U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



FORM 10-KSB



[X]

Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2004



[  ]

Transition report pursuant to section 13 or 15(d) of the Securities Exchange act of 1934 for the transition period from    to



Commission File No. 0-32123



DESERT MINING, INC.

(Exact name of small business issuer as specified in its charter)



Nevada                                          87-0664962

(State or Other Jurisdiction of           (IRS Employer Identification No.)

Incorporation or Organization)



4328 Highway 66, Longmont, CO  80504

(Address of principal executive offices)



(970) 535-6213

(Issuers telephone number)



1135 Lincoln Avenue, Suite 1, Loveland, CO 80537

(Former name and address)



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



Securities registered under Section 12(g) of the Act:  Common Stock, $.001 par value



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



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B in this form,and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  [ x  ]



The Registrant's revenue for its most recent fiscalyear was $-0-.



The aggregate market value of the issuers voting stock held as of December 31, 2004 by non-affiliates of the issuers was $9,839,550 based on the closing price of the registrants common stock .  At December 31, 2004, there were 12,389,000 shares of $0.001par value common stock issued and outstanding.



Transitional Small Business Format:   Yes [   ]   No [ X ]



Documents incorporated by reference:  None.





FORM 10-KSB

DESERT MINING, INC.



INDEX

|         |                                                                                                                                                                                                                                                                                                                                                                                              | Page                 
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------
|PART I   | Item 1.  Description of Business

Item 2.  Description of Property

Item 3.  Legal Proceedings

Item 4.  Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                 | 3

5

5

5           
|PART II  | Item 5.  Market for Common Equity and Related Stockholder Matters

Item 6.  Managements Discussion and Analysis or Plan of Operation

Item 7.  Financial Statements

Item 8.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

Item 8A. Controls and Procedures                                                                                        | 5

6

7

7


8       
|PART III | Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

Item 10.  Executive Compensation

Item 11.  Security Ownership of Certain Beneficial Owners and Management

Item 12.  Certain Relationships and Related Transactions

Item 13.  Exhibits and Reports on Form 8-K

Item 14.  Principal Accountant Fees and Services | 8


9

10

11

11

12
|         | Signatures                                                                                                                                                                                                                                                                                                                                                                                   | 13                   



(Inapplicable items have been omitted)



2







FORWARD-LOOKING STATEMENT NOTICE



When used in this report, the words may, will, expect, anticipate, continue, estimate, project, intend, and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Companys future plans of operations, business strategy, operating results, and financial position.  Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors.  Such factors are discussed under the headings Item 1.  Description of Business, and Item 6.  Managements Discussion and Analysis of Financial Condition and Results of Operations, and also include general economic factors and conditions that may directly or indirectly impact the Companys financial condition or results of operations.



PART I.



Item 1. Description of Business



History and Organization



Desert Mining, Inc., was originally incorporated on June 6, 1979 as Holidays of America, Inc. pursuant to the Nevada Business Corporation Act.  Its original Articles of Incorporation provided for authorized capital of 2,500 shares of common stock with a $0.25 par value.  The Company was formed with the stated purpose of conducting any lawful business activity.  However, no business was undertaken by the Company until 1988.  In 1988 the Company raised $11,625 through private sales of its stock, all of which was expended in the evaluation of a joint venture with Controlled Environment Leaching Systems in the development of certain placer mining claims located in Kern County, California.  After review of all reports and subsequent field examinations, it was determined that the Company did not have the resources to pursue the project and all attempts to engage in business ended in 1990, and the Company again became dormant.



On November 3, 2000, the shareholders amended the articles of incorporation, changing the Companys name to Desert Mining, Inc., and increasing the authorized capital to 100,000,000 shares of common stock with a par value of $0.001 per share.   The shareholders also authorized a 200 to 1 forward split of the outstanding shares.  The amended articles were filed with the State of Nevada on November 28, 2000.  Management then began seeking potential operating businesses and business opportunities with the intent to acquire or merge with such businesses.



In June of 2003, there was a change in control of the Company.  Following the change in control, the Company cancelled 1,594,000 common shares and effected a ten for one forward split of its issued and outstanding stock for shareholders of record as of July 15, 2003.  As a result of the change in control, the Company moved its operations and business location to 4328 Highway 66, Longmont, CO  80504.  The Company's telephone number is (970) 535-6213.  Management is currently focused on seeking oil and gas leases for drilling activities.



The accompanying balance sheets of Desert Mining, Inc. (a development stage company) at December 31, 2004, and the related statements of operations, and the statements of cash flows, for the years ended December 31, 2004 and 2003 and the period June 6, 1979 to December 31, 2004, have been prepared by the Companys management in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.





