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

Form 10-KSB

ý
    Annual report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended May 31, 2004

q
   Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________________ to ________________
Commission file number __________________

BARNABUS ENTERPRISES LTD.



|Nevada 
(State of Incorporation)                                                                                                                                                          | 98-0370750
(I.R.S. Employer Identification No.)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------
|2006 - 1500 Hornby Street, Vancouver, BC V6Z 2R1
Telephone No.: (604) 889-8888
(Address and telephone number of Registrant's principal
executive offices and principal place of business)

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

Securities registered pursuant to Section 12(g) of the Act:Common Stock

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý
    No q

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of the 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. q

The Company's revenues during the year ended May 31, 2004 were $nil.

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.) $13,809,250 based on the last sales price of the registrant's common stock on September 2, 2004.

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The number of issued and outstanding shares of the registrant's common stock as of August 30, 2004 was 48,855,000.

Documents incorporated by reference: None

Transitional Small Business Disclosure Format (check one): Yes q
    No ý



Table of Contents

|Part I
Item 1
Item 2
Item 3
Item 4                      | BusinessPropertyLegal ProceedingsSubmission of Matters to a Vote ofSecurity Holders                                                                                                                                                                                                        
|------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Part II
Item 5
Item 6
Item 7
Item 8
Item 8A             | Market for Common Equity andRelated Stockholder MattersManagement's Discussion andAnalysis or Plan of OperationFinancial StatementsChanges In and Disagreements withAccountantsControls and Procedures                                                                                     
|Part III
Item 9
Item 10
Item 11
Item 12
Item 13
Item 14 | Directors, Executive Officers, Promotersand Control Persons; Section 16(a)Beneficial OwnershipReporting ComplianceExecutive CompensationSecurity Ownership of CertainBeneficial Owners and ManagementCertain Relationships AndRelated TransactionsExhibitsPrincipal Accountant and Services

PART I

Item 1. Business

General

Barnabus Enterprises Ltd. was incorporated under the laws of the state of Nevada on April 11, 2002, whose principal executive offices are located in Vancouver, British Columbia, Canada.

Business Overview

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

We acquired a 100% undivided mineral interest in the Mount mineral claim, located in Toodoggone area, Liard Mining Division of British Columbia in April 2002.  There is no assurance that a mineral deposit exists on the mineral claim until appropriate geological exploration is done and a final comprehensive evaluation is concluded.  There are no mineral reserves on the mineral claim and our proposed exploration program is entirely exploratory in nature.  Our claim has been forfeited to the government because we failed to keep the property in good standing.  However, we have re-staked the property on September 2, 2004.

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The exploration program known as preliminary reconnaissance proposed by Barnabus is designed to determine whether mineralization exists to the extent that further exploration is recommended to outline any such discovered mineralized zones. It is uncertain at this time the precise quantity of minerals in the property that would justify actual mining operations.  If we decide to abandon our mineral claim at any stage of our exploration program, we intend to acquire other properties and conduct similar exploration programs.  The other properties may be located in the same mining district or we may decide to seek properties in other locations in the Province of British Columbia.  Although management presently intends to explore properties located in British Columbia, we may in the future explore properties located in other jurisdictions, which may include other provinces in Canada, or in the United States.

Plan of Operations

Our business plan is to carry out exploration work on the Mount Claim and to ascertain the quantities of copper, zinc, silver, gold and other valuable minerals.  We will not be able to determine whether or not our mineral claims contain a mineral deposit, or reserve, until appropriate exploratory work is done and an economic evaluation based on that work concludes economic viability.

The Company has no cash requirements until it commences Phase I exploration program.  Phase I exploration program will cost approximately $32,500.  We will not commence Phase I until we receive funding.

We will not be conducting research in connection with the exploration of the mineral claim. We are not going to buy or sell any plant or significant equipment. We do not expect a change in our number of employees.

Between May to August 2003, we raised $27,570 from the issuance of 2,757,000shares of common stock (the number of shares issued after the 15:1 forward stock split on March 3, 2004 becomes 41,355,000) as part of our self-underwritten financing described in our effective SB-2 filing.  The offering was terminated in September 2003.  Management had originally planned on dispersing the $27,570 towards deferred offering expenses and towards Phase I of our exploration program.  However, management changed its plans and spent the offering proceeds on consulting fees and continuous disclosure costs.  The Company still has the option to request a loan from its two directors to initiate Phase I of our exploration program.  Management is attempting to raise additional capital through private placements of its common stock, in order to initiate Phase I of our exploration program.  As of May 31, 2004, of the $27,570 offering proceeds and $6,933 money advanced by a related party, $21,420 has been applied towards legal and accounting fees; $3,715 has been applied towards filing fees, expenses related to the offering, exploration and operating costs; $9,230 towards consulting fees; and $455 towards repayment of amount owing by the Company to the two directors of the Company.  The $9,230 consulting fees was paid to John Mirko for providing management and advisory services.

Interest in Mineral Claim

Lorne B. Warren staked the claims.  The claims expired on August 7, 2004.  We inadvertently failed to keep the claims in good standing.  In order to keep our mineral claim in good standing, we had to pay approximately $1,000 to the Mineral Titles Branch of the British Columbia government, or instead, complete and file assessment work equivalent to $1,000 for each year prior to August 7, 2004.  The claim has been forfeited to the government, however we have re-staked the claim on September 2, 2004.  Ms. Chen and Mr. Nagy will hold recorded title to the mineral interest in the mineral claim in their names as trustees, on behalf of Barnabus.  The mineral claim was recorded in the names of Ms. Chen and Mr. Nagy to avoid paying additional fees, however, Ms. Chen and Mr. Nagy signed a Declaration of Trust confirming that Barnabus was the beneficial owner of the mineral interest in the mineral claim.  If we were to register the property in our name, we will be required to form a wholly-owned British Columbia corporation and pay a minimum of $500 and register other documentation to be able to file a Bill of Sale on the Company's behalf.  We have decided that if exploration results warrant we will: (1) file as a foreign corporation; (2) pay the additional fees; and (3) record the claim in our name.  The decision to record or not record the mineral claim in our name is solely within our discretion.

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Property Purchase Agreement

Pursuant to the Property Purchase Agreement dated April 11, 2002 and Amending Letter Agreement dated October 1, 2002, Barnabus acquired a 100% undivided mineral interest in the Mount Claim from Lorne B. Warren for cash consideration of $3,500.  Mr. Warren retained a 3% Net Smelter Return Royalty on the mineral claim, but Barnabus has a right to repurchase a portion of such royalty interest at a price of $1,000,000 for each 30% interest to the royalty to an aggregate of 60%.  Under the Property Purchase Agreement, if Barnabus does not expend a total of $100,000 on the Mount Claim prior to December 31, 2005, the mineral claim ownership will go back to Lorne Warren.  Barnabus may also extend the expiration date up to a maximum of 2 additional years by paying $2,000 per year commencing on December 31, 2003 and ending on December 31, 2006, for the right to extend the expiry date, and such total payments will be deducted from any royalty payments which may be required to be paid to Mr. Warren.  $2,000 was made the current year.

