
                  LEGAL
      PROCEEDINGS
                  17ITEM
      4.
                  SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
                  17PART
      II
                  18ITEM
      5.
                  MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
                  18ITEM
      6.
                  SELECTED
      FINANCIAL DATA
                  18ITEM
      7.
                  MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                  19ITEM
      7A.
                  QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                  26ITEM
      8.
                  FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                  26ITEM
      9.
                  CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
                  41ITEM
      9A(T)
                  CONTROLS
      AND PROCEDURES
                  41ITEM
      9B.
                  OTHER
      INFORMATION
                  42PART
      III
                  42ITEM
      10.
                  DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
                  42ITEM
      11.
                  EXECUTIVE
      COMPENSATION
                  44ITEM
      12.
                  SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
                  45ITEM
      13.
                  CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
      INDEPENDENCE
                  46ITEM
      14.
                  PRINCIPAL
      ACCOUNTING FEES AND SERVICES
                  48ITEM
      15.
                  EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES
                  49
  2


FORWARD-LOOKING
STATEMENTS





Certain
statements contained in this Annual Report on Form 10-K constitute
“forward-looking statements”. These statements, identified by words such as
“plan”, “anticipate”, “believe”, “estimate”, “should,” “expect” and similar
expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Information
concerning the interpretation of drill results and mineral resource estimates
also may be deemed to be forward-looking statements, as such information
constitutes a prediction of what mineralization might be found to be present if
and when a project is actually developed. You are cautioned that any such
forward-looking statements are not guarantees and may involve risks and
uncertainties. Our actual results may differ materially from those in the
forward-looking statements due to risks facing us or due to actual facts
differing from the assumptions underlying our predictions. Some of these risks
and assumptions include:




·
            general
      economic and business conditions, including changes in interest rates,
      fluctuations in the prices for base metals, fluctuations in prices for
      securities in the resource sector, demand for base metals and other
      economic and business conditions;




·
            natural
      phenomena or disasters that may affect completion of drill programs,
      exploration work, completion of feasibility studies or development, if
      warranted;




·
            actions
      by government authorities, including changes in government regulation,
      permitting requirements or environmental
  legislation;




·
            the
      Company’s ability to raise sufficient financing to complete its planned
      exploration work on its properties and to place its properties into
      development, if warranted, and to continue as a going
    concern;




·
            the
      Company's ability to complete the proposed transaction with Royalty
      Exploration, LLC under the Term Sheet effective as of September 16, 2008,
      and amended on November 12,
2008;




·
            the
      Company’s ability to complete transactions, attract additional capital
      and continue as a going
concern;




·
            future
      decisions by management in response to changing conditions,
      and




·
            misjudgments,
      inaccurate assumptions or changes in conditions related to forward-looking
      statements.




Certain
risks and uncertainties include those set forth under the caption “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
elsewhere in this Form 10-K. We advise you to carefully review the reports and
documents we file from time to time with the Securities and Exchange Commission
(the “SEC”), particularly our quarterly reports on Form 10-Q and our current
reports on Form 8-K.




We advise
you that these cautionary remarks expressly qualify in their entirety all
forward-looking statements attributable to us or persons acting on our behalf.
The Company assumes no obligation to update its forward-looking statements to
reflect actual results, changes in assumptions or changes in other factors
affecting such statements. You should not place undue reliance on such
forward-looking statements.




As used
in this Annual Report, the terms “we”, “us”, “our”, “Texada” and the “Company”
mean Texada Ventures Inc., unless otherwise indicated. All dollar amounts in
this Annual Report are expressed in U.S. dollars unless otherwise
indicated.





3


PART
I





ITEM
1. BUSINESS





Overview





Texada
Ventures Inc. (the “Company”) is engaged in the business of acquisition and
exploration of mineral and resource properties.  We were incorporated
on October 17, 2001 under the laws of the State of Nevada. Our principal office
is located at 11616 E. Montgomery Drive, Suite 54, Spokane Valley, WA 99206. Our
phone number is 509-301-6635. Our facsimile number is 509-924-2524.





We have
acquired a 100% undivided interest in a group of mineral claims located in the
Wheaton River District in the Yukon Territory, Canada that we refer to as the
Peek Claims. We have not earned any revenues to date. Our plan of operation is
to continue to carry out exploration work on these claims in order to ascertain
whether they possess commercially exploitable mineral deposits. We are presently
in the exploration stage of our business and we can provide no assurance that
commercially viable mineral deposits exist on our claims or that we will
discover commercially exploitable levels of mineral resources on our properties,
or if such deposits are discovered, that we will enter into further substantial
exploration programs. We will not be able to determine whether or not our
mineral claims contain a commercially exploitable mineral deposit, or reserve,
until appropriate exploratory work is done and an economic evaluation based on
that work concludes economic viability.





We
generally conduct our business through verbal agreements with consultants and
arms-length third parties. Our verbal agreement with our geologist includes his
reviewing all of the results from the exploratory work performed upon the site
and making recommendations based on those results in exchange for payments equal
to the usual and customary rates received by geologists performing similar
consulting services.





As a
result of our failure to generate substantial revenues since our inception, we
have decided to review our initial business plan in order to evaluate the
progress of our mining business.  We have not attained profitable
operations to date and are dependent upon obtaining financing to pursue our plan
of operation.  Following Dr. John Veltheer’s acquisition of 49% of our
issued and outstanding shares and his appointment to the board of Texada in
October 2006, we have decided to continue to develop our current mining business
and to seek other business opportunities.  In accordance with that
decision, in September 2008, we appointed Ted R. Sharp as our President, Chief
Executive Officer, Chief Financial Officer, Treasurer, Secretary and a member of
our Board of Directors. Also in September 2008, we entered into a Term Sheet
with Royalty Exploration, LLC for the purchase of that company, which Term Sheet
was amended in November 2008.








RECENT
SIGNIFICANT CORPORATE DEVELOPMENTS




We have
experienced the following significant corporate developments during our fiscal
year ended November 30, 2008:





Anglo
Agreement:





On March
21, 2007, we entered into a Term Sheet Agreement with Anglo Energy Refining
Corp., a Panamanian corporation (“Anglo”), to acquire all of Anglo’s rights and
interests in a Production Sharing Agreement (the “PSA”) to be entered into
between Anglo and a joint venture partner. The PSA related to a 40% production
sharing interest an Ecuadorian oil and gas field to be obtained by Anglo’s joint
venture partner. On August 31, 2008, we abandoned the Anglo Agreement and
recognized an impairment of $115,000 associated with that property abandonment
by both parties.  No further expenditures will be
incurred.








4


Term
Sheet:





On
September 16, 2008, we signed a Term Sheet (the “Term Sheet”) that sets forth
the principal terms upon which we propose to enter into a definitive agreement
(the “Definitive Agreement”) to acquire Royalty Exploration, LLC (“REX”) and
commence a concurrent financing of $40,000,000. REX has entered into an
agreement to acquire substantially all of the assets of a business unit of a
large research and development and manufacturing company engaged in the business
of providing exploration and environmental surveys to resource companies for a
purchase price of $40,000,000, of which $30,000,000 is due at closing and the
balance is payable by issuing a promissory note. The Term Sheet is non-binding,
except for customary binding provisions.  The Term Sheet was
subsequently amended on November 12, 2008.





We intend
to use commercially reasonable efforts to commence a financing to raise
$40,000,000 by issuing securities (the “Placement”) to fund the REX acquisition
and general working capital requirements of the combined company. We, at our
option, may raise such financing through mezzanine debt financing, which may be
satisfied by a subsequent placement of issuing our securities.





We
propose to enter into a Definitive Agreement under which we will acquire all of
the issued and outstanding equity of REX by issuing shares of our common stock
(“Consideration Shares”) to the equity holders of REX (“REX Unitholders”) equal
to 50% of our issued and outstanding voting stock after giving effect to the
Placement and the REX acquisition.





We agreed
to fund, for the benefit of REX, the sum of up to $500,000 for the purposes of
(i) reimbursing REX for transaction related expenses, (ii) our transaction
related expenses, and (iii) subject to satisfaction of certain conditions,
making a cash advance to REX.  REX is required to repay us for REX’s
transaction related expenses and cash advances on the later of (a) March 31,
2009, (b) closing date of the transaction, or (c) termination of the Term Sheet
or, if the transaction does not close, in 12 monthly installments.





The Term
Sheet may be terminated by either party if the conditions set forth in the Term
Sheet have not been satisfied on or before June 30, 2009, as extended from
December 31, 2008 by Amendment No. 1 to the Term Sheet dated November 12,
2008.  That Amendment also waived REX’s ability to terminate the Term
Sheet if we had not provided to REX satisfactory evidence of financial
commitments to raise at least $40,000,000 in the Placement by or before October
31, 2008.





The
significant terms and disclosures of the Term Sheet and its subsequent amendment
were reported in Forms 8-K filed with the SEC on September 22, 2008, and
November 12, 2008, respectively, which are herein incorporated by
reference.





Corporate
Governance:





We
entered into an engagement letter with Sharp Executive Associates, Inc. (“SEA”),
dated September 12, 2008 (the “Engagement Letter”), that outlines the services
and work to be performed by SEA on behalf of the Company, the fees associated
with the work, and the responsibilities of both parties to the Engagement
Letter, as set forth in our Form 8-K dated September 12, 2008, which is
incorporated herein by this reference.





Effective
September 12, 2008, Dr. John Veltheer (“Dr. Veltheer”) resigned as our
CEO, CFO, president, secretary and treasurer (collectively the “Interim
Executive Positions”). Dr. Veltheer’s resignation was not the result of any
disputes, claims or issues with the Company. The Board accepted
Dr. Veltheer’s resignation and appointed Mr. Sharp, 52, to our Board and to
fill the Interim Executive Positions as described in our Form 8-K dated
September 12, 2008, which is incorporated herein by this reference.





5


On
September 12, 2008, we moved our offices and principal place of business from
our location in Vancouver, British Columbia, Canada, to 11616 East Montgomery
Drive, No. 54, Spokane Valley, Washington 99206.








PLAN
OF OPERATION





As a
result of our failure to generate any revenues since our inception, we have not
been satisfied with our initial business plan to this point.  In
September 2008, we appointed Ted R. Sharp as a member of our Board of Directors
and as our President, Chief Executive Officer and Chief Financial
Officer.  We are presently reviewing the current state of our business
in detail with consultants in order to evaluate the progress of our mining
business.  As a result of its change in strategic direction, we
entered into the Term Sheet with REX described above in Recent Significant
Corporate Developments.  We are currently evaluating financing options
to complete the transaction with REX but there can be no assurance that such
financing will be available in acceptable terms, if at all.







Mineral
Properties:





As
described in previous filings, we have taken a phased approach to our
exploration efforts on the Peek Claims, and have received a geological report on
the results of Phase III of our program with further recommendations from our
geological consultant of additional activities prior to engaging in Phase IV of
our plan. In his report, our geologist recommended that, prior to proceeding
with Phase IV, further geological engineering should be undertaken to define the
exact source areas for the known and new vein float material.  Our
geologist recommended reserving a total of $10,000 for a two-stage delineation
program prior to commencing Phase IV of our exploration program.  We
proceeded with our geologist’s recommendation and completed the first phase of
the delineation program during the summer exploration season of
2006.  A detailed, close-spaced, soil geochemical survey over the
conductors using a plugger style overburden sampling drill was recommended to
locate the bed rock source of the mineralization following completion of Phase I
of the delineation program.




Our
decision to proceed to Phase IV of our initial exploration program will be made
based on factors such as other business opportunities, the final assay results
and the recommendations of our geologist, the grades of any mineralization
found, the size and extent of the mineralized zones, and the strength of metal
prices in international markets.




Our
expenditures toward the exploration of our mineral claims may not result in the
discovery of mineral deposits.  Problems such as unusual or unexpected
formations and other conditions are involved in mineral exploration and often
result in unsuccessful exploration efforts.  If the results of
exploration do not reveal viable commercial mineralization, we may decide to
abandon our claims and acquire new claims for new exploration.  The
acquisition of additional claims will be dependent upon our possessing
sufficient capital resources at the time in order to purchase such
claims.  If no funding is available, we may be forced to abandon our
operations.  This assessment will include an assessment of our cash
reserves after the completion of Phase III, the price of minerals and the market
for financing of mineral exploration projects at the time of our assessment.




Corporate
Acquisition:





Our
entrance into the Term Sheet with REX is a strategic change in direction, and is
expected to enable us to diversify into a complementary industry and acquire
income-producing assets.  As part of this acquisition, we will be
required to raise approximately $40,000,000 of new investment
dollars.  As we move through the acquisition process, we will perform
appropriate due diligence activities to more fully assure investors of the
benefits of this strategic move.  We cannot assure you that our
capital raising efforts will be successful given the current state of the
financial markets or that we can successfully complete the acquisition of
REX.




6


Planned
Expenditures:




During
the exploration stage, Ted R. Sharp, our President, Secretary, Treasurer, Chief
Executive Officer and Chief Financial Officer, and Dr. Veltheer will only be
devoting approximately twenty hours per week of their time to our business. We
do not foresee this limited involvement as negatively impacting the Company over
the next twelve months.  All exploratory work is being performed by
our geological consultant, Mr. Timmins, who contracts with appropriately
experienced parties to complete work programs. However, if as a result of our
acquisition efforts, the demands of our business require more business time of
Mr. Sharp or Dr. Veltheer, such as raising additional capital or addressing
unforeseen issues with regard to our exploration efforts, they are prepared to
adjust their timetable to devote more time to our business.




If our
acquisition of REX is successful, we anticipate that we will require capital for
the following over the next twelve months:




Category
                
                Planned
      Expenditures over the Next Twelve Months
                  (US$)Acquisition
      of survey assets
                
                $
                30,000,000Acquisition
      Due Diligence
                
                $
                250,000Professional
      Fees
                
                $
                250,000General
      and Administrative Expenses
                
                $
                800,000Budgeted
      Oil and Gas Drilling and Exploration
                
                $
                3,750,000Business
      Transition and Build Out
                
                $
                4,000,000Funding
      Working Capital Deficit
                
                $
                800,000Debt
      Service Expense
                
                $
                100,000Mineral
      Exploration Expenses
                
                $
                50,000TOTAL
      12-MONTH BUDGET
                
                $
                40,000,000







In
relation to the REX acquisition, we will be required to raise $40,000,000 to
fund the purchase price and working capital for the combined organization. Our
total expenditures over the next twelve months are anticipated to be
approximately all of the $40,000,000, the majority of which is $30,000,000 in
cash required to close the acquisition of REX.  The balance of cash
required is to fund legal, accounting, administrative and due diligence expenses
associated with our acquisition of REX, business transition and build out costs,
payment of our current liabilities, oil and gas drilling and exploration
expenses, interest expense and normal general and administrative operating
expenses.




We cannot
assure you that we will be successful in obtaining financing sufficient to fund
either the pre-acquisition costs or the $40,000,000 required to close the REX
transaction.  Current turmoil in equity and debt markets in the United
States and around the world may negatively affect the evaluation risk of
potential investors, and therefore may discourage individuals or funds that may
otherwise be willing and desirous to invest in the Company.




In the
event that we are successful in securing the $40,000,000 of capital required to
fund the REX transaction, the combined management of the organization will then
be charged with the task of profitably integrating the operations.  We
cannot assure you that the combined management team will be successful in
merging and integrating physical facilities, corporate cultures, management
teams, employee groups and other factors into a streamlined profitable and
smooth running organization.




The
Company has issued four separate 6% convertible debentures with principal
amounts totaling $585,000 which were due and payable on December 31,
2008.  Each of these convertible debentures has been extended to
December 31, 2010. Interest is payable at the option of the Company in cash or
shares. As at November 30, 2008, the Company had not made any interest payments
and pursuant to the




7




debentures
has accrued default interest of 8% since the quarter ended May 31,
2008.  Interest payable has accumulated to a total of $55,015. The
principal and accrued interest on the debentures may be converted at any time
into shares of the Company’s common stock at a price of $0.25 per share, at the
option of the holder. If the Company had closed the Anglo agreement, the
debenture would have automatically converted into common shares of the Company
at a price of $0.25 per share.  As part of the financing arrangements
required to fund and close the REX transaction, the Company will be required to
negotiate with holders of the convertible debentures to convert the debentures
and accrued interest into common stock.