3







Our Business



Desert Mining is in the pre-exploration stage and is engaged in the activity of seeking developmental mineral properties.  In particular Desert is focusing on the oil and gas industry and is actively pursuing oil and gas leases along with joint ventures or acquisitions to complement the intended business operation.



On November 16, 2004, the Company acquired all of the issued and outstanding stock of 44 Mag Production, Inc., a Nevada corporation in exchange for 2,500,000 shares of restricted common stock of the Company making 44 Mag Production, Inc. a wholly owned subsidiary of the Company.  The fair value was considered to be $300,000 of which $100,000 was considered goodwill.  44 Mags assets include certain oil and gas leases that complement those already owned by the Company.



During 2003 and 2004 the Company, and its subsidiary, purchased 27,476 net acres of oil and gas leases consisting of 15,119 acres from the state of Wyoming and 11,450 acres from the BLM and 907 net acres from individuals.  The terms of the BLM leases are for 10 years and require yearly payments of  $16,643 starting one year after the issuance of the leases.  The terms of the state of Wyoming leases are for five years with yearly payments of $15,324, starting one year after the date of the issuance of the leases. The terms of the private leases vary from 19 months to 52 months with no annual payments. The initial payments for the leases are being amortized over 5 and 10 year periods. Additional payments for landman, geological and geophysical services to validate the leases are also capitalized and amortized.  The required yearly payments will be expensed as paid.



During October 2004 the Company participated in a State of Wyoming lease sale and was the high bidder on 4,480 acres.  The company paid a deposit of $1,008,673, but the leases were not issued until January 2005.  These leases have a five year term and will add $9,673 to the annual obligation for State leases.



The Company intends to drill for oil and natural gas on these leases.   The Company will follow the successful efforts method of accounting and will capitalize the successful wells and related leasehold costs, which will be amortized to expense, using the unit of production method.  Dry hole costs and related leasehold costs will be expensed.



Two leases were sold during the year at the original purchase price, with the Company retaining an overriding royalty interest of 4.34%.



We have not yet developed any of our leases.



During August 2003, Desert purchased a 20% interest in GDH Roustabouts, LLC for $50,000.  GDH Roustabouts is in the business of maintaining oil and gas field equipment.  During the first quarter 2004, the interest in Roustabouts was considered to be of no value and has been expensed.  Desert anticipates utilizing GDH Roustabouts services at such time as the oil and gas leases are developed and producing product.



As a part of our planned operations, Desert is actively seeking to develop joint ventures or acquire businesses with current operations in the oil and gas production areas.





4







Item 2. Description of Property



As noted above, we acquired oil and gas leases to 27,476 net acres of land.  In addition to our leases, we have minimal office equipment and no other property.



We are obligated to a two year office lease which expires September 30, 2006 with an option of two one year extensions.  We pay $2,375 per month.   We have approximately 4,500 square feet of office space and believe this will be sufficient to support our operations.



Item 3. Legal Proceedings



The Company is not a party to any legal proceedings, and to the best of its knowledge, no such proceedings by or against the Company have been threatened.



Item 4. Submission of Matters to a Vote of Security Holders



None



PART II



Item 5. Market for Common Equity and Related Stockholder Matters



Our common stock is listed on the Over the Counter Bulletin Board ("OTCBB"), under the symbol "DSRM".  As of December 31, 2004, we had 61 shareholders holding 12,398,000 shares of common stock.  Of the issued and outstanding common stock, 6,250,000 are free trading, the balance are restricted stock as that term is used in Rule 144.  Prior to second quarter of this year, there was no active market in our stock.



CLOSING BID

CLOSING ASK



2004

High

Low

High

Low



First Quarter

3.15

1.60

3.24

1.90

Second Quarter

2.30

1.15

2.85

1.30

Third Quarter

1.60

0.70

1.75

0.95

Fourth Quarter

2.10

1.10

2.30

1.28



2003

High

Low

High

Low



First Quarter

.05

.05

NONE

NONE

Second Quarter

18.90

.05

22.05

18

July 1 through July 14

15

11

18

12.40

July 15 through Sept. 30

2.45

1.01

2.95

1.40

(After a 10 for 1 split)

Fourth Quarter

2

.70

2.15

1.04



The above quotations, as provided Pink Sheets, LLC, represent prices between dealers and do not include retail markup, markdown or commission.  In addition, these quotations do not represent actual transactions.





5







Item 6.  Managements Discussion and Analysis or Plan of Operation



Results of Operations for the Years Ended December 31, 2004 and 2003



Desert did not generate any revenue for the years ended December 31, 2004 and 2003.  Expenses for the year ended December 31, 2004 were $860,082 consisting of lease payment, depreciation and amortization and administration expenses in the amount of $700,707 and other expenses of goodwill expenses, loss of LLC and interest expense totaling $159,375.  This resulted in a net loss for the year ended December 31, 2004 of $860,082.  For the year ended December 31, 2003, we had expenses of $221,305 which consisted of depreciation and amortization and administrative costs, resulting in a net loss of $221,305.