Summary Report

Our business activities to date have been restricted to obtaining a summary report on the Mount Claim from John M. Mirko dated April 30, 2002 and conducting a self-underwritten financing pursuant to an effective SB-2 registration statement. Mr. Mirko is an experienced explorationist, prospector and businessman, however Mr. Mirko is not a geologist.  Mr. Mirko is a self-employed explorationist and development consultant who has been involved in all aspects of exploration and exploitation of resource properties for 30 years.  Since 1972, Mr. Mirko has conducted prospecting, geology, geophysics, geochemisty, property evaluation, project management and mine site supervision for large and small resource companies.  Mr. Mirko does not have any conflict of interest with Barnabus in preparing the report nor does he have any interest in the Mount Claim or Barnabus.  The report is based on the knowledge of Mr. Mirko and his work experience.  Mr. Mirko's report details the geological and exploration history of the Mount Claim owned by Barnabus, including the land status, climate, geology and mineralization.  Mr. Mirko believes that based upon previous exploration activity in the area and his personal knowledge of the property, sufficient evidence exists to warrant further exploration on the Mount Claim.

The Mount Claim is 100% owned by Barnabus and is located in the Liard Mining Division of British Columbia, comprising 741 acres.  A recent sampling of a recessive weathering pyritic-rich feldspar porphyry unit gave anomalous gold values of 0.17 and 1.2 grams/tonne, respectively, which are positive results that warrant further exploration.  To properly establish the sources of the coincident gold and copper soil geochemical anomalies, Mr. Mirko recommends further trenching and diamond drilling.

A two phase exploration and drilling program has been proposed.  Phase I consists of trenching and blasting on the property and is estimated to cost $32,000.  Phase II will be contingent on the success of Phase I and will consist of diamond drilling at a proposed cost of $195,000.  Our exploration program known as preliminary reconnaissance is designed to efficiently explore and evaluate our mineral claim.  We have not commenced Phase I.

Canadian Mining Law

Work on the claim is governed by the laws of British Columbia.  Title to mineral claims are issued and administered by the Mineral Titles Branch, Ministry of Energy and Mines, and title must comply with all provisions under the Mineral Tenure Act (British Columbia).  A mineral claim acquires the right to the minerals which were available at the time of location and as defined in the Mineral Tenure Act (British Columbia).  There are no surface rights included, but the title holder has the right to use the surface of the claim for mining proposes only.  All work carried out on a claim that disturbs the surface by mechanical means requires a Notice of Work and must receive written approval from the District Inspector of Mines prior to commencement.

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Location and Access

The Mount claim is located in north-central British Columbia at the northern-end of the Toodoggone area approximately 35 kilometres north of the past producing Lawyers Mine.

The Mount claim is located at 57 degrees, 47' north latitude and 127 degrees 35' west longitude, NTS map sheet No. 094E/13E, Liard Mining Division, British Columbia.  The nearest road access is to the Lawyers/Energex mine area, and then by helicopter to the property, a distance of 35 kilometres.  Alternative points of supply could be either from Iskut, a town on Highway 37 (120 km), or the Kutcho mining property airstrip (75 km) to the north.  Floatplane access to numerous lakes in the area is also available up to 20 km away from the property.

Camps and airstrip sites are available on/or near the property.  Exploration activities are best carried out during the summer season from June to mid-October and water is present year round in the main valley as creeks or ponds.  We do not expect any unusual challenges in accessing the property via helicopter.

Physical Features

The property covers a southerly facing slope and height of land of rugged mountainous terrain.  Elevations range between 1,370 and 2,250 metres above sea level.  Outcrop frequency is low, mainly restricted to peaks, cliffs and gullies.  Talus with slopes of 35-37 degrees covers higher elevations, while lower elevations are covered by brush, grasses and sub alpine fir trees.

Proposed Exploration Program

There are no known mineral reserves on the Mount claim.  Our proposed exploration program is entirely exploratory in nature.

Our plan of operations is to carry out exploration work on the Mount Claim to ascertain the quantities of copper, zinc, silver, gold and other valuable minerals.  We will not be able to determine whether or not our mineral claims contain a mineral deposit until appropriate exploratory work is done.  The Company will conduct preliminary reconnaissance, which includes but is not limited to sampling and trenching, to determine if the mineralization or geology exhibits potential for expansion of size of concentration in the opinion of the geologist or other qualified persons.  At this stage of preliminary reconnaissance there is no specific quantifiable number of valuable minerals that will trigger more work.  It is later on in the exploration and development program that quantifiable results will be obtainable.

Exploration must be conducted to determine the amount and configuration of minerals, if any, which exist on the property. Our exploration program is designed to efficiently explore and evaluate our claims.

We do not claim to have any resources whatsoever at this time on any of our claims. We intend to implement an exploration program and to proceed in two phases as described below.

The funds raised in our SB-2 offering is not sufficient to complete the Phase I exploration program consisting of trenching and sampling.  Management is attempting to raise additional capital to initial Phase I of our exploration program.  If our geologist confirms or recommends further work including diamond drilling, we will conduct a Phase II exploration program.  We do not presently have the funds to conduct a Phase II program.  If our geologist recommends drilling, we will raise additional funds in a future financing or enter into a joint venture relationship with a third party.  We presently do not have a joint venture partner in mind and there are no assurances that we would find a suitable joint venture partner.

Phase I involves trenching on the claim which means digging and blasting into the ground up slope of the anomalies originally identified in the soil samples, down to the bedrock and taking representative samples for mineral content, including gold, silver and copper.

Phase I is estimated to cost approximately $32,500 and the total number of man working days required for Phase I completion is estimated to be 10 days.  An additional 7 days is required to analyze the

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bedrock samples and record results.  The total cost of Phase I is approximately $32,500.  The total time required to complete Phase I will depend on the weather conditions.  If we conduct Phase I during the summer, it will be a total of 10 man working days.

If results from Phase I are favourable, diamond drill hole sites will be spotted and we plan to retrieve drill core for analysis from any expected source rock to explain the anomalous soil sample results.

A Phase II work program is conditional upon results of Phase I and will provide for diamond drilling and support as recommended by the Company's consultant for which the Company has budgeted a proposed estimate of $195,000.

Geological and Technical Staff

We are unable to name the geologists and engineers who will be performing work for Barnabus because they have not been retained.  At the right time, we will hire from the available pool of contract geologists depending on the time of the year and availability of experience.  Presently, there are no agreements or understandings to hire such geologists or engineers.

Joint Venture Partner

If the results are positive from Phase I or Phase II, we plan to enter into a joint venture relationship with another company that has experience in the mineral exploration and development business.  The joint venture partner may provide funding in terms of additional exploration expenditures, and operational experience if the mineral claim is determined to have any potential for proven mineral reserves.  If we enter into a joint venture agreement with another partner, we may have to sell an interest in the claim and issue additional shares in return for exploration funds from the joint venture partner.  If our mineral claim  has merit, the joint venture partner will act as both a financier and operational partner.

Competitive Factors

The mineral industry is fragmented. We compete with other exploration companies looking for a variety of mineral resources. We are a very small exploration company compared to many of our competitors.  Although we will be competing with other exploration companies, there is no competition for the exploration of minerals on our mineral claim.  We intend to explore and find sufficient mineralization to a point in which major mining companies or mining financial groups would seriously consider pursuing the mineral claim as a valuable and significant acquisition.

Location Challenges

We do not expect any major challenges in accessing the property during the initial exploration stages.