In the
event that we are unsuccessful in our efforts to fund the REX acquisition, we
will not have cash sufficient to satisfy the debentures in cash.  We
estimate that we would require a minimum of $1.5 million to fund payment of our
current liabilities and the maximum $500,000 pre-acquisition costs that may be
paid to REX.  Absent such financing, we may negotiate with the holders
of the debentures to extend the due dates, convert them to common stock or
modify terms sufficient to remove or delay the requirement to satisfy the
obligations with cash.  Should we be unable to reach conversion or
modification of the debentures on terms acceptable to us, we may be required to
default on the obligations.




We also
maintain our position in mining claims in our mineral property referred to as
the Peek Claim.  In the event we decide to proceed with Phase IV of
our exploration program, which is estimated to cost $120,000, we will need to
obtain additional financing of nearly $1,000,000 to fund exploration, operating
expenses and working capital deficit.




As of
November 30, 2008, we had a working capital deficit of $926,411. We do not
expect our business to achieve profitability in the near future as we expect to
continue to incur substantial acquisition, development and operating expenses.
We will require additional funding to fund our working capital requirements.
However, we cannot provide investors with any assurance that we will be able to
raise sufficient funding from the sale of our common stock or debt to fund our
estimated general administration, exploration and other working capital
requirements.




Currently,
we do not have any financing arrangements in place and there is no assurance
that we will be able to obtain sufficient financing to fund our capital
requirements. If we do not obtain the necessary financing, then our plan of
operation will be scaled back according to the amount of funds available. The
inability to raise the necessary financing will severely restrict our ability to
continue exploration programs or acquisition activities as planned.







ITEM
1A.  RISK FACTORS





Not
required for smaller reporting companies.







ITEM
1B  UNRESOLVED STAFF COMMENTS





Not
required for smaller reporting companies.








ITEM
2.  PROPERTIES




PEEK
CLAIMS




We
purchased a 100% interest in eight mineral claims known as the Peek Claims,
located in Canada’s Yukon Territory, from Glen MacDonald of Vancouver, British
Columbia, by an agreement dated November 2, 2001, for consideration of $2,500.
At the time of the acquisition of the Peek Claims, we were seeking a potential
high-grade gold/silver project. There was, at the time, an extensive technical
file available detailing the history of exploration on the Peek Claims property.
We also considered the






8




existence
of a nearby milling plant as advantageous. Mr. Timmins, P.Eng. and Mr. Laurie
Stephenson, P.Eng. were involved in assisting us in the selection
process.






The YQMA
and its regulations govern the procedures involved in the location, recording
and maintenance of mineral titles in the Yukon Territory. The YQMA also governs
the issuance of quartz mining licenses which are long-term licenses to produce
minerals. Under the YQMA, title to Yukon quartz mineral claims can only be held
by individuals or Yukon corporations. Because of this regulation, Barclay
McDonald, Glen MacDonald’s son, is holding the mineral claim in trust for us
until we can determine whether there are significant mineral reserves on our
claim. If we determine that there are significant mineral reserves on our claim
we will incorporate a Yukon subsidiary to hold title to the claim and Barclay
MacDonald will transfer the mineral claim to the subsidiary. The transfer will
be at no cost to us other than the costs associated with the incorporation of
the Yukon subsidiary.









9







Location,
Infrastructure and Access




The
Peek Claims cover a broad northwest trending ridge south of Pugh Peak (referred
to locally as “Gold Hill”), extending from the Wheaton River to Hodnett Lakes.
The property lies 40 km south of Whitehorse, the capital of the Yukon Territory,
at geographical coordinates 60 16’N latitude, 135 06’W longitude, see Figures 1
and 2 below. Whitehorse is a modern city with a population of 25,000, with most
services available for conducting mineral exploration. Daily scheduled flights
link the city with Vancouver, British Columbia, Edmonton, Alberta and Fairbanks,
Alaska.




The Peek
Claims are accessible via an all-weather gravel and paved government-maintained
road system which includes a tidewater port road link to Skagway, Alaska. The
claims are linked by a secondary road with the Mount Skukum gold mill
approximately 12.4 miles away.The Mount Skukum gold mill is a modern gold and
silver production facility that is capable of producing both doré bars and metal
concentrates depending on the type of ore being processed. The mill is currently
idle.





10


The
Alaska and Klondike Highways, and the Wheaton River-Mount Skukum all-season
gravel road provide access to the area. A four-wheel drive road follows Thompson
Creek from the Wheaton Road to the property. Presently access to the Peek Claims
is on foot, by all terrain vehicles or by helicopter because the road is closed
by a slide. Further exploration of the property would require approximately
$2,000 of road construction work to make the road accessible. We intend to
initiate road construction work to make the road accessible prior to commencing
Phase IV of our recommended exploration program, as described
below.




Physiography,
Climate and Vegetation




The
Wheaton River district lies in the Boundary Ranges of the Coast Mountains, a
rolling uplands area featuring prominent peaks and steep-walled stream and river
valleys. Glacial action has modified major river valleys to deep U-shaped
drainages with terrace and outwash deposits. Topographically, the area becomes
progressively more severe to the southwest, culminating in mountains and ice
fields at the headwaters of the Wheaton and Watson Rivers.





A maximum
elevation of 6,069 feet is reached on the Peek Claims while the lowest lying
feature nearby is Wheaton River at 2,900 feet. The claims cover a barren
northwest-trending ridge extending from the Wheaton River to Hodnett Lakes.
Outcrop is common on steep slopes descending from the rounded ridge top. The
effects of local alpine glaciation are evident on the northern side of Pugh
Peak, where cirques and tarns are present. The upland portion of Gold Hill is a
rolling grassy plain with outcrop of less than 5%. Consequently most of the
geological interpretation is based upon bulldozer trenches to expose bedrock at
depths of ranging from six to sixteen feet.





Southwestern
Yukon has a dry sub-arctic climate, locally modified by the Pacific Ocean.
Summer temperatures average 12°C and annual precipitation totals approximately
sixteen inches. The exploration season lasts from May until
October.





Vegetation
in the upland consists of dwarf grasses, moss and lichen. Timber is restricted
to the main valleys at elevations below 3,936 feet.




History
of Exploration




The Peek
Claims property has been progressively explored since 1983 with work to date
including road construction, bulldozer trenching, grid controlled geophysical,
geochemical, and geological surveying and prospecting.





The
Wheaton River/Lake Bennett district was first explored by prospectors traveling
along the major lakes and rivers of southwestern Yukon in the early 1890’s. More
intensive exploration began in 1906 after the discovery of free gold and
gold-silver tellurides on Gold Hill. Wagon roads were built along the Wheaton
River, Thompson Creek and Stevens Creek to provide access to numerous adits and
pits on Mount Anderson. Limited mining of high grade gold and silver bearing ore
occurred on the Gold Reef vein at the northeastern end of Gold Hill and on the
Becker-Cochran (Whirlwind) property on the west face of Mount
Anderson.





From the
mid-1920’s to the late 1960’s, little exploration of significance took place. By
the 1970’s, many of the old showings were restaked as an increase in the value
of base and precious metals rekindled the interest of prospectors and mining
companies in the area. The Venus and Arctic mines again operated on Montana
Mountain between 1969 to 1971. The Venus Mine was again rehabilitated during
1980 to 1981 and a new mill was installed at the southern end of Windy Arm, but
no ore was processed.





On the
area covered by the Peek Claims, recent exploration started in 1984 to 1985 when
the Wheaton River Joint Venture performed prospecting, grid development,
mapping, geochemical and geophysical surveys, bulldozer trenching and road
building. Mineralized quartz veins and stockworks were discovered in several
locations along a five kilometre long ridge on the claim property. The property
was owned by the Wheaton River Syndicate from 1983 to 1986.





11


During
1987 and 1988, Ranger Pacific Minerals Ltd. and others conducted additional
geochemical and geophysical surveys. Also, blast trenching work was undertaken
to better define target zones previously identified and to further explore the
property. The Peek Claims property was owned by Ranger Pacific Minerals Ltd.
from 1987 to 1990.





During
the period from 1991 to 2001, the property was owned by Glen MacDonald of
Vancouver, British Columbia. From 1991 to 2001, exploration work on the property
has included bulldozer trenching, road construction, geological mapping and
prospecting. Exploration work conducted from 1984 to 1998 covered most of the
Gold Hill area, including but not limited to, the area of the Peek
Claims.





In 2001,
we purchased a 100% interest in the Peek Claims from Glen MacDonald by way of a
purchase agreement dated November 2, 2001.





Although
exploratory work on the claims conducted by prior owners has indicated some
potential showings of mineralization, we are uncertain as to the reliability of
these prior exploration results and thus we are uncertain as to whether a
commercially viable mineral deposit exists on our mineral claims. Further
exploration of these mineral claims is required before a final determination as
to their viability can be made.




Mineralization




Precious
metal values to date have occurred on the Peek Claims in two types of quartz
veins: (i) quartz veins up to 6.5 feet wide in granite and
meta-sedimentary/metavolcanic rocks, and (ii) narrow quartz and/or
quartz-calcite veins in limestones, quartzites and schists; and silver occurs
disseminated in siliceous pyritic schist.





Quartz
veins in the first group have a general northwest orientation and are continuous
over long distances. The Gold Reef vein on the northwest end of Gold Hill is
considered a typical example, and has been traced by underground workings, and
surface pits for over 984 feet where the average width has been 5
feet.





Quartz
and quartz-calcite veins appear less continuous and have more random
orientations. They are generally spatially related to Eocene intrusive
rocks.





Alteration
and accessory minerals present around the vein systems include clays (kaolinite,
alunite) black and green chalcedonic breccias, fluorite, barite, pyrite and
hematite. Carbonatization is common in andesitic rocks near veins, and
carbonatization and massive chloritization are present in the shear zones in
andesitic rocks.





Mineralization
on the Peek Claims occurs as either of the following veins and siliceous
stockworks:





1.
            Epithermal
      gold-silver veins associated with northeast-trending normal faults hosted
      with bi-modal calc-alkaline andesitic volcanics of the Skukum Group and
      associated with Eocene rhyolite porphyry dykes outside the volcanic
      complex.





2.
            Gold-silver
      and telluride bearing quartz veins spatially related to the “Tally-Ho
      Shear Zone”, sheared and chloritized mafic volcanic rocks and nearby
      sheared or unsheared granitic rocks and Jurassic Laberge Group arkosic
      sedimentary rocks.





Compliance
with Governmental Regulation




We will
be required to comply with all regulations, rules and directives of governmental
authorities and agencies applicable to the exploration of minerals in the Yukon
Territory. The main agency that governs the exploration of minerals in the Yukon
Territory, Canada, is the Minerals Management Branch of the Yukon Department of
Energy Mines and Resources.





12


The
material legislation applicable to us is the Yukon Quartz Mining Act (the
“YQMA”), administered by the Minerals Management Branch. The YQMA and its
regulations govern the procedures involved in the location, recording and
maintenance of mineral titles in the Yukon Territory. The Government of the
Yukon Territory retains freehold ownership of the land which is subject to the
mineral claims.





All
mineral exploration activities carried out on a mineral claim or mining lease in
the Yukon must be in compliance with the Yukon Quartz Mining Land Use
Regulations (the “Yukon Regulations”). The Yukon Regulations apply to all mines
during exploration, development, construction, production, closure, reclamation
and abandonment. Also, the Yukon Regulations contain standards for exploration
activities including construction and maintenance, site preparation, drilling,
trenching and work in and about a water body. An annual exploration expenditure
of approximately $80 per claim is required by the YQMA to maintain the claims in
good standing. Alternatively an annual payment of approximately $80 per claim in
lieu of work is sanctioned by the YQMA to maintain claims in good standing. Our
annual cost of compliance with the YQMA is presently approximately $672 per
year.





We will
also have to sustain the cost of reclamation and environmental remediation for
all exploration work undertaken. Reclamation is the process of bringing the land
back to its natural state after completion of exploration activities.
Environmental remediation refers to the physical activity of taking steps to
remediate, or remedy, any environmental damage caused, i.e. refilling trenches
after sampling or cleaning up fuel spills.





Recommendation
of Geological Report and Geological Exploration Program




In June
2002, we hired Mr. W. Timmins, P.Eng to provide an initial Geological Report on
the Peek Claims. Mr. Timmins has 39 years experience as a consulting geologist.
He graduated from the Provincial Institute of Mining in Haileybury, Ontario,
Canada in 1956 and attended Michigan Technological University from 1962 to 1965.
He has been a licensed professional Engineer (Geology) in British Columbia since
1969. The purpose of this report was to evaluate the area of the claim group,
and the prior exploration work conducted on the claims, and to recommend an
exploration program. This review was based upon previous explorations performed
on the Peek Claims, including soil geochemical and electromagnetic surveys,
geological mapping, bulldozer and blast trenching and underground drifting. Mr.
Timmins is familiar with the Peek Claims, having consulted on exploration
programs conducted there during the 1980’s and later visited the property in
1999 and 2001. In his geological report, Mr. Timmins, recommended that a four
phase exploration program, at an estimated cost of $140,000, be undertaken on
the property to assess its potential to host high grade gold mineralization
within quartz and sulphide veins. The four phase program consists of the
following:




Phase
                                  Exploration
      Program
                                  Status
                                  CostPhase
      I
                                  Compilation
      of previous exploration data, and geological analysis of the
      data.
                                  Completed
      in August 2002.
                                  $5,000Phase
      II
                                  Detailed
      field examination and study of known mineral zones including localized
      geophysical surveys.
                                  Completed
      in December 2003.
                                  $10,000Phase
      III
                                  Detailed
      field examination of potential exploration sites, including geological
      mapping, localized geophysical surveys and sampling using the knowledge
      obtained from the known exploration areas.
                                  Completed
      April 2006.
                                  $5,000Phase
      IV
                                  Test
      diamond drilling (to 1,200 metres) of the targets delineated within the
      potential exploration sites.
                                  To
      be determined subject to availability of
                                    exploration
      funds and the results of
                                    exploratory
      work.
                                  $120,000
  13
  Contingent
upon favorable results of Phase I and Phase II of our geological exploration
program, Mr. Timmins recommended a further Phase III program of geological
mapping, geophysical surveying and sampling, to select targets for the Phase IV
drilling program consisting of 1,200 metres (approximately 3,936 feet) of
diamond drilling, again contingent upon favorable results of Phase III. A Phase
IV drilling program would be dependent upon a number of factors such as the
geologists’ recommendations based upon previous phases and our available funds.
See “Present Condition of the Property and Current State of Exploration”
below.





The
projected costs of each phase of our exploration program included provision for
mobilization and support costs. The expenditures made by us in the exploration
of our mineral claim may not result in the discovery of mineral deposits.
Problems such as unusual or unexpected formations and other conditions are
involved in mineral exploration and often result in unsuccessful exploration
efforts. If the results of exploration do not reveal viable commercial
mineralization, we may decide to abandon our claim and acquire new claims for
new exploration. The acquisition of additional claims will be dependent upon our
possessing sufficient capital resources at the time in order to purchase such
claims. If no funding is available, we may be forced to abandon our
operations.





We have
complete Phases I through III of the recommended exploration
program.  In the event that we proceed with Phase IV, we intend to
implement a drilling program which will target any mineralized zones or zones of
interest identified in earlier phases’ exploration results. The results of any
drilling will be used to assess whether further geological exploration and
drilling of identified mineralized areas is warranted. The funding required for
the drilling program and our ability to complete the drilling program is
expected to be dependent on the amount of funds we have available for
exploration and our exploration priorities. Completion of our planned Phase IV
drilling program is estimated to cost $120,000 and is expected to include the
following:





(a)
            
            Hiring
      of local contractors familiar with the mining region and drill conditions
      to perform the drilling operations and supply the drill and all other
      equipment and drill technicians required to perform the drilling
      operations;





(b)
            
            Oversight
      of drilling program by a Professional Mining Engineer or Certified
      Geologist;





(c)
            
            Outside
      laboratory analysis, particularly for prospective lode
    gold;





(d)
            
            In-house
      and external review of results, including any feasibility studies;
      and





(e)
            
            Hiring
      of lab technicians.





The
primary expenses related to the drilling program are expected to be labor and
contract costs, including transportation and on-site support.





The
number of personnel involved in the drilling is expected to be four drilling
personnel and/or a foreman and geologist. All personnel are expected to be
contract employees. The geologist is expected to be the onsite technical person
who will be able to evaluate and direct the program. We believe these types of
contract employees are readily available, if needed.





