U.S. SECURITIES AND EXCHANGE COMMISSION
        WASHINGTON, D.C. 20549
        FORM 10-KSB



|x| |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE    
|-- |  | ----------------------------------------------------------------------------
|   |  | SECURITIES EXCHANGE ACT OF 1934                                             
|   |  |                                                                             
|   |  | For the fiscal year ended November 30, 2007                                 
|   |  |                                                                             
|   |  | OR                                                                          
|   |  |                                                                             
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE
|   |  | SECURITIES EXCHANGE ACT OF 1934                                             



For the transition period from ____________ to ____________



Commission file number:
        000-51563



TEXADA VENTURES INC.

(Exact name of registrant as specified in its charter)





|Nevada                                                                 |  | 98-0431245         
|---------------------------------------------------------------------- |  | -------------------
|(State or other jurisdiction of                                        |  | (I.R.S. Employer   
|incorporation or organization)                                         |  | Identification No.)
|                                                                       |  |                    
|Suite 720-999 West Broadway
                    Vancouver, B.C. Canada |  | V5Z 1K5            
|(Address of principal executive offices)                               |  | (Zip Code)         



(604) 562-6915

(Registrant’s telephone number, including area code)



N/A

(Former name, former address and former fiscal year, if changed since last
        report)



Securities registered pursuant to Section 12(b) of the Act:



|Title of each class |  | Name of each exchange on which registered
|------------------- |  | -----------------------------------------
|N/A                 |  | N/A                                      

Securities registered pursuant to Section 12(g) of the Act: Common Stock,
        $0.001 par value per share



Check
        whether the registrant is not required to file reports pursuant to Section 13 or Section
        15(d) of the Exchange Act. o



Indicate by
        check mark whether the registrant (1) has filed all reports required to be filed by Section
        13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
        such shorter period that the registrant was required to file such reports), and (2) has
        been subject to such filing requirements for the past 90 days.

Yes x
                No 
        o



Indicate by
        check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B 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-KSB or any amendment to this Form 10-KSB. 
        o



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

Yes  o
                No
        x



State the
        issuer’s revenues for its most recent fiscal year: $0



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 a specified date
        within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.):
        $38,416,668.75 as of March 10, 2008, based on the last sales price of $1.25 per
        share of the Company’s common stock on the National Association
        of Securities Dealers Over-the-Counter Bulletin Board.

As of March 10, 2008, we had 60,733,335 shares of common stock issued and
        outstanding.



DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable
         
        Transition Small Business Disclosure Format (Check One)

Yes o     
        No   x



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TABLE OF
        CONTENTS

|ITEM
                1. | DESCRIPTION OF
                BUSINESS | 2
|----------------------- | --------------------------------------- | -

|ITEM
                2. | DESCRIPTION OF
                PROPERTIES | 8
|----------------------- | ----------------------------------------- | -

|ITEM
                3. | LEGAL
                PROCEEDINGS | 21
|----------------------- | --------------------------------- | --

|ITEM
                4. | SUBMISSION OF
                MATTERS TO A VOTE OF SECURITY HOLDERS | 21
|----------------------- | ------------------------------------------------------------------- | --

|ITEM
                5. | MARKET FOR
                COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF
                EQUITY SECURITIES | 21
|----------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------- | --

|ITEM
                6. | MANAGEMENT’S DISCUSSION
                AND ANALYSIS OR PLAN OF OPERATION | 23
|----------------------- | ------------------------------------------------------------------------- | --

|ITEM
                7. | FINANCIAL
                STATEMENTS | 33
|----------------------- | ------------------------------------ | --

|ITEM
                8. | CHANGES IN AND
                DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                AND FINANCIAL DISCLOSURE | 34
|----------------------- | -------------------------------------------------------------------------------------------------------------------- | --

|ITEM
                8A. | CONTROLS AND
                PROCEDURES | 34
|------------------------ | --------------------------------------- | --

|ITEM
                9. | DIRECTORS,
                EXECUTIVE OFFICERS AND CONTROL PERSONS; SECTION 16(A) COMPLIANCE | 35
|----------------------- | ------------------------------------------------------------------------------------------- | --

|ITEM
                10. | EXECUTIVE
                COMPENSATION | 37
|------------------------ | -------------------------------------- | --

|ITEM
                11. | SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
                AND RELATED STOCKHOLDER MATTERS | 36
|------------------------ | ------------------------------------------------------------------------------------------------------------------------------ | --

|ITEM
                12. | CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS | 38
|------------------------ | -------------------------------------------------------------- | --

|ITEM
                13. | EXHIBITS | 40
|------------------------ | -------- | --

|ITEM
                14. | PRINCIPAL
                ACCOUNTANT FEES AND SERVICES | 41
|------------------------ | ------------------------------------------------------ | --

|SIGNATURES | 42
|---------- | --

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FORWARD-LOOKING STATEMENTS



Certain statements contained in this Annual Report on Form 10-KSB 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
            Anglo Energy Refining Corp. under the Assignment Agreement effective as of November 8,
            2007;
- 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 or Plan of Operation” and elsewhere
        in this Form 10-KSB. 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-QSB 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.

1



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ITEM 1.     DESCRIPTION OF BUSINESS

Overview

We were
        incorporated on October 17, 2001 under the laws of the State of Nevada. Our principal
        office is located at Suite 720 – 999 West Broadway, Vancouver, British Columbia,
        Canada V5Z 1K5. Our phone number is (604) 562-6915. Our facsimile number is (604)
        662-8974.

Our Business

We are
        an exploration stage company engaged in the acquisition and exploration of mineral and
        resource properties. 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
        determined 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, we have determined to continue to develop our current mining business and to seek
        other business opportunities under Dr. Veltheer’s guidance.

RECENT SIGNIFICANT CORPORATE DEVELOPMENTS

We have experienced the
        following significant corporate developments during our fiscal year ended November 30,
        2007:

| | 1. |  | On November 9,
                2006, the Company entered into a Letter Agreement with Link. On January 11, 2007,
                the Company entered into a Term Sheet with Paddington Holdco and Link, the parent
                company of Paddington Holdco, that superseded and replaced the Letter Agreement.
                Pursuant to the Term Sheet, the Company and the shareholders of Paddington Holdco
                had arranged for investors to advance $3,917,000 (AUS$5,000,000) to facilitate a
                deposit paid by Paddington Holdco in connection with the acquisition by Paddington
                Holdco from Barrick of certain mineral assets located in Australia. The provision
                to pay the $3,917,000 (AUS$5,000,000) was the initial step in the proposed
                acquisition by the Company of 100% of the issued and outstanding shares of
                Paddington Holdco, in exchange for the issuance of 9,000,000 shares of the
                Company’s common stock to the shareholders of Paddington Holdco, and advances
                sufficient for Paddington Holdco to purchase certain mineral assets of Barrick.
                During the year ended November 30, 2006, the Company advanced $78,340 (AUS$100,000)
                to Paddington, secured by a Promissory Note. In order to fund the acquisition of
                the shares of Paddington Holdco, the Company expected to commence a financing to
                raise up to $60,000,000. The Company also agreed that concurrent with the
                acquisition of the mineral assets by Paddington Holdco from Barrick, the Company
                would pay finder’s fees in the amount of $500,000 in cash and shares with a
                value of $1,200,000. Additionally, the Company had agreed to reimburse a third
                party $250,000 for expenses incurred in connection with the acquisition. Closing of
                the transaction was contingent upon, among other things, the Company raising at
                least $55,000,000 in financing.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2

---

| | 2. |  | On February 15,
                2007, the Company issued a promissory note in the principal amount of $50,000 to
                IFG Trust Services Inc. The promissory note bears interest at a rate of 8% per
                annum, payable annually on or before February 14 of each year. Principal under the
                note is payable on demand.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. |  | On February 21,
                2007, the Company received notice from Link that the Term Sheet described above was
                terminated. The Promissory Note between the Company and Paddington Holdco is a
                Demand Promissory Note. On April 26 and June 18, 2007, the Company issued demands
                for payment on the $78,340 (AUS$100,000) promissory note issued to Paddington
                Holdco. During the year ended November 30, 2007, the Company an allowance of 100%
                of the value of the note and recognized $86,797 as a loss on writedown of the note
                receivable.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. |  | 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 Sharing Agreement (the
                “PSA”) to be entered into between Anglo and a joint venture partner.
                The PSA relates to a 40% production sharing interest an Ecuadorian oil and gas
                field to be obtained by Anglo’s joint venture partner. On April 5, 2007,
                Anglo and the Company entered into an Assignment Agreement (the “Ecuador
                Assignment Agreement”) providing for the assignment of Anglo’s interest
                in the PSA in consideration for:
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (a) |  | the payment by
                Texada to Anglo of an aggregate amount equal to $500,000 for expenses incurred by
                Anglo in connection with the PSA, with such amount payable as follows:
| |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | (i) |  | $125,000 on the
                effective date of the Assignment Agreement (paid),
| |  |  | --- |  | ----------------------------------------------------------------------------------

| |  |  | (ii) |  | $125,000 on the
                thirty day anniversary of the effective date of the Ecuador Assignment Agreement
                (paid), and
| |  |  | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | (iii) |  | $250,000 on the
                ninety day anniversary of the effective date of the Ecuador Assignment
                Agreement.
| |  |  | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------

| |  | (b) |  | the payment by
                Texada to Anglo of all future expenses of Anglo related to the PSA after the
                effective date of the Ecuador Assignment Agreement;
| |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (c) |  | the issuance to
                Anglo (or its nominee) of 30,000,000 shares of common stock of Texada upon the
                closing of the PSA; and
| |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (d) |  | the transfer of
                10,084,011 shares of restricted common stock of Texada by one or more existing
                shareholders to Anglo (or its nominee) upon the closing of the PSA.
| |  | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As of July 4,
                2007, Anglo had not delivered requested due diligence documentation related to the
                transaction, and we attempted to negotiate an extension to the payment provisions
                under the Ecuador Assignment Agreement. Negotiations continued through September
                30, 2007. After failing to obtain due diligence related to the proposed joint
                venture, we elected to terminate further negotiations with Anglo. Accordingly, as
                of November 30, 2007, the $250,000 previously paid has been written off.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. |  | On April 10,
                2007, the Company issued a 6% convertible debenture to Blackpool Ltd. in the
                principal amount of $200,000 which is due and payable on December 31, 2008.
                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. The principal and accrued interest on the Debenture may be
                converted at any time into shares of the Company’s common stock at $0.25 per
                share, at the option of the holder.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. |  | On May 2, 2007,
                the Company issued a 6% convertible debenture to Sovereign Services Limited with a
                principal amount of $125,000 which is due and payable on December 31, 2008.
                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. The principal and accrued interest on the Debenture may be
                converted at any time into shares of the Company’s common stock at a rate of
                $0.25 per share, at the option of the holder.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> 3
> 
>             
>             
>             
> 
>             7.
> 
>                     
> 
>                     On November
>                     8, 2007, the Company entered into a Loan Extension Agreement with John
>                     Veltheer, the President, Secretary, Treasurer and Director of the Company,
>                     pursuant to which Mr. Veltheer agreed to extend the maturity date of the
>                     $50,000 loan from Mr. Veltheer to the Company, as described in the Loan
>                     Agreement, dated as of October 18, 2006, between the Company and Mr. Veltheer,
>                     from October 18, 2007 to October 18, 2008.8.
> 
>                     
> 
>                     On November
>                     12, 2007, we entered into an Assignment Agreement (the “Peru Assignment
>                     Agreement”) with Anglo, effective as of November 8, 2007, providing for
>                     the assignment of Anglo’s interest in a Production Agreement (the
>                     “PA”) to be entered into between Anglo and Barrett Resources (Peru)
>                     LLC (“ Barrett”). The PA relates to rights to develop and produce
>                     crude oil, gas and proven reserves at Block 67 located in Peru. In
>                     consideration for the assignment by Anglo to the Company of Anglo’s
>                     rights under the PA, the parties agreed as follows:(a)
> 
>                     
> 
>                     the Company
>                     agreed to pay to Anglo an aggregate amount equal to $115,000 ($100,000 paid),
>                     equivalent to 50% of the expenses incurred by Anglo up to and including the
>                     effective date of the Peru Assignment Agreement in connection with the
>                     negotiation of the PA, upon the receipt by the Company of documentation from
>                     Anglo supporting such expenses (the Company paid an additional $5,000 on
>                     December 5, 2007);(b)
> 
>                     
> 
>                     on the
>                     closing date, the Company agreed to pay to Anglo 100% of the reasonable,
>                     documented expenses incurred by Anglo from the effective date of the Peru
>                     Assignment Agreement to the closing date in connection with the negotiation and
>                     execution of the PA; and(c)
> 
>                     
> 
>                     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 common stock of  the Company on the
>                     closing date.The PA is
>                     subject to negotiation with Barrett and various governmental and regulatory
>                     approvals. The Peru Assignment Agreement provides the Company the right to
>                     participate and observe in the negotiations of a definitive PA and requires the
>                     Company and Anglo to use commercially reasonable efforts to cooperate in
>                     consummating the transactions contemplated therein. Anglo has granted the
>                     Company exclusive rights under the PA by agreeing not to, directly or
>                     indirectly, solicit, initiate, encourage or enter into any acquisition
>                     proposals. In December 2007, the Company hired R. R. Wolfe and Company, Inc. to
>                     complete an evaluation on the properties underlying the Peru Assignment
>                     Agreement. Management of the Company is reviewing such report to determine
>                     whether to move forward with the transactions contemplated by the Peru
>                     Assignment Agreement.9.
> 
>                     On November
>                     19, 2007, the Company issued a 6% convertible debenture to IFG Trust Services
>                     Inc. in the principal amount of $115,000 which is due and payable on December
>                     31, 2008. 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. The principal and accrued interest on the
>                     Debenture may be converted at any time into shares of the Company’s
>                     common stock at a rate of $0.25 per share, at the option of the holder. If the
>                     Company closes the transactions contemplated by the Peru Assignment Agreement,
>                     the Debenture will be automatically converted into common shares of the Company
>                     at $0.25 per share.

**Risk Factors and Uncertainties**

***An investment in our common stock involves a high degree of risk. Readers
        should carefully consider the risks and uncertainties described below before deciding
        whether to invest in shares of our common stock.***

Our
        failure to successfully address the risks and uncertainties described below would have a
        material adverse effect on our business, financial condition and/or results of operations,
        and the trading price of our common stock may decline and investors may lose all or part of
        their investment. We cannot assure you that we will successfully address these risks or
        other unknown risks that may affect our business.

4





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Risks Related To Our Financial Condition and Business Model

We
        have yet to attain profitable operations and because we will need additional financing to
        fund our exploration activities, our accountants believe there is substantial doubt about
        our ability to continue as a going concern.