The significant increase in expenses for the year ended December 31, 2004 are attributed to good will expensed, the write off of Roustabout LLC and interest expense which are expenses we did not have in 2003.  Also, in 2003 we did not have any lease payments.  Our depreciation and amortization increased by approximately 6,993% and our administrative costs increased by approximately 164% compared to year end 2003.  The increase for 2004 is due to obtaining our oil and gas leases and the costs associated with maintaining the leases.



Results of Operations for the Years Ended December 31, 2003 and 2002



Desert did not generate any revenue for the years ended December 31, 2003 and 2002.  Expenses were $221,305 for the year ended December 31, 2003 and consisted mainly of legal and audit costs, consulting fees and administrative costs along with the costs associated with obtaining our oil and gas leases. For the year ended December 31, 2002, expenses were $3,405 and consisted of legal and audit costs related the Companys periodic filings.  The increase in expense is due to the Company commencing its business plan and pursuing oil and gas leases, joint ventures and acquisitions.



Prior to second quarter 2003, the Company was a developmental stage company with no operations.



Liquidity and Capital Resources



At December 31, 2004, we had $12,666 cash on hand, accounts receivable of $6,497, furniture and equipment, net of depreciation valued at $54,253, oil and gas leases, net of amortization valued at $2,274,227 and deposits of $2,531 for total assets of $2,350,174.



Our liabilities consisted of $34,500 in accounts payable and long term note payable and accrued interest of $759,375 for total liabilities of $793,879 at December 31, 2004.  We do not have any capital commitments for the next twelve months.  Management anticipates that we will receive sufficient income from operations to meet our needs through the next 12 months.  However, there can be no assurances to that effect.  Our need for capital may change dramatically.  Should we require additional capital, we may seek additional advances from officers or shareholders, sell common stock or find other forms of debt financing.

During 2004, we sold shares of our restricted common stock in private placements and raised $1,320,000.  Subsequent to the date of this report, the Company has issued 210,000 shares of common stock in a private placement for $210,000.  The shares were sold to accredited investors in private transactions without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.  No broker was involved and no commissions were paid on the transactions.



In October 2004, the Company received $750,000 under a note payable which is due June 19, 2006 including interest at 6%.  The terms of the note includes warrants to purchase 500,000 shares of Common Stock at $1.50 per share at the option of the note holder at any time before April 19, 2007.  The warrants include a cashless exercise provision.  As of December 31, 2004, $9,375 interest payable was accrued on this note.



For the year ended December 31, 2004, the Company issued 870,000 shares of its Common Stock in private placements for cash.  The shares were sold to accredited investors in private transactions without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.  No broker was involved and no commissions were paid on the transactions.



6







On June 25, 2003, the Company cancelled 1,594,000 common shares and effected a ten for one forward split of its issued and outstanding stock for shareholders of record as of July 15, 2003 resulting in 8,000,000 shares issued and outstanding.



On June 26, 2003, we issued 1,200,000 common shares to Mr. Peter K. Nelson, our director and sole executive officer.  Mr. Nelson had access to all information regarding the Company and its financial condition and is considered an accredited investor.  The shares were issued in a private transaction without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.  No broker was involved and no commissions were paid in the transaction.



On July 26, 2003, we issued 200,000 restricted common shares to Mr. Gabriel Holt as consideration for serving on our board of directors.  Mr. Holt had access to all information regarding the Company and its financial condition and is considered an accredited investor.  The shares were issued in a private transaction without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.  No broker was involved and no commissions were paid on the transactions.



In September 2003, we issued 444,000 restricted common shares to three employees and consultants in lieu of salaries.  The employees and consultants are considered to be accredited investors and had access to all information regarding the Company and its financial condition.  The shares were issued in private transactions without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.  No broker was involved and no commissions were paid on the transactions.



Concurrent with the change in control in June of 2003, the Board of Directors authorized a private placement to accredited investors of up to 1,000,000 shares of restricted common stock at $1.20 per share.  As of December 31, 2003, 928,000 shares had been sold generating net proceeds of $1,058,569.  The shares were sold to accredited investors in private transactions without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.  No broker was involved and no commissions were paid on the transactions.



In connection with 310,000 shares sold in the above private placement, the company also sold 620,000 warrants to purchase restricted common shares at a price of $0.05 per warrant.  The warrants are exercisable at $1.40 per share and expire one year from the date of issuance.



Item 7. Financial Statements



The financial statements of the Company appear at Page 14.



Item 8.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.



On March 8, 2004, we filed an amended Form 8-K regarding a change in our accountant.