Due to
our strategic priority of closing the REX acquisition prior to June 30, 2009, we
currently do not plan to execute our Phase IV exploration strategy during fiscal
2009. Raising the $40,000,000 to fund that transaction precludes a competing
effort to raise the funds necessary to embark upon a continuing exploration
program. We cannot provide investors with any assurance that we will be able to
raise sufficient funding from the sale of our common stock to fund our either of
these activities. We believe that debt financing will not be an alternative for
funding. The risky nature of this enterprise and lack of tangible assets places
debt financing beyond the credit-worthiness required by most banks or typical
investors of corporate debt at this time. We presently do not have any
arrangements in place for any future equity financing.





14


Present
Condition of the Property and Current State of Exploration




In years
prior to 2008, we conducted exploration activities on the Peek Claims to
determine whether there is commercially exploitable gold and silver
mineralization or other metals. The following is a summary of the status of our
exploration program on the Peek Claims:




Summary
of Phase I – Exploration Program Results




The
results of our Phase I exploration program delineated three main zones of
mineralization in addition to other mineralized showings that warrant additional
exploration work. The three main mineralization zones identified by our
geologist are described as follows:





(i)
            
            the
      North grid, containing moderate gold-silver and silver-lead soil
      geochemical anomalies and include intense “spot”
  highs;





(ii)
            
            the
      north end of Gold Hill which has a moderate to strong VLF-EM conductor and
      significant gold and silver values in quartz veins carrying galena and
      tetrahedrite occurring in the gully at the north end of Gold Hill and in
      float trains on the ridge top of Gold Hill;
and





(iii)
            
            the
      south end of Gold Hill, in which gold-silver bearing galena and
      tetrahedrite mineralization has been identified.


Our
geologist concluded that the results of Phase I warranted a further program of
exploration.





Summary
of Phase II – Exploration Program Results





The
second phase consisted of detailed geophysical surveys utilizing new and more
sensitive geophysical techniques to enhance the data that previously existed on
the claims.  Our work focused specifically upon the already known
areas which our consultant had indicated may host minerals. This phase also
included a detailed field examination and study of known mineral zones including
localized geophysical surveys.  Phase II was completed in late 2003
and we received a geological report on the results in April, 2004.





The
results of our Phase II exploration program confirmed the anomaly concerning the
gold-silver bearing galena and tetrahedrite mineralization developing along the
contacts on the north and south ends of Gold Hill. The anomaly was confirmed in
the more detailed “vector geophysics survey” and warrants further exploration
according to our geologist. Our geologist concluded that the results of Phase II
confirmed that the geological review identified areas which warranted a further
program of exploration. The report recommends further evaluation of data
obtained from the detailed geophysical surveying, which demonstrated that the
areas evaluated have a geophysical signature that could indicate an unseen depth
or length extent, and recommended further geological surveying and sampling to
identify and confirm targets for the Phase IV drilling.





Summary
of Phase III – Exploration Program Results





In 2005,
our geologist visited the Peek Claims property to conduct testing on areas of
interest indicated by Phase II of our geological program for prospective
gold-silver mineralization. New showings were located and sampled. The samples
were submitted for analysis and we received our geologist’s report with the
assay result of Phase III in April 2006.





According
to the Phase III report, during the 2005 exploration season, our geologist
completed detailed prospecting and geological investigation of a portion of the
claims with geophysical anomalies identified during 2003. Samples of vein
material present as “float” were collected, reviewed and submitted for
geochemical analysis. Our geologist confirmed that the original epithermal vein
systems contained copper, whereas the 2005 discovery contained copper in
silver-deficient chalcopyrite. Six samples




15




returned
copper values ranging from 1,030 parts per million (ppm) (0.100%) to 4,974 ppm
(0.497%) while two samples contained trace amounts.





In April
2006, we received the geological report on the results of Phase III of our 2005
exploration program. During the 2005 exploration season we completed detailed
prospecting and geological investigation of a portion of the claims with
geophysical anomalies identified during 2003. Samples of vein material present
as “float” were collected, reviewed and submitted for geochemical analysis. Our
geologist concluded that these results confirm earlier sample analyses by Texada
and others. Prior to proceeding with Phase IV, our geologist recommends further
geological engineering on the Peek Claims properties to define the exact source
areas for the known and new vein float material because frost action may have
moved the vein material further than originally assumed. Our geologist
recommends a total of $10,000 to be reserved for a two stage delineation
program.





During
the summer exploration season of 2006, we proceeded with the first phase of the
delineation program. A field crew selected one of the sample sites and excavated
a pit nearby, upslope, to examine the soil profile and suggest where the bedrock
source for the float might occur. Boulder-rich overburden was present to a depth
of seven feet, including more fragments of sulphide-rich quartz. Below seven
feet the ground is frozen by permafrost and the quartz vein fragments
discontinued. Thus, our geologist concluded the source of the float lies further
upslope and perhaps is within the geophysical conductors located earlier. A
detailed, close-spaced, soil geochemical survey over the conductors using a
plugger style overburden sampling drill was recommended to locate the bed rock
source of the mineralization.





Phase
IV – Exploration Program





In the
event that we proceed with Phase IV of our exploration program, we will
implement a drilling program expected to take place over a period of two weeks,
which will target any mineralized zone or zones of interest identified in our
Phase I, II and III exploration results. The results of any drilling will be
used to assess whether further geological exploration and drilling of identified
mineralized areas is warranted. The funding required for the drilling program
and our ability to complete the drilling program will be dependent on the amount
of funds we have available for exploration and our corporate
priorities.





We will
not be able to determine whether or not our mineral claims contain a
commercially exploitable mineral deposit, or reserve, until appropriate
exploratory work is done and an economic evaluation based on that work concludes
economic viability.




Peek
Claim Status




The Peek
claims are located in the Whitehorse Mining District of Yukon Territory. The
property consists of eight claims as detailed in Table 1 below. Claims such as
these are administered under the provisions of the YQMA by the supervising
mining recorder located in Whitehorse. An annual exploration expenditure of
approximately $80 per claim is required by the YQMA to maintain the claims in
good standing. Alternatively an annual payment of approximately $80 per claim in
lieu of work is sanctioned by the YQMA to maintain claims in good standing. Our
annual cost of compliance with the YQMA is presently approximately $672 per
year.




Table
1 - Claim Status




Claim Name
              Grant Numbers
              Current Expiry DatePEEK
      1-8
              YC
      19158 – 165
              August
      19, 2009





Anglo Energy
Agreement




On March
21, 2007, the Company entered into a Term Sheet Agreement with Anglo Energy
Refining Corp., a Panamanian corporation (“Anglo”), to acquire all of Anglo’s
rights and interests in a Production






16


Sharing
Agreement (the “PSA”) to be entered into between Anglo and a joint venture
partner. The PSA related to a 40% production sharing interest an Ecuadorian oil
and gas field to be obtained by Anglo’s joint venture partner. On August 31,
2008, the Company abandoned the Anglo Agreement and recognized an impairment of
$115,000 associated with that property abandonment by both
parties.  No further expenditures will be incurred.





COMPETITION





We are an
exploration stage company. We compete with other mineral resource exploration
and development companies for financing and for the acquisition of new mineral
properties. Many of the mineral resource exploration and development companies
with whom we compete have greater financial and technical resources than us.
Accordingly, these competitors may be able to spend greater amounts on
acquisitions of mineral properties of merit, on exploration of their mineral
properties and on development of their mineral properties. In addition, they may
be able to afford greater geological expertise in the targeting and exploration
of mineral properties. This competition could result in competitors having
mineral properties of greater quality and interest to prospective investors who
may finance additional exploration and development. This competition could
adversely impact on our ability to finance further exploration and to achieve
the financing necessary for us to develop our mineral properties.





EMPLOYEES




We have
no employees as of the date of this annual report. We generally conduct our
business through agreements with consultants and arms-length third
parties.







ITEM
3.     LEGAL PROCEEDINGS




Neither
we nor any of our properties are currently subject to any material legal
proceedings or other regulatory proceedings.






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





None.


17





PART
II







ITEM
      5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES




Our
common stock is quoted on the Over the Counter (OTC) Bulletin Board which is
sponsored by the National Association of Securities Dealers (NASD). The OTC
Bulletin Board is a network of security dealers who buy and sell stock. The
dealers are connected by a computer network which provides information on
current “bids” and “asks” as well as volume information.  The OTC
Bulletin Board is not considered a “national exchange.”





Our
Common stock is traded on the NASD OTC Bulletin Board under the symbol
“TXDV”.  The following table shows the high and low bid information
for the Common stock for each quarter of the fiscal years 2007 and
2008.




Fiscal Year
                      
                      LowClosing
                      High Closing2007First
      Quarter
                      $0.01
                      $1.02Second
      Quarter
                      $0.98
                      $1.05Third
      Quarter
                      $0.85
                      $2.30Fourth
      Quarter
                      $0.75
                      $1.022008First
      Quarter
                      $0.70
                      $1.25Second
      Quarter
                      $1.01
                      $1.25Third
      Quarter
                      $0.42
                      $1.01Fourth
      Quarter
                      $0.40
                      $0.79


The above
quotations reflect inter-dealer prices, without retail mark-up, markdown or
commission and may not necessarily represent actual transactions.





Holders
of Record





As of
November 30, 2008 there were 4 shareholders of record of our common stock with
an unknown number of additional shareholders who hold shares through brokerage
firms.





Dividends





We have
not paid any dividends and do not anticipate the payment of dividends in the
foreseeable future.





Securities
Authorized for Issuance under Equity Compensation Plans





None.





Issuer
Purchase of Equity Securities





During
2008, neither the Company nor any of its affiliates repurchased common shares of
the Company registered under Section R of the Exchange Act.








ITEM
6.  SELECTED FINANCIAL DATA





Not
required for smaller reporting companies.








18


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





General





This
discussion and analysis should be read in conjunction with the accompanying
financial statements and related notes. This discussion and analysis contains
forward-looking statements that involve risks, uncertainties and assumptions.
Our actual results may differ materially from those anticipated in these
forward-looking statements as a result of many factors. The discussion and
analysis of the financial condition and results of operations are based upon the
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires us to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of any
contingent liabilities at the financial statement date and reported amounts of
revenue and expenses during the reporting period. On an on-going basis the
Company reviews its estimates and assumptions. The estimates were based on
historical experience and other assumptions that we believe to be reasonable
under the circumstances. Actual results are likely to differ from those
estimates under different assumptions or conditions, but the Company does not
believe such differences will materially affect our financial position or
results of operations. Critical accounting policies, the policies the Company
believes are most important to the presentation of its financial statements and
require the most difficult, subjective and complex judgments, are outlined below
in “Critical Accounting Policies,” as disclosed in this Form 10-K.




Plan
of Operation




As a
result of our failure to generate substantial revenues since our inception, we
have not been satisfied with our initial business plan to this point. We are
presently reviewing the current state of our business in detail with consultants
in order to evaluate the progress of our mining business. At the present time,
we intend to continue to develop our current mining business and complete the
acquisition of REX under our revised management and corporate governance
structure.




Mining:




Phase I
of our exploration program, which consisted of a geological review of prior
exploration work on the Peek Claims, was completed in the summer of 2002 at a
cost of $5,000. Phase II of the recommended geological exploration program cost
$10,000 and was completed in late 2003. Based on the results of Phase II of our
exploration program, we proceeded with Phase III of our exploration program
which was substantially completed during the summer exploration season of 2005.
On April 11, 2006, we received the geological report on the results of Phase III
of our exploration program.





In his
report, our geologist recommended that, prior to proceeding with Phase IV,
further geological engineering should be undertaken to define the exact source
areas for the known and new vein float material. Our geologist recommended
reserving a total of $10,000 for a two stage delineation program prior to
commencing Phase IV of our exploration program. We proceeded with our
geologist’s recommendation and completed the first phase of the delineation
program during the summer exploration season of 2006. A detailed, close-spaced,
soil geochemical survey over the conductors using a plugger style overburden
sampling drill was recommended to locate the bed rock source of the
mineralization following completion of Phase I of the delineation
program.





Our
decision to proceed to Phase IV of our initial exploration program will be made
based on factors such as the final assay results and the recommendations of our
geologist, the grades of any mineralization found, the size and extent of the
mineralized zones, and the strength of metal prices in international
markets.





19


The
expenditures made by us in the exploration of our mineral claims may not result
in the discovery of mineral deposits. Problems such as unusual or unexpected
formations and other conditions are involved in mineral exploration and often
result in unsuccessful exploration efforts. If the results of exploration do not
reveal viable commercial mineralization, we may decide to abandon our claims and
acquire new claims for new exploration. The acquisition of additional claims
will be dependent upon our possessing sufficient capital resources at the time
in order to purchase such claims. If no funding is available, we may be
forced to abandon our operations. This assessment will include an assessment of
our cash reserves after the completion of Phase III, the price of minerals and
the market for financing of mineral exploration projects at the time of our
assessment.





On March
21, 2007, we entered into a Term Sheet Agreement with Anglo Energy Refining
Corp., a Panamanian corporation (“Anglo”), to acquire all of Anglo’s rights and
interests in a Production Sharing Agreement (the “PSA”) to be entered into
between Anglo and a joint venture partner. The PSA related to a 40% production
sharing interest an Ecuadorian oil and gas field to be obtained by Anglo’s joint
venture partner. On August 31, 2008, we abandoned the Anglo Agreement and
recognized an impairment of $115,000 associated with that property abandonment
by both parties.  No further expenditures will be
incurred.




Results
of Operations





We did
not earn any revenues from November 30, 2007 to November 30, 2008. We do not
anticipate earning revenues until such time as we have entered into commercial
production of our mineral properties, which is not expected for several years,
if at all. We are presently in the exploration stage of our business and we can
provide no assurance that we will discover commercially exploitable levels of
mineral resources on our properties, or if such resources are discovered, that
we will enter into commercial production of our mineral properties.
Alternatively, we may begin to earn revenues with the acquisition of REX, but
cannot assure that this acquisition will be consummated.




We
incurred operating expenses in the amount of $175,944 for the period ended
November 30, 2008 compared with $162,966 for the period ended November 30, 2007.
These operating expenses included Consulting fees of $52,555 and General and
administrative costs of $132,453, offset by $9,064 gain on foreign exchange
activities.  The higher operating expenses during fiscal 2008 compared to
fiscal 2007 resulted from increased business activity related to exploring
potential acquisitions. Costs during fiscal 2009 are anticipated to be
consistent with those consulting and general and administrative expenses
incurred in fiscal 2008; however, operational expenses may increase
substantially if the acquisition of REX is successful.





We
incurred a net loss in the amount of $517,805 for the fiscal year ended November
30, 2008, compared to $573,579 for the fiscal year ended November 30, 2007. The
change in net loss was attributable primarily to the write off of the
increased accretion of discounts on convertible debentures, increases in
interest costs on increased borrowings and increases in operating costs
described above, offset by a reduction in write downs in oil and gas deposit
assets in fiscal 2008. In 2008, the Company recognized an impairment of
$115,000 of oil and gas properties, compared with $250,000 for the prior
year.





Liquidity
and Capital Resources




As of
November 30, 2008, we had a working capital deficiency of $926,411. We do not
expect our business to achieve profitability in the near future as we expect to
continue to incur substantial development and operating expenses. We will
require additional funding to fund our working capital requirements. However, we
cannot provide investors with any assurance that we will be able to raise
sufficient funding from the sale of our common stock or debt to fund our
estimated general administration, exploration and other working capital
requirements. We believe that debt financing will not be an alternative for
funding. The risky nature of this enterprise and lack of tangible assets places
debt financing beyond the credit-worthiness required by most banks or typical
investors of corporate debt until we locate mineral reserves on our mineral
claims.





20


Currently,
we do not have any financing arrangements in place and there is no assurance
that we will be able to obtain sufficient financing to fund our capital
requirements. If we do not obtain the necessary financing, then our plan of
operation will be scaled back according to the amount of funds available. The
inability to raise the necessary financing will severely restrict our ability to
continue exploration programs or acquisition activities as planned.





Our
continued existence and plans for future growth depend on our ability to obtain
the capital necessary to operate by the sale of equity shares. We will need to
raise additional capital of $40,000,000 in the next three to four months to
fund our capital requirements through November 30, 2009, and to complete the
transactions contemplated by the REX Agreement.





We
believe there is substantial doubt that we can continue as a going concern
which, if true, raises substantial doubt that a purchaser or holder of our
common stock will receive a return on his or her investment. As at November 30,
2008, we had cash of $3,352, a working capital deficit of $926,411 and an
accumulated deficit of $1,290,811, and will likely continue to incur further
losses as we continue our exploration program and acquisition activities. Our
future is dependent upon our ability to obtain financing and upon future
profitable operations from the development of our mineral properties or
successfully acquiring additional properties or business
opportunities.  If we cannot raise sufficient capital, we may be
required to liquidate our assets, issue securities or debt on terms
extremely dilutive to existing shareholders or file for bankruptcy. Our
financial statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should we be unable to continue as a going concern.