Regulations

Our mineral exploration program will comply with the British Columbia Mineral Tenure Act.  This act sets forth rules for:

*  locating claims
*  posting claims
*  working claims
*  reporting work performed

We also have to comply with the British Columbia Mineral Exploration Code which tells us how and where we can explore for minerals.  We must comply with these laws to operate our business.  Compliance with these rules and regulations will not adversely affect our operations.

In order to explore for minerals on our mineral claim we must submit the plan contained in this prospectus for review.  We believe that the plan as contained in this prospectus will be accepted and an exploration

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permit will be issued to us or our agent.  The exploration permit is the only permit or license we will need to explore for precious and base minerals on the mineral claim.

We will be required to obtain additional work permits from the British Columbia Ministry of Energy and Mines for any exploration work that results in a physical disturbance to the land.  Accordingly, we will be required to obtain a work permit if we proceed with the second phase of our exploration program.  There is a charge of approximately $1,500 in order to obtain a work permit under the Mining Act.  The time to obtain a work period is approximately four weeks.  We will incur the expense of our consultants to prepare the required submissions to the Ministry of Energy and Mines.  We will be required by the Mining Act to undertake remediation work on any work that results in physical disturbance to the land.  The cost of remediation work will vary according to the degree of physical disturbance.  No remediation work is anticipated as a result of completion of Phase I of the exploration program.

We have budgeted for regulatory compliance costs in the proposed exploration program recommended by the  summary report.  As mentioned above, we will have to sustain the cost of reclamation and environmental remediation for all exploration and other work undertaken.  The amount of reclamation and environmental remediation costs are not known at this time as we do not know the extent of the exploration program that will be undertaken beyond completion of the recommended exploration program.  Because there is presently no information on the size, tenor, or quality of any mineral resource at this time, it is impossible to assess the impact of any capital expenditures on earnings or our competitive position in the event a potential mineral deposit is discovered.

If we enter into substantial exploration, the cost of complying with permit and regulatory environment laws will be greater than in Phase I because the impact on the project area is greater.  Permits and regulations will control all aspects of any program if the project continues to that stage because of the potential impact on the environment.  We may be required to conduct an environmental review process under the British Columbia Environmental Assessment Act if we determine to proceed with a substantial project.  An environmental review is not required under the Environmental Assessment Act to proceed with the recommended Phase I or Phase II exploration programs on our Mount Claim.

Environmental Factors

We will also have to sustain the cost of reclamation and environmental remediation for all work undertaken which causes sufficient surface disturbance to necessitate reclamation work.  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 a 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 other than minor clean up and removal of supplies because of 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.  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 earnings or competitive position in the event a potentially-economic deposit is discovered.

Employees

Initially, we intend to use the services of contractors and consultants for exploration work on our properties. Barnabus will consider hiring technical consultants if the Company is successful in raising additional capital or if revenues from operations in the future permit. At present, our only employee is Ms. Chen.  We believe keeping a low number of full-time employees will conserve cash and allow greater flexibility in the future.

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Employees and Employment Agreements

At present, we have no employees, other than Ms. Chen, our President and director who has received no compensation for her services. Ms. Chen does not have an employment agreement with us. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to any employees.

Risk Factors

Please consider the following risk factors before deciding to invest in our common stock.

Risks Associated with Our Company:

1.  Our property has been forfeited to the government.

Our Mount mineral claim has been forfeited to the British Columbia government because we failed to keep the property in good standing.  We inadvertently failed to pay the yearly fee of $1,000 to the Mineral Titles Branch, or instead complete and file assessment work equivalent to $1,000 prior to August 7, 2004.  However, we have re-staked the claim on September 2, 2004.

2.  Management lacks technical skills and may cause irreparable harm to operations of Barnabus.

Management lacks technical training and experience with exploring for starting, and operating a mine.  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.  Their decisions and choices may not take into account standard engineering or managerial approaches mineral exploration companies commonly use.  Consequently, our operations, earnings, and ultimate financial success could suffer irreparable harm due to management's lack of experience in this industry.  At all times where management lacks the skills, the Company intends to retain professional advice.

3.  We are a recently organized business and you cannot evaluate the investment merits of our company because we have no operating history.

Our company is only recently organized with no operating history which makes it difficult to evaluate the investment merits of our company.  Our company was recently organized on April 11, 2002 and is a start-up company. We have no operating history and we do not have any business prior to our organization.  From inception to May 31, 2004, we incurred cash expenses of $62,133.

4.  We may not be able to continue as a going concern if we do not obtain funds from the financing for Phase I.

Because of our lack of funds and short operating history incurring only expenses, our independent accountants' audit report states that there is substantial doubt about our ability to continue as a going concern. Our independent auditor pointed out that we incurred only losses since our inception raising substantial doubt about our ability to continue as a going concern.  Therefore, our ability to continue as a going concern is highly dependent upon obtaining additional financing for our planned operations.  We are dependent upon additional financing to be able to implement our business plan and our lack of revenues and profits may make obtaining additional capital more difficult. We presently have no significant operating capital and we are totally dependent upon additional financing and loans from the principals of Barnabus to provide the capital necessary to commence our proposed Phase I exploration plans.

5.  Because our Officers and Directors do not have formal training specific to the technicalities of mineral exploration, there is a higher risk our business will fail.

Although Chen and Nagy possess Free Miner licenses and Ms. Chen has management experience with mineral exploration companies, they do not have formal training as a geologist.  Accordingly, we will have

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to rely on the technical services of trained explorationists and geologists.  If we are unable to contract for the services of such individuals, it will make it difficult and maybe impossible to pursue our business plan.  There is thus a higher risk of business failure.

6.  Because our Officers and Directors have other business interests, they may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail.

Ms. Chen presently spends approximately 20% of her business time on business management services for our company and Mr. Nagy plans to spend 5% of his time on the affairs of Barnabus.  While Chen and Nagy presently possess adequate time to attend to our interests, it is possible that future demands on them from their other obligations could increase with the result that they would no longer be able to devote sufficient time to the management of our business.  In addition, Chen and Nagy may not possess sufficient time for our business if the demands of managing our business increased substantially beyond current levels.  Competing demands on their business time may cause them to have differing interest in approving significant corporate transactions from those of other stockholders.

7.  We have no known Mineral Resources and if we cannot find any Mineral Resources we may have to cease operations.

We have no measured mineral bodies.  If we do not find a mineral body or bodies containing valuable minerals or metals or if we cannot  conduct further exploration of any discovered minerals, either because we do not have money to do it or because it is not economically feasible to do it, we may have to cease operations and you will loose your investment.

8.  Weather interruptions in the province of British Columbia may affect and delay our proposed exploration operations.

Our mineral claim is located in a remote northern area of the province.  Our current proposed Phase I exploration work can only be performed approximately five to six months out of the year.  There is no direct road access to our mineral claim.  Our mineral claim can only be reached by helicopter.  The nearest road access point is located 22 miles from the mineral claim.  As a result, rain, snow and adverse weather conditions may only allow us to work on our mineral claim for certain periods of time each year.

9.  We may lose our interest in our mineral claim if we do not make $100,000 in Exploration Expenditures.

Under the Property Purchase Agreement and Amending Letter Agreement, if we do not expend $100,000 on the Mount Claim prior to December 31, 2005, we will have to transfer the property back to Lorne Warren, the initial locator of the property.  There are no assurances that we can perform exploration work on the property in the amount of $100,000 by such date.  The company will lose its assets if we do not meet this target.  Barnabus may also extend the expiration date up to a maximum of 2 additional years by paying $2,000 per year commencing on December 31, 2003 and ending on December 31, 2006, for the right to extend the expiry date, and such total payments will be deducted from any royalty payments which may be required to be paid to Mr. Warren.  We made $2,000 payment for the current year.