Item 8A.  Controls and Procedures



(a)

Evaluation of Disclosure Controls and Procedures.  The Company's management, with the participation of the chief executive officer and the chief financial officer, carried out an evaluation of the effectiveness of the Company's "disclosure, controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(3) and 15-d-15(3) as of the end of the period covered by this annual report (the "Evaluation Date").  Based upon that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, the Company's disclosure, controls and procedures are effective, providing them with material information relating to the Company as required to be disclosed in the reports the Company files or submits under the Exchange Act on a timely basis.



(b)

Changes in Internal Control over Financial Reporting.  There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer, that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.





7







Item 8B. Other Information



There are no further disclosures. All information that was required to be disclosed in a Form 8-K during the fourth quarter, 2004 has been disclosed.



PART III



Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.



The following table sets forth the name, age, position and office term of each executive officer and director of the Company.



|Name                | Age | Positions                                         | Since    
|------------------- | --- | ------------------------------------------------- | ---------
|Peter K. Nelson     | 61  | President, Secretary, Treasurer, CFO and Director | June 2003
|Randall B. Anderson | 54  | Chief Executive Officer and Director              | Nov. 2004
|Gabriel Holt        | 28  | Director                                          | July 2003



Peter K. Nelson brings many years of entrepreneurial and management experience to the Company.  Since 1966, Mr. Nelson has operated a variety of business including general contractor, trucking and asphalt maintenance companies.  He was Honorably discharged from the U.S. Air Force in 1966.  From 1985 to 1992, Mr. Nelson worked for the Federal Aviation Administration installing ILS systems at major airports.  Currently, Mr. Nelson is a consultant in the petroleum industry.



Mr. Anderson brings extensive managerial experience with a strong background in finance as well as more than 20 years experience in the oil and gas industry.  Since 2000 Mr. Anderson has been an officer of Wolverine Energy, LLC, holding such positions as Vice President  Finance, Chief Financial Officer and Vice President  Business Development.  Prior to Wolverine Energy, from 1997 to 2000, Mr. Anderson was employed by Paxton Resources, LLC as Controller.   From 1987 to 1996, Mr. Anderson was employed by Kerr-McGee Corporation where he held various positions in Finance and Administration.  During his time with Kerr-McGee, Mr. Anderson spent two years in Beijing, China where he was responsible for the operational accounting and treasury functions.  Mr. Anderson holds a Bachelor of Commerce (Honors) degree from the University of Manitoba and is a Certified Management Accountant.



Gabriel Holt is the owner and proprietor of Drifters Inn located in Baggs, Wyoming, for the past six years.  Mr. Holt brings hands on experience to Desert Mining in the oil and natural gas exploration and production areas.  For over fifteen years Mr. Holt has acted as an independent consultant and employee to various oil and gas companies.  His experience includes excavation of leased ground, gas well drilling, pipeline and location construction, delivery systems, production and equipment.



The Company has no audit committee financial expert, as defined under Section 228.401, serving on its audit committee because it has no audit committee and is not required to have an audit committee because it is not a listed security as defined in Section 240.10A-3.





8







Item 10. Executive Compensation



SUMMARY COMPENSATION TABLE



|Name and
Principal Position                                                         | Year
Ended        | Annual Compensation            | Long Term Compensation      | All Other Compen-
sation
($)           
|----------------------------------------------------------------------------------- | ----------------- | ------------------------------ | --------------------------- | ---------------------------------------
|Awards                                                                              | Payouts          
|Salary
($)                                                                          | Bonus
($)         | Other Annual
Compe-
sation ($) | Restricted Stock Awards
($) | Securities Underlying Options/
SARs (#)
|Peter K. Nelson, President, Secretary, Treasurer, Chief Financial Officer, Director | 12/31/04
12/31/03 | -0-
-0-                        | -0-
-0-                     | -0-
-0-                                
|Randall B. Anderson,
Chief Executive Officer, Director                              | 12/31/04          | -0-                            | -0-                         | -0-                                    
|Gabriel Holt, Oil Field Operations Manager, Director                                | 12/31/04
12/31/03 | -0-                            | -0-                         | -0-                                    



Prior to June 2003, no officers or directors were paid any compensation.  The Company issued 1,200,000 shares to Peter K. Nelson on June 25, 2003 as compensation for his services.  On July 29, 2003, the Company issued 200,000 shares to Gabriel Holt as compensation for his services and as an inducement to sit on our board of directors.  The shares were valued at $0.015 per share.



Compensation Plans



We do not currently have any written compensation plans for any of our employees.  We have not instituted a Bonus Plan, Stock Purchase Plan or Stock Option Plan for our employees or executives.



Compensation of Board Members



Although we do not have a written compensation plan, Board members generally do not receive any remuneration for service on the Board.  However, in July 29, 2003 we issued 200,000 restricted common shares of our stock to Gabriel Holt as compensation for his services as Oil Field Operations Manager and as an inducement to sit on our board of directors.



