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

|X|   Annual report pursuant to section 13 or 15(d) of the Securities Exchange
      Act of 1934 For the fiscal year ended September 30, 2004

|_|   Transition report under section 13 or 15(d) of the Securities Exchange Act
      of 1934 For the transition period from __________ to _____________

                        Commission File Number 333-56262


                        EL CAPITAN PRECIOUS METALS, INC.
                        --------------------------------
                 (Name of small business issuer in its charter)

NEVADA                                                                88-0482413
------                                                                ----------
(State or other jurisdiction of                       (I.R.S. Employer I.D. No.)
incorporation or organization)

                       14301 North 87th Street, Suite 216
                            Scottsdale, Arizona 85260
                            -------------------------
               (Address of principal executive offices)(Zip Code)

         Issuer's telephone number, including area code: (480) 607-7093

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

         Securities registered under Section 12(g) of the Exchange Act:

                          $.001 par value, Common Stock
                                (Title of class)

--------------------------------------------------------------------------------
Check whether the Issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such report(s), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|

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

The issuer had no revenue for its most recent fiscal year.

The aggregate market value of the issuer's voting stock held as of December 31,
2004 by non-affiliates of the issuers was $16,115,202.60 based on the closing
market price of the Registrant's common stock of $0.60 as reported on the OTC
Bulletin Board.

As of December 31, 2004, issuer had 66,574,953 shares of its $.001 par value
common stock outstanding.

Transitional Small Business Format:   Yes |_|   No |X|

Documents incorporated by reference: none
<PAGE>

                        EL CAPITAN PRECIOUS METALS, INC.
                                   FORM 10-KSB

THIS REPORT MAY CONTAIN CERTAIN "FORWARD-LOOKING" STATEMENTS AS SUCH TERM IS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 OR BY THE
SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH
REPRESENT THE REGISTRANT'S EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED
TO, STATEMENTS CONCERNING THE REGISTRANT'S OPERATIONS, ECONOMIC PERFORMANCE,
FINANCIAL CONDITION, GROWTH AND ACQUISITION STRATEGIES, INVESTMENTS, AND FUTURE
OPERATIONAL PLANS. FOR THIS PURPOSE, ANY STATEMENTS CONTAINED HEREIN THAT ARE
NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING
STATEMENTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, WORDS SUCH AS
"MAY", "WILL", "EXPECT", "BELIEVE", "ANTICIPATE", "INTENT", "COULD", "ESTIMATE",
"MIGHT", "PLAN", "PREDICT" OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS
THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND
UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE REGISTRANT'S CONTROL, AND ACTUAL
RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY OF IMPORTANT FACTORS,
INCLUDING UNCERTAINTY RELATED TO ACQUISITIONS, GOVERNMENTAL REGULATION, MANAGING
AND MAINTAINING GROWTH, THE OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES,
VOLATILITY OF STOCK PRICE AND ANY OTHER FACTORS DISCUSSED IN THIS AND OTHER
REGISTRANT FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.

THESE RISKS AND UNCERTAINTIES AND OTHER FACTORS INCLUDE, BUT ARE NOT LIMITED TO,
THOSE SET FORTH UNDER ITEM 1 - RISK FACTORS. GIVEN THESE RISKS AND
UNCERTAINTIES, READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON OUR
FORWARD-LOOKING STATEMENTS. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING
STATEMENTS ATTRIBUTABLE TO THE COMPANY OR TO PERSONS ACTING ON OUR BEHALF ARE
EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THESE CAUTIONARY STATEMENTS. EXCEPT AS
REQUIRED BY FEDERAL SECURITIES LAWS, WE DO NOT INTEND TO UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

(a) Business Development

      El Capitan Precious Metals, Inc. (hereinafter, the "Company", "we" and
"our" refer to El Capitan Precious Metals, Inc.) is a precious minerals company
based in Scottsdale, Arizona. We are an exploration stage company that owns
interests in several mines located in the southwestern United States. We are
principally engaged in the exploration, development and mining of precious
metals, iron ores and other minerals. Our primary assets include interests in
the El Capitan Mine located near Capitan, New Mexico, the COD Mine located near
Kingman, Arizona, and the Weaver Mine located near Congress, Arizona. To date,
we have not had any revenue producing operations.


                                      -1-
<PAGE>

      The Company was previously organized as a Nevada corporation on December
20, 2000 under the name DML Services, Inc. ("DML"). DML was in the catering and
food service business, operating under the name "Go Espresso." On March 17,
2003, we sold the assets and the operations of the catering and food service
business to Michael Flores and Deborah Flores, our executive officers and
directors at that time, in exchange for the redemption of 30,120,000 shares of
our common stock, par value $.001 ("Common Stock": hereinafter, all references
to shares of "Common Stock" shall include adjustments for the four for one stock
split effective November 25, 2002 and the 200% stock dividend effective July 30,
2004, as appropriate) held by Michael Flores and Deborah Flores and $50,000 in
cash.

      On March 18, 2003, we acquired all of the issued and outstanding common
stock of El Capitan Precious Metals, Inc., a Delaware corporation ("ECPN"), in
exchange for the issuance to ECPN's shareholders of 39,000,000 shares of our
Common Stock, which constituted approximately 85% of our total shares
outstanding immediately following the exchange. ECPN constituted the accounting
acquirer in the transaction, and the transaction was recorded as a reverse
acquisition. Our Company then changed its name to "El Capitan Precious Metals,
Inc." Immediately after the transaction Gold and Minerals Co., Inc., a Nevada
corporation ("Gold and Minerals"), which then held 77.5% of ECPN's total
outstanding equity, became our controlling shareholder holding 30,225,000 shares
of our Common Stock, then constituting 66.1% of our outstanding Common Stock.

      After the transaction with ECPN, our primary asset was a 40% interest in
the El Capitan Mine, an inactive iron and related ore mine located in New
Mexico, including the assets used to explore and mine the property. The El
Capitan Mine contains four patented claims and three unpatented claims on
approximately 200 acres in the Capitan Mountains in Lincoln County, New Mexico.
The other 60% interest in the El Capitan Mine is held by El Capitan, Ltd.
("ECL"), an Arizona corporation and a wholly-owned subsidiary of Gold and
Minerals.

      In August 2003, we acquired from Gold and Minerals certain assets known as
the COD Mine located near Kingman, Arizona. The assets we obtained included
thirteen mining claims granted by the United States Bureau of Land Management
(the "BLM"), a building and personal property. In consideration for the
purchase, we issued 3,600,000 shares of our Common Stock to Gold and Minerals,
holding a market value at that time of approximately $1,440,000. Because the COD
Mine was acquired from our controlling stockholder in exchange for our Common
Stock, the transaction was accounted for as a non-monetary exchange and the COD
Mine was recorded at no value on our financial statements. Contemporaneously
with the purchase of the COD Mine, we entered into a management consulting
agreement with Mr. Larry Lozensky, the President of Gold and Minerals, pursuant
to which Mr. Lozensky agreed to continue to manage and operate the COD Mine
until December 31, 2004 in exchange for a management consulting fee of $20,000
per month and the issuance to Mr. Lozensky of 600,000 shares of our Common
Stock. Under the management consulting agreement, we obtained the right to pay
the management consulting fee to Mr. Lozensky in the form of our Common Stock.

      In May 2004, we executed a joint venture agreement (the "Joint Venture")
with U.S. Canadian Minerals, Inc., a publicly-traded Nevada company ("UCAD"), to
explore, operate and utilize the COD Mine, including the recovery of gold and
silver from the tailings of the COD Mine. The Joint Venture is to operate under
the name "CanEl" and will exist until May 11, 2020, unless earlier terminated by
the parties. Pursuant to the Joint Venture, we transferred to UCAD an 80%
interest in the thirteen claims constituting the COD Mine in exchange for
720,000 shares of UCAD restricted common stock . On the transaction date, shares
of unrestricted common stock of UCAD were trading for $2.85 per share.


                                      -2-
<PAGE>

      Pursuant to the Joint Venture, we retained the right to operate the COD
Mine as it relates to the tailings and settlement pond and agreed to contribute
the equipment needed for such operations, which are anticipated to begin in
2005. UCAD has agreed to contribute 90 days operating capital to provide for at
least three workers, fuel, necessary equipment, and equipment repair and
maintenance. In July 2004, UCAD paid $12,500 toward its obligations. After the
90-day period, the parties are to split the costs and expenses related to the
operation of the mine in accordance with their profit participation in the COD
Mine. Net profits, if any, from the operations tailings and settlement pond
operations will be split equally among the Company and UCAD. UCAD shall retain
100% of any other profit. Contemporaneously with the Joint Venture Agreement
with UCAD, we entered into an Agreement for Consulting Services with UCAD,
pursuant to which we engaged UCAD for a period of two years to provide us
services, to include identifying, studying and evaluating merger, acquisition,
joint venture, strategic alliance or other proposals in addition to the
implementation of public relations programs for the Company. As consideration
for its services, UCAD received warrants to purchase up to 3,000,000 shares of
our Common Stock, exercisable for one year at an exercise price of $.14 per
share.

      In July 2004, we acquired from Gold and Minerals the Weaver Mine located
near Congress, Arizona. Consideration for this purchase was 3,000,000 shares of
our Common Stock, which had a market value of $400,000 on the closing date.
Because the Weaver Mine was acquired from our controlling stockholder in
exchange for our Common Stock, and the controlling shareholder had a basis of
zero in the property, the transaction was accounted for as a non-monetary
exchange and the Weaver Mine was recorded at no value on our financial
statements.

      In July 2004, we signed an agreement with Mr. Bob Langguth regarding the
operation of the Rainbow Valley Mine, consisting of claims located on
approximately 1,720 acres in Maricopa County, Arizona. Under the terms of this
agreement, we are paying Mr. Langguth $2,500 per month beginning in August 2004
for management of the testing, permitting and further development of the Mine.
These payments shall continue until the permitting process for the Mine is
complete. Upon results of the final assays, permitting and obtaining the
necessary right of ways, it is the Company's intention to utilize this site for
mining iron ore and as a by-product, sand and gravel. Upon completion of
successful testing and permitting of the site, the Company is required to make a
final payment of $100,000 to Mr. Langguth. In addition, we have agreed to pay a
royalty of $1.00 per ton for each ton of iron ore shipped from the property as
well as 3% of the profit before taxes for any sales of minerals from this
property.

(b) Business of Issuer

      We are an exploration stage company that owns interests in several mines
located in the southwestern United States. We are principally engaged in the
exploration, development and mining of precious metals, iron ores and other
minerals. At this time, we are not engaged in any revenue-producing operations.


                                      -3-
<PAGE>

      During the coming fiscal year, the Company intends to divide itself into
two operational divisions: the (i) Precious Metals Division and (ii) the Iron
Ore/Sand and Gravel Division. Through our Precious Metals Division, we intend to
continue the exploration and development of the El Capitan Mine, COD Mine, and
Weaver Mine. As noted in more detail in Item 2 - Description of Property, these
mines are in various stages of exploration and development. After completing
additional testing to determine the existence and concentration of precious
metals in these mines, and if the results of such testing are positive, the
Company anticipates commencing production of some of these properties in 2005 if
it is economically feasible to do so.

      Through the Iron Ore/Sand and Gravel Division, the Company intends to
enter into operations in 2005 through any or all of the El Capitan, Rainbow
Valley and Little Valley Mines. The El Capitan Mine has been proven to have high
iron ore content. We intend to conduct additional testing on this property to
determine the concentration of iron ore. We also intend to conduct testing on
the Rainbow Valley property in early 2005 to determine the existence and
concentration of iron ore on that property. If the results of our testing are
positive, and extraction is economically feasible, we intend to extract the iron
ore from these properties for sale to steel mills in the United States and
overseas. As a by-product of producing iron ore, ore is separated from sand,
gravel and other minerals through a magnetic separation process. Should this
process result in salable amounts of sand and gravel, we intend to market and
sell sand and gravel to the Phoenix, Arizona market.

