United States
                       Securities and Exchange Commission
                              Washington D.C. 20549

                                   FORM 10-KSB

                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934
  (Mark one)
[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For the fiscal year ended       December 31, 2005      or
                             ------------------------

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

For the transition period from  ________________  to _______________

Commission File Number   000-32551
                         ---------

                       LEGEND INTERNATIONAL HOLDINGS, INC.
             (Exact name of Registrant as specified in its charter)

                 Delaware                                233067904
                 --------                                ---------
      (State or other jurisdiction of                  (IRS Employer
       incorporation or organisation)                Identification No.)


         Level 8, 580 St Kilda Road Melbourne, Victoria, 3004, Australia
         ---------------------------------------------------------------
            (Address of principal executive offices)     (Zip Code)


Registrant's telephone number, including area code   011 (613) 8532 2890
                                                     -------------------

Securities registered pursuant to Section 12 (b) of the Act:
         Title of each class                     Name of each exchange
                                                  on which registered
                 N/A                                      N/A
                 ---                                      ---

Securities registered pursuant to Section 12(g) of the Act:
                     Common stock, par value $.001 per share
                     ---------------------------------------
                                (Title of Class)

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

                           Yes  _X_         No  ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of 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.|X|

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

                           Yes  _X_         No  ___

State Issuer's Revenues for its most recent fiscal year.

None


<PAGE>

The aggregate market value based on the average bid and asked price on the
over-the-counter market of the Registrant's common stock, ("Common Stock") held
by non-affiliates of the Company was $1,900,192 as at December 31, 2005.

There were 18,067,750 outstanding shares of Common Stock as of March 23, 2006.

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable

Transitional Small Business Issuer Yes: ___  No: _X_


<PAGE>



TABLE OF CONTENTS                                                          PAGE


PART I
Item 1       Business                                                         4
Item 2       Properties                                                      12
Item 3       Legal Proceedings                                               12
Item 4       Submission of Matters to a Vote of Security Holders             12

PART II
Item 5       Market for Common Equity and Related Stockholder Matters        13
Item 6       Management's Discussion and Analysis of
              Financial Condition or Plan of Operation                       14
Item 7       Financial Statements                                            19
Item 8       Changes in and Disagreements with Accountants on
              Accounting and Financial Statement Disclosure                  19
Item 8A      Controls and Procedures                                         19


PART III
Item 9       Directors and Executive Officers of the Registrant              20
Item 10      Executive Compensation                                          22
Item 11      Security Ownership of Certain Beneficial Owners
              and Management and Related Stockholder Matters                 23
Item 12      Certain Relationships and Related Transactions                  23


Part IV
Item 13      Exhibits, Financial Statement Schedules, and Reports
              on Form 8-K                                                    26
Item 14      Principal Accounting Fees and Services                          26


             Signatures                                                      27

             Exhibit Index                                                   27


<PAGE>


                                     PART I


Item 1       Business

General

The  terms  "Legend,"   "Company,"   "we,"  "our,"  and  "us"  refer  to  Legend
International Holdings, Inc. unless the context suggests otherwise.


This report and other reports, as well as other written and oral statements made
or released by us, may  contain  forward  looking  statements.  Forward  looking
statements  are  statements  that  describe,  or that are based on, our  current
expectations, estimates, projections and beliefs. Forward looking statements are
based on assumptions made by us, and on information  currently  available to us.
Forward-looking statements describe our expectations today of what we believe is
most likely to occur or may be  reasonably  achievable  in the future,  but such
statements do not predict or assure any future occurrence and may turn out to be
wrong. You can identify forward-looking  statements by the fact that they do not
relate   strictly  to  historical  or  current  facts.   The  words   "believe,"
"anticipate,"  "intend," "expect,"  "estimate,"  "project",  "predict",  "hope",
"should",  "may",  and "will",  other words and  expressions  that have  similar
meanings,  and variations of such words and expressions,  among others,  usually
are intended to help identify forward-looking statements.

Forward-looking  statements  are  subject  to both known and  unknown  risks and
uncertainties  and can be  affected  by  inaccurate  assumptions  we might make.
Risks,  uncertainties  and inaccurate  assumptions could cause actual results to
differ  materially  from  historical  results  or those  currently  anticipated.
Consequently,  no  forward-looking  statement can be  guaranteed.  The potential
risks and uncertainties  that could affect forward looking  statements  include,
but are not limited to the risks of mineral  exploration and  development  stage
projects,  political risks of development in foreign countries, risks associated
with environmental and other regulatory  matters,  mining risks and competitors,
the  volatility  of diamond and other  mineral  prices and  movements in foreign
exchange rates, increased competition,  governmental regulation,  performance of
information  systems,  and the ability of the Company to hire,  train and retain
qualified employees. In addition, other risks, uncertainties,  assumptions,  and
factors that could affect the  Company's  results and prospects are described in
this report,  including  under the heading "Risk  Factors" and elsewhere and may
further  be  described  in the  Company's  prior  and  future  filings  with the
Securities and Exchange Commission and other written and oral statements made or
released by the Company.

We caution you not to place undue  reliance on any  forward-looking  statements,
which speak only as of the date of this document.  The information  contained in
this  report is  current  only as of its date,  and we assume no  obligation  to
update any forward-looking statements.

Legend has a 100% owned  subsidiary  company  Legend  Consolidated  Group Inc, a
Delaware corporation. This company is inactive.

It is the  policy  of our  Board of  Directors  that we will not  engage  in any
activities which would subject us to registration and reporting  requirements of
the Investment Company Act of 1940.


                                       4
<PAGE>

Description of Business

Business Development

Legend was  incorporated  in the State of  Delaware on January 5, 2001 under the
name Sundew International, Inc., to engage in the business of selling compatible
inkjet cartridges and refill kits on the Internet.

On  March  13,  2003,  Legend  filed  for an  Amendment  to its  Certificate  of
Incorporation   (the   "Amendment")   pursuant  to  which  the  name  of  Sundew
International, Inc. was changed to "Legend International Holdings, Inc."

In November 2004, Renika Pty Ltd, an Australian  corporation ("Renika") acquired
an 88%  interest in Legend from William and Michael Tay (the  "Tays"),  the Tays
resigned as  Directors  and  Officers of Legend,  Joseph  Gutnick was  appointed
President,  Chief  Executive  Officer and a Director and Peter Lee was appointed
Secretary.  The Tays also  granted  Renika an option to  acquire  an  additional
578,240  shares of common  stock that Renika  exercised in 2005.  Commencing  in
fiscal  2005,  Legend has decided to focus its  business on mineral  exploration
activities.

Legend is a  development  stage  company.  Legend has not been  involved  in any
bankruptcy,  receivership or similar proceeding. Legend has not been involved in
any material  reclassification,  merger consolidation,  or purchase or sale of a
significant amount of assets not in the ordinary course of business.

Business of Issuer

Business

The Company has never generated any significant  revenues from operations and is
still considered a development  stage company.  The Company was initially formed
to engage in the business of selling  compatible  inkjet  cartridges  and refill
kits on the Internet for the consumer printer market. In March 2003,  management
of the  Company  decided to engage in the  business of  building  and  acquiring
controlling or other interests in one or more companies  engaged in the contract
sales and  distribution  of specialty  medical  products,  and raise  additional
capital for this purpose. Neither business was successful and operations of both
were  eventually  discontinued.  During  fiscal 2004,  management of the Company
developed a plan of operations to acquire  income-producing  real property.  The
Company did not acquire any properties pursuant to such plan.

Following the change of management in November 2004, the Company developed a new
plan of operations,  which was to engage in mineral  exploration and development
activities.  Legend's  business  plan  calls for the  identification  of mineral
properties,  in South America and other parts of the world,  where it can obtain
secure title to exploration, development and mining interests. Our preference is
to identify  large gold deposits with low  operating  costs.  We are prepared to
consider  the  exploration,  development  and  mining of  profitable  base metal
interests.  At the beginning of 2006,  Legend  expanded its areas of interest to
include diamond exploration activities which are discussed below.

Recent Developments


                                       5
<PAGE>

Effective  as of March 3, 2006,  Legend  entered into a Contract for the Sale of
Mining  Tenements  ("Contract")  with  Astro  Diamond  Mines N.L.  ("Astro")  an
Australian  company  pursuant to which the Company shall acquire certain diamond
mining  tenements  in Northern  Australia  from Astro,  subject to the terms and
conditions  discussed  below.  The  Contract is  conditional  on the approval of
shareholders  of  Astro  approving  the sale of the  tenements  to  Legend.  The
consideration  payable by Legend to Astro is Australian dollars $1.5 million and
is payable 90 days after the approval of Astro shareholders.  If Legend does not
make  the  payment  within  the time  period,  the  Contract  is  cancelled.  At
settlement,  Legend is also  required to pay to Astro any costs  incurred on the
tenements after February 1, 2006. Astro has provided commercial warranties which
are usual for a transaction of this nature in favour of Legend. Astro intends to
schedule a meeting of its  shareholders  in April 2006 to consider and vote upon
the Contract.  Under Australian law, Astro is required to provide an independent
experts report to  shareholders  for this  transaction.  In order to prepare the
independent  experts report, a mineral valuation was prepared on behalf of Astro
which  indicated that the preferred value for the tenements that are the subject
of the transaction was Australian dollars $1.5 million. This formed the basis of
the consideration agreed by the parties.

The President and Chief Executive Officer of the Company,  Mr. J. I. Gutnick, is
Chairman  and  Managing  Director of Astro and Dr DS  Tyrwhitt,  an  independent
Director of the Company is also a Director of Astro.

The  tenements  are  located in the  Northern  Territory  of  Australia  and are
prospective  for  diamonds.  The project  areas are referred to as Calvert Hills
(the Foelsche and Selby areas) and Cox (Broadmere).

The  Foelsche  and Selby areas are located in the Gulf  country of the  Northern
Territory.  This land  package  covers over 8,000 square  kilometers  of diamond
prospective  terrain.  The  Foelsche  project  area  is  located  less  than  20
kilometres  east of the Merlin diamond field held by North  Australian  Diamonds
Ltd.  The Selby  prospect  area is  approximately  130  kilometres  to the east.
Portions of these  prospects have been surveyed  using airborne  electromagnetic
geophysical   techniques  ("EM")  with  highly  encouraging  results.   Numerous
anomalies  were  found to occur  within  areas  drained  by  streams  containing
significant  kimberlite  indicator  minerals.  Selected  airborne  anomalies  in
various  settings were followed up with detailed  ground  gravity  surveys.  The
results of the  gravity  survey  have  defined  several  outstanding  coincident
gravity  anomalies  showing much greater detail than the airborne survey.  These
results are considered to be very encouraging. Government requirements will need
to be met before access and drilling can be carried out next year.

Other  holdings  in the  district  include  areas  adjacent  to the Abner  Range
discoveries  of Gravity  Diamonds  Ltd, and a large  position at the Cox project
area,  230  kilometres  to the west.  The Cox project area consists of more than
9,200  square  kilometers  of terrain  that is also  prospective  for  diamonds.
Microdiamonds,  macrodiamonds and chromites were recovered by previous explorers
in the Broadmere  area within the Cox project.  It is envisaged that an airborne
electromagnetic  survey can be flown  over this area in the next  field  season,
which runs from April to November 2006.