Code of Ethics



We have recently adopted a Code of Ethics and Business Conduct authorizing the establishment of a committee to ensure that our disclosure controls and procedures remain effective.  Our Code also defines the standard of conduct expected by our officers, directors and employees.  The Code was filed as an exhibit to our Form 10-KSB for the fiscal year end 2003 and is incorporated herein by reference.





9







Section 16(a) Beneficial Ownership Reporting Compliance



The Company knows of no person, who at any time during the fiscal year, was a director, officer, beneficial owner of more than ten percent of any class of equity securities of the registrant registered pursuant to Section 12 (Reporting Person), that failed to file on a timely basis any reports required to be furnished pursuant to Section 16 (a).  Based upon a review of Forms 3 and 4 furnished to the registrant under Rule 16a-3(d) during its most recent fiscal year, the registrant knows of no Reporting Person that failed to file the required reports during the most recent fiscal year or prior years.



Item 11. Security Ownership of Certain Beneficial Owners and Management.



The following table sets forth as of December 31, 2004, the number and percentage of the 12,398,000 shares of outstanding common stock which, according to the information supplied to the Company, were beneficially owned by (i) each person who is currently a director of the Company, (ii) each executive officer, (iii) all current directors and executive officers of the Company as a group and (iv) each person who, to the knowledge of the Company, is the beneficial owner of more than 5% of the outstanding common stock.  Except as otherwise indicated, the persons named in the table have sole voting and dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable.

|Name and Address                                        | Amount    | Percentage
|------------------------------------------------------- | --------- | ----------
|Peter K. Nelson
4328 Highway 66,
Longmont, CO  80504    | 1,200,000 | 9.67%     
|                                                        |           |           
|Randall B. Anderson
4328 Highway 66
Longmont, CO  80504 | 500,000   | 4.03%     



|Gabriel Holt
4328 Highway 66
Longmont, CO  80504  | 200,000   | 1.61% 
|------------------------------------------------- | --------- | ------
|                                                  |           |       
|Ted Cooper
152 Twin Oaks Road
Los Gatos, CA 85032 | 1,118,000 | 9.02% 
|                                                  |           |       
|All Officers and Directors as a Group
(3 people)  | 1,900,000 | 15.32%



Item 12. Certain Relationships and Related Transactions.



During the year ended December 31, 2003, Desert Mining purchased a 20% interest in GDH Roustabouts, LLC for $50,000.  GDH Roustabouts is owned and controlled by Gabriel Holt.



The Company owes accounts payable for expense reimbursement to Randall B. Anderson in the amount of $2,741.52, Peter K. Nelson in the amount of $734.76 and $593.89 to Don L. Fort, a member of management and a shareholder.



Don L. Fort owes the Company $1,624 for joint venture costs related to the Companys Maverick oil prospect.





10







Item 13. Exhibits and Reports on Form 8-K.



(a) Exhibits:



|Exhibit       Title
Number                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Location                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------
|3(i)          Articles of Incorporation

3(ii)          Bylaws

14            Code of Ethics**

31.1         Certification of the Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

31.2         Certification of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

32.1         Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002***

32.2         Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*** | *

*

**

Attached


Attached


Attached


Attached



* Incorporated by reference. Filed as exhibit to Form 10SB12G filed December 1, 2000.



**Incorporated by reference. Filed as exhibit to Form 10-KSB filed April 5, 2004.



***The Exhibit attached to this Form 10-KSB shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.



Reports on Form 8-K:



Desert Mining filed an amended report on Form 8-K on March 8, 2004 to more clearly state that we had no disagreements regarding accounting principles or practices for the past two fiscal years and as of the date of the change in auditor.



Desert Mining also filed a report on Form 8-K on November 18, 2004 reporting the acquisition of 44 Mag Production, Inc., Item 2.01 and 9.01.  An amended Form 8-K was filed on February 11, 2005 to include the audited financial statements and pro formas for the 44 Mag Production, Inc. transaction.





11







Item 14. Principal Accountant Fees and Services



Audit Fee



The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal account for the audit of Desert Minings annual financial statement and review of financial statements included in Desert Minings10-QSB reports and services normally provided by the accountant in connection with statutory and regulatory filings or engagements were $10,835 for fiscal year ended 2004 and $5,125 for fiscal year ended 2003.

Audit-Related Fees



The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of Desert Minings financial statements that are not reported above were $-0- for fiscal years ended 2004 and 2003.



Tax Fees



The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were $150 for fiscal year ended 2003 and consisted of tax compliance services and $450 for fiscal year ended 2004 and consisted of tax compliance services.



All Other Fees



There were no other aggregate fees billed in either of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above.