Price of Precious Metals

      Gold, silver and platinum are each traded as investments on various world
markets including London, New York, Zurich and Tokyo and are fixed twice daily
in London. The "fix" is the reference price on which a large number of precious
metal transactions around the world are based. The price is set by a number of
market members matching buy and sell orders from all over the world.

      High, low and average London afternoon fix prices for gold, silver and
platinum for the years ended December 31, 2004, 2003, 2002 and 2001 are as
follows:

Gold - London Afternoon Fix Prices - US Dollars

           Year ended              High              Low            Average
           ----------              ----              ---            -------
December 31, 2004                 $454.20           $375.00          $409.72
December 31, 2003                  416.25            328.18           363.38
December 31, 2002                  349.30            277.75           309.73
December 31, 2001                  293.25            255.95           271.04
Data Source: Kitco

Silver - London Afternoon Fix Prices - US Dollars

           Year ended              High              Low            Average
           ----------              ----              ---            -------
December 31, 2004                 $8.2900           $5.4950          $6.6711
December 31, 2003                  5.9650            4.3700           4.8758
December 31, 2002                  5.0975            4.2350           4.5995
December 31, 2001                  4.8200            4.0650           4.3702
Data Source: Kitco


                                      -4-
<PAGE>

Platinum - London Afternoon Fix Prices - US Dollars

           Year ended             High              Low             Average
           ----------             ----              ---             -------
December 31, 2004                 $936.00           $744.00          $845.31
December 30, 2003                  840.00            603.00           691.31
December 31, 2002                  607.00            453.00           539.13
December 31, 2001                  639.50            415.00           529.04
Data Source: Kitco

      Should we be successful in developing and mining any of the mines and
recover appreciable amounts of gold or other precious metals, our revenues would
be highly dependent upon the price of these precious metals, the market for
which can be highly volatile. There is no assurance that should any of the
properties be successfully mined, it will generate significant revenue from the
sale of any precious metals to provide appreciable revenue to our Company.

Iron Ore

      Iron ore is a mineral substance which, when heated in the presence of a
reductant, will yield metallic iron (Fe). Iron ore is the source of primary iron
for the world's iron and steel industries, and is essential for the production
of steel. Approximately 98% of all iron ore is used in steelmaking. Iron ore is
mined in about 50 countries. The seven largest of these producing countries
account for about three-quarters of total world production. Australia and Brazil
together dominate the world's iron ore exports, each having about one-third of
total exports.

      The element iron (Fe) is one of the most abundant on earth, but it does
not exist in nature in its useful metallic form. Iron ore is the term applied to
a natural iron-bearing mineral in which the content of iron is sufficient to be
commercially usable. Metallic iron, from which steel is derived, must be
extracted from iron ore. By definition, steel is a combination of iron with a
small amount of carbon.

      Thousands of products having various chemical composition, forms, and
sizes are made of iron and steel by casting, forging, and rolling processes.
Iron and steel comprise about 95 percent of all the tonnage of metal produced
annually in the United States and the world. On the average, iron and steel are
by far the least expensive of the world's metals. In some applications steel is
required because the strength of other metals is not suitable, such as steel
framing for large buildings.

Transportation

      In the event it is commercially reasonable for us to extract and sell
precious metals, iron ore or sand and gravel, we will incur material costs to
transport the goods to any eventual buyers. This will likely include a
combination of transportation by truck, railroad and possibly ships. We have
been in discussion with various trucking and railroad companies with regard to
our potential transportation needs. It is impossible at this time to adequately
estimate the costs of transportation.

      Currently, there is a national shortage of rail cars for transporting our
products which could affect the ability to market our products in quantities
sufficient to meet future contracts. In light of this current shortage, we are
considering other viable means of transportation in the event the shortage is
continuing at the time we need transportation services.


                                      -5-
<PAGE>

Competition

      The mining industry has historically been highly competitive. It is
dominated by multi-billion dollar, multi-national companies that possess
resources exponentially greater than ours. Given our size and financial
condition, there is no assurance we can compete with these companies for the
mining and sale of our products.

Government Regulation

      Mining and exploration is highly regulated and subject to various
constantly changing federal and state laws and regulations governing the
protection of the environment. These laws are becoming more and more
restrictive, and include without limitation: the Clean Water Act; the Clean Air
Act; the Comprehensive Environmental Response, Compensation and Liability Act;
the Emergency Planning and Community Right-to-Know Act; the Endangered Species
Act; the Federal Land Policy and Management Act; the National Environmental
Policy Act; the Resource Conservation and Recovery Act; and related state laws.
The environmental protection laws dramatically impact the mining and mineral
extraction industries as it pertains to both the use of hazardous materials in
the mining and extraction process and from the standpoint of returning the land
to a natural look once the mining process is completed. Compliance with federal
and state environmental regulations can be expensive and time consuming.

         Compliance with the various government regulations requires us to
obtain multiple permits for each mining property, including without limitation
the following: "Notice of Intent" to explore, "Plan of Operations" to explore,
"Plan of Operations" to mine, "Reclamation Permit", "Air Quality Permit", "Water
Quality Permit", "Industrial Artificial Pond Permit", and various health and
safety permits. These permits are continually subject to amendment or renewal.
Although there is no guarantee that the regulatory agencies will timely approve,
if at all, the necessary permits for our current and anticipated operations, we
have no reason to believe at this time that we will not obtain the necessary
permits in due course. The cost of permits for each property vary, and we are
unable at this time to estimate the total cost of such permits.

Employees

      We currently have four employees. Two of these employees also serve as
directors of the Company. Our officers and directors devote only such time to
our business as is necessary to conduct the operations of the Company.
Additionally, the Company uses consultants for the testing and developing of
mine claims. Once we enter the operations phase, we anticipate hiring additional
employees, and utilizing a combination of employees and consultants as necessary
to conduct our mining operations.

Available Information

      We are a Nevada corporation with our principal offices at 14301 North 87th
Street, Suite 216, Scottsdale, Arizona 85260. Our telephone number is (480)
607-7093. Our website address is www.elcapitanpmi.com.


                                      -6-
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

El Capitan Property

      The El Capitan property consists of approximately 200 acres of mineral
lands bounded by the Lincoln National Forest in Lincoln County, New Mexico. The
property is situated in the Capitan Mountains, near the city of Capitan, in
southwest New Mexico. The main site can be reached by going north from Capitan
on State Road 246 for 5.5 miles, turning right onto an improved private road and
proceeding for about .7 miles.

      The Company holds a 40% interest in the El Capitan Mine. The other 60% is
owned by El Capitan, Ltd., a wholly-owned subsidiary of our majority
shareholder, Gold and Minerals. The Mine consists of four patented and nine BLM
lode claims with mineral deposits to a depth of approximately 300 feet. The lode
claims known as Mineral Survey Numbers 1440, 1441, 1442 and 1443 were each
located in 1902 and patented in 1911. To our knowledge, the Mine was last active
in 1987, prior to its acquisition by El Capitan Ltd.

      The following mining equipment is located at the El Capitan Mine site:

      o     40 x 80 foot steel building;
      o     two impact mills;
      o     a screening plant;
      o     loaders;
      o     water tanks;
      o     conveyors;
      o     7,500 pound capacity furnace;
      o     UHF concentration tables;
      o     a fine grading attrition mill;
      o     chemical reactors;
      o     laboratory and fire assay equipment;
      o     150 and 250 kilowatt generators;
      o     a magnetic separator;
      o     a 150 pound furnace;
      o     and other miscellaneous mining supplies and equipment

      There exists a potential for the discovery of recoverable amounts of
precious metals contained within the lode claims. A study focusing upon the iron
magnetite/hematite ore confirmed the geometry described by previous
investigations. In addition, an extensive geophysical study has shown that the
subsurface iron ore is somewhat larger than previously thought and that there is
a substantial amount of iron ore contained within the Eastern claims which had
not previously been considered. An extensive US Bureau of Mines/ USGS study
(Soule' 1947) was conducted in the 1940's focusing on the potential iron ore.

      Reserves have been defined as two separate types: (i) iron ore body which
has been shown to contain precious metals and associated mineralization, and
(ii) banded, fractured mineralized limestone and other rock existing between the
main iron ore body 250 to 300 ft. below. By using core holes located at
strategic points throughout the main ore body and six government churn holes
that were completed in the 1940's, we have been able to develop subsurface
information and define the ore body.

      There have been no proven commercial precious metals reserves on the El
Capitan Mine site. The Company has obtained necessary permits for the Mine, and
intends to continue testing the property in 2005. The Company has entered into
an agreement with AuRIC Metallurgical Labs of Salt Lake City, Utah ("AuRIC") to
further test the El Capitan Mine. AuRIC offers significant metallurgical
experience in the platinum group metals, and is currently developing a process
to recover gold, platinum, palladium and silver from ores. AuRIC has performed
tests on samples from the El Capitan Mine, which have resulted in commercial
values of non-magnetic ore. We have also retained the services of Dr. Clyde
Smith to work with AuRIC in the testing of the Mine. Dr. Smith is a Consulting
Geologist with over 30 years of experience in the mining industry. Dr. Smith
received a Ph. D. from the University of Idaho in Moscow, Idaho and an M. Sc.
from the University of British Columbia in Vancouver, British Columbia. Dr.
Smith also served as Industrial Associate at the School of Earth Sciences at
Stanford University for a period of 10 years.


                                      -7-
<PAGE>

      Based on the samples taken by AuRIC and the analysis of Dr. Smith, the
Company intends to complete more extensive testing on the samples. If the
results are positive and it is economically feasible, the Company intends to
have a 10 ton per day pilot plant in production by August 2005.

COD Mine

      The COD Mine is an underground mine located in the Cerbat mountains in
Mohave County, Arizona, approximately 10 miles north, northwest of Kingman,
Arizona. The property contains 13 claims granted by the BLM. The rock structures
on the property are precambrian granites with oxide ores being prevalent at
upper levels of the mine, and sulfide ores being prevalent at the lowest levels
of the mine. This property has previously been mined through two underground
shafts leading to seven levels, most recently in the mid 1980's. The COD Mine
was originally located in 1878.

      We have taken preliminary samples at the COD Mine property. Pursuant to a
consulting management consulting agreement, we have retained Mr. Larry Lozensky,
the President of Gold and Minerals, to manage and operate the COD Mine in
exchange for a management fee of $20,000 per month and the issuance to Mr.
Lozensky of 600,000 shares of our Common Stock. The agreement with Mr. Lozensky
expired on December 31, 2004. We anticipate entering into a new agreement with
Mr. Lozensky to manage and operate the property in the near future at terms to
be negotiated by the parties.

      Pursuant to a joint venture agreement with U.S. Canadian Minerals, Inc.
("UCAD") entered into in May 2004, we transferred an 80% interest in the COD
Mine to UCAD. Pursuant to the agreement, we plan to operate the Mine to recover
gold and silver from the tailings of the COD Mine. As operator of the COD Mine,
we will receive 50% of the profits from the gold and silver tailings. We are
required to contribute the equipment needed for such operations, which are
anticipated to begin in January 2005. We also anticipate entering into a new
management consulting agreement with Mr. Lozensky to manage the COD Mine
property, as the current management consulting agreement with Mr. Lozensky
expired on December 31, 2004. UCAD has agreed to contribute 90 days operating
capital to provide for at least three workers, fuel, necessary equipment, and
equipment repair and maintenance. After the 90-day period, the parties are to
split the costs and expenses related to the operation of the mine in accordance
with their profit participation in the COD Mine.