Item 2.  Property

We own a 100% beneficial interest in the mineral rights of the Mount Claim and we may have to give the mineral rights back to Lorne B. Warren, the original locator of the mineral claim, if we do not expend $100,000 on the mineral claim by December 31, 2005.  We do not own or lease any property other than our mineral rights in the Mount Claim.  In the future, we may acquire other exploration properties and conduct similar exploration programs.

We currently do not pay any rent for our office space at 2006 - 1500 Hornby Street, Vancouver, British Columbia.

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Item 3.  Legal Proceedings

None.

Item 4.  Submission of Matters to a Vote ofSecurity Holders

None.

PART II

Item 5.  Market for Common Equity andRelated Stockholder Matters

Our common stock is traded on the NASD OTC Bulletin Board under the symbol BBSE.  The following table sets forth for the periods indicated the high and low bid price per share of our common stock.  The prices have been restated to reflect the 15-for-1 forward stock split effective March 3, 2004.  Quotations commenced on the OTC Bulletin Board on January 8, 2004.  These over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

| | Quarter Ended | High    | Low    
| | ------------- | ------- | -------
| | May 31, 2004  | $.77    | $.77   
| | Feb. 29, 2004 | $.00044 | $.00044

We have approximately 63 registered shareholders of record as of August 30, 2004.

We have not declared any cash dividends, nor do we intend to do so. We are not subject to any legal restrictions respecting the payment of dividends, except that they may not be paid to render us insolvent.  Dividend policy will be based on our cash resources and needs and it is anticipated that all available cash will be needed for our operations in the foreseeable future.

Canadian Securities Law

Certain shareholders who acquired shares under our SB-2 offering and who are also residents of British Columbia may be relying on an exemption from prospectus and registration requirements of B.C. securities laws for the purchase of the Company's securities and may have to comply with B.C. Securities Commission's BC Instrument 72-502 "Trade In Securities of U.S. Registered Issuers" to resell their shares.

According to BC Instrument 72-502, a B.C. resident who acquired securities under a prospectus exemption in a company that is not a reporting issuer under the B.C. Securities Act may sell those securities without filing a prospectus under the Act, if the following conditions are met:

(1) The securities of the company are registered under section 12 of the U.S. Securities Exchange Act of 1934, as amended, or the company is required to file reports under section 15(d) of that Act.

(2) The seller's residential address or registered office is in British Columbia.

(3) A 4-month period has passed since the date the company issued the securities to the seller, or a control person sold the securities to the seller. This 4-month hold period does not apply to securities that a seller acquired under a director or employee stock option.

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(4) If the seller is a control person of the company, then the seller has held the securities for at least 6 months.

(5) The number of securities the seller proposes to sell under this Order, plus the number of securities of the company of the same class that the seller has sold in the preceding 12-month period, does not exceed 5% of the company's outstanding securities of the same class.

(6) The seller sells the securities through a registered investment dealer.

(7) The registered investment dealer executes the trade through an exchange, or market, outside Canada.

(8) There has been no unusual effort made to prepare the market or create a demand for the securities.

(9) The seller has not paid any extraordinary commission or other consideration for the trade.

(10) If the seller is an insider of the company, the seller reasonably believes that the company is not in default of the securities legislation (including U.S. federal and state securities legislation) that governs the company.

Penny Stock Rule

Our shares will have to comply with the Penny Stock Reform Act of 1990 which may potentially decrease your ability to easily transfer our shares. Broker-dealer practices in connection with transactions in "penny stocks" are regulated. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that has to comply with the penny stock rules. As our shares will likely have to comply with such penny stock rules, our shareholders will in all likelihood find it more difficult to sell their securities.

Item 6.  Management's Discussion andAnalysis or Plan of Operation

Forward Looking Statements

The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "hope", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports the Company files with the SEC. These factors may cause the Company's actual results to differ materially from any forward-looking statement. The Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

11



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Business Overview

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

Our auditors have issued a going concern opinion. This means that our auditors believe there is doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated.  Accordingly, we must raise cash from sources other than the sale of minerals found, if any, on the mineral claim. Our only other source for cash at this time is investments by others in our company. We must raise cash to implement our project and stay in business.

To meet our need for cash we are attempting to raise money through private placements of our common stock.  Between May to August 2003, we raised $27,570 from our self-underwritten SB-2 offering, and the offering was terminated in September 2003.  Management had originally planned on dispersing the $27,570 towards deferred offering expenses and towards Phase I of our exploration program.  However, management changed its plans and spent the offering proceeds on consulting fees and continuous disclosure costs.  Management is attempting to raise additional capital through private placements of its common stock, in order to initiate Phase I of our exploration program.  There is no assurance that we will be able to raise enough money through any offering to stay in business.  If we do not raise all of the money we need, the principals of Barnabus intend to loan to the Company the shortfall in funds required to begin and complete Phase I of our exploration program.  Such a decision has not been made.  If we can't additional capital we will either have to suspend operations until we do raise the cash, or cease operations entirely.  We have no plan to engage in any alternative business if Barnabus ceases or suspends operations as a result of not having enough money to complete any phase of the exploration program.

We will be conducting research in connection with the exploration of our property.  We are not going to buy or sell any plant or significant equipment.  We do not expect a change in our number of employees.

Limited Operating History; Need for Additional Capital

There is no historical 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. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration  of our properties, and possible cost overruns due to price and cost increases in services.

Our Mount mineral claim has been forfeited to the British Columbia government because we failed to keep the property in good standing.  We inadvertently failed to pay the yearly fee of $1,000 to the Mineral Titles Branch, or instead complete and file assessment work equivalent to $1,000 prior to August 7, 2004.  However, we have re-staked the claim on September 2, 2004.

To become profitable and competitive, we need to research and conduct an exploration program of our properties before we start production of any minerals we may find. We are seeking financing to provide for the capital required to implement our research and exploration programs.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

Results of Operations From Inception to May 31, 2004

We did not earn any revenues during the period from inception to May 31, 2004. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the pre-exploration stage of our business and we can provide no

12



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assurance that we will commence exploration of mineral resources on our properties, or if 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 incurred operating expenses in the amount of $27,768 for the period from inception on April 11, 2002 to May 31, 2003; and operating expenses were $34,365 for fiscal 2004.  Legal and accounting fees accounted for the majority of the expenses incurred by the Company, $23,952 and $21,420 since inception to May 31, 2003 and in fiscal 2004, respectively .  In fiscal 2004, we paid John Mirko a $9,230 consulting fee for providing management and advisory services.

We incurred a loss in the amount of $27,768 for the period from inception of April 11, 2002 to May 31, 2003; and $34,365 in fiscal 2004.  Our loss was attributable to operating expenses, professional fees and administrative expenses.

Liquidity and Capital Resources

We had cash of $160 as of May 31, 2003, and $4,749 as of May 31, 2004. We anticipate that we will incur for the next 12 months:

- $32,500 in connection with the completion of Phase I of our recommended geological work program, if we decide to proceed with this phase; and

- $5,000 for operating expenses, including working capital and general, legal, accounting and administrative expenses associated with reporting requirements under the Securities Exchange Act of 1934,

If results from Phase I are favourable, we will need $195,000 for Phase II operations.