                                       6
<PAGE>

The Broadmere  prospect is located within the Cox group of tenements,  which are
centred 230 kilometres  northwest of the Merlin field.  Three  macrodiamonds and
numerous  microdiamonds have been recovered by previous explorers from two broad
areas within the Broadmere prospect.  It is envisaged that these two broad areas
will constitute the beginning of further  detailed  airborne surveys in the next
field season, which runs from April to November 2006.

Employees

The services of our Chief Executive  Officer and Chief Financial Officer as well
as clerical  employees  are  provided to us on a part-time  basis  pursuant to a
Service Agreement  effective  December 1, 2004 (the "Service  Agreement") by and
between AXIS  Consultants  Pty Limited and ourselves.  AXIS also provides office
facilities,  equipment,  administration  and  clerical  services  to the Company
pursuant to the Service  Agreement.  The Service  Agreement may be terminated by
written notice from the parties thereto.

Further detail relating to additional terms of the Service Agreement is included
in  "Item  2-  Properties",   "Item  12-  Certain   Relationships   and  Related
Transactions" and "Item 10- Executive Compensation".

Risk Factors

Risks of Our Business

We Lack an Operating  History And Have Losses  Which We Expect To Continue  Into
the Future.

To date we have had no material source of revenue.  We have no operating history
as a mineral  exploration  or mining  company  upon which an  evaluation  of our
future  success or failure  can be made.  Our  ability to achieve  and  maintain
profitability and positive cash flow is dependent upon:

     -    exploration and development of any mineral property we identify;

     -    our  ability to locate  economically  viable  mineral  reserves in any
          mineral property we identify;

     -    our ability to raise the capital necessary to conduct  exploration and
          preserve  our  interest in mineral  claims,  increase  our interest in
          mineral claims and continue as an exploration and mining company; and

     -    our ability to generate revenues and profitably  operate a mine on any
          mineral property we identify.


                                       7
<PAGE>

We Have No  Mineral  Exploration  Properties  and No  Diamond  Or Other  Mineral
Reserves And We Cannot Assure You That We Will Find Such Properties Or Reserves.
If We Develop A Diamond Or Other  Mineral  Reserve,  There Is No Guarantee  That
Production Will Be Profitable.

We do not have any mineral exploration  properties.  We cannot guarantee we will
ever find any or that we will be successful in locating commercial mine reserves
on any exploration  properties that we may obtain.  Even if we find a diamond or
other commercial minerals reserve, there is no assurance that we will be able to
mine them. Even if we develop a mine,  there is no assurance that we will make a
profit.  If we do not find diamonds or other commercial  minerals you could lose
part or all of your investment.

We  Will  Need  Financing  To  Acquire  Mineral  Exploration  Properties  And To
Determine If There Is Diamonds Or Other Commercial  Minerals And To Maintain The
Mineral Claims.

Our success  will depend on our ability to raise  capital.  The Contract for the
acquisition of diamond mining tenements from Astro requires a payment from us of
Australian  dollars  $1,500,000 within 90 days after the receipt of the approval
of the Astro's  shareholders.  We will require  substantial  additional funds to
conduct mineral exploration and development activities on these tenements. There
is no assurance  whatsoever  that funds will be available from any source or, if
available,  that  they  can  be  obtained  on  terms  acceptable  to us to  make
investments.  If funds are not available in the amounts  required to achieve our
business strategy,  we would be unable to reach our objective.  This could cause
the loss of all or part of your investment.

The Reports Of Our Independent  Registered  Public  Accounting  Firms Contain An
Explanatory Paragraph Questioning Our Ability To Continue As A Going Concern.

The  reports  of our  independent  registered  public  accounting  firms  on our
financial  statements as of December 31 , 2005 and for the years ended  December
31, 2005 and 2004 includes an explanatory  paragraph  questioning our ability to
continue  as a going  concern.  This  paragraph  indicates  that we have not yet
commenced revenue  producing  operations and have a retained deficit at December
31,  2005 of  $(599,447)  which  conditions  raise  substantial  doubt about our
ability to continue as a going concern.  Our financial statements do not include
any adjustment that might result from the outcome of this uncertainty.

We Are A Small Operation And Do Not Have Significant Capital.

Because we will have limited working capital, we must limit our exploration.  If
we are unable to raise the capital required to undertake  adequate  exploration,
we may not find diamonds or other  commercial  minerals  even though  properties
that we may acquire may contain diamonds or other commercial minerals.  If we do
not find  diamonds  or  other  commercial  minerals  we may be  forced  to cease
operations and you may lose your entire investment.

We Could Encounter Delays Due To Regulatory And Permitting Delays.

We could face delays in obtaining mining permits and environmental permits. Such
delays, could jeopardize financing, if any, in which case we would have to delay
or abandon work on the properties.


                                       8
<PAGE>

There Are Uncertainties  Inherent In The Estimation Of Diamonds Or Other Mineral
Reserves.

Reserve estimates,  including the economic recovery of diamond ore, will require
us to make assumptions  about recovery costs and diamond market prices.  Reserve
estimation  is, by its  nature,  an  imprecise  and  subjective  process and the
accuracy of such estimates is a function of the quality of available data and of
engineering and geological interpretation, judgment and experience. The economic
feasibility of properties will be based upon our estimates of the size and grade
of  ore  reserves,  metallurgical  recoveries,  production  rates,  capital  and
operating  costs,  and the  future  price of  diamonds.  If such  estimates  are
incorrect  or vary  substantially  it could  affect  our  ability  to develop an
economical mine and would reduce the value of your investment.

If We Define An Economic Ore Reserve And Achieve Production,  It Will Decline In
The Future. An Ore Reserve Is A Wasting Asset.

Our future ore reserve and  production,  if any, will decline as a result of the
exhaustion of reserves and possible closure of any mine that might be developed.
Eventually,  at  some  unknown  time  in the  future,  all  of the  economically
extractable  ore will be removed from the  properties,  and there will be no ore
remaining  unless this Company is  successful in near mine site  exploration  to
extend the life of the mining  operation.  This is called depletion of reserves.
Ultimately,  we must acquire or operate other properties in order to continue as
an on going  business.  Our success in continuing to develop  reserves,  if any,
will affect the value of your investment.

There Are Significant Risks Associated With Mining Activities.

The  mining  business  is  generally  subject  to risks and  hazards,  including
quantity of production,  quality of the ore, environmental  hazards,  industrial
accidents,  the  encountering  of unusual or unexpected  geological  formations,
cave-ins,  flooding,  earthquakes and periodic interruptions due to inclement or
hazardous  weather  conditions.  These occurrences could result in damage to, or
destruction of, our mineral properties or production facilities, personal injury
or death,  environmental damage,  reduced production and delays in mining, asset
write-downs,  monetary  losses and  possible  legal  liability.  We could  incur
significant  costs  that  could  adversely  affect  our  results  of  operation.
Insurance fully covering many environmental risks (including potential liability
for  pollution  or other  hazards  as a result  of  disposal  of waste  products
occurring from  exploration and production) is not generally  available to us or
to other companies in the industry. What liability insurance we carry may not be
adequate to cover any claim.

We May Subject To Significant  Environmental And Other Governmental  Regulations
That Can Require Substantial Capital Expenditure, And Can Be Time-Consuming.

We may be required to comply with various  laws and  regulations  pertaining  to
exploration,  development and the discharge of materials into the environment or
otherwise relating to the protection of the environment in the countries that we
operate,  all of which  can  increase  the  costs  and time  required  to attain
operations.  We may have to obtain  exploration,  development and  environmental
permits,  licenses or approvals that may be required for our  operations.  There
can be no assurance  that we will be  successful in  obtaining,  if required,  a
permit to commence exploration,  development and operation,  or that such permit
can be obtained in a timely  basis.  If we are  unsuccessful  in  obtaining  the
required  permits it may  adversely  affect our ability to carry on business and
cause you to lose part or all of your investment.


                                       9
<PAGE>

Mining  Accidents  Or Other  Adverse  Events At Our  Property  Could  Reduce Our
Production Levels.

If and when we reach  production it may fall below estimated  levels as a result
of mining  accidents,  cave-ins  or  flooding on the  properties.  In  addition,
production  may be  unexpectedly  reduced  if,  during  the  course  of  mining,
unfavorable  ground  conditions or seismic activity are encountered,  ore grades
are lower than expected, or the physical or metallurgical characteristics of the
ore are less amenable to mining or processing  than  expected.  The happening of
these types of events  would  reduce our  profitably  or could cause us to cease
operations which would cause you to lose part or all of your investment.

The  acquisition  of  diamond  mineral  properties  is  subject  to  substantial
competition.  If we must pursue alternative  properties,  companies with greater
financial  resources,  larger staffs,  more  experience,  and more equipment for
exploration  and  development may be in a better position than us to compete for
properties.  We may  have to  undertake  greater  risks  than  more  established
companies in order to compete which could affect the value of your investment.

We May Lose Our  Claims  If We Do No  Maintain  A  Minimum  Level of Work On The
Claims

We will be  required  to carry  out a  minimum  level  of work on each  claim to
maintain of our claims in good  standing.  If we cannot  afford to carry out the
work or pay the fees we could lose our  interest in claims.  The loss of some or
all of our mineral claims would adversely affect the value of your investment.

We are substantially dependent upon AXIS Consultants To Carry Out Our Activities

We are substantially  dependent upon AXIS for our senior  management,  financial
and accounting,  corporate legal and other corporate headquarters functions. For
example,  each of our officers is employed by AXIS and, as such,  is required by
AXIS to devote  substantial  amounts of time to the  business and affairs of the
other shareholders of AXIS.

Pursuant to a services  agreement,  AXIS  provides  us with  office  facilities,
administrative  personnel  and services,  management  and  geological  staff and
services.  No fixed fee is set in the agreement and we are required to reimburse
AXIS for any  direct  costs  incurred  by AXIS  for us.  In  addition,  we pay a
proportion of AXIS indirect  costs based on a measure of our  utilization of the
facilities and activities of AXIS plus a service fee of not more than 15% of the
direct and indirect  costs.  To date,  AXIS has not charged us a service fee but
there can be no  assurance  that AXIS will not charge a fee in the future.  This
service  agreement  may be  terminated  by us or AXIS on 60  days'  notice.  See
"Certain Relationships and Related Party Transactions."

We are one of five  affiliated  companies of which three are  Australian  public
companies  listed on Australian  Stock Exchange.  Each of the companies has some
common Directors,  officers and shareholders. In addition, each of the companies
is  substantially  dependent  upon AXIS for its senior  management  and  certain
mining and exploration  staff. A number of arrangements  and  transactions  have
been entered into from time to time between such companies. Currently, there are
no material  arrangements or planned transactions between the Company and any of
the other affiliated  companies other than AXIS.  However, it is possible we may
enter into such  transactions  in the future  which could  present  conflicts of
interest.