      The following mining equipment is located on the COD Mine property:

      o     45 x 94 foot steel building
      o     20 x 24 foot steel building
      o     small steel building for equipment


                                      -8-
<PAGE>

      o     gravity mill and associated equipment
      o     rod mill
      o     diagonal deck table
      o     various fuel and water storage tanks
      o     crushing circuit equipment and conveyors
      o     compressors and generators
      o     hoists
      o     52' head frame including head frame, ore skip and work car
      o     miscellaneous other mining supplies and equipment

      We have conducted some exploration at the COD Mine, and intend to conduct
further testing in 2005.

Weaver Mine

      The Weaver Mine consists of approximately 40 acres of land located in
Maricopa County, Arizona. The property is located approximately 75 miles north
of Phoenix, near Congress, Arizona.

      The Weaver Mine was acquired from our majority shareholder, Gold and
Minerals. Prior to the acquisition by Gold and Minerals, the Mine was operated
by our President, Charles C. Mottley, and a partner of Mr. Mottley. Mr. Mottley
and his partner operated the Mine from 1982 to 1984, mining approximately
150,000 tons of iron ore during that period of time. There was free gold
recovered with gold nuggets up to an ounce in size. There are approximately
6,000,000 tons of ore at the Weaver Mine.

      We are in the process of completing the permitting on this property. We
currently have no equipment at the Weaver Mine, but we intend to acquire and
place necessary equipment at the mine during fiscal year 2005 to enter this
property into production once the necessary permitting is completed.

Rainbow Valley Mine

      The Rainbow Valley Mine consists of approximately 1,720 acres located in
Maricopa county, approximately 30 miles south of Phoenix near Mobile, Arizona.

      In July 2004, we signed an agreement with Mr. Bob Langguth pursuant to
which we will operate the Rainbow Valley Mine. Under the terms of the agreement,
we are to pay Mr. Langguth $2,500 per month beginning in August 2004 to manage
the testing and further development of the Mine. These payments shall continue
until the permitting process for the Mine is complete. Upon the completion of
successful testing and permitting, we are required to make a final payment of
$100,000 to Mr. Langguth. In addition, we have agreed to pay a royalty of $1.00
per ton for each ton of iron ore shipped from the property as well as 3% of the
profit before taxes for any sales of minerals from this property.

      We have concluded the permitting requirements for testing the Rainbow
Valley Mine. At this time, we have only completed small samples of this
property, and intend to conduct more thorough exploration and testing in 2005.
Additionally, upon positive final assays, necessary permitting and obtaining the
necessary right of ways, we intend to mine iron ore and its by-products, sand
and gravel, in early 2005.


                                      -9-
<PAGE>

      We have hired Steve Balich, who previously worked for Phelps Dodge Mining
Company for more than 28 years, including 18 years in the transportation and
logistics area, to supervise the transportation and logistic effort for El
Capitan. In addition, we entered into a preliminary joint venture agreement with
MG East, LLC ("MG East") in December 2004 pursuant to which MG East will act as
a contract miner on the property. The agreement with MG East provides for equal
participation by the parties in installing a portable screening and crushing
plant at the site. In the first or second quarter of 2005, MG East will move
equipment to the Rainbow Valley Mine where they will separate the iron ore from
the sand and gravel, which is expected to be sold in the Arizona market.

Little Valley Mine

      The Little Valley Mine is located in northwestern Nevada near the town of
Lovelock. The Company currently holds a six month option to investigate the
Little Valley Mine pursuant to an agreement entered into with Little Valley
Company in October 2004. Under the agreement, we will obtain the necessary
permits to evaluate the property, and if satisfied with the results, we intend
to negotiate a long-term agreement to purchase or lease the property from the
Little Valley Company.

Risk Factors

Risks relating to our Common Stock

Trading of our Common Stock is limited.

      Trading of our common stock is conducted on the National Association of
Securities Dealers' Over-the-Counter Bulletin Board, or "OTC Bulletin Board."
This has an adverse effect on the liquidity of our common stock, not only in
terms of the number of shares that can be bought and sold at a given price, but
also through delays in the timing of transactions and reduction in security
analysts' and the media's coverage of us. This may result in lower prices for
our common stock than might otherwise be obtained and could also result in a
larger spread between the bid and asked prices for our common stock.

Because it is a "penny stock" it can be difficult to sell shares of our Common
Stock.

      Our common stock is a "penny stock." Broker-dealers who sell penny stocks
must provide purchasers of these stocks with a standardized risk disclosure
document prepared by the SEC. This document provides information about penny
stocks and the nature and level of risks involved in investing in the penny
stock market. A broker must also give a purchaser, orally or in writing, bid and
offer quotations and information regarding broker and salesperson compensation,
make a written determination that the penny stock is a suitable investment for
the purchaser, and obtain the purchaser's written agreement to the purchase. The
penny stock rules may make it difficult for you to sell your shares of our
stock. Because of the rules, there is less trading in penny stocks. Also, many
brokers choose not to participate in penny stock transactions. Accordingly, you
may not always be able to resell our shares of common stock publicly at times
and prices that you feel are appropriate.

A significant number of shares of our Common Stock may become available for sale
and their sale could depress the price of our Common Stock.

      Future sales of a substantial number of shares of our Common Stock in the
public market could adversely affect the market price for our Common Stock and
make it more difficult for shareholders to sell our Common Stock at times and
prices that they believe are appropriate. As of December 31, 2004, we have
issued and outstanding 66,574,953 shares of Common Stock and warrants to
purchase up to an aggregate amount of 5,910,000 shares of Common Stock.
Additionally, the Company has agreed to issue 1,500,000 shares of Common Stock
if the El Capitan Mine is sold prior to March 18, 2005, and to grant an option
to purchase up to 6,000,000 shares of Common Stock if such sale of the El
Capitan Mine is for $150,000,000 or more. Of our Common Stock issued and
outstanding, 15,967,760 shares are free of restrictions and freely transferable,
42,653,623 are transferable subject to trading restrictions under Rule 144 of
the Securities Act of 1933, as amended, and 7,953,570 are restricted from
transfer for varying time periods under Rule 144 of the Securities Act of 1933.


                                      -10-
<PAGE>

Risks relating to our financial condition

The volatility of precious metal prices may affect our earnings.

      We anticipate that a significant portion of our future revenues to come
from the sale of gold, silver and other precious metals, and as a result, our
earnings will be directly affected by the prices of such metals. Demand for
precious metals can be influenced by economic conditions, including worldwide
production, attractiveness as an investment vehicle, the relative strength of
the U.S. dollar and local investment currencies, interest rates, exchange rates,
inflation and political stability. The aggregate effect of these factors is not
within our control and is impossible to predict with accuracy. The price of
precious metals have on occasion been subject to very rapid short-term changes
due to speculative activities. Fluctuations in precious metal prices may
adversely affect the value of any discoveries made at the sites with which we
are involved. If the market prices for these precious metals falls below the
mining and development costs we incur to produce such precious metals, we will
experience losses and may have to discontinue operations at one or more of our
properties.

We currently do not have enough cash to fund operations during the next fiscal
year.

      As of September 30, 2004, we had only $22,404 of cash and other current
assets on hand. We will be required to raise additional capital in financing
transactions in order to satisfy our expected cash expenditures. We expect to
raise additional capital by selling shares of our capital stock or by borrowing
money. However, such additional capital may not be available to us at acceptable
terms or at all. If we sell additional shares of our capital stock, current
ownership in our company will be subject to dilution. Further, we may choose to
pledge assets of our Company in connection with debt financing, which assets
will be subject to forfeiture if the debt is not repaid when due. In the event
that we are unable to obtain additional capital, we may be forced to reduce our
operating expenditures or to cease development and operations altogether.

As of the end of our fiscal year ending September 30, 2004, we have not had
revenue-generating operations.

      Although we anticipate entering into the operations phase for one or more
of our properties during the next fiscal year, it is possible that none of our
properties will ever produce significant mineral deposits.

Our independent auditors have substantial doubt about our ability to continue as
a going concern.

      We have had net losses for each of the years ended September 30, 2004 and
September 30, 2003, and we had an accumulated deficit as of September 30, 2004.
Since the financial statements for each of these periods were prepared assuming
that we would continue as a going concern, in the view of our independent
auditors, these conditions raise substantial doubt about our ability to continue
as a going concern. Furthermore, since we may not generate significant revenues
in the foreseeable future, our ability to continue as a going concern may
depend, in large part, on our ability to raise additional capital through equity
or debt financing transactions. If we are unable to raise additional capital, we
may be forced to discontinue our business.


                                      -11-
<PAGE>

Risks relating to our business

Our mineral exploration efforts may be unsuccessful.

      Our ability to produce precious metals depends on the success of our
exploration program. Mineral exploration for precious metals is highly
speculative, and is often unsuccessful. Even if exploration leads to a valuable
deposit, it might take several years to enter into production of the minerals
within the deposit. During that time, it might become financially or
economically unfeasible to produce the minerals. Additionally, the cost of
production of any of our mine interests may prohibit us from our exploration or
development of other properties.

We are dependent upon key personnel.

      We are highly dependent upon the abilities and experience of our officers.
There can be no assurances that we will be able to retain these individuals in
the future, and the loss of one or more of these individuals could have a
material effect or our operations. The strong competition within the mining
industry makes the recruitment and retention of employees knowledgeable of the
mining industry difficult and crucial to success.

We will require additional financing to continue to fund our current exploration
projects or acquire interests in other properties.

      Additional financing will be needed in order to fund beyond the initial
exploration of our properties. Our means of acquiring investment capital is
limited to private equity and debt transactions. Other than the interest earned
on our short-term investments or further financing, we have no other source of
currently available funds to engage in additional exploration and development,
which will be necessary to explore our current property interests or to acquire
interests in other mineral exploration projects that may become available. See
"--Risks Relating to Our Financial Condition - We currently do not have enough
cash to fund operations during the next fiscal year."

The nature of mineral exploration is inherently risky.

      The exploration for and development of mineral deposits involves
significant financial risks, which even experience and knowledge may not
eliminate regardless of the amount of careful evaluation applied to the process.
While the discovery of an ore body may result in substantial rewards, very few
properties are ultimately developed into producing mines. Whether a deposit will
be commercially viable depends on a number of factors, including: financing
costs; proximity to infrastructure; the particular attributes of the deposit,
such as its size and grade; and governmental regulations, including regulations
relating to prices, taxes, royalties, infrastructure, land use, importing and
exporting of gold and environmental protection. The effect of these factors
cannot be accurately predicted, and the combination of any of these factors may
prevent us from not receiving an adequate return on invested capital.

We are required to obtain government approvals and permits in order to conduct
mining operations.

      We are required to seek governmental approvals and permits in order to
conduct mining operations. Obtaining the necessary permits is a complex and
time-consuming process involving multiple jurisdictions. The duration and
success of our efforts to obtain permits are contingent upon many variables
outside of our control and may increase costs of or cause delay to our mining
endeavors. There can be no assurance that all necessary approvals and permits
will be obtained, and if they are obtained, that the costs involved will make it
economically unfeasible to continue our exploration, development or production
of some or all of our mines.


                                      -12-
<PAGE>

We face substantial government regulation and environmental risks.

      Our business is subject to extensive federal, state and local laws and
regulations governing exploration, development, production, labor standards,
occupational health, waste disposal, use of toxic substances, environmental
regulations, mine safety and other matters. Additionally, new legislation and
regulations may be adopted at any time that affect our business. Compliance with
these changing laws and regulations could require increased capital and
operating expenditures and could prevent or delay some or all of the Company's
future operations.

Mineral exploration is extremely competitive.

      There is a limited supply of desirable mineral properties available for
claim staking, lease or other acquisition in the areas where we contemplate
participating in exploration activities. We compete with numerous other
companies and individuals, including competitors with greater financial,
technical and other resources than we possess, in the search for and the
acquisition of attractive mineral properties. Our ability to acquire properties
in the future will depend not only on our ability to develop our present
properties, but also on our ability to select and acquire suitable producing
properties or prospects for future mineral exploration. We may not be able to
compete successfully with our competitors in acquiring such properties or
prospects.