We do not have an audit committee currently serving and as a result our board of directors performs the duties of an audit committee.  Our board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services.  We do not rely on pre-approval policies and procedures.





12







SIGNATURES



In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



DESERT MINING, INC.





Date: March 30, 2005

By: /s/ Randall B. Anderson

Randall B. Anderson

Chief Executive Officer





Date: March 30, 2005

By: /s/ Peter K. Nelson

Peter K. Nelson

Chief Financial Officer



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







Date: March 30, 2005

By: /s/ Peter K. Nelson

Peter K. Nelson

Director





Date: March 30, 2005

By: /s/ Randall B. Anderson

Randall B. Anderson

Director





Date: March 30, 2005

By: /s/ Gabriel Holt

Gabriel Holt

Director







13









MADSEN & ASSOCIATES, CPA=s  INC.

684 East Vine St.  Suite 3

Certified Public Accountants and Business Consultants

Murray, Utah  84107



Telephone 801-268-2632

Fax 801-262-3978





Board of Directors

Desert  Mining, Inc. and Subsidiary

Salt Lake City, Utah





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



We have audited the accompanying consolidated balance  sheet of Desert Mining, Inc. and subsidiary  (pre-exploration stage company) at December 31, 2004  and the related consolidated statement of operations, stockholders' equity, and cash flows for the  years ended December 31, 2004 and 2003 and the period June 6, 1979 (date of inception)  to December 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 audit.



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



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Desert Mining, Inc. and subsidiary at December 31, 2004 and the results of operations, and cash flows for the years ended December 31, 2004 and 2003 and the period June 6, 1979 to December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.





s\ Madsen & Associates, CPA=s Inc.

Salt Lake City, Utah,

March 14, 2005







14







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

CONSOLIDATED BALANCE SHEET

December 31, 2004







ASSETS

CURRENT ASSETS

Cash



$    12,666

Accounts receivable

6,497



Total Current Assets





19,163



FURNITURE & EQUIPMENT -net of depreciation

54,253



OTHER ASSETS

Oil & gas leases - net of amortization



2,274,227

Deposits

2,531



2,276,758



$ 2,350,174





LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES



Accounts payable



$  34,500



Total Current Liabilities



34,500



LONG TERM LIABILITIES

Note payable and accrued interest

759,375



STOCKHOLDERS' EQUITY

Common stock

100,000,000 shares authorized, at $0.001 par value;

12,398,000 shares issued and outstanding

12,398

Capital in excess of par value

2,652,926

Deficit accumulated during the pre-exploration stage

(1,109,025)

Total  Stockholders'  Equity



1,556,299

$ 2,350,174







The accompanying notes are an integral part of these financial statements



15







DESERT MINING, INC.  AND SUBSIDIARY

(Pre-Exploration Stage Company)

CONSOLIDATED STATEMENT OF OPERATIONS

For the Years Ended December 31, 2004 and 2003 and the

Period June 6, 1979 (Date of Inception) to December 31, 2004

















Dec 31,

Dec 31,

Jun 6, 1979 to



2004

2003

Dec 31, 2004



REVENUES

$        -

$        -

$            -



EXPENSES



Annual lease payments

7,140

-

7,140

Depreciation and amortization

111,648

1,574

113,222

Administrative



581,919

219,731

829,288

NET LOSS  -before other expenses

(700,707)

(221,305)

(949,650)



OTHER EXPENSES



Good will expensed

(100,000)

-

(100,000)

Loss of  LLC

(50,000)

-

(50,000)

Interest expense



(9,375)

-

(9,375)



NET LOSS

$ (860,082)

$(221,305)

$(1,109,025)







NET LOSS PER COMMON SHARE



Basic and diluted



$ (.09)

$ (.03)



AVERAGE OUTSTANDING SHARES - (stated in 1,000's)



Basic

9,680

8,233

Diluted

10,180

8,733















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



16







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

For the Period June 6, 1979 (Date of Inception)

to December 31, 2004





Capital in



Common Stock

Excess of

Accumulated

Shares

Amount

Par Value

Deficit



Balance June 6, 1979 (date of inception)

-

$    -

$         -

$        -



Issuance of common stock for cash

at $.0025 - 1988

3,400,000

3,400

5,100

-

Net operating loss for the year ended

December 31, 1988

-

-

-

(8,500)

Issuance of common stock for cash

at $.0025 - 1989

1,250,000

1,250

1,875

-

Net operating loss for the year ended

December 31, 1989

-

-

-

(3,125)

Issuance of common stock for cash

at  $.0025 - related parties -

November 28, 2000

3,200,000

3,200

4,800

-

Contributions to capital - expenses

-

-

373

-

Net operating loss for the year ended

December 31, 2000

-

-

-

(9,324)