                                       10
<PAGE>

Future Sales of Common Stock Could Depress The Price Of Our Common Stock

Future sales of  substantial  amounts of common stock pursuant to Rule 144 under
the  Securities  Act of 1933 or otherwise by certain  stockholders  could have a
material  adverse  impact on the market  price for the common stock at the time.
There are presently  approximately  17,389,110  outstanding shares of our common
stock held by one of our stockholders which are deemed  "restricted  securities"
as defined by Rule 144 under the Securities  Act.  Under certain  circumstances,
there shares may be sold without registration pursuant to the provisions of Rule
144.  In  general,  under  rule 144,  a person  (or  persons  whose  shares  are
aggregated)  who has  satisfied a one-year  holding  period may,  under  certain
circumstances,  sell  within  any  three-month  period  a number  of  restricted
securities  which does not exceed the greater of one (1%)  percent of the shares
outstanding  or the average weekly trading volume during the four calendar weeks
preceding  the  notice of sale  required  by Rule  144.  In  addition,  Rule 144
permits, under certain circumstances,  the sale of restricted securities without
any  quantity  limitations  by a person who is not an  affiliate of ours and has
satisfied  a  two-year  holding  period.  Any sales of  shares  by  stockholders
pursuant  to Rule 144 may have a  depressive  effect on the price of our  common
stock.

Our Common Stock Is Traded Over the Counter,  Which May Deprive  Stockholders Of
The Full Value Of Their Shares

Our common stock is quoted via the Over The Counter  Bulletin Board (OTCBB).  As
such, our common stock may have fewer market makers,  lower trading  volumes and
larger  spreads  between  bid and  asked  prices  than  securities  listed on an
exchange  such as the New York Stock  Exchange or the NASDAQ.  These factors may
result in higher  price  volatility  and less  market  liquidity  for the common
stock.

A Low Market Price May Severely Limit The Potential Market For Our Common Stock

Our common stock is currently trading at a price  substantially  below $5.00 per
share, subjecting trading in the stock to certain SEC rules requiring additional
disclosures  by  broker-dealers.  These  rules  generally  apply  to any  equity
security  that has a market  price of less than  $5.00  per  share,  subject  to
certain exceptions (a "penny stock"). Such rules require the delivery,  prior to
any penny stock transaction, of a disclosure schedule explaining the penny stock
market and the risks  associated  therewith and impose  various  sales  practice
requirements  on  broker-dealers  who sell penny  stocks to  persons  other than
established customers and institutional or wealthy investors. For these types of
transactions,  the broker-dealer must make a special  suitability  determination
for the  purchaser  and have  received the  purchaser's  written  consent to the
transaction  prior  to the  sale.  The  broker-dealer  also  must  disclose  the
commissions  payable to the broker-dealer,  current bid and offer quotations for
the  penny  stock  and,  if the  broker-dealer  is the sole  market  maker,  the
broker-dealer must disclose this fact and the  broker-dealer's  presumed control
over the market.  Such information must be provided to the customer orally or in
writing before or with the written  confirmation  of trade sent to the customer.
Monthly  statements  must be sent  disclosing  recent price  information for the
penny stock held in the account and  information  on the limited market in penny
stock. The additional  burdens imposed upon  broker-dealers by such requirements
could discourage broker-dealers from effecting transactions in our common stock.


                                       11
<PAGE>

The Market Price Of Your Shares Will Be Volatile.

The stock market  price of gold mining  exploration  companies  like us has been
volatile.  Securities  markets may experience price and volume  volatility.  The
market  price of our  stock  may  experience  wide  fluctuations  that  could be
unrelated  to  our  financial  and  operating   results.   Such   volatility  or
fluctuations  could  adversely  affect your  ability to sell your shares and the
value you might receive for those shares.

Item 2       Properties

Legend has no  properties  and at this time has no  agreements  to  acquire  any
properties  other than the Contract to acquire  diamond  mining  tenements  from
Astro which is discussed  above.  Legend occupies  certain  executive and office
facilities in Melbourne, Victoria Australia which are provided to it pursuant to
the Service Agreement with AXIS. See "Item 1 - Business  Employees" and "Item 12
- Certain  Relationships  and Related  Transactions".  Legend  believes that its
administrative space is adequate for its current needs.

Item 3       Legal Proceedings

There are no pending legal proceedings to which the Company is a party.

Item 4       Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders through the solicitation
of proxies or otherwise  during the fourth quarter of the fiscal year covered by
this report.



                                       12
<PAGE>


                                     PART II


Item 5       Market for Common Equity and Related Stockholder Matters

Market Information

Legend's  common  stock is traded on the NASD  Over-the-Counter  Bulletin  Board
("OTCBB")  under the ticker  symbol "LGDI" and CUSIP# 52467C 10 0. The Company's
common stock was  initially  cleared for trading on the OTC-BB on September  26,
2003.

The  following  table sets out the high and low bid  information  for the Common
Stock  as  reported  by  the  National   Quotation   Service   Bureau  for  each
period/quarter indicated in US$:

Calendar Period                High Bid (1)                Low Bid (1)
---------------                ---------                   --------


2003
Fourth Quarter                    1.50                       1.00

2004
First Quarter                     1.00                       0.05
Second Quarter                    0.25                       0.04
Third Quarter                     0.06                       0.02
Fourth Quarter                    0.25                       0.05

2005
First Quarter                     0.30                       0.13
Second Quarter                    0.32                       0.20
Third Quarter                     0.25                       0.15
Fourth Quarter                    3.25                       0.15

(1)  The quotations set out herein  reflect  inter-dealer  prices without retail
     mark-up,  mark-down or commission  and may not  necessarily  reflect actual
     transactions.

Shareholders

As of March  23,  2006,  there  were  approximately  36  record  holders  of the
Company's  common stock.  Within the holders of record of the  Company's  common
stock are  depositories  such as Cede & Co., a nominee for The Depository  Trust
Company (or DTC),  that hold shares of stock for brokerage firms which, in turn,
hold shares of stock for one or more beneficial owners. Accordingly, the Company
believes there are many more beneficial  owners of its common stock whose shares
are held in "street name", not in the name of the individual shareholder.

Options

Effective as of December 12,  2005,  the Board of Directors of Company  approved
the  distribution  to  stockholders  for no  consideration  of an  aggregate  of
36,135,500  non-transferable  options,  each of which is exercisable to purchase
one share of common  stock of the Company at an  exercise  price of 25 cents per
share with a latest  exercise  date of December  31, 2012 and  otherwise  on the
terms and conditions set out in Appendix A to this Form 8-K. The options will be
issued on a pro-rata basis to all stockholders of record on December 31, 2005 on
the basis of two (2) options for every one (1) share of common  stock owned by a
stockholder  on the record  date.  The  options may not be  exercised  until the
shares  underlying the options are registered under federal and state securities
laws.


                                       13
<PAGE>

Dividend Policy

The Company has not previously  paid any cash dividends on common stock and does
not  anticipate  or  contemplate   paying  dividends  on  common  stock  in  the
foreseeable  future.  It is the present  intention of  management to utilize all
available  funds  for  the  development  of the  Company's  business.  The  only
restrictions  that limit the ability to pay  dividends on common  equity or that
are likely to do so in the future, are those restrictions  imposed by law. Under
Delaware  corporate law, no dividends or other  distributions  may be made which
would render the Company  insolvent or reduce assets to less than the sum of its
liabilities  plus the  amount  needed to  satisfy  any  outstanding  liquidation
preferences.

Transfer Agent

The transfer  agent and  registrar  for the  Company's  common stock is Holladay
Stock Transfer, Inc. of 2939 N. 67th Place, Scottsdale, Arizona 85251.

Recent Sales of Unregistered Securities

We have  issued no  unregistered  securities  within the period  covered by this
report which have not been previously reported on Form 10-QSB.

Item 6       Management's Discussion and Analysis of Financial Condition
             or Plan of Operation

General

The following  discussion  and analysis of our  financial  condition and plan of
operation  should  be read in  conjunction  with the  Financial  Statements  and
accompanying notes and the other financial  information  appearing  elsewhere in
this report. This report contains numerous  forward-looking  statements relating
to our business.  Such  forward-looking  statements are identified by the use of
words such a s believes,  intends, expects, hopes, may, should, plan, projected,
contemplates,  anticipates or similar words. Actual operating schedules, results
of operations,  ore grades and mineral deposit  estimates and other  projections
and   estimates   could   differ   materially   form  those   projected  in  the
forward-looking statements.

We are a development stage company. Our principal exploration target is for gold
and we are seeking to identify and obtain mineral exploration properties. We are
in the initial stages of our exploration  program and we have not yet identified
any mineral exploration properties.  We have not generated any material revenues
from operations.


                                       14
<PAGE>

Selected Financial Data

Our  selected  financial  data  presented  below  for  each of the  years in the
two-year  period ended December 31, 2005, and the balance sheet data at December
31, 2005 has been derived from financial statements,  which have been audited by
PKF,  Certified Public  Accountants,  a Professional  Corporation.  The selected
financial data should be read in conjunction  with our financial  statements for
each of the  years in the two year  period  ended  December  31,  2005 and Notes
thereto, which are included elsewhere in this Annual Report.

Statement of Operations Data


                                      Year ended December 31


                                           2005         2004
                                              $            $

Revenues                                      -            -
                                 ----------------------------

Other income (loss)                           -        1,073

Costs and expenses                       58,976      181,113
                                 ----------------------------

Loss from operations                    (58,976)    (180,040)

Other income (loss)                           -            -
                                 ----------------------------

Profit (loss) before income
taxes                                  (557,945)    (180,040)

Provision for income taxes                    -            -
                                 ----------------------------

Net profit (loss)                       (57,945)    (180,040)
                                 ----------------------------




Weighted average number
of shares outstanding                13,282,647   10,206,213
                                 ============================

Balance Sheet Data
------------------
                                              $            $
Total assets                                  -            -
Total liabilities                        68,128       10,183
                                 ----------------------------

Stockholders' equity (deficit)          (68,128)     (10,183)
                                 ----------------------------


                                       15
<PAGE>

Plan of Operation

We have no cash at December 31, 2005. See "Liquidity and Capital  Resources" for
a discussion of how the Company intends to finance its plan of operations.

It is our intention to seek to locate one or more mineral exploration properties
during  fiscal 2006 as  discussed  in Item 1  "Description  of Business - Recent
Developments".  Once we obtain one or more mineral  exploration  properties,  we
will develop an exploration program that is appropriate for such properties.

As set out in Item1  "Employees" the services of our Chief Executive Officer and
Chief Financial  Officer as well as certain  clerical  employees are provided by
AXIS.  At the current  time,  we have no plans to change these  arrangements  or
employ any further persons.

Results of Operations

Year ended December 31, 2005 versus Year ended December 31, 2004

Total revenues for the years ended  December 31, 2005 and 2004 were $nil.  Other
income in 2004 amounted to $1,073 and was derived from interest income.