We have
not declared or paid dividends on our shares since incorporation and do not
anticipate doing so in the foreseeable future.




Off-Balance
Sheet Arrangements




We had no
off-balance sheet transactions.




Contractual
Obligations




We have
entered into contracts with various individuals or companies which require
minimum future payments or investments in exploration activities to satisfy the
terms of the contract.





Contractual
      obligations
                                  Payments
      due by periodTotal
                                  Less
      than 1 year
                                  2-3
      years
                                  3-5
      years
                                  More
      than 5 yearsShort-Term
      Debt Obligations (1)
                                  575,000
                                  575,000
                                  -
                                  -
                                  -Promissory
      Notes
                                  290,000
                                  290,000
                                  -
                                  -
                                  -Term
      Sheet for REX Acquisition
                                  40,000,000
                                  40,000,000
                                  -
                                  -
                                  -Total
                                  40,865,000
                                  40,865,000
                                  -
                                  -
                                  -




(1)
            On December 18, 2008, subsequent
      to the end of our fiscal year, we entered into amendments to the
      convertible debentures which extended the maturity dates of the debentures
      from December 31, 2008 to December 31,
  2010.





In
September of 2008, we signed a Term Sheet with Royalty Exploration, LLC
(REX).  Under the Term Sheet, the Company agreed to commence a
financing of $40,000,000 to fund the acquisition of REX, and a business unit REX
has entered into an agreement to acquire. Under the Term Sheet, the Company has
agreed to fund, for the benefit of REX, the sum of $500,000 for the purpose of
reimbursing REX for transaction related expense. The Term Sheet was amended on
November 12, 2008 to extend the acquisition date from December 31, 2008 to June
30, 2009 and also waived the obligation for us to reimburse transaction related
costs beyond those costs already incurred at that date. Total reimbursements of
$83,284 have been made during fiscal 2008 to REX, which REX is required to repay
if the acquisition is not consummated.





21


Critical
Accounting Policies




We have
identified our critical accounting policies, the application of which may
materially affect the financial statements, either because of the significance
of the financials statement item to which they relate, or because they require
management’s judgment in making estimates and assumptions in measuring, at a
specific point in time, events which will be settled in the
future.  The critical accounting policies, judgments and estimates
which management believes have the most significant effect on the financial
statements are set forth below:




a)
            Stock-based
      Compensation




The
Company records stock-based compensation in accordance with SFAS No. 123R,
“Share Based Payments”, using the fair value method. All transactions in which
goods or services are the consideration received for the issuance of equity
instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instrument issued, whichever is more
reliably measurable.




b)
            Oil
      and Gas Properties




The
Company utilizes the full-cost method of accounting for petroleum and natural
gas properties.  Under this method, the Company capitalizes all costs
associated with acquisition, exploration and development of oil and natural gas
reserves, including leasehold acquisition costs, geological and geophysical
expenditures, lease rentals on undeveloped properties and costs of drilling of
productive and non-productive wells into the full cost pool on a country by
country basis. As of November 30, 2008, the Company had no properties with
proven reserves. When the Company obtains proven oil and gas reserves,
capitalized costs, including estimated future costs to develop the reserves
proved and estimated abandonment costs, net of salvage, will be depleted on the
units-of-production method using estimates of proved reserves. The costs of
unproved properties are not amortized until it is determined whether or not
proved reserves can be assigned to the properties. Until such determination is
made the Company assesses annually whether impairment has occurred, and includes
in the amortization base drilling exploratory dry holes associated with unproved
properties.




The
Company applies a ceiling test to the capitalized cost in the full cost pool.
The ceiling test limits such cost to the estimated present value, using a ten
percent discount rate, of the future net revenue from proved reserves, based on
current economic and operating conditions. Specifically, the Company computes
the ceiling test so that capitalized cost, less accumulated depletion and
related deferred income tax, do not exceed an amount (the ceiling) equal to the
sum of: (A) The present value of estimated future net revenue computed by
applying current prices of oil and gas reserves (with consideration of price
changes only to the extent provided by contractual arrangements) to estimated
future production of proved oil and gas reserves as of the date of the latest
balance sheet presented, less estimated future expenditures (based on current
cost) to be incurred in developing and producing the proved reserves computed
using a discount factor of ten percent and assuming continuation of existing
economic conditions; plus (B) the cost of property not being amortized; plus (C)
the lower of cost or estimated fair value of unproven properties included in the
costs being amortized; less (D) income tax effects related to differences
between the book and tax basis of the property.




For
unproven properties, the Company excludes from capitalized costs subject to
depletion, all costs directly associated with the acquisition and evaluation of
the unproved property until it is determined whether or not proved reserves can
be assigned to the property. Until such a determination is made, the Company
assesses the property at least annually to ascertain whether impairment has
occurred. In assessing impairment the Company considers factors such as
historical experience and other data such as primary lease terms of the
property, average holding periods of unproved property, and geographic and
geologic data. The Company adds the amount of impairment assessed to the cost to
be amortized subject to the ceiling test. As of November 30,






22




2008, all
of the Company’s oil and gas properties were unproved and were excluded from
amortization.




c)
            Financial
      Instruments




The fair
values of financial instruments, which include cash, note receivable, accounts
payable, accrued liabilities, amounts due to related parties, promissory notes
payable, and convertible debentures were estimated to approximate their carrying
values due to the immediate or short-term maturity of these financial
instruments. The Company has operations in Canada, which results in exposure to
market risks from changes in foreign currency rates. The financial risk is the
risk to the Company’s operations that arise from fluctuations in foreign
exchange rates and the degree of volatility of these rates. Currently, the
Company does not use derivative instruments to reduce its exposure to foreign
currency risk.







Recent
Accounting Pronouncements




In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles”. The adoption of this statement is not expected to have a material
effect on the Company’s financial statements.




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities – an amendment to FASB Statement No. 133”. SFAS No. 161
is intended to improve financial standards for derivative instruments and
hedging activities by requiring enhanced disclosures to enable investors to
better understand their effects on an entity's financial position, financial
performance, and cash flows. Entities are required to provide enhanced
disclosures about: (a) how and why an entity uses derivative instruments; (b)
how derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations; and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. It is effective for financial statements
issued for fiscal years beginning after November 15, 2008, with early adoption
encouraged. The adoption of this statement is not expected to have a material
effect on the Company’s financial statements.




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations” . This pronouncement requires that the acquisition method of
purchase method of accounting be used for all business combinations and for an
acquirer to be identified for each business combination. This Statement defines
the acquirer as the entity that obtains control of one or more businesses in the
business combination and establishes the acquisition date as the date that the
acquirer achieves control. The pronouncement requires an acquirer to recognize
the assets acquired, the liabilities assumed, and any non-controlling interest
in the acquiree at the acquisition date, measured at their fair values as of
that date, with limited exceptions specified in the pronouncement. This
Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the Company’s fiscal 2010, and
may not be adopted early. Management believes this Statement will have no impact
on the financial statements of the Company once adopted for its fiscal year
starting December 1, 2009.




In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities—Including an Amendment of FASB
Statement No. 115”. This pronouncement permits entities to use the fair value
method to measure certain financial assets and liabilities by electing an
irrevocable option to use the fair value method at specified election
dates.  After election of the option, subsequent changes in fair value
would result in the recognition of unrealized gains or losses as period costs
during the period the change occurred. SFAS No. 159 becomes effective as of the
beginning of the first fiscal year that begins after November 15, 2007, with
early adoption permitted. However, entities






23




may not
retroactively apply the provisions of SFAS No. 159 to fiscal years preceding the
date of adoption. The Company adopted this pronouncement effective December 1,
2007. The adoption of this statement did not have a material effect on the
Company's financial statements




In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
objective of SFAS No. 157 is to increase consistency and comparability in fair
value measurements and to expand disclosures about fair value measurements. SFAS
No. 157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 applies under other accounting pronouncements
that require or permit fair value measurements and does not require any new fair
value measurements. The provisions of SFAS No. 157 are effective for fair value
measurements made in fiscal years beginning after November 15, 2007. The Company
adopted this pronouncement effective December 1, 2007. The adoption of this
statement did not have a material effect on the Company's financial
statements.




Going
concern




The
Company has never generated revenues since inception and has never paid any
dividends and is unlikely to pay dividends or generate earnings in the immediate
or foreseeable future. The continuation of the Company as a going concern is
dependent upon the continued financial support from its shareholders, the
ability of the Company to obtain necessary equity financing to continue
operations, confirmation of the Company’s interests in the underlying
properties, and the attainment of profitable operations. As at November 30,
2008, the Company has a working capital deficit of $926,411, and has accumulated
losses of $1,290,811 since inception. These factors raise substantial doubt
regarding the Company’s ability to continue as a going concern. These financial
statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.




As at
November 30, 2008, the Company had cash of $3,352 on hand. The Company does not
have sufficient funds to meet planned expenditures over the next twelve months,
and will need to seek additional debt or equity financing to meet its planned
expenditures. Management believes that it will need to raise approximately
$40,000,000 in additional financing to complete the transactions contemplated by
the REX Term Sheet and meet its other planned expenditures. The Company
currently has no commitment for such financing. Accordingly, there is a risk
that the Company will be unable to raise the required financing and complete the
transactions contemplated by the REX Term Sheet and its other planned
expenditures.




Private
Placements




On
October 27, 2008, the Company entered into a promissory note with a third party
for $140,000, which is due on demand and bears interest at 5% per annum.
Interest and principal are due on demand.




On
February 15, 2007, the Company entered into a promissory note with a third party
for $50,000, which is due on demand and bears interest at 8% per annum. Interest
is payable annually due on or before February 14 of each year. Interest and
principal are due on demand.




The
foregoing transactions were conducted by the Company in private placements to
non-U.S. persons outside the United States in off-shore transactions pursuant to
an exemption from registration available under Rule 903 of Regulation S of the
United States Securities Act of 1933, as amended.





Convertible
Debenture




On April
10, 2007, the Company issued a 6% convertible debenture with a principal amount
of $200,000 which was due and payable on December 31, 2008.  On
December 18, 2008, the maturity date was extended to December 31,
2010.  Interest is payable semi-annually beginning on September 30,
2007, and thereafter on March 31st and September 30th of each year, payable at
the option of the Company in cash






24


or
shares. As at November 30, 2008, the Company had not made any interest payments
and pursuant to the debenture has accrued default interest of 8% since September
30, 2007. The principal and accrued interest on the debenture may be converted
at any time into shares of the Company’s common stock at a price of $0.25 per
share, at the option of the holder. The Company recognized the intrinsic value
of the embedded beneficial conversion feature of $80,000 as additional paid-in
capital and an equivalent discount which will be charged to operations over the
term of the convertible debenture. The Company records accretion expense over
the term of the convertible debenture up to its face value of $200,000. As at
November 30, 2008, $76,070 has been accreted increasing the carrying value of
the convertible debenture to $196,070.




On May 2,
2007, the Company issued a 6% convertible debenture with a principal amount of
$125,000 which was due and payable on December 31, 2008. On December 18, 2008,
the maturity date was extended to December 31, 2010.  Interest is
payable semi-annually beginning on September 30, 2007, and thereafter on March
31st and September 30th of each year, payable at the option of the Company in
cash or shares. As at November 30, 2008, the Company had not made any interest
payments and pursuant to the debenture has accrued default interest of 8% since
September 30, 2007. The principal and accrued interest on the debenture may be
converted at any time into shares of the Company’s common stock at a price of
$0.25 per share, at the option of the holder. The Company recognized the
intrinsic value of the embedded beneficial conversion feature of $50,000 as
additional paid-in capital and an equivalent discount which will be charged to
operations over the term of the convertible debentures. The Company records
accretion expense over the term of the convertible debenture up to its face
value of $125,000. As at November 30, 2008, $47,455 has been accreted increasing
the carrying value of the convertible debenture to $122,455.




On
November 19, 2007, the Company issued a 6% convertible debenture with a
principal amount of $110,000 which was due and payable on December 31,
2008.  On December 18, 2008, the maturity date was extended to
December 31, 2010.  Interest is payable semi-annually beginning on May
31, 2008, and thereafter on May 31st and November 30th of each year, payable at
the option of the Company in cash or shares. As at November 30, 2008, the
Company had not made any interest payments and pursuant to the debenture has
accrued default interest of 8% since May 31, 2008. The principal and accrued
interest on the debenture may be converted at any time into shares of the
Company’s common stock at a price of $0.25 per share, at the option of the
holder. The Company recognized the intrinsic value of the embedded beneficial
conversion feature of $44,000 as additional paid-in capital and an equivalent
discount which will be charged to operations over the term of the convertible
debenture. The Company records accretion expense over the term of the
convertible debenture up to its face value of $110,000. As at November 30, 2008,
$40,656 has been accreted increasing the carrying value of the convertible
debenture to $106,656.




On March
11, 2008, the Company issued a 6% convertible debenture with a principal amount
of $150,000 which was due and payable on December 31, 2008. On December 18,
2008, the maturity date was extended to December 31, 2010.  Interest
is payable semi-annually beginning on May 31, 2008, and thereafter on May 31st
and November 30th of each year, payable at the option of the Company in cash or
shares. As at November 30, 2008, the Company had not made any interest payments
and pursuant to the debenture has accrued default interest of 8% since May 31,
2008. The principal and accrued interest on the debenture may be converted at
any time into shares of the Company’s common stock at a price of $0.25 per
share, at the option of the holder. The Company recognized the intrinsic value
of the embedded beneficial conversion feature of $60,000 as additional paid-in
capital and an equivalent discount which will be charged to operations over the
term of the convertible debenture. The Company records accretion expense over
the term of the convertible debenture up to its face value of $150,000. As at
November 30, 2008, $53,695 has been accreted increasing the carrying value of
the convertible debenture to $143,695.




In each
case, the Company accounted for the embedded beneficial conversion feature in
accordance with EITF 98-5 “Accounting for Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios”.




The
foregoing transactions were conducted by the Company in private placements to
non-U.S. persons outside the United States in off-shore transactions pursuant to
an exemption from registration available under Rule 903 of Regulation S of the
United States Securities Act of 1933, as amended.






25


ITEM
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
required for smaller reporting companies.








ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA








Texada
Ventures Inc.


(An
Exploration Stage Company)


November
30, 2008





IndexReport
      of Independent Registered Public Accounting Firm
                            27Balance
      Sheets
                            28Statements
      of Operations
                            29Statements
      of Cash Flows
                            30Statement
      of Stockholders’ Deficit
                            31Notes
      to the Financial Statements
                            32
  26










Report of Independent
Registered Public Accounting Firm








To the
Directors and Stockholders


Texada
Ventures Inc.


(An
Exploration Stage Company)






We have
audited the accompanying balance sheets of Texada Ventures Inc. (An Exploration
Stage Company) as of November 30, 2008 and 2007, and the related statements of
operations, cash flows and stockholders' deficit for the year then ended and
accumulated for the period from October 17, 2001 (Date of Inception) to November
30, 2008. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting.
An audit includes consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of internal control over financial reporting. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Texada Ventures Inc. (An
Exploration Company) as of November 30, 2008 and 2007, and the results of its
operations, cash flows and stockholders’ deficit for the years then ended and
accumulated for the period from October 17, 2001 (Date of Inception) to November
30, 2008 in conformity with accounting principles generally accepted in the
United States.




The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 1 to the financial statements,
the Company has a working capital deficiency and has incurred operating losses
since inception. These factors raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans in regard to these
matters are also discussed in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.







/s/ “MANNING ELLIOTT
LLP”





CHARTERED
ACCOUNTANTS




Vancouver,
Canada




February
18, 2009








27


Texada
Ventures Inc.