We have
        incurred a net loss of $773,006 for the period from October 17, 2001 (inception) to
        November 30, 2007, and have no revenues to date. Our future is dependent upon our ability
        to obtain financing and upon future profitable operations from the development of our
        mineral claims. These factors raise substantial doubt that we will be able to continue as a
        going concern.

We
        may be unable to continue as a going concern.

As of
        November 30, 2007, we had cash of $20,665, current assets of $20,817 and current
        liabilities of $290,164.  Our working capital deficit was $269,347 at November 30,
        2007. There is doubt about our ability to continue as a going concern due to our lack of
        working capital for our planned business activities. We currently do not have sufficient
        working capital to meet our on-going obligations. We are also in the process of seeking
        sufficient financing to implement our business strategy. Our ability to raise additional
        financing may be contingent on our ability to restructure our liabilities and may
        require us to restructure our capital structure. Our financial statements do not include
        any adjustments relating to the recoverability and classification of recorded assets, or
        the amounts of and classification of liabilities that might be necessary in the event we
        cannot continue in existence.

If
        we do not obtain additional financing, our business will fail.

In order
        for us to perform any further exploration or extensive testing, to complete the
        transactions contemplated under the Peru Assignment Agreement or to meet our on-going
        working capital requirements, we will need to obtain additional financing. We
        currently do not have any income. Our business plan calls for significant expenses in
        connection with the exploration of our mineral claims and acquisition of additional
        properties. We will require additional financing if further exploration programs are
        necessary. If we elect to proceed with the transactions under the Peru Assignment
        Agreement, we are required to reimburse Anglo for its expenses and we will require
        additional capital to fund our portion of any production agreement that may be negotiated
        with Barrett, if any.  In addition, we will require additional financing to sustain
        our business operations if we are not successful in earning revenues once our exploration
        is complete or we are unable to generate revenues from other business opportunities.

Our
        independent auditor believes there is substantial doubt that we can continue as a going
        concern which, if true, raises substantial doubt that a purchaser of our common stock will
        receive a return on his or her investment. We have incurred a net loss of $773,006 for the
        period from October 17, 2001 (inception) to November 30, 2007, and will likely continue to
        incur further losses as we continue our exploration program. Our future is dependent upon
        our ability to obtain financing and upon future profitable operations from the development
        of our mineral properties. We may be forced to liquidate assets, issue securities that are
        extremely dilutive to existing shareholders or file for bankruptcy if we are unable to meet
        our ongoing working capital requirements.  If we are not able to continue as a going
        concern, it is likely any holder of our common stock will lose their investment in that
        stock.

Because our sole executive officer does not have formal training specific to the
        technicalities of mineral exploration, there is a higher risk our business will
        fail.

Dr. John
        Veltheer, our sole executive officer and director, does not have formal training as a
        geologist and lacks the technical training and experience in managing an exploration
        company. Additionally, Dr. Veltheer has never managed any company involved in starting or
        operating a mine or oil and gas exploration or development company. With no direct training
        or experience in these areas, our management may not be fully aware of many of the specific
        requirements related to working within this industry. Our decisions and choices may not
        take into account standard engineering or managerial approaches mineral exploration or oil
        and gas companies commonly use. Consequently, our operations, earnings, and ultimate
        financial success could suffer irreparable harm due to our lack of experience in this
        industry.

Because of the unique difficulties and uncertainties inherent in the exploration
        business, we face a high risk of business failure.

Potential investors should be aware of the difficulties normally encountered by
        new exploration companies and the high rate of failure of such enterprises. The
        likelihood of success must be considered in light of the problems, expenses, difficulties,
        complications and delays encountered in connection with the exploration of the

5



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resource
        properties that we plan to undertake. These potential problems include, but are not limited
        to, unanticipated problems relating to exploration, and additional costs and expenses that
        may exceed current estimates.

Because we anticipate our operating expenses will increase prior to our earning
        revenues, we may never achieve profitability.

Prior to
        completion of our exploration stage, we anticipate that we will incur increased operating
        expenses without realizing any revenues. We therefore expect to incur significant losses
        into the foreseeable future. We recognize that if we are unable to generate significant
        revenues from the exploration of our mineral claims and the production of minerals thereon,
        if any, or from the potential production agreement with Barrett, if any, we will not be
        able to earn profits or continue operations. There is no history upon which to base any
        assumption as to the likelihood that we will prove successful, and we may not be able to
        generate any operating revenues or ever achieve profitable operations. If we are
        unsuccessful in addressing these risks, our business will most likely fail.

Because of the speculative nature of exploration of mineral claims, there is
        substantial risk that no commercially exploitable minerals will be found and this business
        will fail.

We have
        just begun the initial stages of exploration of our mineral claims, and thus have no way to
        evaluate the likelihood that we will be able to operate the business successfully. The
        search for valuable minerals as a business is extremely risky. Our mineral claims may not
        contain commercially exploitable deposits of gold and silver. Exploration for minerals is a
        speculative venture necessarily involving substantial risk. The expenditures to be made by
        us in the exploration of the mineral claims may not result in the discovery of commercial
        quantities of ore. Problems such as unusual or unexpected formations and other conditions
        are involved in mineral exploration and often result in unsuccessful exploration efforts.
        In such a case, we would be unable to complete our business plan.

Because of the inherent dangers involved in mineral exploration, there is a risk that
        we may incur liability or damages as we conduct our business.

The
        search for valuable minerals involves numerous hazards. As a result, we may become subject
        to liability for such hazards, including pollution, cave-ins and other hazards against
        which we cannot insure or against which we may elect not to insure. The payment of such
        liabilities may have a material adverse effect on our financial position.

Because access to our mineral claims may be restricted by inclement weather, we may
        be delayed in our exploration and any future mining efforts.

Access
        to the Peek mineral claim may be restricted through some of the year due to weather in the
        area. The property is in the Yukon Territory, an area which experiences sub-arctic
        temperatures during much of the year. During the winter months, heavy snowfall and extreme
        low temperatures make it difficult if not impossible to undertake work programs. As a
        result, any attempt to test or explore the property is largely limited to the times when
        weather permits such activities. Generally speaking, the most efficient time for us to
        conduct our work programs will be during the May to October period. These limitations can
        result in significant delays in exploration efforts, as well as mining and production in
        the event that commercial amounts of minerals are found. Such delays can have a significant
        negative effect on our results of operations.

Because our president has only agreed to provide his services on a part-time basis,
        he may not be able or willing to devote a sufficient amount of time to our business
        operations, causing our business to fail.

Dr. John
        Veltheer, our President, also holds positions as a director in SES Solar Inc., a US
        reporting company engaged in business of engineering, manufacturing and distributing
        high-performance photovoltaic solar tiles and modules; the chief executive officer,
        secretary, treasurer and a director of Vecten Corporation, a start-up private equity fund;
        and the president and a director of Iridium Capital Inc., a private Canadian company that
        provides start-up consulting services. Because we are in the early stages of our business,
        Dr. Veltheer devotes approximately twenty hours per week to our company’s affairs. If
        the demands of our business require the full

6

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business time of Dr. Veltheer, he is prepared to adjust his
        timetable to devote more time to our business. However, Dr. Veltheer may not be able to
        devote sufficient time to the management of our business, as and when needed. It is
        possible that the demands of Dr. Veltheer’s other interests will increase with the
        result that he would no longer be able to devote sufficient time to the management of our
        business. Competing demands on Dr. Veltheer’s time may lead to a divergence between
        his interests and the interests of other stockholders.

We may not be able to
        realize any benefit under the Peru Assignment Agreement with Anglo and may be required to
        write off $105,000 advanced to Anglo.

We advanced $105,000 to Anglo Energy Refining
        Corp. under the terms of the Peru Assignment Agreement, which provides for the assignment
        of Anglo’s interest in a Production Agreement to be entered into between Anglo and
        Barrett Resources (Peru) LLC, related to rights to develop and produce crude oil, gas and
        proven reserves at Block 67 located in Peru. Under the terms of the Peru Assignment
        Agreement, we have very limited rights to participate and observe in the negotiations of a
        definitive Production Agreement and Anglo is required to use commercially reasonable
        efforts to cooperate with us in consummating the transactions contemplated therein.
        Accordingly, we rely on Anglo for success in consummating this transaction. The negotiation
        and execution of any Participation Agreement is subject to approval by Barrett and
        governmental regulators, which may not be received. This is our second such agreement with
        Anglo, the first of which was unsuccessful and required us to write off
        $250,000.

In December 2007, we hired R. R. Wolfe and
        Company, Inc. to complete an evaluation on the properties underlying the Peru Assignment
        Agreement. We are reviewing such report to determine whether to move forward with the
        transactions contemplated by the Peru Assignment Agreement. There cannot be any assurance
        that we will conclude any transaction under the Peru Assignment Agreement, and our failure
        to do so would require us to write off $105,000 in advances to Anglo and costs associated
        with the R. R. Wolfe and Company report and due diligence. We anticipate that we will need
        to raise approximately $2.8 million to complete the transactions contemplated under the
        Peru Assignment Agreement.

Because our president, Dr. John Veltheer, owns 49% of our outstanding common stock,
        investors may find that corporate decisions influenced by Dr. Veltheer are inconsistent
        with the best interests of other stockholders.

Dr.
        Veltheer is our sole director and executive officer. He owns 49% of the outstanding shares
        of our common stock. Accordingly, he will have a significant influence in determining the
        outcome of all corporate transactions or other matters, including mergers, consolidations
        and the sale of all or substantially all of our assets, and also the power to prevent or
        cause a change in control. The interests of Dr. Veltheer may differ from the interests of
        the other stockholders. Factors which could cause the interests of Dr. Veltheer to differ
        from the interest of other stockholders include his ability to devote the time required run
        a mineral exploration company.

If
        we do not obtain clear title to our mineral claims, our business may fail.

Under
        Yukon law, title to Yukon quartz mineral claims can only be held by individuals or Yukon
        corporations. Since we are a Nevada corporation we are not legally allowed to hold claims
        in the Yukon. Our mineral claim is being held in trust for us by Glen MacDonald, the vendor
        of our Peek Claims and the recorded title holder to the Peek Claims. If we confirm
        significant mineral reserves exist on our mineral claim we intend to incorporate a Yukon
        subsidiary to hold title the mineral claim and Mr. MacDonald will transfer the claim to the
        subsidiary. Until we can confirm significant mineral reserves on the Peek Claims, Mr.
        MacDonald is holding the claims in trust for us. However, there could be situations such as
        the death of Mr. MacDonald that could interfere with our ability to obtain clear title to
        the mineral claims. If we are unable to obtain clear title to the mineral claims our
        business will likely fail and investors may lose their entire investment in Texada.

As
        we undertake exploration of our mineral claims, we will be subject to compliance with
        government regulation that may increase the anticipated cost of our exploration
        program.

There
        are several governmental regulations that materially restrict mineral exploration or
        exploitation. We will be subject to the Yukon Quartz Mining Act (the “YQMA”) as
        we carry out our exploration program. An annual exploration expenditure of $90 (CDN$100)
        per claim is required by the YQMA to maintain the claims in good standing. Alternatively an
        annual payment of $90 (CDN$100) per claim in lieu of work is sanctioned by the YQMA to
        maintain claims in good standing. We may be required to obtain work permits, post bonds and
        perform remediation work for any physical disturbance to the land in order to comply with
        these regulations. While our planned exploration program budgets for regulatory compliance,
        there is a risk that new regulations could increase our costs of doing business and prevent
        us from carrying our exploration program. Our annual cost of compliance with the YQMA is
        presently approximately $723 (CDN$800) per year.

As we
        undertake exploration of our mineral claims, we will be subject to compliance with
        government regulation that may increase the anticipated cost of our exploration
        program.

We
        intend to conduct further offerings in the future in which case current shareholdings will
        be diluted.

We
        intend to conduct further equity offerings in the future to finance our current projects or
        to finance subsequent projects that we decide to undertake. If common stock is issued in
        return for additional funds, the price per share could be lower than that paid by our
        current stockholders. The result of this could reduce the value of the stock of our
        shareholders. If we issue additional stock, shareholders’ percentage interest in us
        will be lower. This condition is often referred to as “dilution”.  During
        our fiscal year ended November 30, 2007, we issued convertible notes in the aggregate
        principal amount of $440,000.  The notes are convertible at the option of the holders
        into shares of our common stock at $0.25.  Our stock closed at $1.25 per share on the
        OTCBB on March 10, 2008.

7

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As
        our business assets and our directors and officers are located outside of the United
        States, investors may be limited in their ability to enforce civil actions against our
        assets or our directors and officers.

Our
        Company’s business assets are located in Canada and our directors and officers are
        residents of Canada. Consequently, it may be difficult for United States investors to
        effect service of process within the United States upon our assets or our directors or
        officers, or to realize in the United States upon judgments of United States courts
        predicated upon civil liabilities under U.S. Federal Securities Laws. There is substantial
        doubt whether an original action could be brought successfully in Canada against any of our
        assets or our directors and officers predicated solely upon such civil liabilities.

Because our stock is a penny stock, stockholders will be more limited in their
        ability to sell their stock.

The SEC
        has adopted rules that regulate broker-dealer practices in connection with transactions in
        penny stocks. Penny stocks are generally equity securities with a price of less than $5.00,
        other than securities registered on certain national securities exchanges or quoted on the
        Nasdaq system, provided that current price and volume information with respect to
        transactions in such securities is provided by the exchange or quotation system.

Because
        our securities constitute “penny stocks” within the meaning of the rules, the
        rules apply to us as and to our securities. The rules may further affect the ability of
        owners of shares to sell our securities in any market that might develop for them. As long
        as the trading price of our common stock is less than $5.00 per share, the common stock
        will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a
        broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk
        disclosure document prepared by the SEC, that:

1.  contains a description of the nature and level of risk in the market for penny
        stocks in both public offerings and secondary trading;

2.  contains a description of the broker’s or dealer’s duties to the
        customer and of the rights and remedies available to the customer with respect to a
        violation to such duties or other requirements of securities laws;

3.  contains a brief, clear, narrative description of a dealer market, including bid
        and ask prices for penny stocks and the significance of the spread between the bid and ask
        price;

4.  contains a toll-free telephone number for inquiries on disciplinary actions;

5.  defines significant terms in the disclosure document or in the conduct of trading
        in penny stocks; and

6.  contains such other information and is in such form, including language, type,
        size and format, as the SEC shall require by rule or regulation.

The
        broker-dealer also must provide, prior to effecting any transaction in a penny stock, the
        customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of
        the broker-dealer and its salesperson in the transaction; (c) the number of shares to which
        such bid and ask prices apply, or other comparable information relating to the depth and
        liquidity of the market for such stock; and (d) a monthly account statement showing the
        market value of each penny stock held in the customer’s account. In addition, the
        penny stock rules require that, prior to a transaction in a penny stock not otherwise
        exempt from those rules, the broker-dealer must make a special written determination that
        the penny stock is a suitable investment for the purchaser and receive the
        purchaser’s written acknowledgement of the receipt of a risk disclosure statement, a
        written agreement to transactions involving penny stocks, and a signed and dated copy of a
        written suitability statement. These disclosure requirements may have the effect of
        reducing the trading activity in the secondary market for our stock.