Contributions to capital - expenses

-

-

4,234

-

Net operating loss for the year ended

December 31, 2001

-

-

-

(3,284)

Contributions to capital - expenses

-

-

3,405

-

Net operating loss for the year ended

December 31, 2002

-

-

-

(3,405)

Contribution to capital - expenses

-

-

2,457

-

common stock returned and cancelled -

June 25, 2003

(1,594,000)

(1,594)

1,594

-

Issuance of common stock for services

at $.015 - June 26, 2003

1,844,000

1,844

25,816

-

Issuance of common stock for cash at $1.20 -

net of issuance costs - Jun-Aug 2003

618,000

618

685,952

-

Issuance of common stock for cash at $1.20 -

December 31, 2003

310,000

310

371,690

-

Net operating loss for the year ended

December 31, 2003

-

-

-

(221,305)



Balance December 31, 2003

9,028,000

9,028

1,107,296

(248,943)









The accompanying notes are an integral part of these financial statements





17







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

For the Period June 6, 1979 (Date of Inception)

to December 31, 2004





Capital in



Common Stock

Excess of

Accumulated

Shares

Amount

Par Value

Deficit



Issuance of common stock for cash

at $1.45 - March 2004

220,000

220

318,780

-

Issuance of common stock for cash

at $1.43 - April  2004

650,000

650

929,350

-

Issuance of common stock for all

stock of 44 Mag Productions, Inc.

2,500,000

2,500

297,500

-

Net operating loss for the year

ended December 31, 2004

-

-

-

(860,082)



Balance December 31, 2004

12,398,000

$ 12,398

$ 2,652,926

$ (1,109,025)

































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







18







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Years Ended December 31, 2004 and 2003 and the

Period June 6, 1979 (Date of Inception) to December 31, 2004







Dec 31,

Dec 31,

Jun 6, 1979

2004

2003

Dec 31, 2004

CASH FLOWS FROM

OPERATING ACTIVITIES



Net loss

$ (860,082)

$ (221,305)

$ (1,109,025)

Adjustments to reconcile net loss to

net cash provided by operating

activities

Good will expensed

100,000

-

100,000

Loss of  LLC

50,000

-

50,000

Depreciation and amortization

111,648

1,574

113,222

Changes in accounts receivable

(6,497)

-

(6,497)

Changes in deposits

(2,531)

-

(2,531)

Changes in accounts payable

39,379

4,495

43,874

Contributions to capital  expenses

-

2,457

10,470

Issuance of capital stock for expenses

-

27,661

27,661

Net Decrease in Cash From Operations

(568,083)

(185,118)

(772,826)



CASH FLOWS FROM INVESTING

ACTIVITIES

Purchase of office equipment

(57,465)

(2,586)

(60,051)

Purchase of oil and gas leases

(1,698,630)

(585,021)

(2,283,651)

Purchase of interest in LLC

-

(50,000)

(50,000)

(1,756,095)

(637,607)

(2,393,702)

CASH FLOWS FROM FINANCING

ACTIVITIES



Proceeds from note payable

750,000

-

750,000

Proceeds from issuance of common stock

1,320,000

1,089,569

2,429,194



Net Increase in Cash

(254,178)

266,844

12,666

Cash at Beginning of Period

266,844

-

-

Cash at End of Period

$ 12,666

$266,844

$12,666



NON CASH FLOWS FROM OPERATING ACTIVITIES

Contributions to capital - expenses - 2000 -2003

$ 10,470

Issuance of 1,844,000 common shares for services - 2003

27,661





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



19







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

NOTES TO FINANCIAL STATEMENT

December 31, 2004







1.

ORGANIZATION



The Company was incorporated under the laws of the state of Nevada on June 6, 1979 with the name Holidays of America, Inc. with authorized common stock of 2,500 shares at no par value.  On   November 28, 2000 the name was changed to Desert Mining, Inc. and the authorized common stock was increased to 100,000,000 shares with a par value of $0.001 in connection with a forward stock split of two hundred shares for each outstanding share.



This report has been prepared showing after stock split shares from inception with a par value of $0.001.



The Company is in the pre-exploration stage and is engaged in the activity of seeking developmental mineral properties.



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Accounting Methods



The Company recognizes income and expenses based on the accrual method of accounting.



Dividend Policy



The Company has not yet adopted a policy regarding payment of dividends.



Income Taxes



The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse.  An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.



On December 31, 2004, the Company had a net operating loss available for carry forward of $1,006,303. The tax benefit of approximately $303,000 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful since the Company has no operations.  The net operating loss will expire starting in 2005 through 2025.



Financial and Concentrations Risk



The Company does not have any concentration or related financial credit risk except that the Company maintains bank accounts over the insured of amounts on $100,000, however, they are maintained in banks with high quality.