(An
Exploration Stage Company)


Balance
Sheets


(Expressed
in US dollars)




November
      30,
                                                                    2008
                                                                    $
                                                                  
                                                                  
                                                                  November
      30,
                                                                    2007
                                                                    $ASSETSCurrent
      AssetsCash
                                                                  
                                                                  
                                                                  3,352
                                                                  
                                                                  
                                                                  
                                                                  20,665Notes
      receivable (Note 5)
                                                                  
                                                                  
                                                                  83,284
                                                                  
                                                                  
                                                                  
                                                                  –Prepaid
      expenses and deposits
                                                                  
                                                                  
                                                                  5,120
                                                                  
                                                                  
                                                                  
                                                                  152Total
      Current Assets
                                                                  
                                                                  
                                                                  91,756
                                                                  
                                                                  
                                                                  
                                                                  20,817Oil
      and gas interest (Note 4)
                                                                  
                                                                  
                                                                  –
                                                                  
                                                                  
                                                                  
                                                                  110,000Total
      Assets
                                                                  
                                                                  
                                                                  91,756
                                                                  
                                                                  
                                                                  
                                                                  130,817LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      LiabilitiesAccounts
      payable (Note 7(c))
                                                                  
                                                                  
                                                                  72,296
                                                                  
                                                                  
                                                                  
                                                                  52,505Accrued
      liabilities (Note 6)
                                                                  
                                                                  
                                                                  79,915
                                                                  
                                                                  
                                                                  
                                                                  30,952Due
      to related parties (Notes 7(a)(b) and (d))
                                                                  
                                                                  
                                                                  7,080
                                                                  
                                                                  
                                                                  
                                                                  56,707Promissory
      notes payable (Note 8)
                                                                  
                                                                  
                                                                  290,000
                                                                  
                                                                  
                                                                  
                                                                  150,000Convertible
      debentures, less unamortized discount
                                                                    of
      $6,124 (Note 9)
                                                                  
                                                                  
                                                                  568,876
                                                                  
                                                                  
                                                                  
                                                                  –Total
      Current Liabilities
                                                                  
                                                                  
                                                                  1,018,167
                                                                  
                                                                  
                                                                  
                                                                  290,164Convertible
      debentures, less unamortized discount
                                                                    of
      $125,741 (Note 9 and 13(b))
                                                                  
                                                                  
                                                                  –
                                                                  
                                                                  
                                                                  
                                                                  309,259Total
      Liabilities
                                                                  
                                                                  
                                                                  1,018,167
                                                                  
                                                                  
                                                                  
                                                                  599,423Nature
      of Operations and Continuance of Business (Note 1)Commitments
      (Note 11)Subsequent
      Events (Note 13)Stockholders’
      DeficitPreferred
      shares, 100,000,000 shares authorized, $0.001 par value;
                                                                    None
      issued and outstanding
                                                                  
                                                                  
                                                                  –
                                                                  
                                                                  
                                                                  
                                                                  –Common
      shares, 500,000,000 shares authorized, $0.001 par value;
                                                                    60,733,335
      shares issued and outstanding
                                                                  
                                                                  
                                                                  60,733
                                                                  
                                                                  
                                                                  
                                                                  60,733Additional
      paid-in capital
                                                                  
                                                                  
                                                                  303,667
                                                                  
                                                                  
                                                                  
                                                                  243,667Deficit
      accumulated during the exploration stage
                                                                  
                                                                  
                                                                  (1,290,811
                                                                  )
                                                                  
                                                                  
                                                                  (773,006
                                                                  )Total
      Stockholders’ Deficit
                                                                  
                                                                  
                                                                  (926,411
                                                                  )
                                                                  
                                                                  
                                                                  (468,606
                                                                  )Total
      Liabilities and Stockholders’ Deficit
                                                                  
                                                                  
                                                                  91,756
                                                                  
                                                                  
                                                                  
                                                                  130,817




(The
accompanying notes are an integral part of these financial
statements)


28


Texada
      Ventures Inc.


(An
      Exploration Stage Company)


Statements
      of Operations


(Expressed
      in US dollars)








Accumulated
      from
                                                                                                                                    October
      17,
                                                                                                                                    2001
                                                                                                                                    (Date
      of Inception)
                                                                                                                                    to
                                                                                                                                    November
      30,
                                                                                                                                    2008
                                                                                                                                    $
                                                                                                                                  
                                                                                                                                  For
      the
                                                                                                                                    Year
                                                                                                                                    Ended
                                                                                                                                    November
      30,
                                                                                                                                    2008
                                                                                                                                    $
                                                                                                                                  
                                                                                                                                  For
      the
                                                                                                                                    Year
                                                                                                                                    Ended
                                                                                                                                    November 30,
                                                                                                                                    2007
                                                                                                                                    $Revenue
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –Operating
      ExpensesAmortization
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  798
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –Consulting
      (Notes 7(a) and (b))
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  106,554
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  52,555
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  48,000Exploration
      costs
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  20,091
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –General
      and administrative
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  413,385
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  132,453
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  115,671Gain
      on foreign exchange
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (9,064
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (9,064
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –Mineral
      property costs
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  3,747
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (705
                                                                                                                                  )Total
      Operating Expenses
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  535,511
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  175,944
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  162,966Loss
      from Operations
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (535,511
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (175,944
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (162,966
                                                                                                                                  )Other
      Income (Expense)Accretion
      of discount on convertible debentures
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (217,876
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (169,617
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (48,259
                                                                                                                                  )Interest
      income
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  4,022
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  4,022Interest
      on convertible debentures
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (55,014
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (42,766
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (12,248
                                                                                                                                  )Interest
      on promissory notes
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (24,060
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (12,685
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (11,375
                                                                                                                                  )Interest
      on related party loans
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (8,500
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (1,793
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (5,956
                                                                                                                                  )Loss
      on disposal of equipment
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (2,075
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –Loss
      on write down of note receivable
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (86,797
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  –
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (86,797
                                                                                                                                  )Impairment
      of oil and gas interest (Note 4)
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (365,000
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (115,000
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (250,000
                                                                                                                                  )Total
      Other Income (Expense)
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (755,300
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (341,861
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (410,613
                                                                                                                                  )Net
      Loss
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (1,290,811
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (517,805
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (573,579
                                                                                                                                  )Net
      Loss Per Share – Basic and Diluted
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (0.01
                                                                                                                                  )
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  (0.01
                                                                                                                                  )Weighted
      Average Shares Outstanding
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  60,733,335
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  
                                                                                                                                  60,733,335



















(The
accompanying notes are an integral part of these financial
statements)


29


Texada
Ventures Inc.


(An
Exploration Stage Company)


Statements
of Cash Flows


(Expressed
in US dollars)








Accumulated
      from
                                                                                                                          October
      17, 2001
                                                                                                                          (Date
      of Inception)
                                                                                                                          to
                                                                                                                          November
      30,
                                                                                                                          2008
                                                                                                                          $
                                                                                                                        
                                                                                                                        For
      the
                                                                                                                          Year
                                                                                                                          Ended
                                                                                                                          November
      30,
                                                                                                                          2008
                                                                                                                          $
                                                                                                                        
                                                                                                                        For
      the
                                                                                                                          Year
                                                                                                                          Ended
                                                                                                                          November
      30,
                                                                                                                          2007
                                                                                                                          $Operating
      Activities:Net
      loss
                                                                                                                        
                                                                                                                        
                                                                                                                        (1,290,811
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (517,805
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (573,579
                                                                                                                        )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Accretion
      of convertible debt discount
                                                                                                                        
                                                                                                                        
                                                                                                                        217,876
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        169,617
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        48,259Amortization
                                                                                                                        
                                                                                                                        
                                                                                                                        798
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –Loss
      on disposal of equipment
                                                                                                                        
                                                                                                                        
                                                                                                                        2,075
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –Loss
      on write down of note receivable
                                                                                                                        
                                                                                                                        
                                                                                                                        86,797
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        86,797Impairment
      of oil and gas interest
                                                                                                                        
                                                                                                                        
                                                                                                                        365,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        115,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        250,000Changes
      in operating assets and liabilities:Prepaid
      expenses
                                                                                                                        
                                                                                                                        
                                                                                                                        (5,120
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (4,968
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (20
                                                                                                                        )Accounts
      payable and accrued liabilities
                                                                                                                        
                                                                                                                        
                                                                                                                        152,211
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        68,754
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        25,831Due
      to related parties
                                                                                                                        
                                                                                                                        
                                                                                                                        7,080
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        373
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        5,957Net
      Cash Used in Operating Activities
                                                                                                                        
                                                                                                                        
                                                                                                                        (464,094
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (169,029
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (156,755
                                                                                                                        )Investing
      Activities:Acquisition
      of oil and gas interests
                                                                                                                        
                                                                                                                        
                                                                                                                        (365,000
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (5,000
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (360,000
                                                                                                                        )Advance
      of note receivable
                                                                                                                        
                                                                                                                        
                                                                                                                        (170,081
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (83,284
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (8,457
                                                                                                                        )Purchase
      of equipment
                                                                                                                        
                                                                                                                        
                                                                                                                        (2,873
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –Net
      Cash Used In Investing Activities
                                                                                                                        
                                                                                                                        
                                                                                                                        (537,954
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (88,284
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (368,457
                                                                                                                        )Financing
      Activities:Advances
      from related party loan
                                                                                                                        
                                                                                                                        
                                                                                                                        50,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –Repayment
      of related party loan
                                                                                                                        
                                                                                                                        
                                                                                                                        (50,000
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (50,000
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        –Proceeds
      from convertible debentures
                                                                                                                        
                                                                                                                        
                                                                                                                        585,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        150,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        435,000Proceeds
      from promissory notes payable
                                                                                                                        
                                                                                                                        
                                                                                                                        290,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        140,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        50,000Proceeds
      from issuance of common shares
                                                                                                                        
                                                                                                                        
                                                                                                                        130,400
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –Net
      Cash Provided by Financing Activities
                                                                                                                        
                                                                                                                        
                                                                                                                        1,005,400
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        240,000
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        485,000Increase
      (Decrease) in Cash
                                                                                                                        
                                                                                                                        
                                                                                                                        3,352
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        (17,313
                                                                                                                        )
                                                                                                                        
                                                                                                                        
                                                                                                                        (40,212
                                                                                                                        )Cash
      - Beginning of Period
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        20,665
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        60,877Cash
      - End of Period
                                                                                                                        
                                                                                                                        
                                                                                                                        3,352
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        3,352
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        20,665Supplemental
      DisclosuresInterest
      paid
                                                                                                                        
                                                                                                                        
                                                                                                                        8,500
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        8,500
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –Income
      taxes paid
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        –











(The
accompanying notes are an integral part of these financial
statements)




30


Texada
Ventures Inc.


(An
Exploration Stage Company)


Statement
of Stockholders’ Deficit


From
October 17, 2001 (Date of Inception) to November 30, 2008


(Expressed
in US dollars)








DeficitCommon
      Shares
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        AccumulatedAdditional
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        During
      theCommon
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        Par
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        Paid-in
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        ExplorationShares
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        Value
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        Capital
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        Stage
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        Total#
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        $Balance,
      October 17, 2001 (Date of inception)
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –Shares
      issued for cash at $0.0002
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        30,000,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        30,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (24,000
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        6,000Net
      loss for the period
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (4,254
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (4,254
                                                                                                                                                                                        )Balance,
      November 30, 2001
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        30,000,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        30,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (24,000
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (4,254
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        1,746Shares
      issued for cash at $0.004
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        30,000,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        30,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        90,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        120,000Net
      loss for the year
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (21,106
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (21,106
                                                                                                                                                                                        )Balance,
      November 30, 2002
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,000,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        66,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (25,360
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        100,640Net
      loss for the year
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (42,929
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (42,929
                                                                                                                                                                                        )Balance,
      November 30, 2003
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,000,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        66,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (68,289
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        57,711Net
      loss for the year
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (19,057
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (19,057
                                                                                                                                                                                        )Balance,
      November 30, 2004
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,000,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        66,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (87,346
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        38,654Shares
      issued for cash at $0.006
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        733,335
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        733
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        3,667
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        4,400Net
      loss for the year
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (26,580
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (26,580
                                                                                                                                                                                        )Balance,
      November 30, 2005
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,733,335
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,733
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        69,667
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (113,926
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        16,474Net
      loss for the year
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (85,501
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (85,501
                                                                                                                                                                                        )Balance,
      November 30, 2006
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,733,335
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,733
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        69,667
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (199,427
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (69,027
                                                                                                                                                                                        )Beneficial
      conversion feature of
      convertible    debenture
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        174,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        174,000Net
      loss for the year
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (573,579
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (573,579
                                                                                                                                                                                        )Balance,
      November 30, 2007
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,733,335
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,733
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        243,667
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (773,006
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (468,606
                                                                                                                                                                                        )Beneficial
      conversion feature of convertible debenture (Note 9)
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,000
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,000Net
      loss for the year
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        –
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (517,805
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (517,805
                                                                                                                                                                                        )Balance,
      November 30, 2008
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,733,335
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        60,733
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        303,667
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (1,290,811
                                                                                                                                                                                        )
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                        (926,411
                                                                                                                                                                                        )





(The
accompanying notes are an integral part of these financial
statements)


31
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars


1.      Nature
of Operations and Continuance of Business




Texada
Ventures Inc. (the “Company”) was incorporated in the State of Nevada on October
17, 2001. The Company is an Exploration Stage Company, as defined by Statement
of Financial Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting for
Development Stage Enterprises”. The Company’s principal business is the
acquisition and exploration of oil and gas and mineral resources. The Company
has not presently determined whether its properties contain mineral or petroleum
reserves that are economically recoverable.




These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has never generated revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, and the attainment of profitable operations.
As at November 30, 2008, the Company has a working capital deficit of $926,411
and has accumulated losses of $1,290,811 since inception. These factors raise
substantial doubt regarding the Company’s ability to continue as a going
concern. These financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue
as a going concern.




As at
November 30, 2008, the Company had cash of $3,352 on hand, and for the next
twelve months, management anticipates that the minimum cash requirements to fund
its proposed exploration program and continued operations will be $500,000.
Accordingly, the Company does not have sufficient funds to meet planned
expenditures over the next twelve months, and will need to seek additional debt
or equity financing to meet its planned expenditures. There is no assurance that
the Company will be able to raise sufficient cash to fund its future exploration
programs and operational expenditures.




On
September 16, 2008, the Company signed a term sheet (the “Term Sheet”) that sets
forth the principal terms upon which the Company will enter into a definitive
agreement (the “Definitive Agreement”) to acquire Royalty Exploration (”REX”)
and commence a concurrent financing of $40,000,000. REX has entered into an
agreement to acquire substantially all of the assets of a business unit of a
large research and development and manufacturing company engaged in the business
of providing exploration and environmental surveys to resource companies for a
purchase price of $40,000,000, of which $30,000,000 is due at closing and the
balance is payable by issuing a promissory note. The Term Sheet is non-binding,
except for customary binding provisions.








2.    Summary
of Significant Accounting Policies




a)
            Basis
      of Presentation




These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in US dollars. The Company’s fiscal year-end is November 30.




b)
            Reclassifications




Certain
reclassifications have been made to prior period financial statements to conform
to the current period presentation




c)
            Use
      of Estimates




The
preparation of financial statements in conformity with US generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The Company regularly
evaluates estimates and assumptions related to its investment in oil and gas
properties, valuation of note receivable, stock-based compensation, and deferred
income tax asset valuation allowances. The Company bases its estimates and
assumptions on current facts, historical experience and various other factors
that it believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities and the accrual of costs and expenses that are not readily apparent
from other sources. The actual results experienced by the Company may differ
materially and adversely from the Company’s estimates. To the extent there are
material differences between the estimates and the actual results, future
results of operations will be affected.


32
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars


2.    Summary
of Significant Accounting Policies (continued)




d)
            Earnings
      (Loss) Per Share




The
Company computes earnings (loss) per share in accordance with SFAS No. 128,
"Earnings per Share".
SFAS No. 128 requires presentation of both basic and diluted earnings per share
(“EPS”) on the face of the income statement. Basic EPS is computed by dividing
earnings (loss) available to common shareholders (numerator) by the weighted
average number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding during the
period using the treasury stock method and convertible preferred stock using the
if-converted method. In computing Diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive. As at November 30, 2008, the
Company has 2,340,000 (2007 – 1,740,000) dilutive securities
outstanding.




e)
            Mineral
      Property Costs




The
Company is engaged in the acquisition, exploration and development of mineral
properties.  Mineral property acquisition costs are capitalized in
accordance with EITF 04-2, “Whether Mineral Rights Are Tangible
or Intangible Assets” when management has determined that probable future
benefits consisting of a contribution to future cash inflows have been
identified and adequate financial resources are available or are expected to be
available as required to meet the terms of property acquisition and budgeted
exploration and development expenditures. Mineral property acquisition costs are
expensed as incurred if the criteria for capitalization are not met. In the
event that a mineral property is acquired through the issuance of the Company’s
shares, the mineral property will be recorded at the fair value of the
respective property or the fair value of common shares, whichever is more
readily determinable.