The Company will only be able to operate after it receives capital funding. The Company hopes to raise sufficient funding from the sale of our common stock to fund Phase I of our exploration program, should we decide to proceed.  Without necessary cash flow, the Company may be dormant during the next twelve months, or until such time as necessary funds are raised in the equity securities market.

Management is committed, if necessary, to provide sufficient working capital to support and preserve the integrity of the corporate entity.

Item 7.  Financial Statements



13



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BARNABUS ENTERPRISES LTD.

FINANCIAL STATEMENTS

MAY 31, 2004











INDEPENDENT AUDITORS' REPORT

BALANCE SHEETS

STATEMENTS OF OPERATIONS AND DEFICIT

STATEMENT OF STOCKHOLDERS' EQUITY

STATEMENTS OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS

















14



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INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of Barnabus Enterprises Ltd

We have audited the balance sheets of Barnabus Enterprises Ltd. as at May 31, 2004 and 2003 and the statements of operations, stockholders' equity and cash flows for the years then ended and for the period from April 11, 2002 (Inception) to May 31, 2004.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) auditing standards generally accepted in the United States of America

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at May 31, 2004 and 2003 and the results of its operations, changes in stockholders' equity and cash flows for the years then ended and for the period from April 11, 2002(Inception) to May 31, 2004 in accordance with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1, the Company has been in the exploration stage since its inception on April 11, 2002.  Realization of a major portion of the assets is dependent upon the Company's ability to meet its future financing requirements, and the success of future operations.  These factors raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans regarding those matters also are described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



|                | /s/ DALE MATHESON CARR-HILTON LABONTE
|--------------- | -------------------------------------
|                |                                      
|Vancouver, B.C. | DALE, MATHESON, CARR-HILTON LABONTE  
|August 17,2004  | CHARTERED ACCOUNTANTS                





15



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BARNABUS ENTERPRISES LTD.

BALANCE SHEETS

MAY 31,



| | 2004
$ | 2003
$
| | ------ | ------

ASSETS

|CURRENT ASSETS |                                       
|-------------- | --------------------------------------
|               | Cash                                  
|               | 4,749                                 
|OTHER ASSETS   |                                       
|               | Deferred share offering costs (Note 2)
|               | 15,483                                



LIABILITIES

|CURRENT LIABILITIES |                               
|------------------- | ------------------------------
|                    | Accounts payable              
|                    | Due to related party  (Note 3)
|                    | 46,546                        

STOCKHOLDERS' EQUITY (DEFICIT)

|Capital stock (Note 4)
Authorized
1,125,000,000 (75,000,000 pre-split) common shares, each with par value of $0.001
Issued and outstanding
48,855,000 (3,257,000 pre-split) common shares
(2003 - 14,250,000, 950,000 pre-split) | 3,257    | 950     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | --------
|Additional paid-in capital                                                                                                                                                                                                       | 27,813   | 2,550   
|Deficit accumulated during the exploration stage                                                                                                                                                                                 | (62,133) | (27,768)
|                                                                                                                                                                                                                                 | (31,063) | (24,268)
|                                                                                                                                                                                                                                 | 15,483   | 10,836  







The accompanying notes are an integral part of these financial statements.

16



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BARNABUS ENTERPRISES LTD.

STATEMENTS OF OPERATIONS



|                                                               | April 11, 
2002 (inception)
to May 31, 2004
$ | Year ended
|-------------------------------------------------------------- | --------------------------------------------- | ----------
|May 31,
2004
$                                                 | May 31,
2003
$                               
|EXPENSES                                                       |                                              
|                                                               | Consulting fees                               | 9,230     
|                                                               | Interest and bank charges                     | 400       
|                                                               | Legal and accounting                          | 45,373    
|                                                               | Exploration costs (Note 5)                    | 5,500     
|                                                               | Miscellaneous and foreign exchange            | 1,630     
|                                                               | 62,133                                        | 34,365    
|                                                               |                                              
|NET LOSS FOR THE YEAR                                          | (62,133)                                      | (34,365)  
|                                                               |                                              
|                                                               |                                              
|BASIC LOSS PER SHARE                                           |                                               | $(0.00)   
|                                                               |                                              
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (Note 4a) |                                               | 47,763,678
|                                                               |                                              







The accompanying notes are an integral part of these financial statements.

17



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BARNABUS ENTERPRISES LTD.

STATEMENT OF STOCKHOLDERS' EQUITY

|                                                      | Common stock | AdditionalPaid-InCapital$ | DeficitAccumulatedduring theExplorationStage$ | Total$  
|----------------------------------------------------- | ------------ | ------------------------- | --------------------------------------------- | --------
|NumberofShares                                        | Amount$     
|Issuance of common stock at $0.007 per share(Note 4a) | 500,000      | 500                       | 3,000                                         | ---     
|                                                      |              |                           |                                               |         
|Net loss for the period                               | ---          | ---                       | ---                                           | (24,952)
|                                                      |              |                           |                                               |         
|Balance, May 31, 2002                                 | 500,000      | 500                       | 3,000                                         | (24,952)
|                                                      |              |                           |                                               |         
|Issuance of common stock at $0.01 per share(Note 4a)  | 450,000      | 450                       | 4,050                                         | ---     
|                                                      |              |                           |                                               |         
|Subscriptions receivable (Note 4c)                    | ---          | ---                       | (4,500)                                       | ---     
|                                                      |              |                           |                                               |         
|Net loss for the year                                 | ---          | ---                       | ---                                           | (2,816) 
|                                                      |              |                           |                                               |         
|Balance, May 31, 2003                                 | 950,000      | 950                       | 2,550                                         | (27,768)
|                                                      |              |                           |                                               |         
|Issuance of common stock at $0.01 per share(Note 4a)  | 2,307,000    | 2,307                     | 20,763                                        | ---     
|                                                      |              |                           |                                               |         
|Subscriptions received(Note 4c)                       | ---          | ---                       | 4,500                                         | ---     
|                                                      |              |                           |                                               |         
|Implementation of 15:1 forward stock split(Note 4a)   | 45,598,000   | ---                       | ---                                           | ---     
|                                                      |              |                           |                                               |         
|Net loss for the year                                 | ---          | ---                       | ---                                           | (34,365)
|                                                      |              |                           |                                               |         
|Balance May 31, 2004                                  | 48,855,000   | 3,257                     | 27,813                                        | (62,133)





The accompanying notes are an integral part of these financial statements.

18



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BARNABUS ENTERPRISES LTD.