**ITEM 2.     DESCRIPTION OF
        PROPERTIES**

Glossary
        of Technical Terms

The following defined technical
        terms are used in this Annual Report:

8

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|adit                | An opening driven horizontally into the side of a mountain or
                    hill for providing access to a mineral deposit.                                                                                                                                                                                                                                                                                                                                                        | 
|------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|assay               | A chemical test performed on a sample of ores or minerals to
                    determine the amount of valuable metals contained.                                                                                                                                                                                                                                                                                                                                                      | 
|breccia             | Rock consisting of angular fragments in a matrix of
                    finer-grained cementing material.                                                                                                                                                                                                                                                                                                                                                                                | 
|diamond drill (ing) | A rotary type of rock drill in which the cutting is done by
                    abrasion rather than percussion. The cutting bit is set with diamonds and is
                    attached to the end of long hollow rods through which water or other fluid is
                    pumped to the cutting face as a lubricant. The drill cuts a core of rock that
                    is recovered in long cylindrical sections, two centimetres or more in
                    diameter. | 
|dore bar            | The final saleable product of a gold mine. Usually consisting of
                    gold or silver.                                                                                                                                                                                                                                                                                                                                                                                     | 
|drift               | A horizontal underground opening that follows along the length
                    of a vein or rock formation as opposed to a crosscut which crosses the rock
                    formation.                                                                                                                                                                                                                                                                                            | 
|dyke                | A long and relatively thin body of igneous rock that, while in
                    the molten state, intruded a fissure in older rocks.                                                                                                                                                                                                                                                                                                                                                  | 
|fault               | A break in the Earth’s crust caused by tectonic forces
                    which have moved the rock on one side with respect to the other; faults may
                    extend many kilometres, or be only a few centimetres in length; similarly, the
                    movement or displacement along the fault may vary widely.                                                                                                                                                  | 
|feldspar            | A group of rock-forming minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|fracture            | A break in the rock, the opening of which affords the
                    opportunity for entry of mineral- bearing solutions. A “cross
                    fracture” is a minor break extending at more-or-less right angles to the
                    direction of the principal fractures.                                                                                                                                                                                           | 
|granite             | A course-grained (intrusive) ingenious rock consisting of
                    quartz, feldspar and mica.                                                                                                                                                                                                                                                                                                                                                                                 | 
|igneous             | A type of rock which has been formed by the consolidation of
                    magma, a molten substance from the earth’s core.                                                                                                                                                                                                                                                                                                                                                        | 
|                   
|intrusive           | A body of igneous rock formed by the consolidation of magma
                    intruded into other rocks, in contrast to lavas, which are extruded upon the
                    surface.                                                                                                                                                                                                                                                                                                | 
|                   
|mafic               | Igneous rocks composed mostly of dark iron and magnesium rich
                    minerals.                                                                                                                                                                                                                                                                                                                                                                                              | 
|massive             | Solid (without fractures) wide (thick) rock unit.                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|meta- sedimentary   | Metamorphosed sedimentary rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 

|mill           | 1) A plant in which ore is treated for the recovery of
                    valuable metals, or the concentration of valuable minerals into a smaller
                    volume for shipment to a smelter or refinery.2) A piece of milling equipment consisting of a revolving drum,
                    for the fine-grinding of ores as a preparation for treatment. | 
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|mineralization | The concentration of metals and their chemical compounds within
                    a body of rock.                                                                                                                                                                                                                                                                     | 
|modal          | The most frequent value of a set of data.                                                                                                                                                                                                                                                                                                                               | 
|ore            | A mixture of minerals and gangue from which at least one metal
                    can be extracted at a profit.                                                                                                                                                                                                                                                        | 
|porphyry       | Any igneous rock in which relatively large, conspicuous crystals
                    (called phenocrysts) are set in a fine-grained groundmass.                                                                                                                                                                                                                         | 
|              
|quartz         | A mineral whose composition is silicon dioxide. A crystalline
                    form of silica.                                                                                                                                                                                                                                                                       | 

9

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|reserve     | For the purposes of this report, that part of a mineral deposit
                    which could be economically and legally extracted or produced at the time of
                    the reserve determination. Reserves consist of:1) Proven (Measured)
                    Reserves. Reserves for which: (a) quantity is
                    computed from dimensions revealed in outcrops, trenches, workings or drill
                    holes; grade and/or quality are computed from the results of detailed sampling;
                    and (b) the sites for inspection, sampling and measurement are spaced so
                    closely and the geologic character is so well defined that size, shape, depth
                    and mineral content of reserves are well-established.2) Probable (Indicated)
                    Reserves. Reserves for which quantity and grade
                    and/or quality are computed from information similar to that used for proven
                    (measured) reserves, but the sites for inspection, sampling and measurement are
                    farther apart or are otherwise less adequately spaced. The degree of assurance,
                    although lower than that for proven (measured) reserves, is high enough to
                    assume continuity between points of observation. | 
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|           
|           
|           
|           
|rhyolite    | A fine-grained, extrusive igneous rock which has the same
                    chemical composition as granite.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|schist      | A foliated metamorphic rock, the grains of which have a roughly
                    parallel arrangement generally developed by shearing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|sedimentary | A type of rock which has been created by the deposition of
                    solids from a liquid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|shear       | The deformation of rocks by lateral movement along innumerable
                    parallel planes, generally resulting from pressure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|vein        | An occurrence of ore with an irregular development in length,
                    width and depth usually from an intrusion of igneous rock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|volcanics   | Volcanically formed rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 





PEEK MINERAL CLAIMS
        Acquisition of the Peek Mineral 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 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.

The source for the geological data under
        the headings “Location, Infrastructure and Access”,
        “Physiography, Climate and Vegetation”, “History of Exploration”,
        “Mineralization”, “Recommendation of Geological Report and Geological
        Exploration Program” and “Present Condition of the Property and Current State
        of Exploration” is the June 2002 and April 2004 geological reports entitled
        “Geological Report on the Wheaton River Property (Peek 1-8 Mineral Claims;
        YC19158-YC19165) prepared by our consulting geologist, W.G. Timmins.

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.

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11



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12



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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 Mt.
        Skukum gold mill approximately 12.4 miles away.

The Mount Skukum gold mill is a
        modern gold silver production facility that is capable of producing both dore bars and
        metal concentrates depending on the type of ore being processed. The mill is currently
        idle.

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. The Phase IV drilling program may only proceed if the
        results of Phases I, II and III of our exploration program warrant additional
        exploration.

Power sources for the Peek
        Claims property presently consist of portable generators brought onto the
        property.

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 1.55 mile 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 type of environment with outcrop of less than 5%. Consequently most of
        the geological interpretation is based upon bulldozer trenches to expose bedrock at depths
        of 6.56 to16.40 feet.

Southwestern Yukon has a dry
        sub-arctic climate, locally modified by the Pacific Ocean. Summer temperatures average
        12°C and annual precipitation totals 15.74 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.

13



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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.

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:

14



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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. In addition, if we
        progress to the production phase, production of minerals in the Yukon Territory will
        require prior approval of applicable governmental regulatory agencies. We cannot be certain
        that such approvals will be obtained. The cost and delay involved in attempting to obtain
        such approvals cannot be known in advance.

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. The Minerals Management
        Branch manages the development of the Yukon Territory’s mineral resources, and
        implements policies and programs respecting their development while protecting the
        environment. In addition, the Minerals Management Branch regulates and inspects the
        exploration and mineral production industries in the Yukon Territory to protect workers,
        the public and the environment.

The material legislation
        applicable to us and our subsidiary 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 YQMA also governs the issuance of quartz mining
        licenses which are long term licenses to produce minerals. Under the YQMA, the grant of a
        quartz mineral claim entitles the holder to an interest in the land subject to the mineral
        claim and, more specifically, entitles the holder thereof to enter, locate, prospect and
        mine for minerals on any vacant territorial lands in the Yukon Territory and any lands in
        the Yukon Territory where the right to enter, prospect and mine for minerals is reserved
        for the Government of 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 $90 per claim is required by the YQMA to maintain the
        claims in good standing. Alternatively an annual payment of $90 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 $723 per year.

Additional approvals and
        authorizations may be required from other government agencies, depending upon the nature
        and scope of the proposed exploration program.

We will also have to sustain the cost of reclamation and
        environmental remediation for all exploration work undertaken. Both reclamation and
        environmental remediation refer to putting disturbed ground back as close to its original
        state as possible. Other potential pollution or damage must be cleaned-up and renewed along
        standard guidelines outlined in the usual permits. 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. Our Phase I and II programs
        do not require any reclamation or remediation because of the minimal disturbance to the
        ground. The amount of these costs is not known at this time as we do not know the extent of
        the exploration program we will undertake, beyond completion of the recommended two phases
        described above, or if we will enter into production on the property. Because there is
        presently no information on the size, tenor, or quality of any resource or reserve at this
        time, it is impossible to assess the impact of any capital expenditures on
        our

15



---



earnings or competitive position in the event a potentially-economic deposit is discovered.
        We obtained funds to undertake Phase II of our plan of operation for the Peek Claims
        through private placement financings of our common shares. We expect to continue to finance
        our plan of operations through equity financings.

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 visited the property in 1999 and 2001.

- Based upon
                    conclusions in Mr. Timmins’ report, we believe that the Peek Claims may
                    have the potential to host minerals based on earlier geological surveys and
                    sampling.
- The first phase of
                    our geological exploration program was completed in the summer of 2002 at a
                    cost of $5,000. The first phase consisted of a geological surveying and a
                    review of prior exploration work on the Peek Claims. The second phase of our
                    exploration program was completed in late 2003 at a cost of $10,000. The second
                    phase consisted of more detailed geophysical surveys utilizing more sensitive
                    geophysical techniques to enhance the data that currently exists on the claims
                    and focused specifically upon the presently known mineralized
                    areas.
- We received a
                    geological evaluation report on the results of Phase II of our exploration
                    program in April, 2004. The geological report gives conclusions regarding
                    potential mineralization of the mineral claim, discussed below, and recommended
                    a further geological exploration program on the mineral claims. 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                                                                           | Cost     | 
|--------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------- | -------- | 
|Phase I   | Compilation of previous exploration data, and geological
                    analysis of the data.                                                                                                                                         | Completed in August 2002.                                                        | $5,000   | 
|         
|         
|Phase II  | Detailed field examination and study of known mineral zones
                    including localized geophysical surveys.                                                                                                                   | Completed in December 2003                                                       | $10,000  | 
|         
|         
|         
|Phase 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                                                             | $5,000   | 
|         
|         
|         
|         
|         
|Phase IV  | Test diamond drilling (to 1,200 metres) of the targets
                    delineated within the potential exploration sites.                                                                                                              | To be determined subject to the results of exploratory
                    work. | $120,000 | 
|         
|         
|         



16



---



Based upon the 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 if the results of Phase III warrant additional exploration. A
        Phase IV drilling program will be dependent upon a number of factors such as the
        geologists’ recommendations based upon previous phases and our available funds. To
        date, Mr. Timmins has received a total of $17,500 in connection with the completion of the
        first and second phases of our exploration program. See “Present Condition of the
        Property and Current State of Exploration” below.

The projected costs of our
        exploration program include provision for mobilization and support costs. Mr. Timmins will
        issue a recommendation on whether to proceed with a Phase IV drilling program based on his
        review of the assay results and geophysical survey data compiled from Phases I, II and III
        of our exploration program. 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.

In the event that we proceed
        with Phase IV of our exploration program, we intend to implement a drilling program which
        will target any mineralized zones or zones of interest identified in our Phase I, Phase II
        and Phase 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 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 drilling procedure for
        Phase IV is expected to be as follows:

| | (1) |  | The drill is
                set up in a self-contained and completely enclosed module with an opening for the
                drill rods to be put through to contact the ground.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) |  | The drill is
                set up in a self-contained and completely enclosed module with an opening for the
                drill rods to be put through to contact the ground.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) |  | A drill bit
                with industrial diamonds imbedded is fitted to the ground contact end of the drill
                rods.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------

17

---



| | (4) |  | The drill bit
                is turned at a very fast speed with pressure on it and it cuts through the
                overburden until it reaches solid rock. In most cases, casing (a larger diameter
                drill rod) is put down between the drill set up and the solid rock.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) |  | Drilling
                proceeds with the hollow drill bit cutting through the rock capturing a solid core
                of rock that is brought to surface by a wire line attached to the core barrel (a
                smaller diameter drill rod that fits in side the main drill rods), where it is
                analyzed by a geologist.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) |  | The drill bit
                cuts a hole that is between 2 to 5 inches in diameter depending on the type of
                drilling being undertaken and the rock conditions.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) |  | Core samples
                will be initially inspected on site and then transported to a facility for
                additional analysis.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------

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.

The results of our Phase IV
        drilling program, in the event that we proceed with Phase IV, will be used to provide key
        information for any subsequent mining and development work to be completed. In addition,
        results are expected to be used to form the basis for additional geological exploration
        work to be completed by us.

In the event that the results
        of our geological exploration program indicate that our mineral claims contain commercially
        exploitable mineral deposits, we intend to build a mining and milling operation that will
        separate the valuable precious metals, gold and silver, from the waste rock into a saleable
        product that will be purchased for final refining by the Canadian Mint, Handy and Harman
        and MidStates Refinery or other refineries that are willing to pay 98% of the precious
        metal content to the miner. The cost to develop the reserves by drilling is estimated to be
        approximately $500,000 to $2,000,000. Depending on the mining process and mining rate the
        cost to develop the operations and market the mineral products is estimated to cost between
        $5,000,000 and $25,000,000.

However, 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 estimated production and marketing costs. 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 such time we locate mineral
        reserves on our mineral claims. We presently do not have any arrangements in place for any
        future equity financing.

Present Condition of the Property and Current State
        of Exploration

We are presently proceeding with the
        exploration of the Peek Claims to determine whether there are commercially exploitable
        reserves of gold and silver or other metals. The following is a summary of the status of
        our current 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
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18

---



| | (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. The first phase, which
        consisted of a geological review of prior exploration work on the Peek Claims, was
        completed at a cost of $5,000.

Summary of Phase II – Exploration
        Program Results

The second phase consisting of
        detailed geophysical surveys utilizing new and more sensitive geophysical techniques to
        enhance the data that currently exists on the claims focused specifically upon the
        presently known areas which our consultant has indicated may host minerals. The second
        phase consisting of a detailed field examination and study of known mineral zones including
        localized geophysical surveys was completed in late 2003. We received a geological report
        on the results of Phase II 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 confirm that the geological review which identified
        area warranted a further program of exploration. The report recommends further evaluation
        of data obtained from the detailed geophysical surveying conducted on presently known
        mineralized areas during Phase II, which demonstrated that these areas have a geophysical
        signature that could indicate an unseen depth or length extent, and further geological
        surveying and sampling of the same to identify and confirm targets for the Phase IV
        drilling.