When
mineral properties are acquired under option agreements with future acquisition
payments to be made at the sole discretion of the Company, those future
payments, whether in cash or shares, are recorded only when the Company has made
or is obliged to make the payment or issue the shares. When it has been
determined that a mineral property can be economically developed as a result of
establishing proven and probable reserves and feasibility, the costs incurred to
develop such property are capitalized.




f)
            Stock-based
      Compensation




The
Company records stock-based compensation in accordance with SFAS No. 123R, “Share Based Payments”, using
the fair value method. All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable.




g)
            Oil
      and Gas Properties




The
Company utilizes the full-cost method of accounting for petroleum and natural
gas properties.  Under this method, the Company capitalizes all costs
associated with acquisition, exploration and development of oil and natural gas
reserves, including leasehold acquisition costs, geological and geophysical
expenditures, lease rentals on undeveloped properties and costs of drilling of
productive and non-productive wells into the full cost pool on a country by
country basis. As of November 30, 2008, the Company had no properties with
proven reserves. When the Company obtains proven oil and gas reserves,
capitalized costs, including estimated future costs to develop the reserves
proved and estimated abandonment costs, net of salvage, will be depleted on the
units-of-production method using estimates of proved reserves. The costs of
unproved properties are not amortized until it is determined whether or not
proved reserves can be assigned to the properties. Until such determination is
made the Company assesses annually whether impairment has occurred, and includes
in the amortization base drilling exploratory dry holes associated with unproved
properties.


33
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars


2.   Summary
of Significant Accounting Policies (continued)




g)
              Oil
      and Gas Properties
(continued)




The
Company applies a ceiling test to the capitalized cost in the full cost pool.
The ceiling test limits such cost to the estimated present value, using a ten
percent discount rate, of the future net revenue from proved reserves, based on
current economic and operating conditions. Specifically, the Company computes
the ceiling test so that capitalized cost, less accumulated depletion and
related deferred income tax, do not exceed an amount (the ceiling) equal to the
sum of: (A) The present value of estimated future net revenue computed by
applying current prices of oil and gas reserves (with consideration of price
changes only to the extent provided by contractual arrangements) to estimated
future production of proved oil and gas reserves as of the date of the latest
balance sheet presented, less estimated future expenditures (based on current
cost) to be incurred in developing and producing the proved reserves computed
using a discount factor of ten percent and assuming continuation of existing
economic conditions; plus (B) the cost of property not being amortized; plus (C)
the lower of cost or estimated fair value of unproven properties included in the
costs being amortized; less (D) income tax effects related to differences
between the book and tax basis of the property.




For
unproven properties, the Company excludes from capitalized costs subject to
depletion, all costs directly associated with the acquisition and evaluation of
the unproved property until it is determined whether or not proved reserves can
be assigned to the property. Until such a determination is made, the Company
assesses the property at least annually to ascertain whether impairment has
occurred. In assessing impairment the Company considers factors such as
historical experience and other data such as primary lease terms of the
property, average holding periods of unproved property, and geographic and
geologic data. The Company adds the amount of impairment assessed to the cost to
be amortized subject to the ceiling test. As of November 30, 2008, all of the
Company’s oil and gas properties were unproved and were excluded from
amortization.




h)
            Long-lived
      Assets




In
accordance with SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”, the Company tests long-lived assets or
asset groups for recoverability when events or changes in circumstances indicate
that their carrying amount may not be recoverable. Circumstances which could
trigger a review include, but are not limited to: significant decreases in the
market price of the asset; significant adverse changes in the business climate
or legal factors; accumulation of costs significantly in excess of the amount
originally expected for the acquisition or construction of the asset; current
period cash flow or operating losses combined with a history of losses or a
forecast of continuing losses associated with the use of the asset; and current
expectation that the asset will more likely than not be sold or disposed
significantly before the end of its estimated useful life. Recoverability is
assessed based on the carrying amount of the asset and its fair value which is
generally determined based on the sum of the undiscounted cash flows expected to
result from the use and the eventual disposal of the asset, as well as specific
appraisal in certain instances. An impairment loss is recognized when the
carrying amount is not recoverable and exceeds fair value.




i)
            Comprehensive
      Loss




SFAS No.
130, “Reporting Comprehensive
Income,” establishes standards for the reporting and display of
comprehensive loss and its components in the financial statements. As at
November 30, 2008 and 2007, the Company has no items that represent a
comprehensive loss and, therefore, has not included a schedule of comprehensive
loss in the financial statements.




j)
            Cash
      and Cash Equivalents




The
Company considers all highly liquid instruments with maturity of three months or
less at the time of issuance to be cash equivalents.




k)
            Financial
      Instruments




The fair
values of financial instruments, which include cash, notes receivable, accounts
payable, accrued liabilities, amounts due to related parties, promissory notes
payable, and convertible debentures were estimated to approximate their carrying
values due to the immediate or short-term maturity of these financial
instruments. The Company has operations in Canada, which results in exposure to
market risks from changes in foreign currency rates. The financial risk is the
risk to the Company’s operations that arise from fluctuations in foreign
exchange rates and the degree of volatility of these rates. Currently, the
Company does not use derivative instruments to reduce its exposure to foreign
currency risk.


34
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars


2.    Summary
of Significant Accounting Policies (continued)




l)
            Income
      Taxes




The
Company accounts for income taxes using the asset and liability method in
accordance with SFAS No. 109, “Accounting for Income
Taxes”. The asset and liability method provides that deferred tax assets
and liabilities are recognized for the expected future tax consequences of
temporary differences between the financial reporting and tax bases of assets
and liabilities, and for operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using the currently enacted tax rates
and laws that will be in effect when the differences are expected to reverse.
The Company records a valuation allowance to reduce deferred tax assets to the
amount that is believed more likely than not to be realized.




m)
            Foreign
      Currency Translation




The
Company’s functional and reporting currency is the United States dollar.
Occasional transactions may occur in a foreign currency and the Company follows
SFAS No. 52 “Foreign Currency
Translation”. Monetary assets and liabilities denominated in foreign
currencies are translated using the exchange rate prevailing at the balance
sheet date. Non-monetary assets and liabilities denominated in foreign
currencies are translated at rates of exchange in effect at the date of the
transaction. Average monthly rates are used to translate revenues and expenses.
Gains and losses arising on translation or settlement of foreign currency
denominated transactions or balances are included in the determination of
income.




n)
            Asset
      Retirement Obligations




The
Company has adopted SFAS No. 143, “Accounting for Asset Retirement
Obligations”, which requires that an asset retirement obligation (“ARO”)
associated with the retirement of a tangible long-lived asset be recognized as a
liability in the period which it is incurred and becomes determinable, with an
offsetting increase in the carrying amount of the associated asset.




The cost
of the tangible asset, including the initially recognized ARO, is depleted, such
that the cost of the ARO is recognized over the useful life of the asset. The
ARO is recorded at fair value, and accretion expense is recognized over time as
the discounted liability is accreted to its expected settlement value. The fair
value of the ARO is measured using expected future cash flow, discounted at the
Company’s credit-adjusted risk-free interest rate. To date, no significant asset
retirement obligation exists due to the early stage of exploration. Accordingly,
no liability has been recorded.




o)
            Recent
      Accounting Pronouncements




In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles”.The adoption
of this statement is not expected to have a material effect on the Company’s
financial statements.




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment to FASB Statement No.
133”. SFAS No. 161 is intended to improve financial standards for
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity's financial
position, financial performance, and cash flows. Entities are required to
provide enhanced disclosures about: (a) how and why an entity uses derivative
instruments; (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations; and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. It is effective for financial
statements issued for fiscal years beginning after November 15, 2008, with early
adoption encouraged. The adoption of this statement is not expected to have a
material effect on the Company’s financial statements.


35
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars


2.     Summary
of Significant Accounting Policies (continued)




q)
              Recent
      Accounting Pronouncements
(continued)




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” .
This pronouncement requires that the acquisition method of purchase method of
accounting be used for all business combinations and for an acquirer to be
identified for each business combination. This Statement defines the acquirer as
the entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. The pronouncement requires an acquirer to recognize the assets
acquired, the liabilities assumed, and any non-controlling interest in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited exceptions specified in the pronouncement. This Statement applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the Company’s fiscal 2010, and may not be adopted early.
Management believes this Statement will have no impact on the financial
statements of the Company once adopted for its fiscal year starting December 1,
2009.




In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities—Including an Amendment of FASB Statement No.
115”. This pronouncement permits entities to use the fair value method to
measure certain financial assets and liabilities by electing an irrevocable
option to use the fair value method at specified election dates.  After
election of the option, subsequent changes in fair value would result in the
recognition of unrealized gains or losses as period costs during the period the
change occurred. SFAS No. 159 becomes effective as of the beginning of the first
fiscal year that begins after November 15, 2007, with early adoption permitted.
However, entities may not retroactively apply the provisions of SFAS No. 159 to
fiscal years preceding the date of adoption. The Company adopted this
pronouncement effective December 1, 2007. The adoption of this statement did not
have a material effect on the Company's financial statements




In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”.
The objective of SFAS No. 157 is to increase consistency and comparability in
fair value measurements and to expand disclosures about fair value measurements.
SFAS No. 157 defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles, and expands disclosures about
fair value measurements. SFAS No. 157 applies under other accounting
pronouncements that require or permit fair value measurements and does not
require any new fair value measurements. The provisions of SFAS No. 157 are
effective for fair value measurements made in fiscal years beginning after
November 15, 2007. The Company adopted this pronouncement effective December 1,
2007. The adoption of this statement did not have a material effect on the
Company's financial statements.








3.     Mineral
Properties





Pursuant
to an agreement dated November 2, 2001, the Company acquired a 100% interest in
eight mineral claims located in the Whitehorse Mining District, Yukon Territory,
Canada known as the Peek Claims for $2,500 which was recognized as an expense in
the year of purchase. The claims fees are current through August 2009. The
property is being held in trust for the Company by a third party.








4.     Oil
and Gas Interest





On
November 12, 2007, the Company entered into an Assignment Agreement with Anglo
Energy Refining Corp. (“Anglo”), a Panamanian corporation, to acquire all of
Anglo's rights and interests in a Production Agreement (the "PA") to be entered
into between Anglo and Barrett Resources LLC ("Barrett"). The PA related to
rights to develop and produce crude oil, gas and proven reserves at Block 67
located in Peru and was subject to negotiation with Barrett and receipt of
various governmental and regulatory approvals.





For
consideration of the assignment by Anglo to the Company of Anglo's rights under
the PA, the parties agreed as follows:




i.
            the
      Company agreed to pay to Anglo an aggregate amount equal to $115,000
      (paid), equivalent to 50% of the expenses incurred by Anglo up to and
      including the Effective Date in connection with the negotiation of the PA,
      upon the receipt by the Company of documentation from Anglo supporting
      such expenses;




36
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars




4.     Oil
and Gas Interest (continued)




ii.
            on
      the closing date, the Company agreed to pay to Anglo 100% of the
      reasonable, documented expenses incurred by Anglo from the Effective Date
      to the closing date in connection with the negotiation and execution of
      the PA; and




iii.
            on
      the closing date, the Company agreed to issue to Anglo (or its designee)
      that number of common shares such that Anglo (or its designee) shall own
      50% of the issued and outstanding shares of the common stock of the
      Company on the closing date.





As at
November 30, 2008, the Company recognized an impairment of $115,000 as the
property had been abandoned by both parties. No further expenditures will be
incurred.





5.     Notes
receivable





The
Company obtained a note receivable of $83,284 from Royalty Exploration pursuant
to the Term Sheet described in Note 11(a).  The note receivable is due
upon the close of the REX acquisition or, if the REX acquisition is not
consummated, in 12 equal monthly installments after the termination of the Term
Sheet.  The receivable is unsecured and does not accrue
interest.





6.     Accrued
liabilities





Accrued
liability consists of interest accrued of $79,075 (2007 - $23,623) on the
convertible debentures and promissory notes payable and accrued liabilities for
services of $840 (2007 - $Nil). A total of $55,016 (2007 - $13,323) of interest
on the convertible debentures is convertible into common stock as described in
Note 9.





7.     Related
Party Transactions




a)
            On
      September 12, 2008, Company entered into an engagement letter with the
      Chief Executive Officer of the Company as described in Note
      11(b).  Pursuant to the agreement, the Company incurred $4,555
      (2007 - $Nil) in consulting fees to a company owned and controlled by the
      Chief Executive Officer of the Company during the year ended November 30,
      2008.  As at November 30, 2008, $3,080 (2007 - $Nil) of
      consulting fees are owed to the company. A $5,000 retainer was paid to the
      company owned and controlled by the Chief Executive
      Officer.  Upon the acquisition of REX, a success fee consisting
      of 4,534 common shares is due for services rendered through November 30,
      2008.




b)
            During
      the year ended November 30, 2008, the Company incurred $48,000 (2007 -
      $48,000) in consulting fees to the former President of the Company. As at
      November 30, 2008, $4,000 (2007 - $Nil) in consulting fees are owed to the
      former President of the Company.




c)
            As
      at November 30, 2008, accounts payable includes $3,125 (2007 - $3,125)
      owing to a former director for expenses incurred on the Company’s
      behalf.




d)
            During
      the year ended November 30, 2006, the Company received an advance of
      $50,000 from a director.  The amount is supported by a
      promissory note, bears interest at 12% per annum and matured October 18,
      2007. On November 8, 2007, the Company entered into an agreement to extend
      the loan to October 18, 2008. On March 18, 2008, the Company repaid the
      director $58,500, representing the total principal and accrued interest as
      of the repayment date.  Interest of $nil was accrued as at
      November 30, 2008 (2007 - $6,707).





8.     Promissory
Notes Payable




a)
            On
      October 27, 2008, the Company entered into a promissory note with a third
      party for $140,000, which is due on demand and bears interest at 5% per
      annum, payable on demand.




b)
            On
      February 15, 2007, the Company entered into a promissory note with a third
      party for $50,000, which is due on demand and bears interest at 8% per
      annum. Interest is payable annually due on or before February 14 of each
      year. Interest due on February 14, 2008 was not paid and remains in
      Accrued liabilities with interest accrued through November 30,
      2008.




c)
            On
      November 20, 2006, the Company entered into a promissory note with a third
      party for $100,000, which is due on demand and bears interest at 8% per
      annum, payable on demand.




37
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars


9.     Convertible
Debentures




a)
            On
      April 10, 2007, the Company issued a 6% convertible debenture with a
      principal amount of $200,000 which was due and payable on December 31,
      2008.  On December 18, 2008, the maturity date was extended to
      December 31, 2010.  Refer to Note 13(b). Interest is payable
      semi-annually beginning on September 30, 2007, and thereafter on March
      31st and September 30th of each year, payable at the option of the Company
      in cash or shares. As at November 30, 2008, the Company had not made any
      interest payments and pursuant to the debenture has accrued default
      interest of 8% since September 30, 2007. The principal and accrued
      interest on the debenture may be converted at any time into shares of the
      Company’s common stock at a price of $0.25 per share, at the option of the
      holder.In
      accordance with EITF 98-5 “Accounting for Convertible
      Securities with Beneficial Conversion Features or Contingently Adjustable
      Conversion Ratios”, the Company recognized the intrinsic value of
      the embedded beneficial conversion feature of $80,000 as additional
      paid-in capital and an equivalent discount which will be charged to
      operations over the term of the convertible debenture. The Company records
      accretion expense over the term of the convertible debenture up to its
      face value of $200,000. As at November 30, 2008, $76,070 has been accreted
      increasing the carrying value of the convertible debenture to
      $196,070.




b)
            On
      May 2, 2007, the Company issued a 6% convertible debenture with a
      principal amount of $125,000 which was due and payable on December 31,
      2008. On December 18, 2008, the maturity date was extended to December 31,
      2010.  Refer to Note 13(b).  Interest is payable
      semi-annually beginning on September 30, 2007, and thereafter on March
      31st and September 30th of each year, payable at the option of the Company
      in cash or shares. As at November 30, 2008, the Company had not made any
      interest payments and pursuant to the debenture has accrued default
      interest of 8% since September 30, 2007. The principal and accrued
      interest on the debenture may be converted at any time into shares of the
      Company’s common stock at a price of $0.25 per share, at the option of the
      holder.In
      accordance with EITF 98-5 “Accounting for Convertible
      Securities with Beneficial Conversion Features or Contingently Adjustable
      Conversion Ratios”, the Company recognized the intrinsic value of
      the embedded beneficial conversion feature of $50,000 as additional
      paid-in capital and an equivalent discount which will be charged to
      operations over the term of the convertible debentures. The Company
      records accretion expense over the term of the convertible debenture up to
      its face value of $125,000. As at November 30, 2008, $47,455 has been
      accreted increasing the carrying value of the convertible debenture to
      $122,455.




c)
            On
      November 19, 2007, the Company issued a 6% convertible debenture with a
      principal amount of $110,000 which was due and payable on December 31,
      2008.  On December 18, 2008, the maturity date was extended to
      December 31, 2010.  Refer to Note 13(b).  Interest is
      payable semi-annually beginning on May 31, 2008, and thereafter on May
      31st and November 30th of each year, payable at the option of the Company
      in cash or shares. As at November 30, 2008, the Company had not made any
      interest payments and pursuant to the debenture has accrued default
      interest of 8% since May 31, 2008. The principal and accrued interest on
      the debenture may be converted at any time into shares of the Company’s
      common stock at a price of $0.25 per share, at the option of the
      holder.In
      accordance with EITF 98-5 “Accounting for Convertible
      Securities with Beneficial Conversion Features or Contingently Adjustable
      Conversion Ratios”, the Company recognized the intrinsic value of
      the embedded beneficial conversion feature of $44,000 as additional
      paid-in capital and an equivalent discount which will be charged to
      operations over the term of the convertible debenture. The Company records
      accretion expense over the term of the convertible debenture up to its
      face value of $110,000. As at November 30, 2008, $40,656 has been accreted
      increasing the carrying value of the convertible debenture to
      $106,656.




d)
            On
      March 11, 2008, the Company issued a 6% convertible debenture with a
      principal amount of $150,000 which was due and payable on December 31,
      2008. On December 18, 2008, the maturity date was extended to December 31,
      2010.  Refer to Note 13(b).  Interest is payable
      semi-annually beginning on May 31, 2008, and thereafter on May 31st and
      November 30th of each year, payable at the option of the Company in cash
      or shares. As at November 30, 2008, the Company had not made any interest
      payments and pursuant to the debenture has accrued default interest of 8%
      since May 31, 2008. The principal and accrued interest on the debenture
      may be converted at any time into shares of the Company’s common stock at
      a price of $0.25 per share, at the option of the
  holder.