Title to some of our properties may be defective.

      A material portion of our holdings include unpatented mining claims. The
validity of unpatented claims are often uncertain and may be contested. In
accordance with the mining industry practice, we generally do not obtain title
opinions until we decide to develop a property. Accordingly, it is possible that
title to some of our undeveloped properties may be defective.

ITEM 3. LEGAL PROCEEDINGS

      Our Company is not a party to any bankruptcy, receivership or other legal
proceeding, and to the best of our knowledge, no such proceedings by or against
us have been threatened.

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

      During the fourth quarter of fiscal 2004, we mailed to our stockholders an
Information Statement Pursuant to Section 14(c)of the Securities Exchange Act of
1934 notifying them that an amendment to our Articles of Incorporation would be
made following approval by Consent of the Board of Directors and by Consent of
Shareholders owning a majority of the outstanding shares of Common Stock, as of
the record date of March 29, 2004, by means of written consent on June 25, 2004.
The amendment was approved by written consent of Gold and Minerals, our majority
shareholder, holding approximately 65% of our total shares outstanding at the
time.

      Pursuant to the amendment to our Articles of Incorporation, we increased
our authorized shares of Common Stock from Fifty Million (50,000,000) to One
Hundred Million (100,000,000) and authorized the issuance of Five Million
(5,000,000) shares of Preferred Stock, $.001 par value.


                                      -13-
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED MATTERS

(a) Market Information

      Our common stock is not listed on any exchange; however, market quotes for
the Company's common stock (under the symbol "ECPN") may be obtained from the
OTC Bulletin Board ("OTCBB"). The OTCBB is a regulated quotation service that
displays real-time quotes, last-sale prices and volume information in
over-the-counter ("OTC") securities. The following table sets forth, for the
indicated fiscal periods, the high and low bid prices (as reported by the OTCBB)
for the Company's common stock and all historical quotes are revised for a 4 for
1 stock split effective November 25, 2002 as well as a 200% stock dividend
effective July 30, 2004. These quotations represent non-dealer prices, without
retail markups, markdowns or commissions and may not necessarily represent
actual transactions.

                                                       Bid Price
                                                       ---------
                                              High                   Low
                                              ----                   ---
Fiscal year ended September 30, 2003
Quarter ended December 31, 2002               $0.53                 $0.01
Quarter ended March 31, 2003                  $0.58                 $0.37
Quarter ended June 30, 2003                   $1.06                 $0.42
Quarter ended September 30, 2003              $0.57                 $0.32

Fiscal year ended September 30, 2004
Quarter ended December 31, 2003               $0.40                 $0.26
Quarter ended March 31, 2004                  $0.32                 $0.18
Quarter ended June 30, 2004                   $0.26                 $0.12
Quarter ended September 30, 2004              $0.75                 $0.13

The prices set forth in this table represent quotes between dealers and do not
include commissions, mark-ups or mark-downs, and may not represent actual
transactions.

(b) Holders

      The number of record holders of our common stock as of December 31, 2004,
was approximately 87 based on information received from our transfer agent. This
amount excludes an indeterminate number of shareholders whose shares are held in
"street" or "nominee" name.

(c) Dividends

      Effective on July 30, 2004, we paid a stock dividend equal to 200% of our
outstanding common stock on that date of 20,446,454 shares. We have not paid,
nor declared, any cash dividends since our inception and do not intend to
declare any such dividends in the foreseeable future. Our ability to pay
dividends is subject to limitations imposed by Nevada law. Under Nevada law,
dividends may be paid to the extent that a corporation's assets exceed its
liabilities and it is able to pay its debts as they become due in the usual
course of business.


                                      -14-
<PAGE>

(d) Equity Compensation Plan Information

                      EQUITY COMPENSATION PLAN INFORMATION

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


Equity compensation plans not
   approved by security                      --                          --                    261,444(1)
   holders
          Total                              --                          --                      261,444
</TABLE>

(1)   On June 14, 2004, the Company registered on Form S-8 5,400,000 shares of
      its Common Stock for issuance to certain employees and consultants as
      compensation for services rendered to the Company. Pursuant to, and
      subject to, individual agreements with such employees or consultants, the
      Company may issue shares of its Common Stock to such employees or
      consultants in lieu of accrued salary or fees, as applicable. In the event
      of an issuance of Common Stock in lieu of salary or fees, as applicable,
      the number of shares to be issued to the employee or consultant is to be
      equal to the amount to be paid in Common Stock divided by a purchase price
      to be not less than the most recent sale price of the Company's Common
      Stock. Accordingly, it is not possible to estimate the number of
      securities to be issued (column a) or the weighted average price of such
      securities (column b). The amount in column c is the number of securities
      that remain unissued of those registered pursuant to the Form S-8, but it
      is not yet determined whether those shares will be issued in the future.

(e) Recent Sales of Securities

      In addition to the sales of unregistered securities that we reported in
quarterly reports on Form 10-QSB during fiscal year 2004, we made the following
sales of unregistered securities during the quarter ended September 30, 2004.

      For each of the following transactions, we relied upon the exemptions from
registration provided by Section 4(6) or 4(2) of the Securities Act and Rule 506
promulgated thereunder based upon (i) the fact that each investor was an
accredited or sophisticated investor with experience in investing in securities
such that it could evaluate merits and risks related to our securities; (ii)
that no general solicitation of the securities was made by us; (iii) the
securities issued were "restricted securities" as that term is defined under
Rule 144 promulgated under the Securities Act; and (iv) we placed appropriate
restrictive legends on the certificates representing the securities regarding
the restricted nature of these securities. The shares were issued as follows:

      On July 7, 2004, the Company issued 571,428 shares of common stock in
settlement of $80,000 of executive compensation and consulting fees.


                                      -15-
<PAGE>

      On July 14, 2004, the Company issued 3,000,000 shares of restricted common
stock in consideration for the acquisition of the Weaver mining claims and
related buildings and personal property.

      On July 14, 2004, the Company issued 1,343,154 of restricted common stock
in settlement of a note payable and accrued interest amounting to $179,087.34.

      On August 18, 2004, the Company issued 285,714 shares of common stock in
settlement of $40,000 of executive compensation and consulting fees.

      On September 13, 2004, the Company issued 93,022 shares of restricted
common stock in settlement of $40,000 of executive compensation and consulting
fees.

      On September 30, 2004, the Company issued 751,518 shares of restricted
common stock to three note holders in settlement of notes payable and accrued
interest amounting to $263,031.

      On October 19, 2004, the Company entered into an Investment Advisory
Agreement with Blake Advisors, LLC ("Blake") for certain financial and
investment advisory services. The term of the agreement expires on October 31,
2005. Compensation under the agreement provides for a $50,000 payment upon
signing of the agreement, an additional $125,000 over a four month period
beginning November 1, 2004 and a monthly fee of $5,000 beginning November 1,
2004 and ending with the last payment due on October 1, 2005. Pursuant to this
agreement, we issued a warrant to Blake providing the right to purchase up to
500,000 shares of the Company's common stock at an exercise price of $0.85 per
share, and having a five-year term, a cashless-exercise provision and piggyback
registration rights.

      On November 4, 2004, the Company entered into an Exclusive Agency
Agreement with Asia Finance Company, LLC ("AFC") pursuant to which AFC was
engaged to source buyers of iron ore for the Company. As partial consideration
for such services, the Company issued 1,536,859 shares of Common Stock to AFC
and monetary consideration of $100,000.

      On November 5, 2004, the Company sold to two investors a total of 200,000
shares of common stock for an aggregate price of $50,000.

      On November 5, 2004, the Company closed a private placement of securities
to 28 accredited investors in the aggregate amount of $1,055,000 (the
"Offering"). The Offering consisted of 2,110,000 Units, each consisting of one
share of Common Stock and one warrant to purchase one share of Common Stock at
an exercise price of $.75 per share (the "Warrant"). The Warrant is callable
under certain circumstances and expires three years from the date of issuance.

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

      Results of Operations. We have not yet realized any revenue from
operations, nor do we expect to realize potential revenues until late in the
first or during the second calendar quarter of 2005. Loss from operations
decreased from $1,561,669 for the year ended September 30, 2003 to $1,314,320
for the year ended September 30, 2004. Our net loss decrease in 2004 from 2003
was mainly due to a decrease in professional fees approximating $542,000 and a
decrease in officer compensation approximating $229,000. These decreases were
offset by increases in general and administrative and other expenses
approximating $399,000. An increase in legal fees approximating $125,000 were
incurred and expensed relative to the Company's pursuing iron ore contracts with
various China steel companies and US steel companies.


                                      -16-
<PAGE>

      Plan of Operation. To address the going concern problem addressed in our
financial statements, we will require additional working capital. We will also
require additional working capital funds for continuing payments for necessary
corporate personnel, related general and administrative expenses and for the
implementation of our necessary business strategies.

      We can make no assurance, however, that we will be able to have access to
the capital markets in the future, or that the financing will be available on
terms acceptable to terms to satisfy our cash requirements. Our inability to
access various capital markets or acceptable financing could have a material
effect on our results of operations, deployment of our business strategies and
severely threaten our ability to operate as a going concern.

      During the next two quarters the Company will concentrate on raising the
necessary working capital through equity financing and an acceptable debt
facility to insure the Company's ability to implement its business strategies.
To the extent that additional capital is raised through the sale of equity or
equity related securities, the issuance of such securities could result in
dilution of our shareholders.

      We intend to continue to prove up our various mining properties, pursue
finalizing iron ore contracts with China steel producers, and finalize the
expected development plan to extract the precious metals from the El Capitan
property site.

      This report may contain certain "forward-looking" statements as such term
is defined in the Private Securities Litigation Reform Act of 1995 or by the
securities and exchange commission in its rules including section 27A of the
Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934,
regulations and releases, which represent the company's expectations or beliefs,
including but not limited to, statements concerning the company's operations,
economic performance, financial condition, growth and acquisition strategies,
off-balance sheet arrangements, and future operational plans including plans for
the El Capitan property, for this purpose, any statements contained herein that
are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the generality of the foregoing, words such as
"may", "will", "expect", "believe", "anticipate", "intent", "could", "estimate",
"might", or "continue" or the negative or other variations thereof or comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties, certain
of which are beyond the company's control, and actual results may differ
materially depending on the variety of important factors, including uncertainty
related to the company's operations, mergers or acquisitions, governmental
regulation, the value of the company's assets and any other factors discussed in
this and other company filings with the securities and exchange commission.

ITEM 7. FINANCIAL STATEMENTS

      The financial statements and related information required to be filed are
indexed and begin on page F-1 and are incorporated herein.


                                      -17-
<PAGE>

                        El Capitan Precious Metals, Inc.
                      (An Exploration Stage Mining Company)

                        Consolidated Financial Statements
                               For the Years Ended
                           September 30, 2004 and 2003
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                                       Page
                                                                                                                       ----
<S>                                                                                                                    <C>
Reports of Independent Registered Public Accounting Firms...............................................................F-2

Consolidated Balance Sheets - September 30, 2004 and 2003...............................................................F-4

Consolidated Statements of Operations - Years ended September 30, 2004 and 2003 and
   for the period July 26, 2002 (inception) through September 30, 2004..................................................F-5

Consolidated Statements of Changes in Stockholders' Deficit - period from July 26, 2002
   (inception) through September 30, 2002 and for the years ended September 30, 2003 and 2004...........................F-6

Consolidated Statements of Cash Flows - Years ended September 30, 2004 and 2003 and for the
   period July 26, 2002 (inception) through September 30, 2004..........................................................F-8

Notes to Consolidated Financial Statements.............................................................................F-10
</TABLE>


                                      F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
El Capitan Precious Metals Inc.
Scottsdale, Arizona

We have audited the accompanying consolidated balance sheet of El Capitan
Precious Metals Inc. and Subsidiary (an exploration stage mining company) as of
September 30, 2004 and the related consolidated statements of operations,
changes in stockholders' equity (deficit) and cash flows for the year ended
September 30, 2004. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of El Capitan Precious Metals Inc.
and Subsidiary as of September 30, 2004, and the results of their operations and
its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.