Costs and  expenses  decreased  during the year from  $181,113 for the 12 months
ended  December 31, 2004 to $57,945 for the 12 months  ended  December 31, 2005.
The main components of costs and expenses are as follows:-

(i)  Legal, professional and accounting for the twelve months ended December 31,
     2005  amounted to $21,721,  compared to $9,143 for the twelve  months ended
     December 31, 2004. In 2005, the main costs are audit fees of $10,370, legal
     fees of $7,116, and filing fees of $4,148 compared to audit fees of $6,500,
     legal fees of $1,491, and filing fees of $nil in 2004. Audit fees and legal
     fees have  increased  since the change in management in December  2004. For
     the year ended December 31, 2004 no filing fees were incurred,  whereas for
     the year ended December 31, 2005 filing fees have been incurred lodging the
     appropriate SEC returns.

(ii) Stock based  compensation has decreased from $167,850 for the twelve months
     ended  December 31, 2004 to $nil for the twelve  months ended  December 31,
     2005.  In  2004,  a total of  891,000  common  shares  were  issued  to the
     Company's  former officer and director for services valued at $44,550 and 9
     million options to be converted into 9 million shares of common stock at an
     exercise  price of $0.05 and a latest  exercise  date of December 2009 were
     issued to Renika for services to be rendered by the new President and Chief
     Executive  Office of the  Company.  The Company  undertook a Black  Scholes
     valuation of these options using a $0.05 exercise price, $0.05 cents market
     price,  5 year life,  risk free interest rate of 5.155% and a volatility of
     16.7% which equated to a value of $123,300. No such issue was made in 2005.

(iii) During 2005, the Company incurred interest of $1,905. The Company borrowed
     $5,565 from Wilzed, a company which our President and CEO is a director and
     shareholder.  Wilzed charged us $134 interest. Wilzed charged interest at a
     rate of 9.35%  for  2005.  AXIS  provides  management,  administration  and
     geological  services to us pursuant to a service  dated  February 25, 2005.
     AXIS charged us interest of $1,771 on amounts  owing to AXIS.  AXIS charged
     interest at a rate of 9.35% for 2005.


                                       16
<PAGE>

(iv) Administration  costs  increased  from $4,120 for the twelve  months  ended
     December 31, 2004 to $35,350 for the twelve months ended December 31, 2005.
     During 2005 the  management  fee charged by AXIS to us was $20,203 and AXIS
     charged us $12,171  for  salaries  incurred  in relation to AXIS staff that
     provided administration services to the Company.

As a result of the  above,  the loss  before  income  taxes  for the year  ended
December 31, 2005  amounted to  $(57,945)  compared to  $(180,040)  for the year
ended December 31, 2004.

There was no provision for tax in either the prior year or the current year.

As a result  the net loss for the year ended  December  31,  2005 was  $(57,945)
compared to $(180,040) for the year ended December 31, 2004.

Liquidity and Capital Resources

As of December 31, 2005,  the Company has no cash.  The Company is searching for
mineral  properties  that fit into its new plan of  operations,  as discussed at
Item 1, "Business" and expects to spend  approximately  $2,000,000 during fiscal
2006 on its new  business  plan,  including  Australian  dollars  $1,500,000  in
connection with the acquisition of diamond mining  tenements from Astro pursuant
to the Contract.  In addition, it expects that it will need to spend $100,000 on
legal,  professional,  accounting and administration  expenses. The Company will
need to raise funds in cash to fund its  business  plan.  The  Company  plans to
satisfy its cash requirements by additional equity financing or loans. This will
be in the form of private placements of restricted common stock, preferred stock
or debentures.  The Company may not be able to operate if it does not obtain the
additional capital or financing it requires.  There can be no assurance that the
Company will be  successful  in raising such capital or financing  and thus,  be
able to satisfy its cash requirements.

The Company is still  considered  to be a  development  stage  company,  with no
significant  revenue,  and is  dependent  upon the  raising of  capital  through
placement of its common stock,  preferred stock or debentures.  In the event the
Company is  unsuccessful  in raising such capital,  it may never commence active
operations.

Impact of Recent Accounting Pronouncements

For a  discussion  of the  impact of  recent  accounting  pronouncements  on the
Company's financial statements, see Note 2 to the Company's Financial Statements
which are attached hereto.

Quantitative and Qualitative Disclosures about Market Risk

The  Company  is  exposed  to  interest  rate risk  primarily  through  its loan
facilities.  The Company  utilizes these  borrowings to meet its working capital
needs.

At December 31, 2005, the Company had  outstanding  borrowings of  approximately
$47,788 under its Loan  Facilities.  In the event that interest rates associated
with these  facilities  were to increase 100 basis points,  the impact on future
cash flows would be a decrease of approximately $478 annually.


                                       17
<PAGE>

Item 7.      Financial Statements

See F Pages

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

Not applicable.

Item 8A      Controls and Procedures

(a)  Evaluation of disclosure controls and procedures.

Our principal  executive  officer and its principal  financial officer evaluated
the effectiveness of our disclosure controls and procedures as of the end of the
period  covered by this report.  Such  disclosure  controls and  procedures  are
designed to ensure that  information  required to be disclosed by the Company is
accumulated  and  communicated  to the  appropriate  management,  including  the
principal  executive  and  financial  officers,  on a basis that permits  timely
decisions regarding timely disclosure.  Based on that evaluation, such principal
executive officer and principal  financial officer concluded that, the Company's
disclosure  control and  procedures as of the end of the period  covered by this
report have been designed and are functioning  effectively to provide reasonable
assurance  that the  information  required  to be  disclosed  by the  Company in
reports filed under the Securities Exchange Act of 1934 is recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms.

(b)  Change in Internal Control over Financial Reporting.

     No change in our internal control over financial  reporting occurred during
     our  most  recent  fiscal  quarter  that  has  materially  affected,  or is
     reasonably  likely to materially affect our internal control over financial
     reporting.

(c)  We  believe  that a  controls  system,  no  matter  how well  designed  and
     operated,  can not provide  absolute  assurance  that the objectives of the
     controls system, no matter how well designed and operated,  can not provide
     absolute  assurance that the objectives of the controls system are met, and
     no evaluation of controls can provide  absolute  assurance that all control
     issues and instances of fraud, if any, within a company have been detected.


                                       18
<PAGE>


                                    PART III

Item 9.      Directors and Executive Officers of the Registrant

The  following  table sets out  certain  information  concerning  the  Company's
officers and directors.


Name                     Age              Position(s) Held

Joseph Gutnick           54               Chairman of the Board
                                          President, Chief Executive Officer and
                                          Director

David Tyrwhitt           67               Director

Peter Lee                48               Secretary, Chief Financial Officer and
                                          Principal Accounting Officer


Joseph Gutnick
Mr.  Gutnick  has been  Chairman  of the Board,  President  and Chief  Executive
Officer since  November  2004 and has been Chairman of the Board,  President and
Chief Executive Officer of Bay Resources, a Delaware corporation (BYRE.OB) since
March 1988.  He has been a Director  of  numerous  public  listed  companies  in
Australia  specialising  in the  mining  sector  since 1980 and is  currently  a
Director  of Astro  Diamond  Mines  N.L.,  Great Gold Mines  N.L.,  and  Quantum
Resources  Limited.  Mr.  Gutnick was  previously  Executive  Chairman of Tahera
Corporation, a company that is listed on Toronto Stock Exchange from May 2000 to
October 2003 and has previously been a Director of the World Gold Council. He is
a Fellow of the Australasian Institute of Mining & Metallurgy and the Australian
Institute  of  Management  and a Member of the  Australian  Institute of Company
Directors.

David Tyrwhitt
Dr. Tyrwhitt was appointed a Director in March 2005. He is a geologist,  holding
a Bachelor of Science and Ph.D.  degrees and has 40 years  experience in mineral
exploration and management development and operation of gold mines in Australia.
Dr.  Tyrwhitt  has been a  Director  of  numerous  public  listed  companies  in
Australia in the mining  industry  and is currently a Director of Astro  Diamond
Mines N.L.,  Great Gold Mines N.L., and Quantum  Resources  Limited and has also
been a Director of Bay Resources  Ltd, a Delaware  corporation  (BYRE.OB)  since
1996.

Peter Lee
Mr. Lee has been Chief  Financial  Officer since March 2005 and Secretary  since
November 2004. He is a Director,  Chief  Financial  Officer and Secretary of Bay
Resources  Ltd, a  Delaware  corporation  (BYRE.OB).  Mr. Lee is a Member of the
Institute  of  Chartered  Accountants  in  Australia,   a  Fellow  of  Chartered
Secretaries  Australia  Ltd.,  a Member of the  Australian  Institute of Company
Directors  and holds a Bachelor of Business  (Accounting)  from Royal  Melbourne
Institute  of  Technology.  He has over 25 years  commercial  experience  and is
currently  General  Manager  Corporate and Company  Secretary of several  listed
public companies in Australia.


                                       19
<PAGE>

Involvement on Certain Material Legal Proceedings During the Last Five Years

No director, officer, significant employee or consultant has been convicted in a
criminal  proceeding,  exclusive of traffic  violations.  No director,  officer,
significant employee or consultant has been permanently or temporarily enjoined,
barred, suspended or otherwise limited from involvement in any type of business,
securities or banking activities.  No director,  officer or significant employee
has been  convicted of violating a federal or state  securities  or  commodities
law.

Mr. Gutnick was formerly the Chairman of the Board, Dr. Tyrwhitt was formerly an
independent  Director  and Mr. Lee was  formerly  Company  Secretary  of Centaur
Mining &  Exploration  Ltd.,  an  Australian  corporation,  which  commenced  an
insolvency proceeding in Australia in March 2001.

Board of Directors

Our  Certificate  of  Incorporation  provides  that  there  must be at least one
Director  of the  Company.  Our Board of  Directors  currently  consists  of two
directors.

Directors need not be  stockholders  of the Company or residents of the State of
Delaware.  Directors  are elected for an annual term and  generally  hold office
until the next  Directors  have been duly elected and  qualified.  Directors may
receive compensation for their services as determined by the Board of Directors.
A vacancy on the Board may be filled by the remaining Directors even though less
than a quorum remains. A Director appointed to fill a vacancy remains a Director
until his successor is elected by the Stockholders at the next annual meeting of
Shareholder or until a special meeting is called to elect Directors.

The  executive  officers of the Company are appointed by the Board of Directors.
There are no family relationships between any Directors or executive officers of
the Company.

Audit Committee

Our  Company  does not have an Audit  Committee  as we only have two  Directors.
However,  our  Independent  Director,  Dr Tyrwhitt,  liaises  directly  with the
auditors on matters normally dealt with by an Audit Committee.

Code of Ethics

We have  adopted a Code of Conduct  and Ethics and it applies to all  Directors,
Officers and employees.  A copy of the Code of Conduct and Ethics will be posted
on our Web site and we will provide a copy to any person without charge.  If you
require  a  copy,  you  will  be  able to  download  it  from  our  Web  site at
www.lgdi.net  or  alternatively,  contact us by  facsimile or e-mail and we will
send you a copy.