Summary of Phase III – Exploration
        Program Results

From June 23 – June 27,
        2005 our geologist visited the Peek Claims property to conduct testing on areas of interest
        indicated by the previous phase 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’ 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 of the 2005 samples
        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.

Three samples were collected from the original mineralized zones tested earlier and they
        were better defined by our geophysical survey. In April 2006, we received the geological
        report on the results of Phase III of our exploration program completed in 2005. 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
        perma-frost and the quartz vein fragments discontinued. Thus, our geologist concluded the
        source of the float lies



19



---

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.

A geologist for the company visited the property again in the fall and selected five
        samples of sulphide-rich ultra-basic volcanic rock (basaltic composition) to test for the
        possibility that platinum group metals (“PGM’s”) might be present in this
        environment. PGM’s were reported from other properties in the area recently and the
        host rock units traverse the area of the Company’s claims. No PGM’s were
        detected in the samples tested for the Company.

Phase IV – Exploration Program

In the event that we proceed with Phase IV or 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 exploration
        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 $90 per claim is required by the YQMA to maintain the claims in good
        standing. Alternatively an annual payment of $90 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 $723 per year.

Table 1 - Claim Status



|Claim Name | Grant Numbers  | Current Expiry Date
|---------- | -------------- | -------------------
|PEEK 1-8   | YC 19158 – 165 | August 19, 2008    

Peru
        Assignment Agreement

On November 12, 2007,
        we entered into an Assignment Agreement (the “Peru Assignment Agreement”) with
        Anglo, effective as of November 8, 2007, providing for the assignment of Anglo’s
        interest in a Production Agreement (the “PA”) to be entered into between Anglo
        and Barrett Resources (Peru) LLC (“ Barrett”). The PA relates to rights to
        develop and produce crude oil, gas and proven reserves at Block 67 located in Peru. In
        consideration for the assignment by Anglo to the Company of Anglo’s rights under the
        PA, the parties agreed as follows:

(a)

                    

                    the Company
                    agreed to pay to Anglo an aggregate amount equal to $115,000 ($100,000 paid),
                    equivalent to 50% of the expenses incurred by Anglo up to and including the
                    effective date of the Peru Assignment  Agreement in connection with the
                    negotiation of the PA, upon the receipt by the Company of documentation from
                    Anglo supporting such expenses (the Company paid an additional $5,000 on
                    December 5, 2007);





(b)

                    

                    on the
                    closing date, the Company agreed to pay to Anglo 100% of the reasonable,
                    documented expenses incurred by Anglo from the effective date of the Peru
                    Assignment Agreement to the closing date in connection with the negotiation and
                    execution of the PA; and





(c)

                    

                    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 common stock of the Company on the closing
                    date.





The PA is subject to
        negotiation with Barrett and various governmental and regulatory approvals. The Peru
        Assignment Agreement provides the Company the right to participate and observe in the
        negotiations of a definitive PA and requires the Company and Anglo to use commercially
        reasonable efforts to cooperate in consummating the transactions contemplated therein.
        Anglo has granted the Company exclusive rights under the PA by agreeing not to, directly or
        indirectly, solicit, initiate, encourage or enter into any acquisition
        proposals.

In December 2007, the Company hired R. R. Wolfe and Company, Inc. to complete an evaluation
        on the properties underlying the Peru Assignment Agreement. Management of the Company is
        reviewing such report to determine whether to move forward with the transactions
        contemplated by the Peru Assignment Agreement.

Management believes that it will need to raise approximately $2,800,000 in financing to
        complete the transactions contemplated by the Peru Assignment Agreement. 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 Peru Assignment Agreement.

Under the terms of the Peru Assignment Agreement, we have
        very limited rights to participate and observe in the negotiations of a definitive
        Production Agreement and Anglo is required to use commercially reasonable efforts to
        cooperate with us in consummating the transactions contemplated therein. Accordingly, we
        rely on Anglo for success in consummating this transaction. The negotiation and execution
        of any Participation Agreement is subject to approval by Barrett and governmental
        regulators, which may not be received. There cannot be any assurance that we will conclude
        any transaction under the Peru Assignment Agreement. This is our second such agreement with
        Anglo, the first of which was unsuccessful and required us to write off $250,000. Our
        failure to conclude a successful transaction under the Peru Assignment Agreement would
        require us to write off $105,000 in advances to Anglo and costs associated with the R. R.
        Wolfe and Company report and due diligence.



20








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 other than our sole officer. We conduct our business largely
        through agreements with consultants and arms-length third parties.

RESEARCH AND
        DEVELOPMENT EXPENDITURES

We have not incurred any
        research or development expenditures since our incorporation.

**ITEM
        3.     LEGAL PROCEEDINGS**

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

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

We did not submit any matters
        to a vote of our shareholders during the year ended November 30, 2007.

ITEM 5.     MARKET FOR COMMON
        EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
        SECURITIES

Our
        common stock is quoted on the Over-the-Counter Bulletin Board (OTCBB) of the Financial
        Industry Regulatory Authority
        (“FINRA”) (formerly the
        National Association of Securities Dealers, Inc.) under the symbol
        “TXDV.”  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 began trading on the OTCBB on May 5, 2006.  The market for shares in our
        common stock is limited because only a small number of our outstanding shares are available
        for trading in the public market. Our trading price ranged from $0.01 to $2.30 from
        November 30, 2006 through November 30, 2007.

The high
        and low bid quotations of our common stock on the OTC Bulletin Board as reported by the
        FINRA were as follows:



Period

                    Low

                    High

                    Volume2006Second Quarter (May 5 to May 31)

                    

                    $0.025

                    

                    $0.025

                    

                    0Third Quarter

                    

                    $0.025

                    

                    $0.025

                    

                    0Fourth Quarter

                    

                    $0.01

                    

                    $0.025

                    

                    02007
                        First Quarter

                    

                    $0.01

                    

                    $1.02

                    

                    3,036,070Second Quarter

                    

                    $0.98

                    

                    $1.05

                    

                    270,312Third Quarter

                    

                    $0.85

                    

                    $2.30

                    

                    67,040Fourth Quarter

                    

                    $0.75

                    

                    $1.02

                    

                    36,860





21



---




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

As of
        March 10, 2008, the closing bid quotation for our common stock was $1.25 per share as
        quoted by the OTCBB.

As of
        March 10, 2008, we had 60,733,335 shares of common stock issued and outstanding, held by
        four registered shareholders.

Dividends

We have
        not declared or paid any cash dividend on our common stock.

Recent Sales of Unregistered Securities

Except
        as set forth below, during the year ended November 30, 2007, we have not offered or sold
        any securities in unregistered transactions pursuant to exemptions under the Securities Act
        of 1933, as amended.

On February 15, 2007, the Company issued a promissory note in the principal amount of
        $50,000 to IFG Trust Services Inc. The promissory note bears interest at a rate of 8% per
        annum, payable annually on or before February 14 of each year. Principal under the note is
        payable on demand.



On April 10, 2007, the
        Company issued a 6% convertible debenture to Blackpool Ltd. in the principal amount of
        $200,000 which is due and payable on December 31, 2008. 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. The principal and accrued
        interest on the Debenture may be converted at any time into shares of the Company’s
        common stock at $0.25 per share, at the option of the holder.

On May 2, 2007, the
        Company issued a 6% convertible debenture to Sovereign Services Limited with a principal
        amount of $125,000 which is due and payable on December 31, 2008. 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. The principal
        and accrued interest on the Debenture may be converted at any time into shares of the
        Company’s common stock at a rate of $0.25 per share, at the option of the
        holder.



On November 19, 2007, the Company issued a 6% convertible debenture to IFG Trust Services
        Inc. in the principal amount of $115,000 which is due and payable on December 31, 2008.
        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. The
        principal and accrued interest on the Debenture may be converted at any time into shares of
        the Company’s common stock at a rate of $0.25 per share, at the option of the holder.
        If the Company closes the transactions contemplated by the Peru Assignment Agreement, the
        Debenture will be automatically converted into common shares of the Company at $0.25 per
        share.

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.


Purchases of Equity Securities by
        the Small Business Issuer and Affiliates

There were no purchases of our equity securities by us or any of our affiliates during the
        year ended November 30, 2007.

Equity Compensation Plan Information

We do not currently have any securities authorized for issuance under equity compensation
        plans.



22



---





Category

                    Number of securities to be issued upon exercise of
                        outstanding options, warrants and rights
                        (a)

                    Weighted-average exercise price of outstanding options,
                        warrants and rights (b)

                    Number of securities remaining available for future
                        issuance under equity compensation plans (excluding securities reflected in
                        column (a))
                        (c)Equity compensation plans approved by security
                        holders

                    n/a

                    n/a

                    n/aEquity compensation plans not approved by security
                        holder

                    n/a

                    n/a

                    n/a





ITEM 6.     MANAGEMENT’S DISCUSSION AND ANALYSIS OR
            PLAN OF OPERATION






Selected Financial Data




The
        selected financial information presented below as of and for the periods indicated is
        derived from our financial statements contained elsewhere in this report and should be read
        in conjunction with those financial statements.



|INCOME STATEMENT
                DATA           | Year Ended
                November 30, 2007 | Year Ended
                November 30,
                2006 | Year Ended November 30,
                2005 | For the period
                from October 17,
                2001
                (Date of
                Inception) to
                November 30, 2007
|----------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------ | -------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                |                                             
|Revenue                                         |                                              |                                                              | $                                            | —                                                                                                                                                            
|Operating
                Expenses              |                                              |                                                              | $                                            | 162,966                                                                                                                                                      
|Net Income
                (Loss)               |                                              |                                                              | $                                            | (573,579                                                                                                                                                     
|Income (Loss) per Common
                share* |                                              |                                                              | $                                            | (0.01                                                                                                                                                        
|Weighted Average Number
                of      |                                              |                                                             
|Common Shares
                Outstanding       |                                              |                                                              |                                              | 60,733,335                                                                                                                                                   





|BALANCE SHEET
                DATA             | At November 30
|---------------------------------------------- | --------------
|
|                                               |               
|Working Capital
                (Deficiency)   |               
|Total Assets                                   |               
|Accumulated
                Deficits           |               
|Shareholders' Equity
                (Deficit) |               





*

                    

                    Basic and diluted.





Historical results of operations for Texada Ventures Inc. may differ materially from future
        results.

You should read the following discussion and analysis of our financial condition and
        results of operations together with our financial statements and related notes appearing
        elsewhere in this report. 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,
        including, but not limited to, those set forth under “Risk Factors” and
        elsewhere in this report.

This
        discussion and analysis should be read in conjunction with the accompanying Financial
        Statements and related notes. 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



23



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United States. The preparation of financial statements in conformity with accounting
        principles generally accepted in the United States of America requires the company 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 the company believes 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,” and have not changed
        significantly.

Explanatory Note on Financial Statements

The
        audited financial statements included in this report have been prepared pursuant to the
        rules and regulations of the Securities and Exchange Commission.

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
        under Dr. Veltheer’s guidance and seeking other business opportunities, including the
        acquisition of Paddington Holdco.

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.

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.

During this exploration stage,
        Dr. Veltheer, our President, Secretary, Treasurer, Chief Executive Officer and Chief
        Financial Officer, will only be devoting approximately twenty hours per week of his time to
        our business. We do not foresee this limited involvement as negatively impacting our
        company over the next twelve months as all



24



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exploratory work is being
        performed by our geological consultant, Mr. Timmins, who contracts with appropriately
        experienced parties to complete work programs. If, however, the demands of our business
        require more business time of Dr. Veltheer, such as raising additional capital or
        addressing unforeseen issues with regard to our exploration efforts, he is prepared to
        adjust his timetable to devote more time to our business. However, Dr. Veltheer may not be
        able to devote sufficient time to the management of our business, as and when
        needed.

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 Sharing Agreement (the “PSA”) to be entered into between Anglo and
        a joint venture partner. The PSA relates to a 40% production sharing interest an Ecuadorian
        oil and gas field to be obtained by Anglo’s joint venture partner. On April 5, 2007,
        Anglo and the Company entered into an Assignment Agreement (the “Ecuador Assignment
        Agreement”) providing for the assignment of Anglo’s interest in the PSA in
        consideration for:

(a)

                    

                    the payment
                    by Texada to Anglo of an aggregate amount equal to $500,000 for expenses
                    incurred by Anglo in connection with the PSA, with such amount payable as
                    follows:





(i)

                    

                    $125,000 on
                    the effective date of the Assignment Agreement (paid),





(ii)

                    

                    $125,000 on
                    the thirty day anniversary of the effective date of the Ecuador Assignment
                    Agreement (paid), and





(iii)

                    

                    $250,000 on
                    the ninety day anniversary of the effective date of the Ecuador Assignment
                    Agreement.





(b)

                    

                    the payment
                    by Texada to Anglo of all future expenses of Anglo related to the PSA after the
                    effective date of the Ecuador Assignment Agreement;





(c)

                    

                    the
                    issuance to Anglo (or its nominee) of 30,000,000 shares of common stock of
                    Texada upon the closing of the PSA; and





(d)

                    

                    the
                    transfer of 10,084,011 shares of restricted common stock of Texada to Anglo (or
                    its nominee) upon the closing of the PSA.





As of July 4, 2007, Anglo
        had not delivered requested due diligence documentation related to the transaction, and we
        attempted to negotiate an extension to the payment provisions under the Ecuador
        Assignment
        Agreement. Negotiations
        continued through September 30, 2007. After failing to obtain due diligence related to the
        proposed joint venture, we elected to terminate further negotiations with Anglo.
        Accordingly, as of November 30, 2007, the $250,000 previously paid has been written off.

On November 12, 2007, we
        entered into an Assignment Agreement (the “Peru Assignment Agreement”) with
        Anglo, effective as of November 8, 2007, providing for the assignment of Anglo’s
        interest in a Production Agreement (the “PA”) to be entered into between Anglo
        and Barrett Resources (Peru) LLC (“ Barrett”). The PA relates to rights to
        develop and produce crude oil, gas and proven reserves at Block 67 located in Peru. In
        consideration for the assignment by Anglo to the Company of Anglo’s rights under the
        PA, the parties agreed as follows:

(a)

                    

                    the Company
                    agreed to pay to Anglo an aggregate amount equal to $115,000 ($100,000 paid),
                    equivalent to 50% of the expenses incurred by Anglo up to and including the
                    effective date of the Peru Assignment Agreement in connection with the
                    negotiation of the PA, upon the receipt by the Company of documentation from
                    Anglo supporting such expenses (the Company paid an additional $5,000 on
                    December 5, 2007);





(b)

                    

                    on the
                    closing date, the Company agreed to pay to Anglo 100% of the reasonable,
                    documented expenses incurred by Anglo from the effective date of the Peru
                    Assignment Agreement to the closing date in connection with the negotiation and
                    execution of the PA; and




25



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(c)

                    

                    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 common stock of the Company on the closing
                    date.