We have also audited the combination in the statements of operations, cash
flows, and shareholders' equity (deficit) of the amounts as presented for the
year ending September 30, 2004 with the amounts for the corresponding statements
for the period from inception (July 26, 2002) through September 30, 2003. In our
opinion the amounts have been properly combined from the period from inception
(July 26, 2002) through September 30, 2004.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has no revenue producing operations, has
incurred substantial losses from operations and is in the exploration stage.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans with regard to these matters are described
in Note 1. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.


/s/ HEIN & ASSOCIATES LLP

Phoenix, Arizona
January 14, 2005


                                      F-2
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
El Capitan Precious Metals Inc.


We have audited the accompanying consolidated balance sheet of El Capitan
Precious Metals, Inc. and subsidiary (an Exploration Stage Mining Company) as of
September 30, 2003, the related consolidated statements of operations and cash
flows for the year then ended, and the consolidated statements of changes in
stockholders' deficit for the year ended September 30, 2003, and for the period
from July 26, 2002 (inception) through September 30, 2002. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the 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 the 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of El Capitan Precious
Metals, Inc. and subsidiary as of September 30, 2003, and the results of their
operations and their cash flows for the year then ended and for the period from
July 26, 2002 (inception) through September 30, 2002, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company incurred a net loss of $1,561,669
for the year ended September 30, 2003, and a deficit accumulated during the
exploration stage of $1,583,246 for the period from July 26, 2002 (inception)
through September 30, 2003. The Company also has a limited history and no
revenue producing operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans with regard
to these matters are also described in Note 1. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


/S/ GELFOND HOCHSTADT PANGBURN, P.C.

Denver, Colorado
February 3, 2004


                                      F-3
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                    September 30,
                     ASSETS                                      2004           2003
                                                              -----------    -----------
<S>                                                           <C>            <C>
Current Assets:
      Cash                                                    $    22,404    $        75

Investment in Mining Properties                                   100,008         86,008

Other Assets:
      Note receivable net of allowance for doubtful account
         of $12,500                                                    --             --
      Investment in common stock of USCA.PK                            --             --
                                                              -----------    -----------
                                                              $   122,412    $    86,083
                                                              ===========    ===========

                LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
      Accounts payable                                        $   192,354    $    24,070
      Accrued liabilities                                          50,702         33,134
      Accrued liabilities, related parties                             --         70,500
      Interest payable, related parties                             1,652          9,771
      Interest payable, other                                      15,971         17,197
      Notes payable, related parties                               42,577        168,000
      Notes payable, other                                        178,426        340,126
                                                              -----------    -----------
            Total Current Liabilities                             481,682        662,798
                                                              -----------    -----------

Commitments, Contingencies and Subsequent Events
    (Notes 5, 6 and 10)

Stockholders' Deficit:
      Preferred stock, $0.001 par value;  5,000,000 shares
         authorized; none issued and outstanding                       --             --
      Common stock, $0.001 par value; 100,000,000 shares
         authorized; 62,669,616 and 52,109,280 issued and
         outstanding , respectively                                62,670         52,110
      Common stock subscribed                                      50,000             --
      Additional paid-in capital                                2,425,626        954,421
      Deficit accumulated during the exploration stage         (2,897,566)    (1,583,246)
                                                              -----------    -----------
            Total Stockholders' Deficit                          (359,270)      (576,715)
                                                              -----------    -----------
                                                              $   122,412    $    86,083
                                                              ===========    ===========
</TABLE>

                 See notes to consolidated financial statements.


                                      F-4
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                                               Period From
                                                                                              July 26, 2002
                                                                                               (Inception)
                                                                                                 Through
                                                                Year Ended September 30,      September 30,
                                                                  2004            2003            2004
                                                              ------------    ------------    ------------
<S>                                                           <C>             <C>             <C>
General and Administrative Expenses:
      Professional fees                                       $   (360,288)   $   (902,609)   $ (1,262,897)
      Officer compensation expense                                (281,000)       (510,034)       (791,034)
      Management fees, related parties                            (240,000)        (34,500)       (284,500)
      Legal and accounting fees                                   (188,399)        (53,621)       (253,382)
      Mine expenses                                                (15,631)             --         (15,631)
      Other                                                        (46,800)        (16,524)        (63,324)
                                                              ------------    ------------    ------------
                                                                (1,132,118)     (1,517,288)     (2,670,768)
                                                              ------------    ------------    ------------

Other (Expense):
      Interest expense:
                    Related parties (Note 3)                       (12,623)        (14,643)        (27,481)
                    Other                                          (38,329)        (29,738)        (68,067)
      Expenses associated with debt issuance and conversion       (131,250)             --        (131,250)
                                                              ------------    ------------    ------------
                                                                  (182,202)        (44,381)       (226,798)
                                                              ------------    ------------    ------------
Net Loss                                                      $ (1,314,320)   $ (1,561,669)   $ (2,897,566)
                                                              ============    ============    ============

Basic and diluted net loss per common
      share                                                   $      (0.02)   $      (0.04)   $      (0.06)
                                                              ============    ============    ============
Weighted average number of common
      shares outstanding                                        54,707,858      40,718,972      47,064,644
                                                              ============    ============    ============
</TABLE>

                 See notes to consolidated financial statements.


                                      F-5
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                Consolidated Statements of Stockholders' Deficit
              From July 26, 2002 (Inception) to September 30, 2004

<TABLE>
<CAPTION>
                                                                                                       Deficit
                                                                                                     Accumulated
                                                                                       Additional     During The
                                                  Common Stock            Stock         Paid-In      Exploration
                                              Shares        Amount    Subscriptions     Capital         Stage          Total
                                           -----------   -----------   -----------    -----------    -----------    -----------
<S>                                         <C>          <C>           <C>            <C>            <C>            <C>
Initial issuance of common stock in
  September 2002, $0.00 per share            3,315,000   $     3,315   $        --    $    (3,306)   $        --    $         9

Net loss, period ended                              --            --            --             --        (21,577)       (21,577)
                                           -----------   -----------   -----------    -----------    -----------    -----------

Balances at September 30, 2002               3,315,000         3,315            --         (3,306)       (21,577)       (21,568)

Issuance of common stock to Gold and
  Minerals Company, Inc. in connection
  with purchase of interest in assets of
  El Capitan, Ltd. in November 2002,
  $0.00 per share                           30,225,000        30,225            --        (30,217)            --              8

Issuance of common stock for cash
  in November 2002, $0.00 per share          5,460,000         5,460            --         (5,446)            --             14
                                           -----------   -----------   -----------    -----------    -----------    -----------

                                            39,000,000        39,000            --        (38,969)       (21,577)       (21,546)
Acquisition of DML Services, Inc.
  on March 17, 2003                          6,720,000         6,720            --        (56,720)            --        (50,000)

Common stock issued in connection
  with notes payable in March 2003,
  $0.03 per share                              525,000           525            --         16,975             --         17,500

Common stock and warrants issued
  for services in March 2003, $1.26
  per share                                    150,000           150            --        188,850             --        189,000

Common stock issued under executive
  compensation agreement in March
  2003, $0.45 per share                      1,057,140         1,057            --        478,943             --        480,000

Issuance of common stock to Gold and
  Minerals Company, Inc. in connection
  with purchase of COD Mine in
  August 2003, $0.00 per share
                                             3,600,000         3,600            --         (3,600)            --             --

Common stock issued under
  management agreement in August
  2003, $0.35 per share                      1,057,140         1,058            --        368,942             --        370,000


Net loss, year ended September 30,
  2003                                              --            --            --             --     (1,561,669)    (1,561,669)
                                           -----------   -----------   -----------    -----------    -----------    -----------

Balances at September 30, 2003              52,109,280   $    52,110   $        --    $   954,421    $(1,583,246)   $  (576,715)
</TABLE>

                 See notes to consolidated financial statements.


                                      F-6
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                Consolidated Statements of Stockholders' Deficit
              From July 26, 2002 (Inception) to September 30, 2004

<TABLE>
<CAPTION>
                                                                                                             Deficit
                                                                                                           Accumulated
                                                                                             Additional     During The
                                                       Common Stock             Stock         Paid-In      Exploration
                                                   Shares        Amount     Subscriptions     Capital         Stage         Total
                                                -----------    ----------   -------------   -----------   -------------  -----------
<S>                                              <C>          <C>           <C>           <C>            <C>            <C>
Cost associated with warrants issued                     --            --            --       108,000             --        108,000

Common stock issued under executive
  compensation agreement in May 2004,
  $0.13 per share                                 1,350,000         1,350            --       178,650             --        180,000

Common stock issued under management
  agreement in May 2004, $0.13 per share          1,350,000         1,350            --       178,650             --        180,000

Common stock issued for services in June
  2004, $0.20 per share                             836,760           837            --       163,728             --        164,565

Common stock issued in connection with
  notes payable in June 2004, $0.25 per share       225,000           225            --        56,025             --         56,250

Common stock issued under executive
  compensation agreement in July 2004
  $0.14 per share                                   285,714           286            --        39,714             --         40,000

Common stock issued under management
  agreement in July 2004, $0.14 per share           285,714           285            --        39,715             --         40,000

Common stock issued for acquisition of
  Weaver mining interest in July 2004,
  $0.00 per share                                 3,000,000         3,000            --        (3,000)            --             --

Common stock issued for services in July
  2004, $0.15 per share                             703,740           704            --       105,128             --        105,832

Common stock issued for retirement of a note
  payable and accrued interest in July 2004,
  $0.13 per share                                 1,343,154         1,343            --       177,744             --        179,087

Common stock issued under executive
  compensation agreement in August 2004
  $0.14 per share                                   142,857           143            --        19,857             --         20,000

Common stock issued under management
  agreement in August 2004, $0.14 per share         142,857           143            --        19,857             --         20,000

Common stock issued for services in August
  2004, $0.20 per share                              50,000            50            --         9,950             --         10,000

Common stock issued under executive
  compensation agreement in September 2004,
  $0.43 per share                                    46,511            46            --        19,954             --         20,000

Common stock issued under management
  agreement in September 2004, $0.43 per
  share                                              46,511            47            --        19,953             --         20,000

Common stock issued for retirement of notes
  payable and accrued interest in September
  2004, $0.35 per share                             751,518           751            --       262,280             --        263,031

Beneficial Conversion of Notes payable                   --            --            --        75,000             --         75,000

Stock subscriptions                                      --            --        50,000            --             --         50,000

Net loss, year ended September 30, 2004                  --            --            --            --     (1,314,320)    (1,314,320)
                                                -----------   -----------   -----------   -----------    -----------    -----------

Balances at September 30, 2004                   62,669,616   $    62,670   $    50,000   $ 2,425,626    $(2,897,566)   $  (359,270)
                                                ===========   ===========   ===========   ===========    ===========    ===========
</TABLE>

                 See notes to consolidated financial statements.