                                       20
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Pursuant to Section 16(a) of the Securities Exchange Act of 1934, our Directors,
executive  officers and  beneficial  owners of more than 10% of the  outstanding
Common  Stock are  required to file  reports  with the  Securities  and Exchange
Commission  concerning  their ownership of and  transactions in our Common Stock
and are also required to provide to us copies of such  reports.  Based solely on
such reports and related information  furnished to us, we believe that in fiscal
2005 all such filing  requirements  were complied with in a timely manner by all
Directors and executive officers.

Item 10.     Executive Compensation.

The  following  table  sets  forth  the  annual  salary,  bonuses  and all other
compensation  awards and pay outs on account of our Chief Executive  Officer for
services rendered to us during the fiscal year ended December 31, 2005, 2004 and
2003. No other executive  officer received more than US$100,000 per annum during
this period.

<TABLE>
<CAPTION>
Summary Compensation Table
                                                                                   Long-Term
                                             Annual Compensation              Compensation Awards
                                       -------------------------------   -----------------------------
                                                                                           Securities
                                                          Other Annual     Restricted      Underlying
Name and Principal Position            Year     Salary    Compensation    Stock Awards      Options
                                       ----     ------    ------------   --------------  -------------
<S>                                    <C>      <C>       <C>            <C>             <C>
Joseph Gutnick, Chairman of the
Board, President and CEO (1)(2)        2005        -            -               -               -
                                       2004        -            -               -               -
William Tay, Chairman of the
Board, President and CEO *(3)          2004        -         $44,550            -               -
                                       2003        -        $111,700            -               -
------------------------

1.   Joseph Gutnick appointed November 2004.
2.   Excludes  9,000,000  options  granted to Renika of which Mr JI Gutnick is a
     Director and Shareholder (see Item 12 - Certain  Relationships  and Related
     Party Transactions)
3.   William Tay resigned November 2004.
</TABLE>

For  additional  information  about the  Service  Agreement  and the  Consulting
Agreement see "Item 1- Business- Employees" and "Item 12- Certain  Relationships
and Related Transactions".


                                       21
<PAGE>


<TABLE>
<CAPTION>
                      EQUITY COMPENSATION PLAN INFORMATION
-------------------------------------- ----------------------- ----------------------- -------------------------
                                                (a)                   (b)                        (c)
-------------------------------------- ----------------------- ----------------------- -------------------------
                                                                                       Number of securities
                                       Number of securities    Weighted-average        remaining available for
                                       to be issued upon       exercise price of       future issuance under
                                       exercise of             outstanding options,    equity compensation plans
                                       outstanding options,    warrants and rights     (excluding securities
                                       warrants and rights                             reflected in column (a))
-------------------------------------- ----------------------- ----------------------- -------------------------
<S>                                    <C>                     <C>                     <C>
Equity compensation plans approved
by security holders                              0                       0                        0
-------------------------------------- ----------------------- ----------------------- -------------------------

-------------------------------------- ----------------------- ----------------------- -------------------------
Equity compensation plans not
approved by security holders                     0                       0                        0
-------------------------------------- ----------------------- ----------------------- -------------------------
</TABLE>

Compensation Pursuant to Plans.

The Company does not have any pension or profit sharing plans.

Compensation to Directors

It is our policy to  reimburse  Directors  for  reasonable  travel  and  lodging
expenses incurred in attending Board of Directors  meetings.  Commencing January
2005, independent Directors are paid Directors fees of $15,600 per annum.

Item 11.     Security Ownership of Certain Beneficial Owners and Management and
             Related Stockholder Matters.

The  following  table sets out,  to the best of our  knowledge,  the  numbers of
shares in us beneficially owned as at December 31, 2005 by:

(i)  each of our present Executive Officers and Directors,

(ii) each  person  (including  any  "group"  as that term is  defined in Section
     13(d)(3) of the Securities Exchange Act) who beneficially owns more than 5%
     of our Common Stock, and

(iii) all of our present Directors and officers as a group.

Name                          Number of Shares Owned             Percentage of
                                                                 Shares (1)

Renika Pty Ltd                   52,167,330   (2)(3)(4)             98.72

Joseph Gutnick                   52,167,330   (2)(3)(4)             98.72

Stera Gutnick                    52,167,330   (2)(3)(4)             98.72

David Tyrwhitt                            -                             -

Peter Lee                                 -                             -
                             -------------------------------------------------

All officers and Directors
As a group                       52,167,330                         98.72


                                       22
<PAGE>

Notes relating to Item 11:

(1)  Based on 18,067,750 shares outstanding

(2)  Includes  17,389,110  shares of Common  Stock  owned by Renika,  of both of
     which Mr Joseph  Gutnick,  Stera M. Gutnick and members of their family are
     officers, Directors and principal stockholders.

(3)  Joseph Gutnick and Stera Gutnick are husband and wife.

(4)  Includes 34,778,220 shares issuable upon exercise of stock options owned by
     Renika at an exercise price of $0.25.

Item 12.     Certain Relationships and Related Transactions

We are one of five  affiliated  companies of which three are  Australian  public
companies  listed on Australian  Stock Exchange.  Each of the companies has some
common Directors,  officers and shareholders. In addition, each of the companies
is  substantially  dependent  upon AXIS for its senior  management  and  certain
mining and exploration  staff. A number of arrangements  and  transactions  have
been  entered into from time to time  between  such  companies.  It has been the
intention of the affiliated  companies and  respective  Boards of Directors that
each of such  arrangements  or  transactions  should  accommodate the respective
interest of the relevant  affiliated  companies in a manner which is fair to all
parties and  equitable  to the  shareholders  of each.  Currently,  there are no
material arrangements or planned transactions between the Company and any of the
other affiliated companies other than AXIS.

AXIS is paid by each  company for the costs  incurred by it in carrying  out the
administration  function  for  each  such  company.   Pursuant  to  the  Service
Agreement, AXIS performs such functions as payroll, maintaining employee records
required by law and by usual accounting procedures,  providing insurance, legal,
human resources, company secretarial,  land management,  certain exploration and
mining support,  financial,  accounting advice and services. AXIS procures items
of equipment necessary in the conduct of the business of the Company.  AXIS also
provides  for the Company  various  services,  including  but not limited to the
making available of office supplies, office facilities and any other services as
may be required  from time to time by the Company as and when  requested  by the
Company.

We are required to reimburse  AXIS for any direct costs incurred by AXIS for the
Company.  In addition,  we are required to pay a proportion  of AXIS's  overhead
cost based on AXIS's  management  estimate of our  utilisation of the facilities
and activities of AXIS plus a service fee of not more than 15% of the direct and
overhead costs. AXIS has not charged the 15% service fee to us. Amounts invoiced
by AXIS are required to be paid by us. We are also not  permitted to obtain from
sources  other  than  AXIS,  and we are not  permitted  to  perform  or  provide
ourselves,  the services contemplated by the Service Agreement,  unless we first
requests  AXIS to provide  the  service  and AXIS fails to provide  the  service
within one month.

The Service Agreement may be terminated by AXIS or us upon 60 days prior notice.
If the  Service  Agreement  is  terminated  by AXIS,  we would  be  required  to
independently  provide,  or to seek an  alternative  source  of  providing,  the
services  currently  provided by AXIS.  There can be no assurance  that we could
independently  provide or find a third  party to  provide  these  services  on a
cost-effective  basis or that any transition  from receiving  services under the
Service  Agreement will not have a material  adverse effect on us. Our inability
to provide such  services or to find a third party to provide such  services may
have a material adverse effect on our operations.


                                       23
<PAGE>

In  accordance  with the Service  Agreement  AXIS  provides the Company with the
services of our Chief Executive  Officer,  Chief Financial  Officer and clerical
employees, as well as office facilities, equipment,  administrative and clerical
services.  We pay AXIS for the actual  costs of such  facilities  plus a maximum
service fee of 15%.

In October  14,  2003,  the Company  issued  109,000  shares of common  stock to
William Tay, the Company's  former  vice-president  and secretary,  for services
rendered.

In April 2004,  the  Company  issued to Mr.  Michael  Tay 891,000  shares of its
restricted  common stock,  at a valuation of $0.05 per share, in satisfaction of
amounts  owed to Mr.  Tay for  services  rendered  to the  Company as its former
President and Treasurer.

In  November  2004,  the Company  repaid to Mr.  William Tay and Michael Tay all
amounts owed pursuant to the Company's $100,000 in principal amount of 8% Senior
Subordinated Debentures.

In December  2004, the Company  entered into an agreement with AXIS  Consultants
Pty Ltd to provide  geological,  management and  administration  services to the
Company.  AXIS is affiliated  through  common  management.  AXIS provided  these
services during December 2004 at a cost to the Company of $1,560.  During fiscal
2005,  AXIS continued to provide these services and charged the Company  $20,203
in management fees, $12,171 for salaries incurred in relation to AXIS staff that
provided  administration  services to the Company and charged interest of $1,771
on the outstanding  balance.  AXIS charged interest at a rate of 9.35% for 2005.
The amount owed to AXIS at December 31, 2005 was $42,281.

On December 14,  2004,  the Company  issued 9 million  options to Renika Pty Ltd
("Renika") as consideration for services to be rendered by the new President and
Chief  Executive  Officer of the  Company.  The 9 million  options  convert to 9
million  shares  of  common  stock at an  exercise  price of $0.05  and a latest
exercise date of December 2009. The Company  undertook a Black Scholes valuation
of the options using a $0.05  exercise  price,  $0.05 market price, 5 year life,
risk free  interest  rate of 5.155% and a volatility of 16.7% which equated to a
value of  $123,300.  The  $0.05  market  price  was  based  on the  price of the
Company's  shares of common stock at the time. In the absence of any independent
directors on the Company's  Board,  the Company's  sole director,  Mr.  Gutnick,
appointed  Dr.  David  Tyrwhitt to approve the terms of the options on behalf of
the Company. In September 2005, Renika exercised the 9,000,000 options using the
cashless exercise feature and were issued 7,593,750 shares of common stock.

Transactions with Management

We have a policy  that we will not enter into any  transaction  with an Officer,
Director  or  affiliate  of us or  any  member  of  their  families  unless  the
transaction  is  approved  by  a  majority  of  our  disinterested  non-employee
Directors  and the  disinterested  majority  determines  that  the  terms of the
transaction  are  no  less  favourable  to us  than  the  terms  available  from
non-affiliated  third  parties or are  otherwise  deemed to be fair to us at the
time authorised.


                                       24
<PAGE>


                                     PART IV

Item 13.     Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  Financial Statements and Notes thereto.

     The Financial  Statements  and Notes thereto listed on the Index at page 28
     of this  Annual  Report on Form  10-KSB are filed as a part of this  Annual
     Report.

(b)  Exhibits

     The Exhibits to this Annual Report on Form 10-KSB are listed in the Exhibit
     Index at page 28 of this Annual Report.

(c)  Form 8-K

     Form 8-K dated December 14, 2005 lodged in relation to Item 5.