The PA is subject to
        negotiation with Barrett and various governmental and regulatory approvals. The Peru
        Assignment Agreement provides the Company the right to participate and observe in the
        negotiations of a definitive PA and requires the Company and Anglo to use commercially
        reasonable efforts to cooperate in consummating the transactions contemplated therein.
        Anglo has granted the Company exclusive rights under the PA by agreeing not to, directly or
        indirectly, solicit, initiate, encourage or enter into any acquisition
        proposals.

In December 2007, the Company hired R.R. Wolfe and Company, Inc. to complete an evaluation
        on the properties underlying the Peru Assignment Agreement. Management of the Company is
        reviewing such report to determine whether to move forward with the transactions
        contemplated by the Peru Assignment Agreement.

Management believes that it will need to raise approximately $2,800,000 in financing to
        complete the transactions contemplated by the Peru Assignment Agreement. 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 Peru Assignment Agreement.

We anticipate that we will
        incur over the next twelve months the following expenses:



Category

                    Planned Expenditures Over
                    Next Twelve Months
                    (US$)Professional
                    Fees

                    

                    $150,000Office
                    Expenses

                    

                    $5,000Mineral Exploration
                    Expenses

                    

                    $10,000TOTAL
                    12-MONTH BUDGET

                    

                    $165,000Working Capital
                    Deficit

                    

                    $269,347TOTAL

                    

                    $434,347


Our total expenditures over the next twelve months are anticipated to be
            approximately $165,000, the majority of which is due to general, legal, accounting and
            administrative expenses associated with our becoming a reporting issuer under the
            Exchange Act. 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 approximately $500,000 to
            fund exploration, operating expenses and working capital deficit. Our management has
            agreed to provide by way of loan the funding required to pay our legal, audit and
            administrative expenses until we secure additional financing.


In December 2007, we hired R. R. Wolfe and
            Company, Inc. to complete an evaluation on the properties underlying the Peru
            Assignment Agreement. We are reviewing such report to determine whether to move forward
            with the transactions contemplated by the Peru Assignment Agreement. There cannot be
            any assurance that we will conclude any transaction under the Peru Assignment
            Agreement, and our failure to do so would require us to write off $105,000 in advances
            to Anglo and costs associated with the R. R. Wolfe and Company report and due
            diligence. If the negotiations with Barrett are successful and governmental approval is
            obtained for a Participation Agreement, under the terms of the Peru Assignment
            Agreement, we anticipate that we will need to raise approximately $2.8 million during
            the next twelve months to complete the transactions contemplated under the agreement.
            The $2.8 million is anticipated to be used as follows:  Category

                    Planned Expenditures Over
                    Next Twelve Months Under the Peru Assignment Agreement (1)Professional Fees(2)

                    

                    $165,000Expense Reimbursements
                    for Anglo(3)

                    

                    $200,000Contribution Under
                    Production Agreement(4)

                    

                    $2,000,000Contingency
                    Fund(5)

                    

                    $435,000Total Budgeted
                    Expenditures

                    

                    $2,800,000  (1)Assumes that a Production Agreement is
            successfully negotiated between Anglo and Barrett and we assume Anglo’s rights
            under the agreement. (2)Estimated professional fees (legal,
            engineering, consulting and accounting) related to transaction under the Peru
            Assignment Agreement.. (3)On the closing date, we agreed to pay to
            Anglo 100% of the reasonable, documented expenses incurred by Anglo from the effective
            date of the Peru Assignment Agreement to the closing date in connection with the
            negotiation and execution of the Production Agreement. Based on management’s
            estimates.. (4) 
            Estimated contribution under the
            Participation Agreement based on discussions among the parties. (5)10% contingency reserve estimated based on a
            Estimated contribution under the Participation Agreement. There cannot be any assurance that we will
            conclude any transaction under the Peru Assignment Agreement or if we do that we will
            successfully raise the additional $2.8 million required to fund our obligations. We
            also cannot assure you that our estimates will be accurate since a definitive
            Production Agreement has not been negotiated. We may require more capital and such
            capital may not be available on terms acceptable to us, if at all. This is our second
            such agreement with Anglo, the first of which was unsuccessful and required us to write
            off $250,000. Our failure to conclude a successful transaction under the Peru
            Assignment Agreement would require us to write off $105,000 in advances to Anglo and
            costs associated with the R. R. Wolfe and Company report and due
            diligence.


As of November 30, 2007, we had
        a working capital deficiency of $269,347. 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 such time we locate mineral
        reserves on our mineral claims.

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.

26



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Results of Operations for the Year Ended
        November 30, 2007 Compared to November 30, 2006



We did not earn any revenues from November 30,
        2006 to November 30, 2007. 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.



We advanced $105,000 to Anglo
        Energy Refining Corp. under the terms of the Peru Assignment Agreement, which provides for
        the assignment of Anglo’s interest in a Production Agreement to be entered into
        between Anglo and Barrett Resources (Peru) LLC, related to rights to develop and produce
        crude oil, gas and proven reserves at Block 67 located in Peru. Under the terms of the Peru
        Assignment Agreement, we have very limited rights to participate and observe in the
        negotiations of a definitive Production Agreement and Anglo is required to use commercially
        reasonable efforts to cooperate with us in consummating the transactions contemplated
        therein. Accordingly, we rely on Anglo for success in consummating this transaction. The
        negotiation and execution of any Participation Agreement is subject to approval by Barrett
        and governmental regulators, which may not be received. In December 2007, we hired R. R.
        Wolfe and Company, Inc. to complete an evaluation on the properties underlying the Peru
        Assignment Agreement. We are reviewing such report to determine whether to move forward
        with the transactions contemplated by the Peru Assignment Agreement. If the negotiations
        with Barrett are successful and governmental approval is obtained for a Participation
        Agreement, under the terms of the Peru Assignment Agreement, we anticipate that we will
        need to raise approximately $2.8 million during the next twelve months to complete the
        transactions contemplated under the agreement. There cannot be any assurance that we will
        conclude any transaction under the Peru Assignment Agreement, and our failure to do so
        would require us to write off $105,000 in advances to Anglo and costs associated with the
        R. R. Wolfe and Company report and due diligence.



We incurred operating expenses in the amount
        of $162,966 for the period from November 30, 2006 to November 30, 2007. These operating
        expenses included: (a) consulting fees of $48,000; and (b) general and administrative costs of
        $115,671.  We incurred operating expenses in the amount
        of $82,676 during our fiscal year ended November 30, 2006, including consulting expenses of
        $6,000; exploration costs of $2,591 and general and administrative costs of $72,552. The
        higher operating expenses during fiscal 2007 compared to fiscal 2006 resulted from
        increased business activity related to exploring potential acquisitions. Anticipated costs during
        fiscal 2008 are anticipated to be consistent with those consulting and general and
        administrative expenses incurred in fiscal 2007; however, operational expenses may increase
        substantially if the negotiations with Barrett are successful and governmental approval is
        obtained for a Participation Agreement and we proceed under the terms of the Peru
        Assignment Agreement. Our failure to conclude a successful transaction under the Peru
        Assignment Agreement would require us to write off $105,000 in advances to Anglo and costs
        associated with the R. R. Wolfe and Company report and due diligence.



We
        incurred a loss in the amount of $573,579 for the fiscal year ended November 30, 2007,
        compared to $85,501 for the fiscal year ended November 30, 2006. The increased loss
        was attributable primarily to the write off of the deposit under the Ecuador Assignment
        Agreement, and increased administrative expenses, consulting fees and loss on write down of
        note receivable in fiscal 2007.

Liquidity and Capital Resources

There is limited financial information about
        our company upon which to base an evaluation of our performance. We are an exploration
        stage company and have not generated any revenues from operations.

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 $500,000 in the next 12 months
        to fund normal operating costs, exploration efforts and acquisition activities. We
        anticipate that we will need to raise an additional $2,800,000 in the next three to four
        months to fund our capital requirements through November 30, 2008, and to complete the
        transactions contemplated by the Peru Assignment Agreement, if a production agreement is
        negotiated and we elect to proceed. If we are not able to obtain additional or alternative
        funding, we will be unable to continue as a going concern. Our recurring losses and
        negative cash flow from operations raise substantial doubt about our ability to continue as
        a going concern.

Our independent auditor believes there is
        substantial doubt that we can continue as a going concern which, if true, raises
        substantial doubt that a purchaser of our common stock will receive a return on his or her
        investment. We have incurred a net loss of $773,006 for the period from October 17, 2001
        (inception) to November 30, 2007, 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.  If we are not able to continue
        as a going concern it is likely any holder of our common stock will lose their investment
        in that stock.

As at November 30, 2007, we had
            cash of $20,665, a working capital deficit of $269,347 and an accumulated deficit of
            $773,006.




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.

Critical Accounting Policies

Use of Estimates

The
        preparation of financial statements in conformity with U.S. 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 allowances for notes
        receivable, its investment in oil and gas properties and deferred



27



---



income
        tax asset valuations. 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.

Reclassifications

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

Basic and Diluted Net Income (Loss) Per
        Share

The
        Company computes net income (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 net income
        (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. At November 30,
        2007, the Company has no dilutive securities outstanding.

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, 2007 and 2006, the Company has no items that represent a comprehensive
        loss and, therefore, has not included a schedule of comprehensive loss in the financial
        statements.

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. At November 30, 2007, the Company had no cash
        equivalents.

Mineral Property Costs

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

28



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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.

Mineral
        property exploration costs are expensed as incurred.

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. Because option payments do not meet the definition of tangible property
        under EITF 04-2, all option payments are expensed as incurred.

When
        it has been determined that a mineral property can be economically developed as a result of
        establishing proven and probable reserves and pre feasibility, the costs incurred to
        develop such property are capitalized.

Estimated
        future removal and site restoration costs, when determinable are provided over the life of
        proven reserves on a units-of-production basis. Costs, which include production equipment
        removal and environmental remediation, are estimated each period by management based on
        current regulations, actual expenses incurred, and technology and industry standards. Any
        charge is included in exploration expense or the provision for depletion and depreciation
        during the period and the actual restoration expenditures are charged to the accumulated
        provision amounts as incurred.

As of
        the date of these financial statements, the Company has incurred only acquisition and
        exploration costs which have been expensed.

To
        date the Company has not established any proven or probable reserves on its mineral
        properties.

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, 2007, 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

29



---

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, 2007,
        all of the Company’s oil and gas properties were unproved and were excluded from
        amortization.

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.

Financial Instruments

The
        fair values of financial instruments, which include cash, note receivable, accounts
        payable, accrued liabilities, amounts due to a related party and promissory notes
        payable were estimated to approximate their carrying values due to the immediate or
        short-term maturity of these financial instruments. The Company’s operations are 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.

Income Taxes

Potential
        benefits of income tax losses are not recognized in the accounts until realization is more
        likely than not. The Company has adopted SFAS No. 109 “Accounting for Income
        Taxes” as of its inception. Pursuant to SFAS No. 109 the Company is required to
        compute tax asset benefits for net operating losses carried forward. Potential benefit of
        net operating losses have not been recognized in these financial statements because the
        Company cannot be assured it is more likely than not it will utilize the net operating
        losses carried forward in future years.

Foreign Currency Translation

The
        Company’s functional and reporting currency is the United States dollar. Monetary
        assets and liabilities denominated in foreign currencies are translated in accordance with
        SFAS No. 52 “Foreign Currency Translation”, using the exchange rate prevailing
        at the balance sheet date. Gains and losses arising on settlement of foreign currency
        denominated transactions or balances are included in the determination of income. Foreign
        currency transactions are primarily undertaken in Canadian dollars. The Company has not, to
        the date of the accompanying financials statements, entered into derivative instruments to
        offset the impact of foreign currency fluctuations.



30



---



Revenue Recognition

The
        Company recognizes revenue in accordance with the criteria outlined in Securities Exchange
        Commission Staff Accounting Bulletin No. 104 (“SAB 104”), “Revenue
        Recognition”. Revenues will be recognized once they are earned; specifically when:
        (a) services are provided or products are delivered to customers, (b) clear proof that an
        arrangement exists, (c) amounts are fixed or can be determined, and (d) the Company’s
        ability to collect is reasonably assured.

Environmental Costs

Environmental
        expenditures that relate to current operations are charged to operations or capitalized as
        appropriate. Expenditures that relate to an existing condition caused by past operations,
        and which do not contribute to current or future revenue generation, are charged to
        operations. Liabilities are recorded when environmental assessments and/or remedial efforts
        are probable, and the cost can be reasonably estimated. Generally, the timing of these
        accruals coincides with the earlier of completion of a feasibility study or the
        Company’s commitments to plan of action based on the then known facts.

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.

Recent Accounting
        Pronouncements

In December 2007, the
        Financial Accounting Standards Board (FASB) issued SFAS No. 141R, “Business
        Combinations”. This statement replaces SFAS 141 and defines the acquirer in a
        business combination as the entity that obtains control of one or more businesses in a
        business combination and establishes the acquisition date as the
        date that the acquirer
        achieves control. SFAS 141R requires an acquirer to recognize the assets acquired, the
        liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition
        date, measured at their fair values as of that date. SFAS 141R also requires the acquirer
        to recognize contingent consideration at the acquisition date, measured at its fair value
        at that date. This statement is effective for fiscal years, and interim periods within
        those fiscal years, beginning on or after December 15, 2008 and earlier adoption is
        prohibited. 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. 160, “Noncontrolling Interests in Consolidated Financial
        Statements Liabilities –an Amendment of ARB No. 51”. This statement amends ARB
        51 to establish accounting and reporting standards for the Noncontrolling interest in a
        subsidiary and for the deconsolidation of a subsidiary. This statement is effective for
        fiscal years, and interim periods within those fiscal years, beginning on or after December
        15, 2008 and earlier adoption is prohibited. The Company is currently evaluating the
        impact that SFAS No. 159 may have on the position, results of operations and cash flows of
        the Company.

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

31



---



fiscal years preceding
        the date of adoption. The adoption of this statement is not expected to have a material
        effect on the Company's financial statements.

In September 2006, the
        FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension
        and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and
        132(R)”. This statement requires employers to recognize the overfunded or underfunded
        status of a defined benefit postretirement plan (other than a multiemployer plan) as an
        asset or liability in its statement of financial position and to recognize changes in that
        funded status in the year in which the changes occur through comprehensive income of a
        business entity or changes in unrestricted net assets of a not-for-profit organization.
        This statement also requires an employer to measure the funded status of a plan as of the
        date of its year-end statement of financial position, with limited exceptions. The
        provisions of SFAS No. 158 are effective for employers with publicly traded equity
        securities as of the end of the fiscal year ending after December 15, 2006. The adoption of
        this statement is not expected to have a material effect on the Company's future reported
        financial position or results of operations.