STATEMENTS OF CASH FLOWS



|                                                    | April 11, 2003 (Inception) To May 31, 2004
$ | Year  ended     
|--------------------------------------------------- | -------------------------------------------- | ----------------
|May 31, 2004
$                                      | May 31, 2003
        $                      
|CASH FLOWS FROM OPERATING ACTIVITIES                |                                              |                 
|                                                    | Net loss for the year                        | (62,133)        
|                                                    | Changes in non-cash working capital:         |                 
|                                                    |                                              | Accounts payable
|Net cash provided by (used in) operating activities | (24,389)                                     | (29,856)        
|                                                    |                                              |                 
|CASH FLOWS FROM INVESTING ACTIVITIES                |                                              |                 
|                                                    | Deferred share offering costs                | (10,734)        
|Net cash used in investing activities               | (10,734)                                     | (58)            
|CASH FLOWS FROM FINANCING ACTIVITIES                |                                              |                 
|                                                    | Advances from related parties                | 8,802           
|                                                    | Common shares issued for cash                | 31,070          
|Net cash provided by financing activities           | 39,872                                       | 34,503          
|                                                    |                                              |                 
|INCREASE IN CASH                                    | 4,749                                        | 4,589           
|                                                    |                                              |                 
|CASH,beginning of year                              | ---                                          | 160             
|                                                    |                                              |                 
|CASH, end of year                                   | 4,749                                        | 4,749           







The accompanying notes are an integral part of these financial statements.

19



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BARNABUS ENTERPRISES LTD.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR MAY 31, 2004



|1.  NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 
|-------------------------------------------------- | 

Barnabus Enterprises Ltd. (the "Company") filed for incorporation on April 11, 2002 under the laws of the state of Nevada primarily for the purpose of acquiring, exploring and developing mineral properties.

The company is actively seeking additional capital to explore for metals, including gold and other valuable minerals, on the recently acquired property, the Mount Claim, in British Columbia, Canada.

Going Concern

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America with the on-going assumption applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.  The continued operations of the Company and the recoverability of the carrying value of assets is dependent upon the ability of the Company to obtain necessary financing to fund future operations and ultimately to attain profitable operations. However, there are inherent uncertainties in mining operations and management cannot provide assurances that it will be successful in this endeavour.  The Company has not yet determined whether the property contains reserves that are economically recoverable.  To May 31,2004, the Company has a working capital deficit of $41,797 and has incurred losses since inception totalling $62,133.  Management's plans include obtaining additional capital through debt/equity financing.

The Company will depend almost exclusively on outside capital to complete its exploration activities.  Such outside capital will include the sale of additional stock and may include commercial borrowing. There can be no assurance that capital will be available as necessary to meet these exploration costs or, if the capital is available, that it will be on terms acceptable to the Company.  The issuances of additional equity securities by the Company may result in a significant dilution in the equity interests of its current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the business and future success may be adversely affected.

Given the Company's limited operating history, lack of sales, and its operating losses, there can be no assurance that it will be able to achieve or maintain profitability.  Accordingly, these factors raise substantial doubt about the Company's ability to continue as a going concern.

|2.  SIGNIFICANT ACCOUNTING POLICIES | 
|----------------------------------- | 

a)  Exploration stage company

The Company complies with Financial Accounting Standard Board Statement No. 7 and The Securities and Exchange Commission Exchange Act Guide 7 for its characterization of the Company as Exploration stage.

20



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BARNABUS ENTERPRISES LTD.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR MAY 31, 2004



|2.  SIGNIFICANT ACCOUNTING POLICIES - CONT'D | 
|-------------------------------------------- | 

b)  Exploration stage activities

The Company has been in the exploration stage since its formation on April 11, 2002 and has not yet realized any revenues from its planned operations.  It is primarily engaged in the acquisition, exploration and development of mining properties.  Upon location of a commercial mineable reserve, the Company expects to actively prepare the site for extraction and enter into the development stage.

c)  Accounting method

The Company's financial statements are prepared using the accrual method of accounting.

d)  Basic and diluted loss per share

Loss per share was computed by dividing the net loss by the weighted average number of shares outstanding during the period.  The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Basic and diluted loss per share were the same, as there were no common stock equivalents outstanding. (Note 4a)

e)  Cash and cash equivalents

For purposes of the Statement of Cash Flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.

f)  Provision for taxes

The Company follows the liability method of accounting for income taxes.  Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances.  Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.

At May 31, 2004, the Company had an accumulated net operating loss of $62,133.

The realization of the benefits from the deferred tax asset appears uncertain due to the Company's limited operating history.  Accordingly, a valuation allowance has been recorded which offsets the deferred tax asset at the end of the year.

21



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BARNABUS ENTERPRISES LTD.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED MAY 31, 2004



|2.  SIGNIFICANT ACCOUNTING POLICIES - CONT'D | 
|-------------------------------------------- | 

g)  Use of estimates

The process of preparing financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses.  Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements.  Accordingly, upon settlement, actual results may differ from estimated amounts.

h)  Impaired asset policy

In accordance with the requirements of SFAS No. 144, the Company determined the carrying value of its long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less cost to sell. The costs incurred to acquire a mineral claim (Note 5) was expensed in 2002 as exploration costs.

i)  Exploration costs

Mineral property acquisition, exploration and development costs are expensed as incurred until such time as economic reserves are quantified.  To date the Company has not established any proven reserves on its mineral properties.

j)  Foreign currency translation

The Company has adopted Financial Accounting Standard No.52.  There were no foreign currency translation adjustments required at May 31, 2004.  The Company will record future foreign currency translation results as a separate component of stockholders equity.

k)  Derivative instruments

In June, 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities."  This standard establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.  It requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

At May 31, 2004, the Company has not engaged in any transactions that would be considered derivative instruments or hedging activities.

l)  Deferred share offering costs

Deferred share offering costs represent professional fees and other expenses related to filing registration statements with the Securities and Exchange Commission in anticipation of a planned share offering.  These costs will be netted against proceeds of the offering when it completes

22



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BARNABUS ENTERPRISES LTD.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED MAY 31, 2004



|2.  SIGNIFICANT ACCOUNTING POLICIES - CONT'D | 
|-------------------------------------------- | 

m)	Stock-based compensation

In December 2002, the Financial Accounting Standards Board issued Financial Accounting Standard No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure ("SFAS No. 148"), an amendment of Financial Accounting Standard No. 123 "Accounting for Stock-Based Compensation" ("SFAS No. 123).  The purpose of SFAS No. 148 is to: (1) provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation, (2) amend the disclosure provisions to require prominent disclosure about the effects on reported net income of an entity's accounting policy decisions with respect to stock-based employee compensation, and (3) to require disclosure of those effects in interim financial information.  The disclosure provisions of SFAS No. 148 were effective for the Company for the year ended May 31, 2003.  The adoption of SFAS 148 has not had an impact on the Company's financial position or results of operations.

The Company has elected to continue to account for stock-based employee compensation arrangements in accordance with the provisions of Accounting Principles Board Opinion NO. 25, "Accounting for Stock Issued to Employees", ("APB No.25") and comply with the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148 as described above.  In addition, in accordance with SFAS No. 123 the Company applies the fair value method using the Black-Scholes option-pricing model in accounting for options granted to consultants.  Under APB No. 25, compensation expense is recognized based on the difference, if any, on the date of grant between the estimated fair value of the Company's stock and the amount an employee must pay to acquire the stock.  Compensation expense is recognized immediately for past service and pro-rata for future service over the option-vesting period.

In accordance with SFAS No. 123, the Company applies the fair value method using the Black-Scholes option-pricing model in accounting for options granted to consultants.

The Company accounts for equity instruments in exchange for the receipt of goods or services from other than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force in Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other than Employees for Acquiring or in Conjunction with Selling Goods or Services" ("EITF 96-18").  Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable.  The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by EITF 96-18.

As at May 31, 2004 the Company had not granted any stock options.