                                      F-7
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                        Period From
                                                                                       July 26, 2002
                                                                                        (Inception)
                                                                                          Through
                                                           Year Ended September 30,    September 30,
                                                              2004           2003          2004
                                                          -----------    -----------    -----------
<S>                                                       <C>            <C>            <C>
Cash Flows From Operating Activities:
      Net loss                                            $(1,314,320)   $(1,561,669)   $(2,897,566)
      Adjustments to reconcile net loss to net cash
        used in operating activities:
      Expenses associated with common stock and
        warrants                                              964,647      1,039,000      2,003,647
      Beneficial conversion of notes payable                   75,000             --         75,000
      Amortization of discount on notes payable                    --         17,500         17,500
      Provision for uncollectible related party note
        receivable                                                 --         12,500         12,500
      Changes in operating assets and liabilities:
          Increase in accounts payable                        168,284         14,112        192,354
          Increase in accrued liabilities                      17,568         33,134         50,702
          (Decrease) increase in accrued liabilities,
            related parties                                   (70,500)        60,285             --
          Increase in interest payable, related parties        12,968          9,771         22,739
          Increase in interest payable, other                  36,805         17,197         54,002
                                                          -----------    -----------    -----------
              Net Cash Used in Operating Activities          (109,548)      (358,170)      (469,122)
                                                          -----------    -----------    -----------

Cash Flows From Investing Activities:
      Purchase of mine interest                               (14,000)       (68,500)      (100,000)
      Issuance of notes receivable                                 --        (12,500)       (12,500)
      Cash paid in connection with acquisition of
        DLM Services, Inc.                                         --        (50,000)       (50,000)
                                                          -----------    -----------    -----------
          Net Cash used in Investing Activities               (14,000)      (131,000)      (162,500)
                                                          -----------    -----------    -----------

Cash Flows From Financing Activities:
      Proceeds from the sale of common stock                       --             14             23
      Proceeds from notes payable, related parties             47,400         52,500        219,900
      Proceeds of notes payable, other                         63,300        359,000        422,300
      Stock subscription received                              50,000             --         50,000
      Repayment of notes payable, related parties             (14,823)        (4,500)       (19,323)
      Repayment of notes payable, other                            --        (18,874)       (18,874)
                                                          -----------    -----------    -----------
          Net Cash Provided by Financing Activities           145,877        388,140        654,026
                                                          -----------    -----------    -----------

Increase (Decrease) in Cash                                    22,329       (101,030)        22,404

Cash, Beginning of Period                                          75        101,105             --
                                                          -----------    -----------    -----------

Cash, Ending of Period                                    $    22,404    $        75    $    22,404
                                                          ===========    ===========    ===========
</TABLE>

                 See notes to consolidated financial statements.


                                      F-8
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                   Period From
                                                                                  July 26, 2002
                                                                                   (Inception)
                                                                                     Through
                                                         Year Ended September 30,  September 30,
                                                            2004         2003         2004
                                                         ----------   ----------   ----------
<S>                                                      <C>          <C>          <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
       Cash paid for interest                            $    1,177   $       --   $    1,177
                                                         ==========   ==========   ==========

       Cash paid for income taxes                        $       --   $       --   $       --
                                                         ==========   ==========   ==========

SUPPLEMENTAL DISCLOSURE OF NON-CASH
  INVESTING AND FINANCING ACTIVITIES:

       Issuance of common stock to Gold and Minerals
         Company, Inc. in connection with the purchase
         of interest in assets of El Capitan, Ltd.       $       --   $        8   $        8
                                                         ==========   ==========   ==========

       Issuance of common stock to Gold and Minerals
         Company, Inc. in connection with the purchase
         of the COD Mine (Note 1)                        $       --   $    3,600   $    3,600
                                                         ==========   ==========   ==========

       Issuance of common stock to Gold and Minerals
         Company, Inc. in connection with the purchase
         of the Weaver mineral property                  $    3,000   $       --   $    3,000
                                                         ==========   ==========   ==========

       Costs associated with warrants issued             $  108,000   $       --   $  108,000
                                                         ==========   ==========   ==========

       Stock based compensation                          $  800,397   $1,039,000   $1,839,397
                                                         ==========   ==========   ==========

       Issuance of common stock for financing costs      $   56,250   $       --   $   56,250
                                                         ==========   ==========   ==========

       Conversion of notes payable and accrued
         interest for the issuance of common stock       $  442,118   $       --   $  442,118
                                                         ==========   ==========   ==========
</TABLE>

                 See notes to consolidated financial statements.


                                      F-9
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

1.    BUSINESS, OPERATIONS, ORGANIZATION, LIQUIDITY AND BASIS OF PRESENTATION

      Business and Operations - On July 26, 2002, El Capitan Precious Metals,
      Inc. was incorporated as a Delaware corporation to engage in the business
      of acquiring mining properties containing precious metals, principally
      gold, silver, and platinum. The Company has a wholly owned Subsidiary. The
      results of El Capitan and its subsidiary ("El Capitan" or the "Company")
      are presented on a consolidated basis.

      The Company is in the exploration stage and since inception, has completed
      certain acquisitions and transactions (Note 2), but has not had any
      revenue producing operations.

      Organization - The Company was previously organized as DML Services, Inc.
      ("DML"), a Nevada corporation, formed in 2000. On March 17, 2003, DML sold
      the assets and operations of its catering and food-service business to the
      executive officers and directors of DML in exchange for the return of
      30,120,000 shares of DML and cash of $50,000, paid by El Capitan. On March
      18, 2003, DML acquired all of the issued and outstanding common stock of
      El Capitan in exchange for 39,000,000 shares of DML's common stock issued
      to the El Capitan stockholders, which represented 85% of the Company's
      total shares outstanding immediately following the exchange. As a result
      of a four share for one stock split completed by DML on November 25, 2002,
      and the retirement of 30,120,000 post-reverse-split shares which took
      place immediately prior to closing the transaction, the stockholders of
      DML hold 6,720,000 shares of the Company's common stock, which represents
      15% of the total outstanding shares of common stock of the Company
      immediately following the exchange.

      The El Capitan transaction was recorded as a reverse acquisition based on
      factors demonstrating that El Capitan constituted the accounting acquirer.
      The shareholders of El Capitan received 85% of the post-acquisition
      outstanding common stock of DML. In addition, post-acquisition management
      personnel and the sole board member of the Company now consist of
      individuals previously holding positions with El Capitan. The historical
      stockholders' equity of El Capitan prior to the exchange was retroactively
      restated (a recapitalization) for the equivalent number of shares received
      in the exchange after giving effect to any differences in the par value of
      the DML and El Capitan common stock, with an offset to additional paid-in
      capital. The restated consolidated deficit accumulated during the
      development stage of the accounting acquirer (El Capitan) has been carried
      forward after the exchange.

      Basis of Presentation and Going Concern - The accompanying financial
      statements have been prepared assuming the Company will continues a going
      concern, which contemplates the realization of assets and the settlement
      of liabilities and commitments in the normal course of business. The
      Company is an exploration stage mining company and since its inception has
      had no mining revenues and has incurred recurring losses aggregating
      $2,897,566 accumulated during the exploration stage (A net loss of
      $1,561,669 for the year ended September 30, 2003, and a deficit
      accumulated during the explorations stage of $1,583,246 for the period
      from July 26, 2002 (inception) through September 30, 2003). In addition,
      the Company does not have a revolving credit facility with any financial
      institution. These factors raise substantial doubt about the Company's
      ability to continue as a going concern. The ability of the Company to
      continue as a going concern is dependent on raising additional capital,
      negotiating adequate financing arrangements and on achieving sufficiently
      profitable operations. financial statements do not include any adjustments
      relating to the recoverability and classification of assets or the amounts
      and classification of liabilities that might be necessary should the
      Company be unable to continue as a going concern.


                                      F-10
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      The Company believes its cash requirements over the next twelve months can
      be funded through a combination of financing activities completed and
      projected subsequent to year end and prior to cash flow generated through
      operations. The Company has completed a private placement during the
      quarter ended December 31, 2004 (Note 10). The Company is anticipating
      structuring a long-term debt instrument which will be collateralized with
      certain assets of the Company. The Company is continually evaluating
      business opportunities such as joint venture processing agreements with
      the objective of creating cash flow to sustain the corporation and provide
      a source of funds for growth. While the Company believes it will be able
      to finance its continuing activities, there are no assurances of success
      in this regard or in the Company's ability to obtain continued financing
      through capital markets, joint ventures, or other acceptable arrangements.
      If management's plans are not successful, operations and liquidity may be
      adversely impacted.

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

2.    ACQUISITIONS AND DIVESTITURES

      Acquisition of El Capitan Mine from Gold and Minerals Company, Inc. - In
      October 2003, the Company completed the acquisition of a 40% interest in
      certain assets of El Capitan, Ltd. ("ECL"), an Arizona corporation, a
      wholly-owned subsidiary of Gold and Minerals Company, Inc. ("Minerals"), a
      Nevada corporation. Minerals is involved in the exploration, development,
      and testing of mining properties. Consideration for the acquisition
      consisted of the issuance of 30,225,000 shares of the Company's common
      stock to Minerals (which occurred in November 2002, and which constituted
      a 77.5% equity ownership in the Company prior to the reverse acquisition)
      and $100,000 cash, of which $86,000 was paid through September 30, 2003,
      and $14,000 was paid in October 2003.

      The assets of ECL primarily consist of the El Capitan mine (the "Mine"),
      an inactive iron and related ore mine located in New Mexico. The Mine
      contains four patented claims and three unpatented claims on approximately
      200 acres in the Capitan Mountains in Lincoln County, New Mexico. The Mine
      has no proven reserves. The Company did not assume any liabilities or
      obligations of ECL.

      Purchase of Mining Claims from Minerals - In August 2003, the Company
      acquired from Minerals certain mining claims granted by the United States
      Bureau of Land Management, buildings and personal property known as the
      COD Mine located near Kingman, Arizona. The COD Mine is an inactive
      underground mine consisting of thirteen mining claims as well as various
      outbuildings and other associated personal property Consideration for this
      purchase consisted of 3,600,000 shares of the Company's common stock.
      Because the COD Mine was acquired from the Company's controlling
      stockholder in exchange for shares of the Company's common stock, the
      transaction was accounted for as a non-monetary exchange and was recorded
      at no value in the consolidated financial statements.


                                      F-11
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      Sale of 80% of Mining Claims and Joint Venture - In May 2004, the Company
      executed a joint venture agreement (the "Joint Venture") with U.S.
      Canadian Minerals, Inc. ("USCA.PK"), a publicly-traded Nevada company, to
      explore, operate and utilize the COD Mine, including the recovery of gold
      and silver from the tailings of the COD Mine. The Joint Venture is to
      operate under the name "CanEl" until May 2020, unless terminated earlier
      pursuant to the terms of the Joint Venture. Under terms of the Joint
      Venture Agreement, the Company was required to transfer to USCA.PK an 80%
      interest in the COD mine in exchange for 720,000 shares of USCA.PK common
      stock. On the date of the transaction, shares of unrestricted freely
      trading USCA.PK common stock traded at $2.85 per share.

      The USCA.PK common stock is restricted with respect to sale until at least
      May 2005. USCA.PK's common stock is currently traded on the Pink Sheets,
      its most recent SEC filings have not been reviewed by an registered
      accounting firm, and it faced a SEC imposed temporary trading suspension
      in October of 2004 (which has since expired). The Company also has
      continuing involvement (as discussed below) related to the COD Mine. Based
      on these factors, no gain on the sale was recorded and the Company has not
      ascribed any value to the common stock received.

      When the USCA.PK restriction period ends, and when the Company's
      assessment of the common stock allows for classification of the securities
      as marketable securities, it intends to classify the investment as an
      available for sale under Statement of Financial Accounting Standard (SFAS)
      No 115, Accounting for Certain Investments in Debt and Equity Securities.
      The Company will not record any value associated with the common stock
      until such time, unless it liquidates its investment earlier.

      The Joint Venture provides that the Company is to operate the COD Mine as
      it relates to the tailings and settlement pond and contribute the
      equipment needed for such operations which have not yet begun. USCA.PK has
      agreed to contribute 90 days operating capital to provide for at least
      three workers, fuel, necessary equipment agreed upon by the parties, and
      equipment repair and maintenance and paid $12,500 in July 2004. Net
      profits, if any, from the operations tailings and settlement pond
      operations will be split equally among the Company and USCA.PK.