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 adoption of this
        statement is not expected to have a material effect on the Company's future reported
        financial position or results of operations.

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, 2007, the Company has a working capital deficit of $269,347,
        and has accumulated losses of $773,006 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.

Management’s plan for the next twelve months is to
        further explore its mineral property interest in the Peek Claims and its oil and gas
        interests in Peru. As at November 30, 2007, the Company had cash of $20,665 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. Management believes that it will need to raise approximately
        $2,800,000 in additional financing to complete the transactions contemplated by the Peru
        Assignment Agreement and meet its other planned expenditures associated therewith,
        assuming that the negotiations with Barrett are successful
        and the Company elects to proceed under the terms of the Peru Assignment Agreement.
        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 Peru Assignment Agreement.



32








Texada
        Ventures Inc.

(An
        Exploration Stage Company)



November
        30, 2007



Index




Report of Independent Registered Public Accounting Firm
                        (Manning Elliott LLP)

                    F-1




Report of Independent Registered Public Accounting Firm
                        (Telford Sadovnick, P.L.L.C.)

                    F-2




Balance Sheets

                    F-3




Statements of Operations

                    F-4




Statements of Cash Flows

                    F-5




Statements of Stockholders’ Equity
                        (Deficit)

                    F-6




Notes to the Financial Statements

                    F-7




33
















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, 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, 2007. These financial statements are the
        responsibility of the Company's management. Our responsibility is to express an opinion on
        these financial statements based on our audit.

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

In our
        opinion, 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, 2007, and the results of its operations and its cash flows for the year then
        ended and accumulated for the period from October 17, 2001 (Date of Inception) to November
        30, 2007 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

March 7,
        2008, with the exception of Note 12 which is as of March 11, 2008



F-1













REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
        FIRM



To the Board of Directors and Stockholders of

Texada Ventures Inc.

(An Exploration Stage Company)



We have audited the accompanying balance sheets of Texada
        Ventures Inc. (An Exploration Stage Company) as at November 30, 2006 and 2005, the
        related statements of operations and cash flows for the years then ended and for the period
        from inception on October 17, 2001 to November 30, 2006 and the related statement of
        stockholders’ (deficiency) equity for the period from inception on October 17, 2001
        to November 30, 2006. 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 standards of the
        Public Company Accounting Oversight Board (United States). Those standards require that we
        plan and perform an audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining, on a test basis,
        evidence supporting the amounts and disclosures in the financial statements. An audit also
        includes assessing the accounting principles used and significant estimates made by
        management, as well as evaluating the overall financial statement presentation. We believe
        that our audits provide a reasonable basis for our opinion.



In our opinion, based on our audits, such financial statements
        present fairly, in all material respects, the financial position of Texada Ventures Inc.
        (An Exploration Stage Company) as at November 30, 2006 and 2005, and the results of its
        operations and its cash flows for the years then ended and for the period from inception on
        October 17, 2001 to November 30, 2006, in conformity with accounting principles generally
        accepted in the United States of America.



The accompanying financial statements have been prepared
        assuming the Company will continue as a going concern. As described in Note 1 to the
        financial statements, the Company’s operating losses raise substantial doubt about
        its ability to continue as a going concern, unless the Company attains future profitable
        operations and/or obtains additional financing. The financial statements do not include any
        adjustments that might result from the outcome of this uncertainty.





/s/
                        TELFORD SADOVNICK,
                        P.L.L.C.


CERTIFIED PUBLIC ACCOUNTANTS




Bellingham, Washington

February 27, 2007





F-2










**Texada Ventures Inc.**

(An
        Exploration Stage Company)

Balance
        Sheets

(Expressed in US dollars)



November 30,
                    2007
                    $

                    November 30,
                    2006
                    $ASSETSCurrent AssetsCash

                    

                    

                    

                    20,665

                    

                    

                    60,877Prepaid
                    expenses

                    

                    

                    

                    152

                    

                    

                    132Note receivable, net of
                    allowance (Note 4)

                    

                    

                    

                    —

                    

                    

                    78,340Total Current
                    Assets

                    

                    

                    

                    20,817

                    

                    

                    139,349Oil and gas interest
                    (Note 5)

                    

                    

                    

                    110,000

                    

                    

                    —Total Assets

                    

                    

                    

                    130,817

                    

                    

                    139,349LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)Current
                    LiabilitiesAccounts
                    payable

                    

                    

                    

                    52,505

                    

                    

                    48,399Accrued
                    liabilities

                    

                    

                    

                    30,952

                    

                    

                    9,227Due to related party
                    (Note 6(c))

                    

                    

                    

                    56,707

                    

                    

                    50,750Promissory notes payable
                    (Note 7)

                    

                    

                    

                    150,000

                    

                    

                    100,000Total Current
                    Liabilities

                    

                    

                    

                    290,164

                    

                    

                    208,376Convertible debentures,
                    less unamortized discount of $125,741 (Note 8)

                    

                    

                    

                    309,259

                    

                    

                    —Total
                    Liabilities

                    

                    

                    

                    599,423

                    

                    

                    208,376Contingencies and Commitments (Notes 1 and 9)Stockholders’
                    Equity (Deficit)Preferred Shares,
                    100,000,000 shares authorized, $0.001 par valueNone issued and
                    outstanding

                    

                    

                    

                    —

                    

                    

                    —Common Shares,
                    500,000,000 shares authorized, $0.001 par value60,733,335 shares issued
                    and outstanding

                    

                    

                    

                    60,733

                    

                    

                    60,733Additional Paid-In
                    Capital

                    

                    

                    

                    243,667

                    

                    

                    69,667Deficit Accumulated
                    During the Exploration Stage

                    

                    

                    

                    (773,006

                    )

                    

                    (199,427

                    )Total
                    Stockholders’ Equity (Deficit)

                    

                    

                    

                    (468,606

                    )

                    

                    (69,027

                    )Total Liabilities and
                    Stockholders’ Equity (Deficit)

                    

                    

                    

                    130,817

                    

                    

                    139,349





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




F-3










**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,
                    2007
                    $

                    For the
                    Year
                    Ended
                    November 30,
                    2007
                    $

                    For the
                    Year
                    Ended
                    November 30,
                    2006
                    $

                    For the
                    Year
                    Ended
                    November 30,
                    2005
                    $Revenue

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    —

                    

                    

                    —ExpensesAmortization

                    

                    

                    

                    798

                    

                    

                    —

                    

                    

                    718

                    

                    

                    80Consulting

                    

                    

                    

                    54,000

                    

                    

                    48,000

                    

                    

                    6,000

                    

                    

                    —Exploration
                    costs

                    

                    

                    

                    20,091

                    

                    

                    —

                    

                    

                    2,591

                    

                    

                    —General and
                    administrative

                    

                    

                    

                    280,932

                    

                    

                    115,671

                    

                    

                    72,552

                    

                    

                    25,710Loss (gain) on foreign
                    exchange

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    815

                    

                    

                    (60

                    )Mineral property
                    costs

                    

                    

                    

                    397

                    

                    

                    (705

                    )

                    

                    —

                    

                    

                    850Write off of deposit
                    (Note 5)

                    

                    

                    

                    3,350

                    

                    

                    —

                    

                    

                    —

                    

                    

                    —Total Operating
                    Expenses

                    

                    

                    

                    359,568

                    

                    

                    162,966

                    

                    

                    82,676

                    

                    

                    26,580Net Loss from
                    Operations

                    

                    

                    

                    (359,568

                    )

                    

                    (162,966

                    )

                    

                    (82,676

                    )

                    

                    (26,580

                    )Other Income
                    (Expense)Accretion of discount on
                    convertible debentures (Note 8)

                    

                    

                    

                    (48,259

                    )

                    

                    (48,259

                    )

                    

                    (750

                    )

                    

                    —Interest on related
                    party advance

                    

                    

                    

                    (6,706

                    )

                    

                    (5,956

                    )

                    

                    —

                    

                    

                    —Interest on promissory
                    notes

                    

                    

                    

                    (11,375

                    )

                    

                    (11,375

                    )

                    

                    (2,075

                    )

                    

                    —Loss on disposal of
                    equipment

                    

                    

                    

                    (2,075

                    )

                    

                    —

                    

                    

                    —

                    

                    

                    —Loss on write down of
                    note receivable (Note 4)

                    

                    

                    

                    (86,797

                    )

                    

                    (86,797

                    )

                    

                    —

                    

                    

                    —Loss on write down of deposit

                    

                    

                    

                    (250,000

                    )

                    

                    (250,000

                    )Interest
                    income

                    

                    

                    

                    4,022

                    

                    

                    4,022

                    

                    

                    —

                    

                    

                    —Interest expense
                    on convertible debentures

                    

                    

                    

                    (12,248

                    )

                    

                    (12,248

                    )

                    

                    —

                    

                    

                    —Net Loss

                    

                    

                    

                    (773,006

                    )

                    

                    (573,579

                    )

                    

                    (85,501

                    )

                    

                    (26,580

                    )Net Loss Per Share
                    — Basic and Diluted

                    

                    

                    

                    

                    

                    

                    (0.01

                    )

                    

                    —

                    

                    

                    —Weighted Average Shares
                    Outstanding

                    

                    

                    

                    

                    

                    

                    60,733,335

                    

                    

                    60,733,335

                    

                    

                    60,387,765





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

F-4













**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,
                    2007
                    $

                    For the
                    Year
                    Ended
                    November 30,
                    2007
                    $

                    For the
                    Year
                    Ended
                    November 30,
                    2006
                    $

                    For the
                    Year
                    Ended
                    November 30,
                    2005
                    $Operating
                    ActivitiesNet loss

                    

                    

                    

                    (773,006

                    )

                    

                    (573,579

                    )

                    

                    (85,501

                    )

                    

                    (26,580

                    )Adjustments to reconcile
                    net loss to net cashused in operating
                    activities:Accretion of
                    convertible debt discount

                    

                    

                    

                    48,259

                    

                    

                    48,259

                    

                    

                    —

                    

                    

                    —Amortization

                    

                    

                    

                    798

                    

                    

                    —

                    

                    

                    718

                    

                    

                    80Write-off
                    of oil and gas deposit

                    

                    

                    

                    250,000

                    

                    

                    250,000

                    

                    

                    —

                    

                    

                    —Loss on
                    write down of note receivable

                    

                    

                    

                    86,797

                    

                    

                    86,797

                    

                    

                    2,075

                    

                    

                    —Loss on
                    disposal of equipment

                    

                    

                    

                    2,075

                    

                    

                    —

                    

                    

                    —

                    

                    

                    —Change in operating
                    assets and liabilities:Prepaid
                    expenses

                    

                    

                    

                    (152

                    )

                    

                    (20

                    )

                    

                    2,368

                    

                    

                    (2,500

                    )Notes
                    receivable

                    

                    

                    

                    (8,457

                    )

                    

                    (8,457

                    )

                    

                    —Accounts payable and
                    accrued liabilities

                    

                    

                    

                    83,457

                    

                    

                    25,831

                    

                    

                    46,345

                    

                    

                    (1,298

                    )Due to related
                    party

                    

                    

                    

                    6,707

                    

                    

                    5,957

                    

                    

                    750

                    

                    

                    3,450Net Cash Used in
                    Operating Activities

                    

                    

                    

                    (303,522

                    )

                    

                    (165,212

                    )

                    

                    (33,245

                    )

                    

                    (26,848

                    )Investing
                    ActivitiesDeposit payment for oil
                    and gas interests

                    

                    

                    

                    (250,000

                    )

                    

                    (250,000

                    )

                    

                    —

                    

                    

                    —Acquisition of oil
                    and gas interests

                    

                    

                    

                    (110,000

                    )

                    

                    (110,000

                    )

                    

                    —

                    

                    

                    —Advance of note
                    receivable

                    

                    

                    

                    (78,340

                    )

                    

                    —

                    

                    

                    (78,340

                    )

                    

                    —Office
                    equipment purchase

                    

                    

                    

                    (2,873

                    )

                    

                    —

                    

                    

                    —

                    

                    

                    (2,873

                    )Net Cash Used In
                    Investing Activities

                    

                    

                    

                    (441,213

                    )

                    

                    (360,000

                    )

                    

                    (78,340

                    )

                    

                    (2,873

                    )Financing
                    ActivitiesLoan advanced by
                    related party

                    

                    

                    

                    50,000

                    

                    

                    —

                    

                    

                    50,000

                    

                    

                    —Proceeds from
                    convertible debentures

                    

                    

                    

                    435,000

                    

                    

                    435,000

                    

                    

                    —

                    

                    

                    —Proceeds from
                    promissory notes payable

                    

                    

                    

                    150,000

                    

                    

                    50,000

                    

                    

                    100,000

                    

                    

                    —Proceeds from
                    issuance of common shares

                    

                    

                    

                    130,400

                    

                    

                    —

                    

                    

                    —

                    

                    

                    4,400Net Cash Flows Provided
                    by Financing Activities

                    

                    

                    

                    765,400

                    

                    

                    485,000

                    

                    

                    150,000

                    

                    

                    4,400Increase (Decrease) in
                    Cash

                    

                    

                    

                    20,665

                    

                    

                    (40,212

                    )

                    

                    38,415

                    

                    

                    (25,321

                    )Cash - Beginning of
                    Period

                    

                    

                    

                    —

                    

                    

                    60,877

                    

                    

                    22,462

                    

                    

                    47,783Cash - End of
                    Period

                    

                    

                    

                    20,665

                    

                    

                    20,665

                    

                    

                    60,877

                    

                    

                    22,462Supplemental
                    DisclosuresInterest
                    paid

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    —

                    

                    

                    —Income taxes
                    paid

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    —

                    

                    

                    —





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



F-5










**Texada Ventures Inc.**

(An
        Exploration Stage Company)

Statement of Stockholders' Equity (Deficit)

From
        October 17, 2001 (Date of Inception) to November 30, 2007

(Expressed in US dollars)





Common
                    Shares

                    

                    Deficit
                    AccumulatedCommon
                    Shares
                    #

                    Par
                    Value
                    $

                    Additional
                    Paid-in
                    Capital
                    $

                    During the
                    Exploration
                    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

                    )Equity component 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

                    )





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







F-6








**Texada
        Ventures Inc.**

(An
        Exploration Stage Company)
        Notes to the Financial Statements
        November 30, 2007

1.

                    Exploration Stage Company


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, confirmation of the
        Company’s interests in the underlying properties, and the attainment of profitable
        operations. As at November 30, 2007, the Company has a working capital deficit of $269,347,
        and has accumulated losses of $773,006 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.

Management’s plan for the next twelve months is to further explore its
        mineral property interest in the Peek Claims (Note 3) and its oil and gas interests in Peru
        (Note 5(a)). As at November 30, 2007, the Company had cash of $20,665 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.