20







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2004







2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued



Basic and Diluted Net Income (Loss) Per Share



Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the  exercise becomes antidilutive and then only the basic per share amounts are shown in the report.



Statement of Cash Flows



For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.



Revenue Recognition



Revenue is recognized on the sale and delivery of a product or the completion of a service provided.



Advertising and Market Development



The company expenses advertising and market development costs as incurred.



Estimates and Assumptions



Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could vary from the estimates that were assumed in preparing these financial statements.



Financial Instruments



The carrying amounts of financial instruments, including cash, accounts receivable, and accounts payable are considered by management to be their estimated fair values due to their short term maturities.





21







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2004







2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued



Principles of Consolidation



The accompanying consolidated financial statements include the accounts  of the Company and its subsidiary from  its inception.  All significant intercompany accounts and balances have been eliminated in consolidation.



Recent Accounting Pronouncements



The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its  financial statements.



3.  OIL & GAS LEASES



During 2003 and 2004 the Company, and its subsidiary, purchased 27,476 net acres of oil and gas leases consisting of 15,119 acres from the state of Wyoming and 11,450 acres from the BLM and 907 net acres from individuals.  The terms of the BLM leases are for 10 years  and require  yearly payments of  $16,643 starting one year after the issuance of the leases.  The  terms of the state of Wyoming leases are for five years with yearly  payments of $15,324, starting one year after the date of the issuance of the leases. The terms of the private leases vary from 19 months to 52 months with no annual payments. The initial payments for the leases are being amortized over 5  and 10 year periods. Additional payments for landman, geological and geophysical services to validate the leases are also capitalized and amortized.  The required yearly payments will be expensed as paid.



During October 2004 the Company participated in a State of Wyoming lease sale and was the high bidder on 4,480 acres.  The company paid a deposit of $1,008,673, but the leases were not issued until January 2005.  These leases  have a five year term and will add $9,673 to the annual obligation for State leases.



The Company intends to drill for oil and natural gas on these leases.   The  Company will follow the successful efforts method of  accounting and will capitalize  the successful wells and related leasehold costs, which will be amortized to expense,  using the unit of production method.  Dry hole costs and related leasehold costs will be expensed.



Two leases were sold during the year at the original purchase price, with the Company retaining an overriding royalty interest of 4.34%.





22







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2004







4.  LONG  TERM  NOTE  PAYABLE



The Company received $750,000  under a note payable dated October 19, 2004 which is  due June 19, 2006 including interest at 6%.  The terms of the note includes  warrants to purchase 500,000 common shares of the Company at $1.50 per share, at the option of the note holder, at any time before April 19, 2007 and includes a cashless exercise provision.



On December 31, 2004 $9,375 interest payable was  accrued.



5.  CAPITAL STOCK



During 2004 the Company issued 870,000 common shares, in  private placements for cash.



On November 16, 2004   Desert Mining, Inc. (parent)  acquired of all of the outstanding stock of 44 Mag Production, Inc. (subsidiary) by a stock for stock exchange in which the stockholders of   the subsidiary received 2,500,000 common shares of the parent,  representing 20% of the outstanding stock of the parent after the acquisition, which was reported as a purchase.  On the date of  the exchange the fair value of the parent company stock issued was considered to be  $300,000 and the fair value of the subsidiary stock  received in exchange was $200,000,  resulting in good will of $100,000. The Company uses the discounted cash flows approach to value good will and since the subsidiary has no operations the good will has been expensed.



44 Mag Production, Inc. was organized on September 22, 2004 in the state of Nevada.

A summary of the assets and liabilities of 44 Mag on November 16, 2004 is shown in the following.



Book value              Fair value

Cash                                          $ 76,275                $  76,275

Oil & gas leases                           29,386                  127,386

Accounts payable                       (3,661)                  (3,661)

Total                                     102,000                   200,000                                                               .



Subsequent to the balance sheet date the Company issued 210,000 common shares in a private placement for $210,000.



The Company has warrants outstanding to purchase 500,000 common shares of the Company, as outlined in note 4.





23







DESERT MINING, INC. AND SUBSIDIARY

(Pre-Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2004







6.  INVESTMENT IN LLC



During August 2003 the Company purchased a 20%  interest in GDH Roustabouts L.L.C. for $50,000. Roustabouts   is in the business of  the  maintenance of oil field equipment.  During the first  quarter 2004 the interest in Roustabouts L.L.C. was considered to be of no value and has been expensed.



7.  RELATED PARTY TRANSACTIONS



Officers-directors and Company managers  have acquired 17 % of the common capital stock  issued and have accounts payable due them of $4,071 and have amounts due the Company of $1,624.



8.  CONTINUING LIABILITIES



The Company is obligated under a two year office lease of $2,375 per month which expires September 30, 2006.  The lease also includes two one year extension options.





24