      In addition to the Joint Venture, the Company also retained USCA.PK as a
      consultant for a period of two years to provide services pertaining to,
      among other things, identifying, studying and evaluating merger,
      acquisition, joint venture, strategic alliance and other proposals as well
      as implementation of financial public relations programs for the Company.
      In exchange for its services, USCA.PK was issued a one year warrant to
      acquire up to 3,000,000 shares of El Capitan common stock exercisable at
      $0.14 per share. The total compensation cost related to the warrants was
      valued at $108,000 utilizing the Black Scholes option pricing method, the
      entire amount was expensed during the year ended September 30, 2004.

      Acquisition of Weaver Mining Claims - In July 2004 the Company purchased
      the Weaver mining claims from its controlling stockholder, Gold &
      Minerals, Inc., for the consideration of 3,000,000 shares of the Company's
      common stock. This acquisition consists of mining claims granted by the
      United States Bureau of Land Management, buildings and personal property
      and located near Wickenburg, Arizona. Although the Company believes the
      fair value of the common stock


                                      F-12
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      approximates the fair value of the mining claims received, because the
      Weaver claims were acquired from the Company's controlling stockholder in
      exchange for shares of the Company's common stock, the transaction was
      accounted for as a non-monetary exchange and was recorded at a zero basis
      in the consolidated financial statements, as that was the basis of Gold
      and Minerals, Inc.

      Purchase Agreement for Rainbow Valley Mining Property - In July 2004 the
      Company signed an agreement with an individual for the acquisition of
      approximately 1,720 acres located in Maricopa County, Arizona. The
      property is currently in the permitting stage and the property will be
      drilled and assayed in early 2005 to determine the iron ore content of the
      mining site. Upon results of the final assays, permitting and obtaining
      the necessary right of ways, it is the Company's intent to utilize this
      site for mining iron ore and as a by-product, sand and gravel.

      Under the terms of the agreement, The seller is to be paid $2,500 monthly
      for managing the testing, further developing of the property and necessary
      permitting. Upon completion of the successful testing and permitting of
      the site, the Company shall pay the seller $100,000. Additional
      consideration to be paid to the seller under the agreement consist of a
      royalty of $1.00 a ton and 3% of the before tax profit on any minerals
      shipped from the property.

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Principals of Consolidation - The consolidated financial statements
      include the accounts of El Capitan Precious Metals, Inc. and its wholly
      owned subsidiary. All significant inter-company accounts and transactions
      have been eliminated in the consolidated financial statements.

      Cash and Cash Equivalents - The Company considers those short-term, highly
      liquid investments with maturities of three months or less as cash and
      cash equivalents.

      Management Estimates and Assumptions - The preparation of the Company's
      consolidated 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 of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of expenses
      during the reporting periods. Management makes these estimates using the
      best information available at the time the estimates are made; however,
      actual results could differ materially from these estimates.

      Fair Value of Financial Instruments - The fair values of the company's
      financial instruments include cash, investments, accounts payable, accrued
      expenses and notes payable approximate their carrying amounts because of
      the short maturities of these instruments or because of restrictions.

      Comprehensive Income (Loss) - Statement of Financial Accounting Standards
      ("SFAS") No. 130, Reporting Comprehensive Income, establishes requirements
      for disclosure of comprehensive income and its components, which include,
      among other items, unrealized gains or losses from marketable securities
      and foreign currency translation adjustments that previously were only
      reported as a component of stockholders' equity. The Company did not have
      any components of comprehensive income (loss) during the periods
      presented.


                                      F-13
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      Net Income (Loss) Per Share - SFAS No. 128, Earnings per Share, requires
      dual presentation of basic and diluted earnings or loss per share ("EPS")
      with a reconciliation of the numerator and denominator of the basic EPS
      computation to the numerator and denominator of the diluted EPS
      computation. Basic EPS excludes dilution. Diluted EPS reflects the
      potential dilution that could occur if securities or other contracts to
      issue common stock (3,300,000 shares at September 30, 2004; 300,000 shares
      at September 30, 2003) were exercised or converted into common stock or
      resulted in the issuance of common stock that then shared in the earnings
      of the entity. These dilutive securities are not considered in the
      calculation, as the impact of the potential shares would be to decrease
      loss per share. Therefore, diluted loss per share is equivalent to basic
      loss per share.

      Earnings and loss per share of common stock is computed based on the
      average number of common shares outstanding during the period. The
      historical loss per share of El Capitan prior to the merger has been
      retroactively restated to reflect the new capital structure.

      Stock-Based Compensation - SFAS No. 123, Accounting for Stock-Based
      Compensation, defines a fair-value based method of accounting for
      stock-based employee compensation plans and transactions in which an
      entity issues its equity instruments to acquire goods or services from
      non-employees, and encourages but does not require companies to record
      compensation cost for stock-based employee compensation plans at fair
      value. The Company has chosen to continue to account for stock-based
      compensation using the intrinsic value method prescribed in Accounting
      Principles Board Opinion No. 25, Accounting for Stock Issued to Employees,
      and guidance provided in SFAS Interpretation ("FIN") No. 44, Accounting
      for Certain Transactions Involving Stock Compensation. Accordingly,
      compensation cost for stock options is measured as the excess, if any, of
      the quoted market price of the Company's stock at the date of the grant
      over the amount an employee must pay to acquire the stock.

      No stock options were issued in 2003 or 2004, accordingly the Company's
      pro forma net loss is equal to its actual net loss.

      Impairment of Long-Lived Assets - Management assesses the carrying value
      of long-lived assets for impairment when circumstances indicate such
      amounts may not be recoverable from future operations. Generally, assets
      to be held and used are considered impaired if the sum of expected
      undiscounted future cash flows is less than the carrying amount of the
      asset. At September 30, 2004 and 2003, long-lived assets were recorded at
      no value in the consolidated financial statements.

      Mineral Property Costs - Mineral property exploration and development
      costs are expensed as incurred until such time as economic reserves are
      quantified. To date the Company has not established any proven or probable
      reserves on its mineral properties. The Company has capitalized $100,008
      of mineral property acquisition costs.

      Income Taxes - The Company computes deferred income taxes under the asset
      and liability method prescribed by the Statement of Financial Accounting
      Standards No. 109. Under this method, deferred tax assets and liabilities
      are recognized for temporary differences between the financial statement
      amounts and the tax basis of certain assets and liabilities by applying
      statutory rates in effect when the temporary differences are expected to
      reverse. Valuation allowances are established when necessary to reduce
      deferred tax assets to the amount more likely than not to be realized.


                                      F-14
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      New Accounting Pronouncements - In December 2004, the FASB issued SFAS No.
      123 (Revised 2004) "Share Based Payment" ("SFAS 123R"), which is a
      revision to SFAS 123 and supersedes APB 25 and SFAS 148. This statement
      requires that the cost resulting from all share-based payment transactions
      be recognized in the financial statements. This statement establishes fair
      value as the measurement objective in accounting for share-based payment
      arrangements and requires all entities to apply a fair-value based
      measurement method in accounting for share-based payment transactions with
      employees except for equity instruments held by employee share ownership
      plans.

      SFAS 123R applies to all awards granted after the required effective date
      (the beginning of the first interim or annual reporting period that begins
      after June 15, 2005) and to awards modified, repurchased, or cancelled
      after that date. As of the required effective date, all public entities
      that used the fair-value-based method for either recognition or disclosure
      under Statement 123 will apply this Statement using a modified version of
      prospective application. Under that transition method, compensation cost
      is recognized on or after the required effective date for the portion of
      outstanding awards for which the requisite service has not yet been
      rendered, based on the grant-date fair value of those awards calculated
      under Statement 123 for either recognition or pro forma disclosures. For
      periods before the required effective date, those entities may elect to
      apply a modified version of the retrospective application under which
      financial statements for prior periods adjusted on a basis consistent with
      the pro forma disclosures required for those periods by Statement 123. As
      a result, beginning in our fiscal third quarter for 2005, we will adopt
      SFAS 123R and begin reflecting the stock option expense determined under
      fair value based methods in our income statement rather than a pro forma
      disclosure in the notes to the financial statements. We expect the effect
      of adopting SFAS 123R to be similar to the effect presented in our pro
      forma disclosure related to SFAS 123.

4.    INVESTMENTS IN USCA.PK

      At September 30, 2004 the Company owns 720,000 restricted shares of U. S.
      Canadian Minerals common stock. The market value per an unrestricted share
      at closing on September 30, 2004 was $4.75 based on the last published
      sales price. These shares contain restrictions on their sale until May
      2005. As discussed in Note 2, the initial carrying value of this
      investment is recorded at no value in the consolidated financial
      statements.

5.    RELATED PARTY TRANSACTIONS

      Notes Receivable - In March 2003, the Company advanced $12,500 to an
      affiliate in which an officer of the Company is also an officer of the
      affiliate, in exchange for two unsecured, 8% promissory notes, which are
      due on demand. At September 30, 2003 and 2004, the Company has recorded a
      valuation allowance of $12,500 against this receivable due to uncertainty
      as to the ultimate collectibility of these promissory notes.


                                      F-15
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      Notes Payable - At September 30, 2004, the Company has $34,000 of
      unsecured notes payable with two related parties. The notes bear interest
      at 8% and 10% per annum. At September 30, 2003, the Company had $158,000
      in notes payable to a related party. The notes bear interest at 8% per
      annum. The Company also had one unsecured 8% per annum note payable to the
      president and sole director of the Company at September 30, 2004 and 2003.
      The note payable to the president of the Company totaled $8,577 and
      $10,000, respectively. All the notes are due on demand.

      In July 2003, the Company received $1,000 from its corporate secretary in
      exchange for an unsecured promissory note bearing interest at 8% per
      annum. This note was repaid in July 2003.

      Employment Agreement -In March 2003, the Company executed a two-year
      employment agreement under which the Company issued 600,000 shares of
      common stock to its president and sole director as incentive compensation.
      The Company also agreed to a salary of $20,000 per month, effective
      January 1, 2003, which, at the option of the president, may be satisfied
      in shares of the Company's common stock. At September 30, 2004, the
      Company has issued 2,282,222 shares of common stock in payment of $420,000
      of his salary. The 600,000 shares of common stock granted to the president
      were valued at $320,000, which was recorded as general and administrative
      expense in March 2003.

      Terms of the employment agreement also require the Company to issue
      1,500,000 shares of common stock to the president should the Company sell
      the El Capitan mine during the term of the employment agreement. Should
      the Company sell the Mine for a price in excess of $150 million, the
      Company is to grant the president a five-year option to purchase 6 million
      shares of the Company's common stock at an exercise price of $1.00 per
      share.

      Management Fees - The Company has agreed to pay management fees to a
      stockholder ($5,000 per month beginning August 1, 2002), and its corporate
      secretary ($1,000 per month beginning October 1, 2002, increased to $3,500
      per month beginning January 1, 2003 and reduced to $2,500 a month in
      September 2004). The agreements are on a month-to-month basis. The Company
      paid or accrued management fees pursuant to these agreements of $171,000
      and $72,000 during the years ended September 30, 2004 and 2003,
      respectively, and $275,000 during the period from July 26, 2002
      (inception) through September 30, 2004. In June 2004, $68,100 representing
      the accrued management fees payable to the stockholder where converted to
      346,260 shares of common stock of the Company. In July 2004 the
      shareholder and corporate secretary converted $105,832 of accrued
      management fees to 703,740 shares of common stock of the Company. Accrued
      management fees at September 30, 2004 and 2003 are $40,668 and $53,600,
      respectively. In August 2004 the corporate secretary converted accrued
      fees of $10,000 to 50,000 shares of the Company's common stock. All
      conversion prices were equal to the closing price of the Company's common
      stock on the date of conversion.

      The management fees to the stockholder terminated as of September 30,
      2004. The Company will continue to pay management fees to the corporate
      secretary, who resigned as corporate secretary as of July 1, 2004, through
      December 31, 2004 for consulting activities.