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)

                    Use of Estimates


The preparation of financial statements in conformity with U.S. 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 allowances
        for notes receivable, its’ investment in oil and gas properties, and deferred income
        tax asset valuations. 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.

c)

                    Reclassifications


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



F-7












**Texada
            Ventures Inc.** (An Exploration Stage Company)
            Notes to the Financial Statements
            November 30, 2007  2.

                    Summary of Significant Accounting Policies
                        (continued)


d)

                    Basic and Diluted Net Income (Loss) Per Share


The Company computes net income (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 net income (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. At November 30, 2007, the Company has no dilutive
        securities outstanding.

e)

                    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, 2007 and 2006, the Company has no items that represent a comprehensive loss
        and, therefore, has not included a schedule of comprehensive loss in the financial
        statements.

f)

                    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. At November 30, 2007, the
        Company had no cash equivalents.

g)

                    Mineral Property Costs


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.

Mineral property exploration costs are expensed as incurred.

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. Because option payments do not meet the
        definition of tangible property under EITF 04-2, all option payments are expensed as
        incurred.

When it has been determined that a mineral property can be economically
        developed as a result of establishing proven and probable reserves and pre feasibility, the
        costs incurred to develop such property are capitalized.

Estimated future removal and site restoration costs, when determinable are
        provided over the life of proven reserves on a units-of-production basis. Costs, which
        include production equipment removal and environmental remediation, are estimated each
        period by management based on current regulations, actual expenses incurred, and technology
        and industry standards. Any charge is included in exploration expense or the provision for
        depletion and depreciation during the period and the actual restoration expenditures are
        charged to the accumulated provision amounts as incurred.

As of the date of these financial statements, the Company has incurred only
        acquisition and exploration costs which have been expensed.

To date the Company has not established any proven or probable reserves on
        its mineral properties.



F-8





---



**Texada
        Ventures Inc.**

(An
        Exploration Stage Company)
        Notes to the Financial Statements
        November 30, 2007



2.

                    Summary of Significant Accounting Policies
                        (continued)


h)

                    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, 2007, 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, 2007, all of the Company’s
        oil and gas properties were unproved and were excluded from amortization.

i)

                    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.





F-9



---





**Texada
        Ventures Inc.**

(An
        Exploration Stage Company)
        Notes to the Financial Statements
        November 30, 2007



2.

                    Summary of Significant Accounting Policies
                        (continued)


j)

                    Financial Instruments


The fair values of financial instruments, which include cash, note
        receivable, accounts payable, accrued liabilities, amounts due to a related party and
        promissory notes payable were estimated to approximate their carrying values due to the
        immediate or short-term maturity of these financial instruments. The Company’s
        operations are 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.

k)

                    Income Taxes


Potential benefits of income tax losses are not recognized in the accounts
        until realization is more likely than not. The Company has adopted SFAS No. 109
        “Accounting for Income
        Taxes” as of its inception. Pursuant to SFAS No. 109 the
        Company is required to compute tax asset benefits for net operating losses carried forward.
        Potential benefit of net operating losses have not been recognized in these financial
        statements because the Company cannot be assured it is more likely than not it will utilize
        the net operating losses carried forward in future years.

l)

                    Foreign Currency Translation


The Company’s functional and reporting currency is the United States
        dollar. Monetary assets and liabilities denominated in foreign currencies are translated in
        accordance with SFAS No. 52 “Foreign Currency
        Translation”, using the exchange rate prevailing at the
        balance sheet date. Gains and losses arising on settlement of foreign currency denominated
        transactions or balances are included in the determination of income. Foreign currency
        transactions are primarily undertaken in Canadian dollars. The Company has not, to the date
        of these financials statements, entered into derivative instruments to offset the impact of
        foreign currency fluctuations.

m)

                    Revenue Recognition


The Company recognizes revenue in accordance with the criteria outlined in
        Securities Exchange Commission Staff Accounting Bulletin No. 104 (“SAB
        104”), “Revenue
        Recognition”. Revenues will be recognized once they are
        earned; specifically when: (a) services are provided or products are delivered to
        customers, (b) clear proof that an arrangement exists, (c) amounts are fixed or can be
        determined, and (d) the Company’s ability to collect is reasonably
        assured.

n)

                    Environmental Costs


Environmental expenditures that relate to current operations are charged to
        operations or capitalized as appropriate. Expenditures that relate to an existing condition
        caused by past operations, and which do not contribute to current or future revenue
        generation, are charged to operations. Liabilities are recorded when environmental
        assessments and/or remedial efforts are probable, and the cost can be reasonably estimated.
        Generally, the timing of these accruals coincides with the earlier of completion of a
        feasibility study or the Company’s commitments to plan of action based on the then
        known facts.

o)

                    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.





F-10



---



**Texada Ventures Inc.**

(An Exploration Stage Company)
        Notes to the Financial Statements
        November 30, 2007



2.

                    Summary of Significant Accounting Policies
                        (continued)


p)

                    Recently Issued Accounting Pronouncements


In December 2007, the Financial Accounting Standards Board (FASB) issued
        SFAS No. 141R, “Business
        Combinations”. This statement replaces SFAS 141 and defines
        the acquirer in a business combination as the entity that obtains control of one or more
        businesses in a business combination and establishes the acquisition date as the date that
        the acquirer achieves control. SFAS 141R requires an acquirer to recognize the assets
        acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the
        acquisition date, measured at their fair values as of that date. SFAS 141R also requires
        the acquirer to recognize contingent consideration at the acquisition date, measured at its
        fair value at that date. This statement is effective for fiscal years, and interim periods
        within those fiscal years, beginning on or after December 15, 2008 and earlier adoption is
        prohibited. 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. 160,
        “Noncontrolling Interests in Consolidated Financial
        Statements Liabilities –an Amendment of ARB No. 51”.
        This statement amends ARB 51 to establish accounting and reporting standards for the
        Noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This
        statement is effective for fiscal years, and interim periods within those fiscal years,
        beginning on or after December 15, 2008 and earlier adoption is prohibited. The adoption of
        this statement is not expected to have a material effect on the Company's financial
        statements.

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 adoption of this statement is not expected to have a material effect on the
        Company's financial statements

In September 2006, the FASB issued SFAS No. 158,
        “Employers’ Accounting for Defined Benefit Pension and
        Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and
        132(R)”. This statement requires employers to recognize the
        overfunded or underfunded status of a defined benefit postretirement plan (other than a
        multiemployer plan) as an asset or liability in its statement of financial position and to
        recognize changes in that funded status in the year in which the changes occur through
        comprehensive income of a business entity or changes in unrestricted net assets of a
        not-for-profit organization. This statement also requires an employer to measure the funded
        status of a plan as of the date of its year-end statement of financial position, with
        limited exceptions. The provisions of SFAS No. 158 are effective for employers with
        publicly traded equity securities as of the end of the fiscal year ending after December
        15, 2006. The adoption of this statement is not expected to have a material effect on the
        Company's future reported financial position or results of operations.

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 adoption of this statement is not expected to have a material effect
        on the Company's future reported financial position or results of operations.



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 Peak claims for cash consideration of $2,500. The
>             property is being held in trust for the Company by a third party.





F-11



---



**Texada Ventures Inc.**

(An Exploration Stage Company)
        Notes to the Financial Statements
        November 30, 2007





4.

                    Note Receivable


During the year ended November 30, 2006, the Company advanced $78,340
        (AUS$100,000) to Paddington Gold Holdings Pty. Ltd. (“Paddington Holdco.”),
        secured by a demand promissory note receivable, bearing interest at 10% per annum,
        repayable on the earlier of one year or upon closing of a merger transaction between the
        Company and Paddington Holdco. Refer to Note 9. During the year ended November 30, 2007,
        the principal amount increased by $4,435 as a result of foreign exchange, and accrued
        interest of $4,022. During the year ended November 30, 2007, the Company recorded an
        allowance of 100% of the value of the note and recognized $86,797 as a loss on write down
        of note receivable.



5.

                    Oil and Gas Interest




a)

                    On November 12, 2007, the Company entered into an Assignment
                        Agreement with Anglo Energy Refining Corp., a Panamanian corporation
                        ("Anglo"), 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 relates to rights to develop and produce crude oil,
                        gas and proven reserves at Block 67 located in Peru and is subject to
                        negotiation with Barrett and receipt of various governmental and regulatory
                        approvals.


In consideration for 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, 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;


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, 2007, the Company has paid $110,000 for expenses incurred
        up to and including the Effective Date, $nil of expenses from the Effective Date to the
        Closing Date, and have not issued any common shares with respect to the PA.

b)

                    On March 21, 2007, the Company entered into a Term Sheet
                        Agreement with Anglo Energy Refining Corp., a Panamanian corporation
                        (“Anglo”), to acquire all 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 relates to a 40%
                        production sharing interest in an Ecuadorian oil and gas field to be
                        obtained by Anglo’s joint venture partner.


On April 5, 2007, Anglo and the Company entered into an Assignment Agreement
        (the “Assignment Agreement”) providing for the assignment of Anglo’s
        interest in the PSA in consideration for:

(1)

                    the payment to Anglo of an aggregate amount equal to
                        $500,000 for expenses incurred by Anglo in connection with the PSA, with
                        such amount payable as follows:


i.

                    $125,000 on the effective date of the Assignment Agreement
                        (paid),


ii.

                    $125,000 on the thirty day anniversary of the effective date
                        of the Assignment Agreement (paid), and


iii.

                    $250,000 on the ninety day anniversary of the effective date
                        of the Assignment Agreement;


(2)

                    the payment to Anglo of all future expenses of Anglo related
                        to the PSA after the effective date of the Assignment Agreement;




(3)

                    the issuance to Anglo (or its nominee) of 30,000,000 shares
                        of common stock of the Company upon the closing of the PSA; and


(4)

                    the transfer of 10,084,011 shares of restricted common stock
                        of the Company to Anglo (or its nominee) upon the closing of the
                        PSA.








F-12



---



**Texada Ventures Inc.**

(An Exploration Stage Company)
        Notes to the Financial Statements
        November 30, 2007



5.

                    Oil and Gas Interest (continued)


As of November 30, 2007, the Company has forfeited the agreement, and
        accordingly, the $250,000 previously paid has been written-off to operations.



6.

                    Related Party Transactions/Balances


Unless disclosed elsewhere in the financial statements, the following
        represents all significant balances and transactions entered into by the Company with its
        directors, shareholders or with companies related by virtue of common ownership or common
        directors:

a)

                    During the year ended November 30, 2007, the Company
                        incurred $48,000 (2006 - $6,000) in consulting fees to a
                        director.


b)

                    Accounts payable as at November 30, 2007 includes $3,125
                        (2006 - $3,125) owing to a former director for expenses incurred on the
                        Company’s behalf.


c)

                    During the prior 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 matures October 18,
                        2007. On November 8, 2007, the Company entered into an agreement to extend
                        the loan to October 18, 2008. Accrued interest of $6,707 has been recorded
                        as at November 30, 2007.


These transactions were in the normal course of operations and were measured
        at the exchange amount, which represented the amount of consideration established and
        agreed to by the related parties.



7.

                    Promissory Notes Payable


a)

                    The Company entered into a demand promissory note effective
                        February 15, 2007 with a third party for $50,000, to be repaid on demand
                        together with interest at 8% per annum, interest payable annually due on or
                        before February 14 of each year. As at November 30, 2007, accrued interest
                        of $3,156 has been recorded.


b)

                    The Company entered into a demand promissory note dated
                        November 20, 2006 with a third party for $100,000, to be repaid on demand
                        together with interest at 8% per annum. As at November 30, 2007, accrued
                        interest of $8,219 has been recorded.




8.

                    Convertible Debentures


a)

                    On April 10, 2007, the Company issued a 6% convertible
                        debenture (the “Debenture”) with a principal amount of $200,000
                        which is due and payable on December 31, 2008. 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. The principal and accrued interest on the Debenture may be
                        converted at any time into shares of the Company’s common stock at a
                        rate of $0.25 per share, at the option of the holder. If the Company closes
                        the Anglo agreement, as described in Note 5(b), the Debenture will be
                        automatically converted into common shares of the Company at the rate of
                        $0.25 per share.


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 debentures. The Company will record interest expense over the term of the
        remaining convertible debentures of $200,000 resulting from the difference between the
        stated value and carrying value at the date of issuance. At November 30,
        2007, accrued interest of $7,693 has been included in accrued liabilities,
        and interest expense of $29,667 has been accreted increasing the carrying value of the
        convertible debentures to $149,667.



F-13



---



**Texada
        Ventures Inc.**

(An
        Exploration Stage Company)
        Notes to the Financial Statements
        November 30, 2007



8.

                    Convertible Debentures (continued)


b)

                    On May 2, 2007, the Company issued a 6% convertible
                        debenture (the “Debenture”) with a principal amount of $125,000
                        which is due and payable on December 31, 2008. 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. The principal and accrued interest on the Debenture may be
                        converted at any time into shares of the Company’s common stock at a
                        rate of $0.25 per share, at the option of the holder. If the Company closes
                        the Anglo agreement, as described in Note 5(b), the Debenture will be
                        automatically converted into common shares of the Company at the rate of
                        $0.25 per share.


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 will record interest expense over the term of the
        remaining convertible debentures of $125,000 resulting from the difference between the
        stated value and carrying value at the date of issuance. At November 30, 2007, accrued
        interest of $4,356 has been included in accrued liabilities, and interest expense of
        $17,406 has been accreted increasing the carrying value of the convertible debentures to
        $92,406.

c)

                    On November 19, 2007, the Company issued a 6% convertible
                        debenture (the “Debenture”) with a principal amount of $110,000
                        which is due and payable on December 31, 2008. 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. The principal and accrued interest on the Debenture may be
                        converted at any time into shares of the Company’s common stock at a
                        rate of $0.25 per share, at the option of the holder. If the Company closes
                        the Anglo agreement, as described in Note 5(a), the Debenture will be
                        automatically converted into common shares of the Company at the rate of
                        $0.25 per share.


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 debentures. The Company will record interest expense over the term of the
        remaining convertible debentures of $110,000 resulting from the difference between the
        stated value and carrying value at the date of issuance. At November 30, 2007, accrued
        interest of $199 has been included in accrued liabilities, and interest expense of $1,186
        has been accreted increasing the carrying value of the convertible debentures to
        $67,186.



9.

                    Commitments


During the year ended November 30, 2007, the Company entered into a
        consulting agreement in which the Company will make a $10,000 payment for consulting
        services rendered in 2008. The first instalment of $5,000 is due on December 1, 2007 and
        second instalment of $5,000 upon delivery and acceptance of
        service.



10.

                    Segment Disclosures


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.



F-14





---




**Texada
        Ventures Inc.**

(An
        Exploration Stage Company)
        Notes to the Financial Statements
        November 30, 2007



11.