Item 14.     Principal Accounting Fees and Services

The following table shows the audit fees incurred for fiscal 2005 and 2004.

                                           2005                    2004
                                           ----                    ----

Audit fees                              $11,295                  $5,075
Audit related fees                            -                       -
Tax fees                                      -                       -
                                  --------------          --------------

Total                                   $11,295                  $5,075
                                  ==============          ==============

Audit  fees were for the audit of our  annual  financial  statements,  review of
financial statements included in our 10-QSB/10-Q quarterly reports, and services
that are normally provided by independent  auditors in connection with our other
filings with the SEC. This category also includes  advice on accounting  matters
that  arose  during,  or as a result  of,  the audit or  review  of our  interim
financial statements.

As part of its duties,  our Board of Directors  pre-approves audit and non-audit
services  performed  by our  independent  auditors  in order to assure  that the
provision of such services does not impair the auditors' independence. Our Board
of Directors does not delegate to management its responsibilities to pre-approve
services performed by our independent auditors.


                                       25
<PAGE>



                                   SIGNATURES


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


                                           BAY RESOURCES LTD.

                                           (Registrant)



                                           By: /s/ Peter J. Lee
                                               ---------------------------------
                                               Peter J. Lee
                                               Chief Financial Officer and
                                               Secretary


Dated: March 29, 2006


                                       26
<PAGE>



                           FORM 10-KSB Signature Page


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


Signature                        Title                            Date


1.  Joseph Gutnick               Chairman of the Board,           March 29, 2006
    -----------------------      President and Chief Executive
    Joseph Gutnick               Officer (Principal Executive
                                 Officer) and Director


2.  David Tyrwhitt               Director                         March 29, 2006
    -----------------------
    David Tyrwhitt


3.  Peter Lee                    Chief Financial Officer and      March 29, 2006
    -----------------------      Secretary, (Principal Financial
    Peter Lee                    and Accounting Officer)


                                       27
<PAGE>


EXHIBIT INDEX

Incorporated by
Reference to:


Exhibit No.    Exhibit

1.1            Subscription Agreement (1)

3.1            Certificate of Incorporation (1)

3.2            Amended Certificate of Incorporation (2)

3.3            Bylaws (1)

3.4            Specimen Stock Certificate (1)

4.1            Form of 8% Senior  Subordinated  Convertible  Debenture due March
               31, 2004 (3)

4.2            Form of Notice of Conversion (3)

10.1           2002 Employee, Consultant & Advisor Stock Compensation Plan (4)

10.2           Form of Stock Payment Agreement (4)

10.3           Contract for the Sale of Mining Tenements (5)

21.1           Subsidiaries of the Registrant (6)

31.1           Certification  Pursuant  to 18 U.S.C.  Section  1350,  as Adopted
               Pursuant  to  Section  302 of the  Sarbanes-Oxley  Act of 2002 by
               Joseph Isaac Gutnick (6)

31.2           Certification  of Pursuant to 18 U.S.C.  Section 1350, as Adopted
               Pursuant  to  Section  302 of the  Sarbanes-Oxley  Act of 2002 by
               Peter James Lee (6)

32.1           Certification  of Pursuant to 18 U.S.C.  Section 1350, as Adopted
               Pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of 2002 by
               Joseph Isaac Gutnick (6)

32.2           Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
               Peter James Lee (6)

Footnotes:

(1)  Incorporated herein by reference to the Company's Registration Statement on
     Form  SB-2,  filed  on  February  2,  2001,  File  No.  333-55116,  and the
     amendments thereto.

(2)  Incorporated  herein by reference to the Company's  current  report on Form
     8-K filed on March 21, 2003.


                                       28
<PAGE>

(3)  Incorporated  herein by reference to the Company's  current  report on Form
     8-K filed on June 23, 2003.

(4)  Incorporated herein by reference to the Company's Registration Statement on
     Form S-8 filed on May 14, 2002, File No. 333-88184.

(5)  Incorporated by reference to the Company's current report on Form 8-K filed
     on March 10, 2006.

(6)  Filed herewith

     Financial Statements for the years ended December 31, 2004 and 2005.

     Legend International Holdings, Inc.
     Audited  Financial  Statements for the Company for the years ended December
     31, 2005 and 2004.



                                       29
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          (A Development Stage Company)


                              Financial Statements

                           December 31, 2005 and 2004

         (with Report of Independent Registered Public Accounting Firm)




<PAGE>


CONTENTS


                                                                            Page


Report of Independent Registered Public Accounting Firm                      F-1
Balance Sheet                                                                F-2
Statements of Operations                                                     F-3
Statements of Stockholders' Equity (Deficit)                                 F-4
Statements of Cash Flows                                                     F-5
Notes to Consolidated Financial Statements                            F-6 - F-13


<PAGE>


             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------

To the Board of Directors and Stockholders of
Legend International Holdings, Inc.

We have audited the accompanying balance sheet of Legend International Holdings,
Inc (A  Development  Stage  Company) as of December  31,  2005,  and the related
statements of operations,  stockholders' equity (deficit) and cash flows for the
years  ended  December  31,  2005  and  2004  and the  cumulative  amounts  from
inception, January 5, 2001 through December 31, 2005. 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. The related
statements of operations,  stockholders'  equity (deficit),  and cash flows from
inception of the development stage on January 5, 2001 through December 31, 2003,
were audited by other  auditors  whose reports dated March 20, 2004 and April 7,
2003 expressed an unqualified opinion,  with an explanatory paragraph discussing
the  company's  ability  to  continue  as a going  concern.  Our  opinion on the
statements of  operations,  stockholders'  equity  (deficit) and cash flows from
inception of the  development  stage  through  December 31, 2005,  insofar as it
relates to amounts for prior periods through  December 31, 2003, is solely based
on the reports of other auditors.

We conducted  our audits in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform 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 Legend International  Holdings,
Inc. at December 31, 2005,  and the results of its operations and its cash flows
for the  periods  indicated  above  in  conformity  with  accounting  principles
generally accepted in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will continue as a going  concern.  As described in note 1, at December 31, 2005
the Company had not yet commenced revenue producing operations and had a working
capital deficit of $20,340 and a retained deficit of $599,447.  These conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  The consolidated  financial  statements do not include any adjustments
that might result from the outcome of this  uncertainty.  Management's  plans in
regard to these matters are also discussed in note 1.







New York, NY                                     S/S PKF
March 23, 2006                                   Certified Public Accountants
                                                 A Professional Corporation


                                       F-1
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          (A Development Stage Company)
                                  Balance Sheet
                                December 31, 2005

ASSETS
                                                                   US$
                                                                   ---
Current Assets
Cash                                                                     -
                                                             --------------

Total Current Assets                                                     -
                                                             --------------

Total Assets                                                             -
                                                             ==============

LIABILITIES

Current Liabilities
Accounts payable and accrued expenses                               20,340
                                                             --------------

Total Current Liabilities                                           20,340
                                                             --------------

Non Current Liabilities
Long-term advance affiliates                                        47,788
                                                             --------------

Total Non Current Liabilities                                       47,788
                                                             --------------

Total Liabilities                                                   68,128
                                                             --------------

STOCKHOLDERS' EQUITY (DEFICIT)

Preferred Stock
 $.001 par value, 20,000,000 shares authorized
 no shares issued and outstanding
Common Stock
 $.001 par value, 100,000,000 shares authorized
 18,067,750 shares issued and outstanding                           18,068
Additional paid-in capital                                         513,251
Retained deficit during the development period                    (599,447)
                                                             --------------

Total Stockholders' Equity (Deficit)                               (68,128)
                                                             --------------

Total Liabilities and Stockholders' Equity (Deficit)                     -
                                                             ==============

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


                                      F-2
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          (A Development Stage Company)
                            Statements of Operations

                                          For the years ended         January 5,
                                              December 31,                  2001
                                                                  (Inception) to
                                                                    December 31,
                                           2005          2004               2005
                                            US$           US$                US$
Revenues:

Sales                                             -             -         4,875
less cost of sales                                -             -         1,045
                                      ------------------------------------------

Gross profit                                      -             -         3,830

Other income
Interest income                                   -         1,073         1,493

                                      ------------------------------------------
                                                  -         1,073         5,323
                                      ------------------------------------------

Costs and expenses:
Legal, professional and accounting           21,721         9,143        35,336
Stock-based compensation                          -       167,850       503,300
Interest expense                              1,905             -         6,572
Administration expenses                      35,350         4,120        60,593
                                      ------------------------------------------
Total expenses                               58,976       181,113       605,801
                                      ------------------------------------------

(Loss) from operations                      (58,976)     (180,040)     (600,478)
Foreign currency exchange gain                1,031             -         1,031
                                      ------------------------------------------
(Loss) before income taxes                  (57,945)     (180,040)     (600,478)

Provision for income taxes                        -             -             -
                                      ------------------------------------------

Net (loss)                                  (57,945)     (180,040)     (599,447)
                                      ==========================================

Basic and diluted loss per common
 shares                                       (0.00)        (0.02)        (0.07)
                                      ------------------------------------------

Weighted average number of common
 shares used in per share
 calculations                            13,282,647    10,206,213     8,346,922
                                      ==========================================

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


                                      F-3
<PAGE>

<TABLE>
<CAPTION>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Deficit)
                     for the period ended December 31, 2005

                                            Common Stock                  Retained
                                                                          (Deficit)
                                                           Additional    During the   Stockholders'
                                              $0.001        Paid-In      Development     Equity
                                             Par Value      Capital        Period       (Deficit)
                                 Shares         US$           US$            US$           US$
                             ----------------------------------------------------------------------
<S>                             <C>               <C>          <C>          <C>           <C>
Balance, January 5, 2001                 -             -             -             -             -

Shares issued to founder for
 organisation cost and
 services at $0.05 per shares    1,910,000         1,910        93,590                      95,500

Shares issued for services
 rendered at $0.05 per share        65,000            65         3,185                       3,250

Shares issued for cash             274,000           274        13,426                      13,700

Net Loss                                                                    (100,852)     (100,852)
                             ----------------------------------------------------------------------
Balance, December 31, 2001       2,249,000         2,249       110,201      (100,852)       11,598

Shares issued for cash             100,000           100         4,900                       5,000

Shares issued for officer's
 compensation                    5,000,000         5,000       120,000             -       125,000

Net Loss                                                                    (140,154)     (140,154)

                             ----------------------------------------------------------------------
Balance, December 31, 2002       7,349,000         7,349       235,101      (241,006)        1,444

Shares issued for services
 rendered at $.05 per share      2,234,000         2,234       109,466                     111,700

Net Loss                                                                    (120,456)     (120,456)

                             ----------------------------------------------------------------------
Balance, December 31, 2003       9,583,000         9,583       344,567      (361,462)       (7,312)
Shares issued for services
 rendered at $0.05 per share       891,000           891        43,659             -        44,550
Options issued for services              -             -       123,300             -       123,300
Loan forgiveness-former major
 shareholder                             -             -         9,319                       9,319

Net Loss                                 -             -             -      (180,040)     (180,040)
                             ----------------------------------------------------------------------