38
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars





9.     Convertible
Debentures (continued)




In
accordance with EITF 98-5 “Accounting for Convertible
Securities with Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios”, the Company recognized the intrinsic value of the
embedded beneficial conversion feature of $60,000 as additional paid-in capital
and an equivalent discount which will be charged to operations over the term of
the convertible debenture. The Company records accretion expense over the term
of the convertible debenture up to its face value of $150,000. As at November
30, 2008, $53,695 has been accreted increasing the carrying value of the
convertible debenture to $143,695.








The
Company operates in one operating segment, which is the acquisition and
exploration of oil and gas resources and mineral resources. The Chief Executive
Officer is the Company’s Chief Operating Decision Maker (“CODM”) as defined by
SFAS 131, “Disclosure about
Segments of an Enterprise and Related Information.” The CODM allocates
resources and assesses the performance of the Company based on the results of
operations.





11.   Commitments




a)
            On
      September 16, 2008, the Company signed a term sheet (The Term Sheet) that
      sets forth the principal terms upon which the Company will enter into a
      definitive agreement (the “Definitive Agreement”) to acquire Royalty
      Exploration (“REX Acquisition”) and commence a concurrent financing of
      $40,000,000. Royalty Exploration (REX) has entered into an agreement to
      acquire substantially all of the assets of a business unit of a large
      research and development and manufacturing company engaged in the business
      of providing exploration and environmental surveys to resource companies
      for a purchase price of $40,000,000, of which $30,000,000 is due at
      closing and the balance is payable by issuing a promissory note. The Term
      Sheet is non-binding, except for customary binding
    provisions.




The
Company intends to use commercially reasonable efforts to commence a financing
to raise $40,000,000 by issuing securities (the “Placement”) to fund the REX
Acquisition and general working capital requirements of the combined company.
The Company, at its option, may raise such financing through mezzanine debt
financing, which may be satisfied by a subsequent placement of issuing the
Company’s securities.




The
Company proposes to enter into a Definitive Agreement under which the Company
will acquire all of the issued and outstanding equity of REX by issuing shares
of the Company’s common stock (“Consideration Shares”) to the equity holders of
REX (“REX Unitholders”) equal to 50% of the issued an outstanding voting stock
of the Company after giving effect to the Placement and the REX
acquisition.




The
Company agreed to fund, for the benefit of REX, the sum of up to $500,000 for
the purposes of (i) reimbursing REX for transaction related expenses, (ii) the
Company’s transaction related expenses, and (iii) subject to satisfaction of
certain conditions, making a cash advance to REX.  REX is required to
repay the Company for REX’s transaction related expenses and cash advances on
the later of (a) March 31, 2009, (b) closing date of the transaction, or (c)
termination of the Term Sheet or, if the transaction does not close, in 12
monthly installments.




The Term
Sheet may be terminated by either party if the conditions set forth in the Term
Sheet have not been satisfied on or before December 31, 2008. The Term Sheet may
be terminated by REX if the Company has not provided to REX satisfactory
evidence of financial commitments to raise at least $40,000,000 in the Placement
by or before October 31, 2008.




On
November 12, 2008, the Company amended the term sheet to extend the closing date
of the transaction from December 31, 2008 to June 30, 2009 and to waive the
ability to terminate the term sheet for failure to provide evidence of financial
commitments on or before October 31, 2008.  Effective October 31,
2008, the Company’s obligations to advance funds to REX were suspended unless
previously approved by the Company.




b)
            On
      September 12, 2008, the Company entered into an engagement letter with the
      Company’s Chief Executive Officer to provide management services in
      consideration for fees based upon time expended, with a designated portion
      payable in cash. The amount not paid in cash invoice will be satisfied as
      a success fee upon consummation of the REX acquisition by issuance of
      shares of the Company’s common stock at a deemed price of $1.00 per share,
      thereafter payable and issued quarterly against an invoice for management
      services rendered for the preceding quarter. Refer to Note
      7.


39
 Texada
Ventures Inc.
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
 November
30, 2008
 Expressed
in US Dollars







The
Company accounts for income taxes under SFAS No. 109, "Accounting for Income Taxes."
Deferred income tax assets and liabilities are determined based upon differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Income tax expense differs from the amount
that would result from applying the U.S federal and state income tax rates to
earnings before income taxes. The Company has a net operating loss carryforward
of approximately $1,070,400 available to offset taxable income in future years
which expire through fiscal 2028. Pursuant to SFAS 109, the potential benefit of
the net operating loss carryforward has not been recognized in the financial
statements since the Company cannot be assured that it is more likely than not
that such benefit will be utilized in future years.





The
Company is subject to United States federal and state income taxes at an
approximate rate of 35%. The reconciliation of the provision for income taxes at
the United States federal statutory rate compared to the Company’s income tax
expense as reported is as follows:





November
      30,
                                      2008
                                      $
                                    
                                    
                                    November
      30,
                                      2007
                                      $Income
      tax recovery at statutory rate
                                    
                                    $
                                    181,200
                                    
                                    
                                    $
                                    200,800Accretion
      on convertible debentures
                                    
                                    
                                    (59,400
                                    )
                                    
                                    
                                    (16,900
                                    )Valuation
      allowance change
                                    
                                    
                                    (121,800
                                    )
                                    
                                    
                                    (183,900
                                    )Provision
      for income taxes
                                    
                                    $
                                    –
                                    
                                    
                                    $
                                    –





Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Deferred income taxes arise from
temporary differences in the recognition of income and expenses for financial
reporting and tax purposes. The significant components of deferred income tax
assets and liabilities at November 30, 2008 are as follows:





November
      30,
                                      2008
                                      $
                                    
                                    
                                    November
      30,
                                      2007
                                      $Net
      operating loss carryforward
                                    
                                    $
                                    374,600
                                    
                                    
                                    $
                                    252,800Valuation
      allowance
                                    
                                    
                                    (374,600
                                    )
                                    
                                    
                                    (252,800
                                    )Net
      deferred income tax asset
                                    
                                    $
                                    –
                                    
                                    
                                    $
                                    –





The
Company has recognized a valuation allowance for the deferred income tax asset
since the Company cannot be assured that it is more likely than not that such
benefit will be utilized in future years. The valuation allowance is reviewed
annually. When circumstances change and which cause a change in management's
judgment about the realizability of deferred income tax assets, the impact of
the change on the valuation allowance is generally reflected in current
income.




13.   
Subsequent Events




a)
            On
      December 19, 2008, the Company borrowed $50,000 as a promissory note
      payable with an unrelated third party, which bears interest at 5% per
      annum. Interest and principal are due on
demand.




b)
            On
      December 18, 2008, the Company entered into amendments to the convertible
      debentures described in Note 9. Pursuant to the amendments the maturity
      dates of the notes were extended from December 31, 2008 to December 31,
      2010 (Note 9).







40


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





There
have been no disagreements between the Company and its accountants regarding any
matter or accounting principles or practice or financial statement
disclosures.  The Company changed its accountants in March 2007 as
disclosed in Form 8-K filed with the SEC on March 1, 2007.








ITEM
9A(T).  CONTROLS AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures





At the
end of the period covered by this report, an evaluation was carried out under
the supervision of, and with the participation of, the Company’s management,
including the Chief Executive Officer / Chief Financial Officer, of the
effectiveness of the design and operation of the Company’s disclosure controls
and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) of the
Securities and Exchange Act of 1934, as amended).  Based on that
evaluation, the Chief Executive Officer / Chief Financial Officer has concluded
that as of the end of the period covered by this report, due to material
weaknesses in internal controls over financial reporting described below, the
Company’s disclosure controls and procedures were not adequately designed and
were not effective in ensuring that information required to be disclosed by the
Company in its reports that it files or submits to the SEC under the Exchange
Act, is recorded, processed, summarized and reported within the time period
specified in applicable rules and forms.





Our Chief
Executive Officer / Chief Financial Officer has also determined that, due to
material weaknesses in internal controls over financial reporting described
below, the disclosure controls and procedures are not effective to ensure that
material information required to be disclosed in our reports filed under the
Exchange Act is accumulated and communicated to our management, including the
Company’s Chief Executive / Chief Financial Officer, to allow for accurate
required disclosure to be made on a timely basis.





Through
the year ended November 30, 2008, and to the present, we have engaged legal
counsel who is experienced and qualified to practice before the Security and
Exchange Commission, who actively reviewed company events and major transactions
to advise management on appropriate disclosure of those events and transactions.
Additionally, the Company entered into an agreement with Ted R. Sharp, CPA, an
experienced CFO of publicly-traded companies, to serve as CEO and CFO of the
Company, Company filings with the SEC are reviewed by the Board of Directors,
our management, and our SEC legal firm for proper and complete
disclosure.  Management believes that appropriate improvements in
controls over financial reporting in the future will improve the results of its
evaluation of disclosure controls.





Management’s
Report on Internal Control over Financial Reporting





The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting.  The Company’s internal
control over financial reporting is a process designed under the supervision of
its Chief Executive Officer / Chief Financial Officer to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of the Company’s financial statements for external reporting in accordance with
accounting principles generally accepted in the United States of
America.  Management evaluates the effectiveness of the Company’s
internal control over financial reporting using the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control – “Integrated Framework.”  Management, under the
supervision and with the participation of the Company’s Chief Executive Officer
/ Chief Financial Officer, assessed the effectiveness of the Company’s internal
control over financial reporting as of November 30, 2008 and concluded that it
is ineffective in assuring that the financial reports of the Company are free
from material errors or misstatements.





Management
has identified three areas that contain material weaknesses and is evaluating
appropriate action to remedy and remove those weaknesses in its internal
controls over financial reporting:


·
            Lack
      of segregation of duties of functions that contribute to the financial
      reporting processes. Due to the size of the Company and the associated
      limitations of staffing, segregation of duties issues exist in the   41
  assignment
      of conflicting tasks.  Management has segregated critical tasks
      related to cash to the extent possible; however, these conflicts may not
      be avoidable without adding additional manpower, which is not economically
      possible at this time. The Company is evaluating application of additional
      detective controls to mitigate this
weakness.


·
            General
      journal entries made during the audit.  While not large in
      dollar amount, these audit entries were material to the Company’s
      financial statements due to the very small size of the Company, and
      indicate that additional controls are needed to ascertain that all
      material transactions are posted to the Company’s financial records on a
      complete and timely basis. Management is evaluating application of
      additional detective controls in the financial reporting
      process.


·
            Lack
      of an independent board of directors, including an independent financial
      expert.  With the consummation of the REX acquisition, the
      Company anticipates expanding the board of directors to include a
      financial expert and independent directors.  The current board
      is composed of two members who are not
  independent.





This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management’s report
in this annual report.





Changes
in internal controls over financial reporting





During
the period covered by this report, there have been changes in the Company’s
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting. On September 12, 2008, we entered into a contract with
Sharp Executive Associates, Inc.,  under which that firm would provide
management and accounting services through its principal, Ted R. Sharp, CPA and
additional professional and clerical staff as assigned.  Mr. Sharp
assumed responsibilities as the Company’s Chief Executive Officer, Chief
Financial Officer, Treasurer, Secretary and Director. Mr. Sharp has 27 years of
experience in accounting, with more than 15 years as an executive of
publicly-traded companies. Concurrent with that contractual arrangement, Dr.
John Veltheer resigned from his corporate officer positions, except that he
remains on the Board of Directors.





ITEM
9B.  OTHER INFORMATION





None.





PART
III







ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE




The
following table sets forth certain information with respect to our current
directors, executive officers and key employees. The term for each director
expires at our next annual meeting or until his or her successor is appointed.
The ages of the directors, executive officers and key employees are shown as of
November 30, 2008.








Name,
      Current Office
            Principal
      Occupation
            Director/Officer
      Since
            AgeTed R.
      Sharp, CPA
              Chief Executive Officer
              Chief Financial Officer,
              President, Secretary,
              Treasurer and Director
            Strategy
      Consultant
            September 12,
      2008
            52Dr. John Veltheer,
      Director
            Strategy
      Consultant
            September 26,
      2006
            43







42





Ted
R. Sharp, Principal Executive Officer and Principal Financial
Officer:





We
entered into a written Independent Contractor Agreement, effective September 12,
2008, with Sharp Executive Associates, Inc., and the owner of that firm, Ted R.
Sharp CPA, for Mr. Sharp to act as a Management Consultant to serve as Chief
Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
and to provide through his extended staff and firm all services typical of a
Strategy Consultant and accounting department for a small company.





Since
February 2006, Mr. Sharp serves as Chief Financial Officer under a part-time
management contract for Chief Financial Officer of Goldrich Mining Company, a
mineral exploration company (OTCBB:GRMC).  Since November 2006, he
also serves as Chief Financial Officer and Director under a part-time management
contract for Commodore Applied Technologies, Inc., an environmental remediation
company (OTCBB:CXIA).  In December 2002, Mr. Sharp founded Sharp
Executive Associates, Inc., a consulting firm providing contract CFO services,
Sarbanes-Oxley compliance services and other contract services to both
privately-held and publicly-traded companies. From February 1989 through March
2003, Mr. Sharp served in executive management positions for Key Technology,
Inc., a manufacturer of commercial goods (NASDAQ: KTEC).  Those
positions included Corporate Controller, Managing Director of European
Operations and Chief Financial Officer.





We have
agreed to pay Sharp Executive Associates, Inc. contracted hourly rates ranging
from $200 per hour to $25 per hour, with half of the fee accrued payable in
common stock upon the close of the REX acquisition, for Mr. Sharp, our sole
officer, and others on his staff in consideration of management consulting,
accounting and other services provided to the Company. Mr. Sharp does not
receive any salary in his capacity as an officer or director of the
Company.