                    Income Taxes


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 $722,200 available to offset taxable income in future
        years which expires in fiscal 2027. 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,
                    2007
                    $

                    November 30,
                    2006
                    $

                    November 30,
                    2005
                    $Income tax
                    recovery at statutory rate

                    

                    

                    

                    200,800

                    

                    

                    29,050

                    

                    

                    9,000Change in tax
                    rate

                    

                    

                    

                    —

                    

                    

                    2,215

                    

                    

                    —Other
                    (rounding)

                    

                    

                    

                    —

                    

                    

                    (1,050

                    )

                    

                    —Accretion on Convertible
                    Debenture

                    

                    

                    

                    (16,900

                    )

                    

                    —

                    

                    

                    —Valuation allowance
                    change

                    

                    

                    

                    (183,900

                    )

                    

                    (30,215

                    )

                    

                    (9,000

                    )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, 2007 are as follows:



November 30,
                    2007
                    $

                    November 30,
                    2006
                    $

                    November 30,
                    2005
                    $Net
                    operating loss carryforward

                    

                    

                    

                    252,800

                    

                    

                    68,900

                    

                    

                    38,700Valuation
                    allowance

                    

                    

                    

                    (252,800

                    )

                    

                    (68,900

                    )

                    

                    (38,700

                    )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.



12.

                    Subsequent Event


On March 11, 2008, the Company issued a 6% convertible debt with a principal  amount of $150,000,  and due and
     payable on December 31, 2008.  Interest is payable  semi-annually  commencing  May 31, 2008, and is payable at
     the  option of the  Company  in either  cash or  common  shares of the  Company.  The  principal  and  accrued
     interest on the  Debenture  may be converted at any time into shares of the  Companys  common stock at a rate
     of $0.25 per share, at the option of the holder.



F-15














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

Effective on or about March 1, 2007,
        we terminated the services of our principal independent auditor, Telford Sadovnick,
        P.L.L.C., Chartered Accountants of Bellingham, Washington (the “Former
        Accountant”).

In the Former Accountant’s
        principal accountant reports on the registrant’s financial statements for each of the
        past two years, no adverse opinion was issued and no opinion of the Former Accountant was
        modified as to audit scope or accounting principles. Registrant’s principal
        accountant report on the registrant’s financial statements for the years-ended
        November 30, 2006 and 2005, as reported in the registrant’s Form 10-KSB filed with
        the Securities and Exchange Commission on February 28, 2007, contained a disclaimer
        paragraph concerning uncertainty as to the registrant’s ability to continue as a
        going concern. The financial statements did not include any adjustments that might have
        resulted from the outcome of this uncertainty. No other reports in each of the last two
        years contained a disclaimer of opinion or were modified as to uncertainty.

The change in auditor was
        recommended and approved by Texada’s Board of Directors.

During the fiscal year ended
        November 30, 2006 and any interim period preceding such dismissal, the registrant is not
        aware of any disagreements with the Former Accountant on any matter of accounting
        principles or practices, financial statement disclosure, or auditing scope or procedure,
        which disagreement(s), if not resolved to the satisfaction of the Former Accountant, would
        have caused it to make references to the subject matter of the disagreement(s) in
        connection with its report.

The registrant is not aware of any
        reportable events (as defined in Item 304(a)(1)(B) of Regulation S-B) that have occurred
        during the two most recent fiscal years and the interim period preceding the dismissal of
        the Former Accountant.

The registrant has engaged Manning
        Elliott LLP, Vancouver, British Columbia (the “New Accountant”), as its new
        principle independent accountant effective on or about March 1, 2007, to audit our
        financial records. During the two most recent fiscal years and the interim period preceding
        the appointment of the New Accountant, we have not consulted the New Accountant regarding
        either:

1.

                    The
                    application of accounting principles to a specified transaction, either
                    completed or proposed; or the type of audit opinion that might be rendered on
                    our financial statements, and neither a written report nor oral advice was
                    provided to the registrant that the registrant considered an important factor
                    in reaching a decision as to the accounting or financial reporting issue;
                    or





2.

                    Any matter
                    that was either the subject of a disagreement or event (as defined in
                    Regulation S-B, Item 304(a)(1)(B)).





ITEM 8A.     CONTROLS AND PROCEDURES

Evaluation Of Disclosure
        Controls And Procedures

We
        maintain disclosure controls and procedures designed to ensure that information required to
        be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is
        recorded, processed, summarized and reported within the specified time periods. As of the
        end of the period covered by this report, our principal executive officer and principal
        financial officer evaluated the effectiveness of our disclosure controls and procedures.
        Based on the evaluation, which disclosed no significant deficiencies or material
        weaknesses, our principal executive officer and principal financial officer concluded that
        our disclosure controls and procedures are effective and that our disclosure controls and
        procedures were adequately designed and are effective to ensure that information required
        to be disclosed by us in the reports we file or submit under the Exchange Act is recorded,
        processed, summarized and reported within the time periods specified in applicable rules
        and forms. In addition, our principal executive officer and principal financial officer
        have determined that the disclosure controls and procedures are effective to ensure that
        information required to be disclosed in the reports that are filed under the



34







Exchange Act are accumulated and communicated to management,
        including our principal executive officer and principal financial officer, to allow timely
        decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting
        The Company’s management, including the CEO/CFO, does not expect that its disclosure
        controls and procedures or internal controls and procedures will prevent all error and all
        fraud.  A control system, no matter how well conceived and operated, can provide only
        reasonable, not absolute, assurance that the objectives of the control system are met.
        Further, the design of a control system must reflect the fact that there are resource
        constraints, and the benefits of controls must be considered relative to their costs.
        Because of the inherent limitations in all control systems, no evaluation of controls can
        provide absolute assurance that all control issues and instances of fraud, if any, within
        the Company have been detected.  These inherent limitations include the realities that
        judgments in decision-making can be faulty, and that breakdowns can occur because of simple
        error or mistake.  Additionally, controls can be circumvented by the individual acts
        of some persons, by collusion of two or more people, or by management override of the
        control.  The design of any system of controls also is based in part upon certain
        assumptions about the likelihood of future events, and there can be no assurance that any
        design will succeed in achieving its stated goals under all potential future conditions;
        over time, control may become inadequate because of changes in conditions, or the degree of
        compliance with the policies or procedures may deteriorate. Because of the inherent
        limitations in a cost-effective control system, misstatements due to error or fraud may
        occur and not be detected.
               
        As a non-accelerated filer as defined in Rule 12b-2 of the Exchange Act of 1934, as
        amended, the Company is not required to provide management’s report on internal
        control over financial reporting until its annual report for the year ended November 30,
        2007.  Further, the Company’s independent registered public accounting firm is
        not required to provide an attestation on management’s report on internal control
        over financial reporting until the Company’s annual report for the fiscal year ended
        November 30, 2008.  This annual report does not include
        a report on management’s assessment regarding internal control over financial
        reporting or an attestation report of the company’s registered public accounting firm
        regarding internal control over financial reporting pursuant to temporary rules of the
        Securities and Exchange Commission.

Changes In Internal Controls Over
        Financial Reporting

There
        were no changes in our internal control over financial reporting (as defined in Rule
        13(a)-15(f) or 15(d)-15(f)) that occurred during the Company’s most recent fiscal
        quarter and the period covered by this annual report that have materially affected, or are
        reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 8B.     OTHER
        INFORMATION**

None.



ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS;
        SECTION 16(a) COMPLIANCE




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, 2007.



Name

                    Current Office

                    Principal Occupation

                    Director/Officer
                        Since

                    AgeJohn Veltheer

                    Chief Executive Officer, Chief Financial
                        Officer, President, Secretary, Treasurer and Director

                    Strategy Consultant

                    September 26, 2006

                    42





35





Dr. John Veltheer

Dr. Veltheer
        was appointed our Chief Executive
        Officer, Chief Financial Officer, President, Secretary and Treasurer effective September
        26, 2006. 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. Veltheer does not have formal
        training as a geologist or in the technical or managerial aspects of management of a
        mineral exploration company. Dr. Veltheer’s prior managerial and consulting positions
        have not been in the mineral exploration industry. 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 do not have any employees who have
        professional training and experience in the mining industry. We rely on our independent
        geological consultant, Mr. Timmins, to make recommendations to us on work programs on our
        property, to hire appropriately skilled persons on a contract basis to complete work
        programs and to supervise, review, and report on such programs to us.

We have agreed to pay Dr. Veltheer,
        our sole director and officer, $4,000 per month in consideration of management consulting
        services provided to the Company. Dr. Veltheer does not receive any salary in his capacity
        as an officer or director of the Company.

Significant Employees

There are no significant employees other than Dr. John Veltheer.

Family Relationships

There are no family relationships among directors, executive officers or persons nominated
        or chosen by the Company to become directors or executive officers.

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.

Corporate Cease Trade Orders and Bankruptcies

Except
        as disclosed in this report, none of our directors or officers is, or has been within the
        ten years before the date of this report, a director or officer of any other company that,
        while such person was acting in that capacity, was the subject of a cease trade or similar
        order, or an order that denied the company access to any

36







statutory exemptions under applicable securities
        legislation, for a period of more than 30 consecutive days, or was declared bankrupt, made
        a proposal under any legislation relating to bankruptcy or insolvency or was subject to or
        instituted any proceedings, arrangements or compromise with creditors or had a receiver,
        receiver manager or trustee appointed to hold the assets of that company.

Penalties and Sanctions

None of
        our directors or officers has been subject to any penalties or sanctions imposed by a court
        relating to any securities legislation or by any securities regulatory authority or has
        entered into a settlement agreement with any securities regulatory authority or been
        subject to any other penalties or sanctions imposed by a court or regulatory body that
        would likely be considered important to a reasonable investor in making an investment
        decision.

Personal Bankruptcies

None of
        our directors or officers has, within the ten years before the date of this report, become
        bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was
        subject to or instituted any proceedings, arrangements or compromises with creditors, or
        had a receiver, receiver manager or trustee appointed to hold the assets of the director or
        officer.

Conflicts of Interest

To our
        knowledge, and other than as disclosed in this report, there are no known existing or
        potential conflicts of interest among us, our promoters, directors and officers, or other
        members of management, or of any proposed director, officer or other member of management
        as a result of their outside business interests except that certain of the directors and
        officers serve as directors and officers of other companies, and therefore it is possible
        that a conflict may arise between their duties to us and their duties as a director or
        officer of such other companies.

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, 2007



ITEM 10.     EXECUTIVE COMPENSATION

Summary Compensation Table

A summary of cash and other compensation paid to our sole
        executive officer and director for the fiscal years ended November 30, 2007 and
        2006 is as follows:





37














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)Dr. John Veltheer
                        Chief Executive Officer, Chief Financial Officer, President, Secretary,
                        Treasurer and Director

                    2007
                        2006

                    -
                        -

                    -
                        -

                    -
                        -

                    -
                        -

                    -
                        -

                    -
                        -

                    48,000
                        6,000

                    48,000
                        6,000







We have agreed to pay Dr. Veltheer, our sole director and officer, $4,000
        per month in consideration of management consulting services provided to the Company. Dr.
        Veltheer does not receive any salary in his capacity as an officer or director of the
        Company.

Outstanding Equity Awards at Fiscal Year End

None.

Director Compensation

We do not pay any compensation to John
        Veltheer, our sole director, for serving on our board of directors.



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

None.

Additional Information with Respect to Compensation Committee Interlocks and Insider
        Participation in Compensation Decisions

None.

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

The
        following tables set forth information as of March 10, 2008 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.

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 March 10, 2008.

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 March 10, 2008 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.

38











Officers, Directors and Principal Stockholders



Name and Address of Beneficial
                        OwnerName/Position

                    Address

                    Number of
                        Shares

                    Percentage of Issued
                        and OutstandingOfficers and DirectorsDr. John Veltheer

                        Chief Executive Officer, Chief Financial
                        Officer, President, Secretary, Treasurer and Director

                    

                    2957 West 21st Avenue
                        Vancouver, B.C. V6L 1K7
                        Canada

                    

                    30,000,000

                    

                    49.4%Officers and Directors as
                        a Group (1 person)

                    

                    

                    

                    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 12.     CERTAIN RELATIONSHIPS AND RELATED
        TRANSACTIONS

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.

On November 1, 2001, we issued 30,000,000 shares of common stock to Marc Branson, our
        former president, secretary and treasurer. Mr. Branson acquired these shares at a price of
        $0.001 per share. These shares were issued pursuant to Section 4(2) of the Securities Act
        and are restricted shares as defined in the Act. This issuance was made to Mr. Branson who
        is a sophisticated individual and, by way of his positions as president, secretary, and
        treasurer, is in a position of access to relevant and material information regarding our
        operations.



Effective September 25, 2006, Marc Branson entered into a share purchase agreement (the
        “Share Purchase Agreement”) with Dr. John Veltheer. Pursuant to the Share
        Purchase Agreement, Mr. Branson transferred 30,000,000 shares of the Company’s Common
        Stock held by him to Dr. Veltheer at an aggregate price of $9,000.

On November 8, 2007, the Company entered into a Loan Extension Agreement with John
        Veltheer, the President, Secretary, Treasurer and Director of the Company, pursuant to
        which Mr. Veltheer agreed to extend the maturity date of the $50,000 loan from Mr. Veltheer
        to the Company, as described in the Loan Agreement, dated as of October 18, 2006, between
        the Company and Mr. Veltheer, from October 18, 2007 to October 18, 2008.



We have agreed to pay
        Dr. Veltheer, our sole director and officer, $4,000 per month in consideration of
        management consulting services provided to the Company.

39











ITEM 13.     EXHIBITS

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 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 John
                    Veltheer(10)10.8

                    

                    

                    Assignment Agreement,
                    effective November 8, 2007, between Texada Ventures Inc. and Anglo Energy
                    Refining Corp.(10)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 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



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ITEM 14.     PRINCIPAL ACCOUNTANT 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, 2006 to November 30, 2007 and from November 30, 2005 to November 30, 2006 and
        reviews of the consolidated financial statements included in the Company’s Forms
        10-QSB for the periods from November 30, 2006 to November 30, 2007 and from November 30,
        2005 to November 30, 2006, were $9,000 and $10,750, 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, 2006 to November 30, 2007 and from November
        30, 2005 to November 30, 2006, 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, 2006 to November
        30, 2007 and from November 30, 2005 to November 30, 2006, 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, 2006 to November 30, 2007 and from November
        30, 2005 to November 30, 2006, were $nil and $nil, respectively.



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SIGNATURES

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



Date: March 14, 2008

                    **TEXADA VENTURES INC.**

                        

                        By:   /s/ John
                        Veltheer

                        John Veltheer

                        Chief Executive Officer, Chief Financial Officer, President, Secretary,
                        Treasurer and Director

                        (Principal Executive Officer and Principal Financial and Accounting
                        Officer)


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