Balance, December 31, 2004      10,474,000        10,474       520,845      (541,502)      (10,183)

Shares issued on cashless
 exercise of options             7,593,750         7,594        (7,594)            -             -
Net Loss                                 -             -             -       (57,945)      (57,945)
                             ----------------------------------------------------------------------
Balance, December 31, 2005      18,067,750        18,068       513,251      (599,447)      (68,128)
                             ======================================================================
</TABLE>

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


                                      F-4
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          (A Development Stage Company)
                             Statement of Cash Flows

                                          For the years ended         January 5,
                                              December 31,                  2001
                                                                  (Inception) to
                                                                    December 31,
                                           2005          2004               2005
                                            US$           US$                US$
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Loss                                    (57,945)     (180,040)     (599,447)
                                      ------------------------------------------

Adjustments to reconcile net loss to
 net cash provided (used) by
 operating activities:
Foreign exchange                             (1,031)            -        (1,031)
Shares and options issued for stock
 based compensation                               -       167,850       503,300
Accrued interest added to principal           1,905             -         1,905
Net changes in:
Accounts payable and accrued expenses        10,157        10,183        25,070
                                      ------------------------------------------

Net cash provided (used in) operating
 activities                                 (46,914)       (2,007)      (70,203)
                                      ------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of convertible debenture                -      (100,000)     (100,000)
Repayment of shareholder advance                  -          (429)         (492)
Proceeds from convertible debenture
 payable                                          -             -       100,000
Shareholder advance                               -             -         5,081
Proceeds from issuance of stock                   -             -        18,700
Net borrowing from affiliates                46,914                      46,914
                                      ------------------------------------------

Net cash (used by)/provided for
 financing activities                        46,914      (100,429)       70,203
                                      ------------------------------------------

Net increase (decrease) in cash                   -      (102,436)            -

Cash at beginning of period                       -       102,436             -
                                      ------------------------------------------

Cash at end of period                             -             -             -
                                      ------------------------------------------

Supplemental Disclosures:
Cash paid for interest                            -             -             -
Cash paid for income taxes                        -             -             -
Stock and options issued for services             -       167,850       503,300
Accrued interest and stockholder
 advances charged to paid in capital              -         9,319         9,319

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


                                      F-5
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          Notes to Financial Statements

1.   ORGANISATION AND BUSINESS

Legend International Holdings,  Inc., formerly Sundew International,  Inc. ("the
Company"),  was incorporated  under the laws of the State of Delaware on January
5, 2001.

The Company has never generated any significant  revenues from operations and is
still considered a development  stage company.  The Company was initially formed
to engage in the business of selling  compatible  inkjet  cartridges  and refill
kits on the Internet for the consumer printer market. In March 2003,  management
of the  Company  decided to engage in the  business of  building  and  acquiring
controlling or other interests in one or more companies  engaged in the contract
sales and  distribution  of specialty  medical  products,  and raise  additional
capital for this purpose. Neither business was successful and operations of both
were  eventually  discontinued.  During  fiscal 2004,  management of the Company
developed a plan of operations to acquire  income-producing  real property.  The
Company did not acquire any properties pursuant to such plan.

Following the change of management in November 2004, the Company has developed a
new  plan  of  operations  for  fiscal  2006,  which  is to  engage  in  mineral
exploration and development activities. Legend's current business plan calls for
the  identification of mineral  properties,  in South America and other parts of
the world,  where it can obtain  secure title to  exploration,  development  and
mining  interests.  The Company's  preference is to identify large gold deposits
with low operating  costs.  The Company is prepared to consider the exploration,
development and mining of profitable base metal interests.

The  Company's  financial  statements  are  prepared  using  generally  accepted
accounting  principles  applicable to a going concern,  which  contemplates  the
realization  of assets and  liquidation  of  liabilities in the normal course of
business.  However,  the Company has incurred net losses since its inception and
has  experienced  liquidity  problems  that raise  substantial  doubt  about its
ability  to  continue  as a  going  concern.  The  stockholders/officers  and or
directors  have  committed to advancing  funds to cover  operating  costs of the
Company to insure that the Company has enough  operating  capital  over the next
twelve months.

Development Stage Enterprise

The Company is a development  stage  enterprise,  as defined in the Statement of
Financial  Accounting  Standards No. 7 "Accounting  and Reporting by Development
Stage  Enterprises".  The  Company is  devoting  all of its  present  efforts in
securing and establishing a new business,  and its planned principal  operations
have not  commenced,  and,  accordingly,  no revenue has been derived during the
organizational period.


                                      F-6
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          Notes to Financial Statements

2.   RECENT ACCOUNTING PRONOUNCEMENTS

In December  2004,  the FASB issued a revision to SFAS No. 123  "Accounting  for
Stock Based Compensation" ("FASB 123R"). This statement established standard for
the  accounting  for  transactions  in  which an  entity  exchanges  its  equity
instruments for goods or services and addresses  transactions in which an entity
incurs  liabilities in exchange for goods or services that are based on the fair
value of the entity's equity  instruments or that may be settled by the issuance
of those equity  instruments.  This  statement is effective for interim  periods
beginning  after June 15,  2005.  The  Company's  policy has been to account for
options using the fair value method under FASB 123. Accordingly, the adoption of
FASB  123R is not  expected  to  have  an  impact  on the  consistent  financial
reporting of the Company.

In May  2005,  the FASB  issued  SFAS no.  154,  "Accounting  Changes  and Error
Corrections  ("SFAS No.  154") which  replaces  APB Opinion No. 20,  "Accounting
Changes"  and SFAS No. 3,  "Reporting  Accounting  Changes in Interim  Financial
Statements-An Amendment of ABP Opinion No. 28. SFAS No. 154 provides guidance on
the  accounting for and reporting of accounting  changes and error  corrections.
Specially,  this statement  requires  "retrospective  application" of the direct
effect  for a  voluntary  change  in  accounting  principle  to  prior  periods'
financial  statements,  if it is practical to do so. SFAS No. 154 also  strictly
defines  the term  "restatement"  to mean the  correction  of an error  revising
previously issued financial statements. SFAS No. 154 is effective for accounting
changes and  corrections of errors made in fiscal years beginning after December
15, 2005 and are  required to be adopted by the Company in the first  quarter of
fiscal year 2007.  Although we will continue to evaluate the application of SFAS
No. 154,  management  does not currently  believe  adoption will have a material
impact on our results of operations, financial position or cash flows.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Stock Options

For the  issuances  of  stock  options,  the  Company  follows  the  fair  value
provisions of Financial Accounting Standards No. 123 "Accounting for Stock Based
Compensation".  SFAS 123  requires  the  company to measure the cost of employee
services received in exchange for an award of equity  instruments based on grant
date fair value.  The cost will be  recognised  over the period  during which an
employee is required to provide  service in exchange for the award - usually the
vesting period. In the case where there is no required service period,  the fair
value of the equity instruments is expensed immediately.

Loss per Common Share

Basic loss per share is computed on the basis of the weighted  average number of
common  shares  outstanding  during  each  year.  Diluted  loss per share is not
presented as the effect of common stock equivalents would be anti dilutive.

Comprehensive Income


                                      F-7
<PAGE>

Statement  of  Financial   Accounting   Standards  (SFAS)  No.  130,  "Reporting
Comprehensive  Income,"  establishes  standards  for  reporting  and  display of
comprehensive  income,  its components and accumulated  balances.  Comprehensive
income is defined to include all changes in equity except those  resulting  from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial  statements.  The  Company  does not have  any  items or  transactions
requiring disclosure of comprehensive income.

Fixed Assets

The Company has no fixed assets at this time.

Federal Income Tax

The Company has adopted the provisions of Financial  Accounting  Standards Board
Statement No. 109,  Accounting for Income Taxes. The Company accounts for income
taxes pursuant to the  provisions of the Financial  Accounting  Standards  Board
Statement No. 109,  "Accounting  for Income Taxes",  which requires an asset and
liability approach to calculating deferred income taxes. The asset and liability
approach requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary  differences  between the carrying
amounts and the tax basis of assets and liabilities.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure on contingent  assets and liabilities at the date of
the  financial  statements,  and the  reported  amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

The Company's  functional and reporting  currency is the US dollar. A portion of
the Company's  administrative  operations  are in Australian  dollars.  Expenses
incurred in a currency other than the reporting currency,  United States dollars
are translated at the date invoiced  Assets and liabilities are re-valued at the
period end exchange rate where  appropriate.  Foreign currency  exchange gain in
2005 amounted to $1,031.

Financial Instruments

The Company's payables carrying value reasonably approximates their fair value.

4.   COMMON STOCK

In January 2001,  1,910,000  common shares were issued to the Company's  founder
for organization cost valued at $95,500, and 65,000 common shares were issued to
a related party in exchange for consulting fee valued at $3,250.

In March 2002,  5,000,000 common shares were issued to the Company's  founder in
exchange for present and future services valued at $125,000.


                                      F-8
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          Notes to Financial Statements

4.   COMMON STOCK (CONT'D)

In April 2002, the Company closed its offering under its registration  statement
filed with the United States  Securities  and Exchange  Commission to sell up to
2,000,000 shares of its common stock at $0.05 per share,  which became effective
on April 11, 2001. The Company sold 374,000 shares (274,000 shares in 2001 and a
further 100,000 shares in 2002) of its common stock under the offering.

In 2003, a total of 2,234,000  common shares were issued to the  Company's  sole
officer and director for services valued at $111,700 or $.05 per share.

In 2004, a total of 891,000  common shares were issued to the  Company's  former
sole officer and director for services valued at $44,550 or $0.05 per share.

In December 2004, the Company issued to Renika Pty Limited ("Renika"), a company
associated with Mr J I Gutnick, 9,000,000 options to be converted into 9,000,000
shares of common stock, at an exercise price of $0.05 and a latest exercise date
of  December  2009 for  services  to be  rendered  to the  Company.  The Company
undertook a Black  Scholes  valuation of these  options  using a $0.05  exercise
price,  $0.05 market price, 5 year life, risk free interest rate of 5.155% and a
volatility of 16.7%.  The  9,000,000  options were valued at $123,300 or $0.0137
each.  The stock options were issued for services  rendered,  to be rendered and
for  agreeing to provide  financial  assistance  to the Company  (not the actual
provision  of  financial  assistance).  The issue of the stock  options  was not
contingent  upon any  further  services  or events.  The stock  options  are not
forfeitable   if  the  services  or  financial   assistance  are  not  provided.
Accordingly, the value of the stock options was expensed immediately.

In September  2005,  Renika  exercised the 9,000,000  options using the cashless
exercise feature and were issued 7,593,750 shares of common stock.

Effective as of December 12,  2005,  the Board of Directors of Company  approved
the  distribution to all  stockholders  for no  consideration of an aggregate of
36,135,500  non-transferable  options,  each of which is exercisable to purchase
one share of common  stock of the Company at an  exercise  price of 25 cents per
share with a latest  exercise date of December 31, 2012. The options were issued
on a pro-rata  basis to all  stockholders  of record on December 31, 2005 on the
basis of two (2)  options  for every one (1)  share of common  stock  owned by a
stockholder  on the record  date.  The  options may not be  exercised  until the
shares  underlying the options are registered under federal and state securities
laws.