Dr.
John Veltheer





On
September 12, 2008, Dr. Veltheer resigned his positions as our Chief Executive
Officer, Chief Financial Officer, President, Secretary and Treasurer, to which
he was appointed September 26, 2006.  He remains on our Board of
Directors. Dr. Veltheer has had experience at the executive level of a number of
public and private companies over the past nine years, including both
established businesses and start-up ventures. From 1999 to 2000, Dr. Veltheer
was president and director of SUMmedia.com Inc. (OTCCB:ISUM), a U.S. reporting
company where, in addition to significant fundraising, he oversaw the running of
one of the Internet’s first eCoupon portals. From 2002 to 2003, Dr. Veltheer was
the president and a director of Rapidtron, Inc. (OTCBB:RPDT), a U.S. reporting
company and a leading provider of Radio Frequency Smart access control and
ticketing/membership systems, where he was responsible for SEC compliance and
corporate governance. From 2003 to 2005, Dr. Veltheer was vice-president,
business development and later chief operating officer and director of House of
Brussels Chocolates, Inc. (OTCBB:HBSL), a U.S. reporting company whose primary
business is gourmet chocolate wholesaling. From 2005 to September 2006, Dr.
Veltheer was president and director of SES Solar Inc. (OTCBB:SESI), a U.S.
reporting company, where he managed a business combination with a Swiss Solar
Energy concern and associated fundraising. Dr. Veltheer remains a director of
SES Solar Inc. Dr. Veltheer is currently the chief executive officer, secretary,
treasurer and a director of Vecten Corporation, a startup private equity fund.
Dr. Veltheer continues to serve as the president and a director of Iridium
Capital Inc., a private Canadian company that provides its clients with start-up
consulting services. Dr. Veltheer received his B.Sc. Chemistry (Honours) from
Queen’s University in 1988 and his Ph.D. (Chemistry) from the University of
British Columbia in 1993.





Dr. John
Veltheer provides management consulting to the Company on a contract basis. We
have agreed to pay Dr. Veltheer $4,000 per month in consideration of management
consulting provided to the Company. Dr. Veltheer does not receive any salary in
his capacity as an officer or director of the Company.




Significant
Employees




Neither
Mr. Sharp nor Dr. Veltheer has formal training as a geologist or in the
technical aspects of a mineral exploration company. Accordingly, we will have to
rely on the technical services of others to advise us on the managerial aspects
specifically associated with a mineral exploration company. We rely on our
independent geological consultant, Mr. Timmins, to make recommendations to us on
work programs on our property, to hire






43


appropriately
skilled persons on a contract basis to complete work programs and to supervise,
review, and report on such programs to us.




Code
of Ethics




We have
adopted a Code of Ethics applicable to our officers and directors which is a
“code of ethics” as defined by applicable rules of the SEC.  Our Code
of Ethics was attached as an exhibit to our Annual Report filed on February 28,
2007.  A copy of such Code of Ethics will be provided to any person
without charge upon written request sent to the Company at its principal
address.





Committees
of the Board of Directors




We have
no Audit, Compensation, Corporate Governance or Nominating Committee due to our
small size. Our board of directors is responsible for developing our approach to
corporate governance issues.




Section
16(a) Beneficial Ownership Reporting Compliance




Section
16(a) of the Securities and Exchange Act of 1934 requires any person who is our
director or executive officer or who beneficially holds more than 10% of any
class of our securities which have been registered with the Securities and
Exchange Commission, to file reports of initial ownership and changes in
ownership with the Securities and Exchange Commission. These persons are also
required under the regulations of the Securities and Exchange Commission to
furnish us with copies of all Section 16(a) reports they file.




To our
knowledge, based solely on our review of the copies of the Section 16(a) reports
furnished to us, all Section 16(a) filing requirements applicable to our
directors, executive officers and holders of more than 10% of any class of our
registered securities were timely complied with during the year ended November
30, 2008.







ITEM
11.     EXECUTIVE COMPENSATION




Compensation
Discussion and Analysis





We have
no fulltime employees, including our executive officers. Our business is
currently very small and does not require the services of full-time persons to
execute our corporate strategies. Engaging professional consultants under
part-time contracts allows us to conserve our limited cash resources while
applying appropriate resources to technical and executive tasks. Our executives
have been engaged and compensated as independent contractors to provide services
similar to those provided by them to other companies. Additionally, the fees
paid to the firm owned by our Chief Executive Officer / Chief Financial Officer,
Ted R. Sharp, is at reduced rates from market rates, with a success fee to be
paid in common stock upon the successful close of the REX acquisition. That
contract also provides the ability to utilize other members of his consulting
firm without entering into employment arrangements with each
one.  This compensation structure not only allows us to conserve cash
for Mr. Sharp’s professional services, it also provides him incentive to close
that strategic transaction.  As we are successful in our growth
strategies, our employment practices will change to more traditional
employer/employee relationships as appropriate.








Summary
Compensation Table




A summary
of cash and other compensation paid to our executive officers and directors for
the fiscal years ended November 30, 2008 and 2007 is as follows:








44

















Name
                and
                Principal
      Position
              Year
      Ending November 30
              Salary
                ($)
              Bonus
                ($)
              Stock
      Awards
                ($)
              Option
                Awards
                ($)
              Non-Equity
      Incentive Plan Compensation
                ($)
              Nonqualified
      Deferred Compensation Earnings
                ($)
              All
      other Comp.
              Total(a)
              (b)
              (c)
              (d)
              (e)
              (f)
              (g)
              (h)
              (i)
              (j)Ted
      R. Sharp  (1)
                Chief
      Executive Officer, Chief Financial Officer, President, Secretary,
      Treasurer and Director
              2008
                2007
              -
              -
              -
              -
              -
              -
              $9,089
                0
              $9,089
                0Dr.
      John Veltheer (2)
                Chief
      Executive Officer, Chief Financial Officer, President, Secretary,
      Treasurer and Director
              2008
                2007
              -
              -
              -
              -
              -
              -
              $48,000
                $48,000
              $48,000
                $48,000





(1)
            Mr.
      Sharp was appointed to these positions on September 12,
      2008.  Amounts paid includes $3,080 due in cash and $2,367 of
      fair value of stock issuable as of November 30,
  2008.


(2)
            Dr.
      Veltheer resigned all positions except Director on September 12,
      2008.  He continues to provide consulting services under
      contract through and beyond the year ended November 30, 2008 for which he
      is paid $4,000 per month.





Our
contract with Ted R. Sharp and his firm Sharp Executive Associates, Inc.
provides for 50% of the fees charged to be paid in the form of common stock,
contingent upon the successful close of the REX acquisition.  Such
stock is issued at a deemed price of $1.00 per share payable and issued
quarterly against an invoice for services rendered for the preceding
quarter.  Upon the acquisition of REX, a success fee consisting of
4,534 common shares is due for services rendered during the year ended November
30, 2008.




The
Company has no equity or incentive plan under which shares of company stock may
be issued to officers, directors, employees or other interests.




Director
Compensation




We do not
pay any compensation to Dr. John Veltheer or Ted R. Sharp for serving on our
board of directors.




Employment
Contracts and Termination of Employment and Change-In-Control
Arrangements




On
September 12, 2008, we entered into a engagement letter agreement with Sharp
Executive Associates, Inc., a management consulting firm owned by Ted R. Sharp,
CPA, under which Mr. Sharp would serve as Chief Executive Officer, Chief
Financial Officer, President, Secretary, Treasurer and Director.  In
general, that agreement provides for hourly compensation for services rendered
by Mr. Sharp or members of his staff at rates ranging from $200 per hour to $25
per hour, with 50% of the fee payable in the form of common stock upon the
successful closing of the REX acquisition.  The consulting agreement
has been filed with the SEC on Form 8-K dated September 14, 2008.





On
September 12, 2008, concurrent with the engagement of Mr. Sharp and his firm,
Dr. Veltheer resigned all positions except Director.  He continues to
provide consulting services under contract through and beyond the year ended
November 30, 2008 for which he is paid $4,000 per month.





ITEM
12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS




The
following tables set forth information as of February 27, 2009 regarding the
ownership of our common stock by:




•  each
person who is known by us to own more than 5% of our shares of common stock;
and


•  each
named executive officer, each director and all of our directors and executive
officers as a group.





45


The
number of shares beneficially owned and the percentage of shares beneficially
owned are based on 60,733,335 shares of common stock outstanding as of February
27, 2009.




Beneficial
ownership is determined in accordance with the rules and regulations of the
Securities and Exchange Commission. Shares subject to options that are
exercisable within 60 days following February 27, 2009 are deemed to be
outstanding and beneficially owned by the optionee for the purpose of computing
share and percentage ownership of that optionee but are not deemed to be
outstanding for the purpose of computing the percentage ownership of any other
person. Except as indicated in the footnotes to this table, and as affected by
applicable community property laws, all persons listed have sole voting and
investment power for all shares shown as beneficially owned by
them.




Officers,
Directors and Principal Stockholders




Name and Address of Beneficial
      OwnerName/Position
                                                              Officers
      and Directors
                                                            Address
                                                            Number
      ofShares
                                                            Percentage
      of Issuedand
      OutstandingTed
      R. Sharp, CPA
                                                              Chief
      Executive Officer, Chief Financial Officer, President, Secretary,
      Treasurer and Director
                                                            714
      Whisperwood Ct.
                                                              Nampa,
      ID 83686
                                                            0
                                                            0%Dr.
      John Veltheer
                                                              Former
      Chief Executive Officer, Former Chief Financial Officer,
      Former  President, Former Secretary, Former Treasurer and
      Director
                                                            2957
      West 21st Avenue
                                                              Vancouver,
      B.C. V6L 1K7
                                                              Canada
                                                            30,000,000
                                                            49.4%Officers
      and Directors as a Group
                                                            
                                                            30,000,000
                                                            49.4%







We have
no knowledge of any arrangements, including any pledge by any person of our
securities, the operation of which may at a subsequent date result in a change
in our control.




We are
not, to the best of our knowledge, directly or indirectly owned or controlled by
another corporation or foreign government.







ITEM
13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE




None of
the following parties has, since our date of incorporation, had any material
interest, direct or indirect, in any transaction with us or in any presently
proposed transaction that has or will materially affect us, other than noted in
this section:




•
            any
      of our directors or officers;


•
            any
      person proposed as a nominee for election as a
  director;


•
            any
      person who beneficially owns, directly or indirectly, shares carrying more
      than 10% of the voting rights attached to our outstanding share of common
      stock;


•
            any
      of our promoters;


•
            any
      relative or spouse of any of the foregoing persons who has the same home
      address as such person.




46


On
September 12, 2008, Company entered into an engagement letter with Ted R. Sharp,
the Chief Executive Officer of the Company, as described
earlier.  Pursuant to the agreement, the Company incurred $4,555 (2007
- $Nil) in consulting fees to a company owned and controlled by the Chief
Executive Officer of the Company during the year ended November 30,
2008.  As at November 30, 2008, $3,080 (2007 - $Nil) of consulting
fees are owed to Mr. Sharp’s company. A $5,000 retainer was paid to the company
owned and controlled by the Chief Executive Officer.  Upon the
acquisition of REX, a success fee consisting of 4,534 common shares is due for
services rendered during the year ended November 30, 2008.




During
the year ended November 30, 2008, the Company incurred $48,000 (2007 - $48,000)
in consulting fees to Dr. John Veltheer, a director and the former President of
the Company. As at November 30, 2008, $4,000 (2007 - $Nil) in consulting fees
are owed to Mr. Veltheer.




As at
November 30, 2008, accounts payable includes $3,125 (2007 - $3,125) owing to a
former director for expenses incurred on the Company’s behalf.




During
the year ended November 30, 2006, the Company received an advance of $50,000
from Mr. Veltheer, a director.  The amount is supported by a
promissory note, bears interest at 12% per annum and matured October 18, 2007.
On November 8, 2007, the Company entered into an agreement to extend the loan to
October 18, 2008. On March 18, 2008, the Company repaid the director $58,500,
representing the total principal and accrued interest as of the repayment
date.  Interest of $nil was accrued as at November 30, 2008 (2007 -
$6,707).





Director
Independence





There are
no independent directors on the Board of Directors of the
Company.


47


ITEM
14.     PRINCIPAL ACCOUNTING FEES AND
SERVICES




Audit
Fees




The
aggregate fees billed by the Company's auditors for professional services
rendered in connection with the audit of the Company's annual financial
statements for the periods from November 30, 2007 to November 30, 2008 and from
November 30, 2006 to November 30, 2007 and reviews of the consolidated financial
statements included in the Company’s Forms 10­-Q or 10-QSB for the periods
from November 30, 2007 to November 30, 2008 and from November 30, 2006 to
November 30, 2007, were $23,675 and $9,000, respectively.




Audit-Related
Fees




The
aggregate fees billed by the Company's auditors for any additional fees for
assurance and related services that are reasonably related to the performance of
the audit or review of the Company’s financial statements and are not reported
under “Audit Fees” above for the periods November 30, 2007 to November 30, 2008
and from November 30, 2006 to November 30, 2007, were $nil and $nil,
respectively.




Tax
Fees




The
aggregate fees billed by the Company’s auditors for professional services for
tax compliance, tax advice, and tax planning for the periods from November 30,
2007 to November 30, 2008 and from November 30, 2006 to November 30, 2007, were
$nil and $nil, respectively.




All
Other Fees




The
aggregate fees billed by the Company’s auditors for all other non-audit services
rendered to the Company, such as attending meetings and other miscellaneous
financial consulting, for the periods from November 30, 2007 to November 30,
2008 and from November 30, 2006 to November 30, 2007, were $nil and $nil,
respectively.




48


ITEM
15.     EXHIBITS, FINANCIAL STATEMENT
SCHEDULES





EXHIBIT
                      DESCRIPTION3.1
                      Articles
      of Incorporation(1)3.2
                      Bylaws,
      as amended(1)3.3
                      Articles
      of Incorporation, as amended(2)4.1
                      Form
      of Share Certificate(1)10.1
                      Mineral
      Claim Purchase Agreement, dated November 2, 2001, between Glen MacDonald
      and Texada Ventures Inc.(1)10.2
                      Loan
      Agreement, dated October 18, 2006, between Dr. John Veltheer and Texada
      Ventures Inc.(3)10.3
                      Letter
      Agreement, dated November 9, 2006, between Texada Ventures Inc. and Link
      Investment Holdings, S.A.(4)10.4
                      Promissory
      Note issued by Texada Ventures Inc. to IFG Trust Services, Inc. on
      February 15, 2007(7)10.5
                      Term
      Sheet Agreement, dated March 21, 2007, between Texada Ventures Inc. and
      Anglo Energy Refining Corp.(8)10.6
                      Assignment
      Agreement, dated April 5, 2007, between Texada Ventures Inc. and Anglo
      Energy Refining Corp.(9)10.7
                      Loan
      Extension Agreement, dated November 8, 2007, between Texada Ventures Inc.
      and Dr. John Veltheer(10)10.8
                      Assignment
      Agreement, effective November 8, 2007, between Texada Ventures Inc. and
      Anglo Energy Refining Corp.(10)10.9
                      Engagement
      Letter agreement, dated September 12, 2008, between Texada Ventures Inc.
      and Sharp Executive Associates, Inc. (12)14.1
                      Code
      of Ethics(5)16.1
                      Letter
      from Telford Sadovnick, P.L.L.C. regarding change in certifying
      accountant(11)23.1
                      Consent
      of W. G. Timmons31.1
                      Certification
      of Chief Executive Officer and Chief Financial Officer as adopted pursuant
      to Section 302 of the Sarbanes-Oxley Act of 200232.1
                      Certification
      of Chief Executive Officer and Chief Financial Officer as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 200299.1
                      Share
      Purchase Agreement, dated September 25, 2006, between Marc Branson and Dr.
      John Veltheer
(6)








(1)
              Filed
      with the SEC as an exhibit to our Registration Statement on Form SB-2
      originally filed on April 15, 2003, as amended.(2)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on
      November 21, 2006.


(3)
            Filed
      with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on
      October 20, 2006.


(4)
            Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on
      November 11, 2006


(5)
            Filed
      with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on
      March 9, 2006.


(6)
            Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on
      September 29, 2006


(7)
            Filed
      with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on
      February 28, 2007


(8)
            Filed
      with the SEC as an exhibit to our Current Report on 8-K filed on March 23,
      2007


(9)
            Filed
      with the SEC as an exhibit to our Current Report on 8-K filed on April 11,
      2007


(10)
            Filed
      with the SEC as an exhibit to our Current Report on 8-K filed on November
      13, 2007


(11)
            Filed
      with the SEC as an exhibit to our Current Report on 8-K filed on March 5,
      2007


(12)
            Filed
      with the SEC as an exhibit to our Current Report on 8-K filed on September
      14, 2008













49





SIGNATURES











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





TEXADA
      VENTURES INC.Date:  February
      27, 2009
            /s/ Ted R. SharpTed
      R. Sharp, Chief Executive Officer,
              Chief
      Financial Officer











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





Signature
            Title
            Date/s/ Ted R. Sharp
            Chief
      Executive Officer, Chief Financial Officer and Director
              (Principal
      Executive Officer and Principal Financial Officer)
            February
      27, 2009Ted
      R. Sharp/s/ John Veltheer
            Director
            February
      27, 2009Dr.
      John Veltheer