23



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BARNABUS ENTERPRISES LTD.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED MAY 31, 2004



|2.  SIGNIFICANT ACCOUNTING POLICIES - CONT'D | 
|-------------------------------------------- | 

n)	Recent Accounting Pronouncements

In June, 2002, the FASB issued SFAS No.146, "Accounting for Costs Associated with Exit or Disposal Activities."  Such standard requires costs associated with exit or disposal activities (including restructurings) to be recognized when the costs are incurred, rather than at a date of commitment to an exit or disposal plan.  SFAS No.146 nullifies EITF Issue No.94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)".  Under SFAS No.146, a liability related to an exit or disposal activity is not recognized until such liability has actually been incurred whereas under EITF Issue No.94-3 a liability was recognized at the time of a commitment to an exit or disposal plan.  The provisions of this standard are effective for exit or disposal activities initiated after December 31, 2002.  The adoption of SFAS 146 did not have a material effect on the Company's financial position or results of operations.

In April 2003, the Financial Accounting Standards Board issued SFAS No.149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities", which clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS No.133, "Accounting for Derivative Instruments and Hedging Activities".  SFAS No.149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003.  The adoption of SFAS 149 did not have a material effect on the Company's financial position or results of operations.

In May 2003, SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity", was issued.  This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity.  It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances).  Many of those instruments were previously classified as equity.  Generally, a financial instrument, whether in the form of shares of otherwise, that is mandatory redeemable, i.e. that embodies an unconditional obligation requiring the issuer to redeem it by transferring its shares or assets at a specified or determinable date (or dates) or upon an event that is certain to occur, must be classified as a liability (or asset in some circumstances).  In some cases, a financial instrument that is conditionally redeemable may also be subject to the same treatment.  This Statement does not apply to features that are embedded in a financial instrument that is not a derivative (as defined) in its entity.  For public entities, this Statement is effective for financial instruments entered into or modified after May 31, 2003.  The adoption of SAFA 150 did not affect the Company's financial position or results of operations.



24



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BARNABUS ENTERPRISES LTD.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED MAY 31, 2004



|2.  SIGNIFICANT ACCOUNTING POLICIES - CONT'D | 
|-------------------------------------------- | 

n)	Recent Accounting Pronouncements - Cont'd

In November 2002, the FASB issued FASB Interpretation No.45, "Guarantor's Accounting for Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB Statements No.5, 57 and 107 and rescission of FASB Interpretation No.34, Disclosure of Indirect Guarantees of Indebtedness of Others" ("FIN 45").  FIN 45 clarifies the requirements for a guarantor's accounting for, and disclosure of, certain guarantees issued and outstanding.  It also requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee.  This interpretation also incorporates without reconsideration the guidance in FASB Interpretation No.34, which is being superseded.  The adoption of FIN 45 did not affect the Company's financial position or results of operations.

In January 2003, the FASB issued FASB Interpretation No.46, Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletins ("ARB") No.51, Consolidated Financial Statements ("FIN 46").  FIN 46 applies immediately to variable interest entitles created after January 31, 2003, and in the first interim period beginning after June 15, 2003 for variable interest entities created prior to January 31, 2003.  The interpretation explains how to identify variable interest entities and how an enterprise assesses its interest in a variable interest entity to decide whether to consolidate that entity.  The interpretation requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved.  Variable interest entities that effectively disperse risks will not be consolidated unless a single party holds an interest or combination of interests that effectively recombines risks that were previously dispersed.  The adoption of FIN 46 did not affect the Company's financial position or results of operations.



25



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BARNABUS ENTERPRISES LTD.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED MAY 31, 2004

|3.  RELATED PARTY | 
|----------------- | 

An officer of the Company has advanced monies to the Company for the payment of legal fees.  This amount is unsecured, is non-interest bearing, and has no fixed terms for repayment.

|4.  COMMON STOCK | 
|---------------- | 

Authorized:  1,125,000,000 (75,000,000 pre-split) with $0.001 par value per share

a)	45,598,000 shares of common stock were issued to current shareholders as part of the 15:1 forward stock split which was occurred on March 3, 2004.  As a result of this stock split, the authorized share capital increased from 75,000,000 to 1,125,000,000, and the number of shares issued and outstanding increased from 3,257,000 to 48,855,000.  The par value of the stock remained as $0.001 per share.  All reference to the number of shares outstanding in the financial statements and notes to the financial statements, with the exception of the Statements of Stockholders' Equity, to common stock or average number of common shares outstanding for current and comparative years reflect the value of common stock after the effects of the 15:1 split.

b)	During 2002, 7,500,000 shares (500,000 pre-split) of common stock were issued to officers and directors for cash.  There was no public offering of any securities.  These shares were issued pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933.  Shares were issued for a total cash consideration of $3,500.

c)	During 2003, 6,750,000 shares (450,000 pre-split) of common stock were issued.  Shares were issued for a total cash consideration of $4,500, which was received in 2004.

d)	During 2004, 34,605,000 shares (2,307,000 pre-split) of common stock were issued.  Shares were issued for a total cash consideration of  $23,070.





26



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BARNABUS ENTERPRISES LTD.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR MAY 31, 2004



|5.  MINERAL CLAIM | 
|----------------- | 



Pursuant to a purchase agreement dated April 11, 2003, the Company acquired an undivided 100% interest of one mineral claim in the Liard Mining Division in the Toodoggone area of North-Central British Columbia, Canada, for a cash payment of $4,710.

Under the agreement, if the Company fails to spend $100,000 on the property prior to December 31, 2005, the Company will be required to transfer the property back to the previous owner unless the Company exercises its right to extend the agreement to a maximum of two additional years to December 31, 2007, by paying $2,000 per year from December 31, 2003 to December 31, 2006.  All extension payments may be deducted against the net smelter return royalty. $2,000 was paid during the current year.  The claim is subject to a 3% net smelter return royalty.

The Company has a right to purchase up to an aggregate of sixty percent (60%) of such royalty interest at a price of $1,000,000 for each thirty percent (30%) interest.

As there are no proven mineral reserves on the property and in view of the uncertainty with respect to recovery of costs incurred to acquire the claim, all amounts spent on the property were expensed as incurred.







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Item 8.  Changes In and Disagreements withAccountants

None.

Item 8A.  Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of the Company's management, including the Company's Principal Executive Officer and Principal Financial Officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14(c) within 90 days of the filing date of this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective. There were no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

Potential investors should be aware that the design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events.  There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

PART III

Item 9.  Directors, Executive Officers, Promotersand Control Persons; Section 16(a)Beneficial Ownership Reporting Compliance

Officers and Directors

The following table sets forth the directors and executive officers of our company, their ages, term served and all officers and positions with our company. A director is elected by stockholders and serves until his or her successor is duly elected by the stockholders and qualifies. Officers and other employees serve at the will of the Board of Directors.

|Name of Director | Age | Term Served      | Positions                        
|---------------- | --- | ---------------- | ---------------------------------
|Victoria Chen    | 36  | since April 2002 | President, Secretary and Director
|Kerry Nagy       | 32  | since April 2002 | Treasurer & Director             
|                 |     |                  |                                  

The following sets forth certain information concerning the past and present principal occupations of the Company's officers and directors.