                                      F-9
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          Notes to Financial Statements


                                                                            US$
                                                                           2005
5.   LONG-TERM ADVANCE - AFFILIATE                                         ----

Loan from AXIS Consultants, a corporation affiliated with the
President of the Company. Interest accrued at the rate of 9.35%
per annum being the "Reference Rate" of the ANZ Banking Group Ltd.       42,281

Loan from Wilzed Pty Ltd, a corporation affiliated with the President
of the Company. Interest accrued at 9.35% per annum.                      5,507

                                                                      ----------
                                                                         47,788
                                                                      ==========

Each of the  above  affiliates  has  agreed  not to call up the  loans  prior to
December 31, 2006.

6. AFFILIATE TRANSACTIONS

The Company issued  unregistered  common stock to its former  President  between
2001 and 2004, in exchange for services as President,  Secretary and  Treasurer,
and to non management consultants in exchange for their services which was based
on the Company's  expected  initial  offering price of $0.05 per share, has been
reflected as organization  costs,  consulting  services and web site development
cost in the  accompanying  statements  of  operations.  These shares were issued
under Section 4(2) of the Securities Act of 1933, as amended, and are subject to
the resale  provisions  of Rule 144 and may not be sold or  transferred  without
registration except in accordance with Rule 144.  Certificates  representing the
securities bear such a legend.

As of December 31,  2003,  the Company owed the former sole officer and director
an  outstanding  balance of $5,081 for  expenses  incurred  on its  behalf.  The
advance was non-interest bearing and no interest had been accrued.  During 2004,
a former  officer  and  director  incurred  expenses  on behalf  of the  Company
amounting  to $1,236 and the  Company  paid  $1,665 and the former  officer  and
director forgave the balance of $4,652.

This amount, along with $4,667 of accrued and unpaid interest on the convertible
note at  January  1, 2004 was  forgiven  and has been  reflected  as a credit to
additional paid in capital in the accompanying 2004 financial statements.

During 2003, the former  officers and directors  loaned an amount of $100,000 to
the Company in the form of a  convertible  debenture.  The  debenture  was an 8%
senior subordinated convertible debenture due March 31, 2004 and was convertible
into  restricted  common  stock at $0.10 per share.  In October 2004 the Company
notified the former officers and director of a decision to prepay the debentures
in full and an amount of $100,000 was repaid. No interest was paid to the former
officers and directors.

The Company is one of five  affiliated  companies of which three are  Australian
public companies listed on Australian Stock Exchange.  Each of the companies has
some common  Directors,  officers and  shareholders.  In  addition,  each of the
companies is  substantially  dependent  upon AXIS for its senior  management and
certain mining and exploration  staff. A number of arrangements and transactions
have been entered into from time to time between such companies. It has been the
intention of the affiliated  companies and  respective  Boards of Directors that
each of such  arrangements  or  transactions  should  accommodate the respective
interest of the relevant affiliated companies in a manner which is fair to all


                                      F-10
<PAGE>

                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          Notes to Financial Statements

6.   AFFILIATE TRANSACTIONS (CONT'D)

parties and  equitable  to the  shareholders  of each.  Currently,  there are no
material arrangements or planned transactions between the Company and any of the
other affiliated companies other than AXIS.

AXIS is paid by each  company for the costs  incurred by it in carrying  out the
administration  function  for  each  such  company.   Pursuant  to  the  Service
Agreement, AXIS performs such functions as payroll, maintaining employee records
required by law and by usual accounting procedures,  providing insurance, legal,
human resources, company secretarial,  land management,  certain exploration and
mining support,  financial,  accounting advice and services. AXIS procures items
of equipment necessary in the conduct of the business of the Company.  AXIS also
provides  for the Company  various  services,  including  but not limited to the
making available of office supplies, office facilities and any other services as
may be required  from time to time by the Company as and when  requested  by the
Company.

The Company is required to reimburse  AXIS for any direct costs incurred by AXIS
for the  Company.  In addition,  the Company is required to pay a proportion  of
AXIS's overhead cost based on AXIS's  management  estimate of our utilisation of
the facilities and activities of AXIS plus a service fee of not more than 15% of
the direct and overhead  costs.  AXIS has not charged the 15% service fee to us.
Amounts  invoiced by AXIS are required to be paid by us. The Company is also not
permitted to obtain from sources  other than AXIS,  and we are not  permitted to
perform  or  provide  ourselves,   the  services  contemplated  by  the  Service
Agreement,  unless we first  requests AXIS to provide the service and AXIS fails
to provide the service within one month.

The Service Agreement may be terminated by AXIS or us upon 60 days prior notice.
If the Service Agreement is terminated by AXIS, the Company would be required to
independently  provide,  or to seek an  alternative  source  of  providing,  the
services  currently provided by AXIS. There can be no assurance that the Company
could independently provide or find a third party to provide these services on a
cost-effective  basis or that any transition  from receiving  services under the
Service  Agreement will not have a material  adverse effect on us. The Company's
inability  to provide  such  services or to find a third  party to provide  such
services may have a material adverse effect on our operations.

In  accordance  with the Service  Agreement  AXIS  provides the Company with the
services of the Company's Chief Executive  Officer,  Chief Financial Officer and
clerical employees, as well as office facilities, equipment,  administrative and
clerical  services.  We pay AXIS for the actual costs of such  facilities plus a
maximum  service fee of 15%.  In December  2004,  the  Company  entered  into an
agreement with AXIS  Consultants Pty Ltd to provide  geological,  management and
administration  services  to the  Company.  AXIS is  affiliated  through  common
management.  AXIS provided these services  during December 2004 at a cost to the
Company of $1,560.

During  fiscal  2005 AXIS  provided  these  services  and  charged the Company a
$20,203  management fee, $12,171 for salaries incurred in relation to AXIS staff
that provided  administration  services to the Company and interest of $1,771 on
the  outstanding  balance.  The amount  owed to AXIS at  December  31,  2005 was
$42,281.


                                      F-11
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          Notes to Financial Statements

6.   AFFILIATE TRANSACTIONS (CONT'D)

In September  2005,  Wilzed Pty Ltd  ("Wilzed"),  a company  associated with the
President and CEO of the Company, Joseph Gutnick, paid expenses on behalf of the
Company. Wilzed loaned the company $5,565 and charged interest of $134 and there
was an exchange gain on the  outstanding  balance of $192. As December 31, 2005,
the Company owed Wilzed $5,507.

In December 2004, the Company issued to Renika, a company  associated with Mr. J
I Gutnick,  9,000,000  options to be converted into  9,000,000  shares of common
stock,  at an exercise  price of 5 cents and a latest  exercise date of December
2009 for services to be rendered to the Company.  The Company  undertook a Black
and Scholes  valuation of these options using a 5 cent  exercise  price,  5 cent
market price, 5 year life, risk free interest rate of 5.155% and a volatility of
16.7%.  This valued the  9,000,000  options at  $123,300 or 1.37 cents each.  In
September  2005,  Renika  exercised  the  9,000,000  options  using the cashless
exercise feature and were issued 7,593,750 shares of common stock.

7.   INCOME TAXES

The Company has adopted the  provisions of SFAS No. 109  "Accounting  for Income
Taxes". SFAS 109 requires recognition of deferred tax liabilities and assets for
the expected  future tax  consequences  of events that have been included in the
financial statements or tax returns. Under this method, deferred tax liabilities
and  assets  are  determined  based on the  differences  between  the  financial
statement  and tax basis of assets and  liabilities  using  enacted tax rates in
effect for the year in which the differences are expected to reverse.

At December 31, 2005 and 2004 deferred taxes consisted of the following:

                                                          2005           2004
                                                             $              $
                                                ------------------------------
Deferred tax assets

Net operating loss carry-forward                       200,400        180,942
Less valuation allowance                              (200,400)      (180,942)
                                                ------------------------------
Net deferred taxes                                           -              -
                                                ==============================

The valuation allowance offsets the net deferred tax asset for which there is no
assurance of recovery.  The valuation  allowance will be evaluated at the end of
each year, considering positive and negative evidence about whether the deferred
tax asset will be realized.

At that time, the allowance will either be increased or reduced; reduction could
result  in the  complete  elimination  of the  allowance  if  positive  evidence
indicates  that the value of the deferred  tax assets is no longer  impaired and
the allowance is no longer required.


                                      F-12
<PAGE>


                       LEGEND INTERNATIONAL HOLDINGS, INC.
                          Notes to Financial Statements

7.   INCOME TAXES (CONT'D)

As a result of the ownership change that occurred in November 2004 (see note 1),
Internal  Revenue Code Section 382 limits the use of  available  operating  loss
carryforwards  for losses incurred prior to the ownership  change.  In addition,
the Company will need to file tax returns for 2004 and 2005 to establish the tax
benefits of the net operating loss carry forwards.  Future net operating  losses
will be fully  available to offset future taxable  income.  Total  available net
operating  loss  carryforwards,  which are  subject  to  limitations,  amount to
approximately  $588,000  at December  31, 2005 and expire in years 2021  through
2025.

8.   SUBSEQUENT EVENTS - POTENTIAL ACQUISITION

Effective as of March 3, 2006, Legend  International  Holdings,  Inc, a Delaware
corporation  (the  "Company")  entered  into a  Contract  for the Sale of Mining
Tenements  ("Contract")  with Astro Diamond  Mines N.L.  ("Astro") an Australian
company  pursuant to which the Company  shall  acquire  certain  diamond  mining
tenements in Northern Australia from Astro,  subject to the terms and conditions
discussed  below. The Contract is conditional on the approval of shareholders of
Astro approving the sale of the tenements to Legend.  The consideration  payable
by Legend to Astro is  Australian  dollars  $1.5  million and is payable 90 days
after the  approval of Astro  shareholders.  If Legend does not make the payment
within the time period, the Contract is cancelled. At settlement, Legend is also
required to pay to Astro any costs  incurred on the tenements  after February 1,
2006. Astro has provided commercial warranties which are usual for a transaction
of this nature in favour of Legend.  Astro  intends to schedule a meeting of its
shareholders  in April  2006 to  consider  and vote  upon  the  Contract.  Under
Australian  law, Astro is required to provide an  independent  experts report to
shareholders for this transaction.  In order to prepare the independent  experts
report, a mineral valuation was prepared on behalf of Astro which indicated that
the  preferred  value for the  tenements  the  subject  of the  transaction  was
Australian  dollars  $1.5  million.  This formed the basis of the  consideration
agreed by the parties.

The President and Chief Executive Officer of the Company,  Mr. J. I. Gutnick, is
Chairman  and  Managing  Director of Astro and Dr DS  Tyrwhitt,  an  independent
Director of the Company is also a Director of Astro.

The Company is currently  working on funding options to provide the cash for the
payment of the  purchase  price  which may include  equity or debt  funding or a
mixture of both.



                                      F-13