Ms. Chen has been our President, Secretary and a Director since our company's inception on April 11, 2002.  Prior to joining our company, Ms. Chen was a consultant with Pacific Paragon Group of Companies, a resource company, of Vancouver, British Columbia, from November 2001 to September

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2002, and a consultant with Princeton Financial Group, a management company of public companies, of Vancouver, British Columbia from July 1998 to March 2001.

Mr. Nagy has been our Treasurer and a Director of the Company since April 11, 2002.  Since July 1999 to present, Mr. Nagy has been employed as an Insurance Underwriter for St. Paul's Guarantee Insurance Company, of Vancouver, British Columbia.  From February 1998 to July 1999, he was a Financial Services Officer and Loans Officer with Surrey Metro Savings Credit Union, New Westminster, British Columbia.

Ms. Chen devotes approximately 20% (or 8 hours per week) of her business time to Barnabus, and Mr. Nagy devotes approximately 5% (or 2 hours per week) of his business time to Barnabus.

Compliance with Section 16(a) of the Exchange Act

The Company's directors and executive officers made all required filings pursuant to Section 16(a) of the Securities Exchange Act of 1934, except as follows:

Victoria Chen and Kerry Nagy were each late in filing a report of changes in ownership of equity securities of the Company (on Form 5) regarding the additional shares they received as a result of the 15:1 forward stock split of the Company's common stock in March, 2004.

Item 10.  Executive Compensation

The following table sets forth in summary form the compensation received by (i) the Principal Executive Officer of the Company and (ii) by each other executive officer of the Company who received in excess of $100,000 during the fiscal years ending May 31, 2002, May 31, 2003 and May 31, 2004.  The Company was incorporated on April 11, 2002.

|Name and Principal Position                                           | FiscalYear     | Salary   | Bonus    | Other Annual Compen- sation | Restricted Stock Awards | Options Granted
|--------------------------------------------------------------------- | -------------- | -------- | -------- | --------------------------- | ----------------------- | ---------------
|Victoria Chen, 
President and Secretary (Principal Executive Officer) | 2004
2003
2002 | $0
$0
$0 | $0
$0
$0 | $0
$0
$0                    | $0
$0
$0                | $0
$0
$0       

There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.

Option/SAR Grants

No individual grants of stock options,  whether or not in tandem with stock appreciation rights ("SARs") and freestanding SARs have been made to any executive officer or any director since our inception, accordingly, no stock options have been exercised by any of the officers or directors in the fiscal year ended May 31, 2004.

Long-Term Incentive Plan Awards

We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance to occur over a period longer than one fiscal year, whether such performance is measured by reference to our financial performance, our stock price, or any other measure.

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Compensation of Directors

The directors did not receive any compensation for serving as members of the Board of Directors. The Board has not implemented a plan to award options. There are no contractual arrangements with any member of the Board of Directors.

We do not expect to pay salaries to any of our officers until such time as we generate sufficient revenues to do so any compensation earned prior to this is expected to be waived.  We do not intend to pay any additional compensation to our directors.  As of the date hereof, we have not entered into employment contracts with any of our officers and we do not intend to enter into any employment contracts until such time as it profitable to do so.

Indemnification

Our Bylaws and sections 78.7502 and 78.751 of the Nevada Revised Statutes provide for indemnification of our officers and directors in certain situations where they might otherwise personally incur liability, judgments, penalties, fines and expenses in connection with a proceeding or lawsuit to which they might become parties because of their position with the Company.  We have authorized the indemnification of our officer and director to the full extent available under the Nevada Revised Statutes.

To the extent that indemnification may be related to liability arising under the Securities Act, the Securities and Exchange Commission takes the position that indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Item 11.  Security Ownership of CertainBeneficial Owners and Management

The following table sets forth certain information as of September 2, 2004 concerning the common stock owned by each officer and director of the Company, and each other person known to the Company to be the beneficial owner of more than 5% of the Company's common stock.  Unless otherwise indicated, the address for each listed stockholder is c/o Barnabus Enterprises Ltd., 2006 - 1500 Hornby Street, Vancouver, British Columbia V6Z 2R1.

|Name and Address                                 | Shares Owned                                | Percentage                           
|------------------------------------------------ | ------------------------------------------- | -------------------------------------
|Victoria Chen                                    | 3,750,000                                   | 7.7%                                 
|Kerry K.W. Nagy                                  | 5,650,000 (1)                               | 11.6%                                
|All officers and directors as group (3 persons): | ----------------------
9,400,000
========== | --------------------
19.3%
==========

Note (1):  Includes 2,025,000 shares held by his wife and immediate family members which Mr. Nagy disclaims ownership.

Item 12.  Certain Relationships AndRelated Transactions

In April 2002, we issued a total of 500,000 shares of restricted common stock to Victoria Chen and Kerry Nagy, officers and directors of our company, for cash of $0.007 per share.

Between June and August 2003, we issued a total of 172,500 shares of common stock, for cash of $0.01 per share, to five shareholders who are immediate family members of our affiliates.  The shares are registered by an effective SB-2.

Since our inception, Ms. Chen, advanced loans to us in the total sum of $1,314 which were used for organizational and start-up costs and operating capital. The loans do not bear interest.  There are no documents reflecting the loan and they are not due on a  specific date.  Ms. Chen will accept repayment from us when money is available.  The money was repaid to Ms. Chen before June 30, 2003.

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During the fiscal year ended May 31, 2004, an officer of the Company advanced monies to the Company for the payment of legal fees.  This amount is unsecured, is non-interest bearing and has no fixed terms for repayment.

Item 13.  Exhibits

|Exhibit No. | Description of Exhibit                                                                                                         
|----------- | -------------------------------------------------------------------------------------------------------------------------------
|3.1(1)      | Articles of Incorporation                                                                                                      
|3.2(2)      | Amended Articles of Incorporation effective March 3, 2004                                                                      
|3.3(1)      | Bylaws                                                                                                                         
|31.1        | Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                            
|31.2        | Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                            
|32          | Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)   Incorporated by reference to same exhibit filed with the Company's Form SB-2 Registration Statement on August 1, 2002.

(2)   Incorporated by reference to same exhibit filed with the Company's Quarterly Report on Form 10-QSB for the Quarterly Period ended February 29, 2004.

Item 14.  Principal Accountant Fees and Services

1)  Audit Fees - The aggregate fees billed us for each of the last two fiscal years for professional services rendered by our principal accountant for the audit of our annual financial statements and review of our quarterly financial statements is $8,250 for the fiscal year ended May 31, 2004 and $6,382 for the fiscal year ended May 31, 2003.

2) Audit-Related Fees - Nil.

3) Tax Fees - Nil.

4) All Other Fees - Nil.

5) Not applicable.

6) Not Applicable.



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SIGNATURES

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

|                        | BARNABUS ENTERPRISES LTD.                                                     
|----------------------- | ------------------------------------------------------------------------------
|Date: September 3, 2004 | By:   /s/  Victoria Chen      Victoria Chen, Director, President and Secretary

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dated indicated.

|Signatures                          | Title                                                           | Date             
|----------------------------------- | --------------------------------------------------------------- | -----------------
|/s/ Victoria Chen
Victoria Chen     | President, Secretary and Director (Principal Executive Officer) | September 3, 2004
|/s/ Kerry K.W. Nagy
Kerry K.W. Nagy | Treasurer and Director (Principal Financial Officer)            | September 3, 2004

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