                                      F-16
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      Consulting Agreements -The Company has entered into a consulting agreement
      with an officer of Gold and Minerals, Inc. pursuant to which the Company
      issued 600,000 shares of common stock to the consultant and agreed to pay
      a fee of $20,000 per month, which may be paid in shares of the Company's
      common stock at the Company's option. Through September 30, 2004, the
      Company has issued 2,282,222 shares in payment of $420,000 of the earned
      fees. In addition, if the El Capitan mine is sold for $150 million or more
      before December 31, 2004, than the Company is obligated to grant a five
      year option to the consultant to purchase 6,000,000 shares of the
      Company's common stock at $1.00 per share and issue 1,500,000 shares of
      free trading Company common stock.

6.    NOTES PAYABLE OTHER

      At September 30, 2004, the Company had 8% and 12% unsecured notes payable
      to four stockholders of the Company amounting to $153,426 and $25,000,
      respectively, all of which are due on demand. At September 30, 2003, the
      Company had 8% unsecured notes payable to five stockholders of the Company
      amounting to $340,126, all of which are due on demand.

7.    CONSULTING AGREEMENTS

      In June 2004, the Company entered into a one year consulting agreement
      with an unaffiliated third party in which the Company is to receive
      corporate planning and development services in exchange for 360,000 shares
      of the Company's common stock valued at $70,800 (the market price of the
      common stock at the date of issuance). Although the agreement was for a
      one year period, the entire amount was expensed during the year ended
      September 30, 2004 as this was the period the majority of the services
      were rendered.

      In June 2004, the Company entered into a consulting agreement in which the
      Company received corporate consulting related to business strategy and
      development services in exchange for 115,500 shares of the Company's
      common stock valued at $22,715 (the market price of the common stock at
      the date of issuance), which was expensed during the quarter ended June
      30, 2004.

      In June 2004, the Company agreed to issue 15,000 shares of its common
      stock valued at $2,950 (the market value of the common stock at the date
      of issuance) to a consultant in payment for developing and maintaining the
      Company's website, which was expensed during the quarter ended June 30,
      2004.

      In October 2002, the Company entered into a consulting and services
      agreement (the "Agreement") for business development and investor
      relations services. The term of the Agreement is 18 months, but may be
      terminated earlier under certain circumstances. Terms of the agreement
      require the Company to pay a total of $200,000 to the consultant, which
      was expensed during the year ended September 30, 2003, and which was paid
      as of September 30, 2003.

      In March 2003, the Company entered into a business consulting and
      financial advisory agreement. In exchange for services performed under
      this agreement, the Company issued 150,000 shares of


                                      F-17
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      common stock valued at $80,000 ($.53 per share; the market value of the
      Company's common stock on the date of issuance) and warrants to purchase
      300,000 shares of common stock valued at $109,000 utilizing the
      Black-Scholes option pricing model (Note 9).

      See Note5 for a description of the consulting agreement with a related
      party.

8.    INCOME TAXES

      The Company has incurred no current income taxes during the period from
      July 26, 2002 (inception) through September 30, 2004. At September 30,
      2004 the Company has operating loss carryforwards approximating $2,900,000
      to reduce future taxable income, if any, and expires ay various dates in
      2022 through 2024. The calculated tax benefit at September 30, 2004 and
      2003 is based on a Federal statutory income tax rate of 34%. The
      difference between the expected tax benefit and non-recognition of a tax
      benefit during the periods is the result of a valuation allowance applied
      to the net deferred tax asset, which primarily consists of the Company's
      net operating loss carryforwards. A valuation allowance has been provided
      to reduce the net deferred tax asset, as realization of the asset is not
      assured.

                                                      Year Ended September 30,
                                                       2004              2003
                                                    ---------         ---------
          Computed expected tax benefit             $ 985,000         $ 538,000
          Valuation allowance                        (985,000)         (538,000)
                                                    ---------         ---------
          Net deferred tax asset                    $      --         $      --
                                                    =========         =========

9.    STOCKHOLDERS' DEFICIT

      Changes to the Company's Capital Structure and Dividend - In April 2004,
      the Company's board of directors authorized an increase in the number of
      shares authorized for issuance by the Company from 50,000,000 to
      100,000,000. The change was approved by the Company majority shareholder.
      In conjunction with the increase in authorized shares, the board of
      directors authorized, and on July 23, 2004 declared, a 200% stock dividend
      for stockholders of record as of July 30, 2004. Accordingly, the Company
      issued 40,982,908 shares of its common stock to stockholders of record on
      July 30, 2004 resulting in total shares outstanding on that date of
      61,474,362. The Company accounted for the stock dividend as a stock split
      effected in the form of a dividend. All shares presented in prior periods
      have been restated to reflect the stock dividend.

      In addition, the board of directors authorized the addition of 5,000,000
      shares of preferred stock, $.001 par value, which may be issued by the
      Company pursuant to the voting powers, designation, liquidation or
      dividend preference, and relative participating, option or other special
      rights, and the qualifications, limitations or restrictions of the shares
      as may be so established for any series issued by the board of directors.
      This change was also approved by the Company's majority shareholder. No
      shares of preferred stock have been issued to date.


                                      F-18
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      Issuances of Common Stock - On May 18, 2004, the Company issued 2,700,000
      shares of common stock in settlement of $360,000 of executive compensation
      and consulting fees. The Company registered these shares for trading by
      way of an S-8 Registration Statement filed on June 15, 2004.

      On June 10, 2004, the Company issued 346,260 shares of restricted common
      stock in settlement of $68,100 of consulting fees.

      On June 11, 2004, the Company issued 490,500 shares of common stock to
      three consultants in settlement of $96,465 of consulting fees. The Company
      registered these shares for trading by way of an S-8 Registration
      Statement filed on June 15, 2004.

      On June 15, 2004, the Company issued 225,000 shares of restricted common
      stock in consideration to two note holders as financing costs amounting to
      $56,250.

      On July 7, 2004, the Company issued 571,428 shares of common stock in
      settlement of $80,000 of executive compensation and consulting fees.

      On July 14, 2004, the Company issued 703,740 shares of common stock in
      settlement of $105,832 of executive compensation and consulting fees. The
      Company has registered these shares for trading by way of an S-8
      Registration Statement filed on June 15, 2004.

      On July 14, 2004, the Company issued 3,000,000 shares of restricted common
      stock in consideration for the acquisition of the Weaver mining claims and
      related buildings and personal property.

      On July 14, 2004, the Company issued 1,343,154 of restricted common stock
      in settlement of a note payable and accrued interest amounting to
      $179,087.

      On August 18, 2004, the Company issued 285,714 shares of common stock in
      settlement of $40,000 of executive compensation and consulting fees.

      On August 20, 2004, the Company issued 50,000 shares of common stock in
      settlement of $10,000 of executive compensation. The Company has
      registered these shares for trading by way of an S-8 Registration
      Statement filed on June 15, 2004.

      On September 13, 2004, the Company issued 93,022 shares of restricted
      common stock in settlement of $40,000 of executive compensation and
      consulting fees.

      On September 16, 2004, the Company issued 751,518 shares of restricted
      common stock to three note holders in settlement of notes payable and
      accrued interest amounting to $263,031. Because the stock price was in
      excess of the conversion price, the Company recorded a charge of $75,000
      to account for the beneficial conversion feature.

      Common Stock Subscriptions Received - The Company accepted two
      subscriptions from accredited investors for a total of 200,000 shares of
      restricted common stock for an aggregate price of $50,000.


                                      F-19
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      Warrants - The following table summarizes of warrant activity for the
      years ended September 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                Warrants Outstanding                     Warrants Exercisable
                                           -------------------------------         ---------------------------------
                                                              Weighted                                 Weighted
                                             Number            Average               Number            Average
                                            of Shares       Exercise Price          of Shares       Exercise Price
                                           -----------    ----------------         -----------    ------------------
<S>                                         <C>                <C>                  <C>                 <C>
     Balance, September 30, 2002                   --          $  --                       --           $  --
        Granted                               300,000          $1.66                  300,000           $1.66
        Exercised                                  --          $  --                       --           $  --
                                           -----------                             -----------

     Balance, September 30, 2003              300,000          $1.66                  300,000           $1.66
        Granted                             3,000,000          $0.14                3,000,000           $0.14
        Exercised                                  --          $  --                       --           $  --
                                           -----------                             -----------

     Balance, September 30, 2004            3,300,000          $0.28                3,300,000           $0.28
                                           ===========    ================         ===========    ==================
</TABLE>

      The following table summarizes information for warrants outstanding and
      exercisable at September 30, 2004:

<TABLE>
<CAPTION>
                                      Warrants Outstanding                            Warrants Outstanding
                           -------------------------------------------     -------------------------------------------
                                       Weighted Average                                Weighted Average
                           -------------------------------------------     -------------------------------------------
          Range of                          Remaining       Exercise                      Remaining        Exercise
           Prices             Number          Life           Price           Number         Life            Price
        ---------------    ------------    -----------    ------------     ----------    -----------    --------------
<S>                        <C>                     <C>       <C>           <C>                  <C>         <C>
         $0.83-$2.50         300,000               1.5       $1.66           300,000            1.5         $1.66
            $0.14          3,000,000                .6       $0.14         3,000,000             .6         $0.14
                           ------------                                    ----------

                           3,300,000                .7       $0.28         3,300,000             .7         $0.28
                           ============    ===========    ============     ==========    ===========    ==============
</TABLE>

10.   SUBSEQUENT EVENTS

      On October 19, 2004, the Company entered into an Investment Advisory
      Agreement with Blake Advisors, LLC ("Blake") for certain financial and
      investment advisory services. The term of the agreement expires on October
      31, 2005. Compensation under the agreement provides for a $50,000 payment
      upon signing of the agreement, an additional $125,000 over a four month
      period beginning November 1, 2004 and a monthly fee of $5,000 beginning
      November 1, 2004 and ending with the last payment due on October 1,
      2005.The agreement also calls for the Company to deliver a warrant to the
      consultant for the purchase of 500,000 shares of the Company's common
      stock at an exercise price of $0.85 per share, and having a five-year
      term, a cashless-exercise provision and piggyback registration rights.

      The Company signed a lease for office space effective November 1, 2004.
      The lease has a two year term and requires monthly payments of $3,845.


                                      F-20
<PAGE>

                 EL CAPITAN PRECIOUS METALS, INC. AND SUBSIDIARY
                      (An Exploration Stage Mining Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003

      On November 4, 2004, the Company entered into an Exclusive Agency
      Agreement with Asia Finance Company, LLC ("AFC") pursuant to which AFC was
      engaged to source buyers of iron ore for the Company. As partial
      consideration for such services, the Company issued 1,536,859 shares of
      restricted common stock to AFC and monetary consideration of $100,000.

      On November 4, 2004, the Company approved and accepted subscriptions in a
      private placement of securities with certain accredited investors in the
      amount of $1,055,000 (the "Offering"). The Offering consisted of 2,110,000
      Units, each unit consisting of one share of common stock, and one warrant
      to purchase one share of common stock at an exercise price of $0.75 per
      share ("the Warrant"). The Warrant is callable under certain circumstances
      and expires three years from the date of issuance. The Company has agreed
      to file a registration statement covering the sale or the shares of common
      stock and the common stock issuable upon exercise of the of the Warrants
      within ninety (90) days and to use commercially reasonable efforts to
      cause such registration Statement to be declared effective by the SEC and
      to keep the Registration Statement effective for one year following the
      effective date.


                                      F-21
<PAGE>

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

      On May 9, 2003, the Board of Directors of El Capitan Precious Metals, Inc.
engaged the accounting firm of Gelfond Hochstadt Pangburn, P.C. as independent
accountants for the Registrant for the newly adopted fiscal year ended September
30, 2003. Hawkins Accounting was dismissed effective May 9, 2003. These actions
were approved by our Board of Directors.

      During the fiscal years ended December 31, 2001 and December 31, 2002, and
interim periods subsequent to December 31, 2002, there were no disagreements
with Hawkins Accounting on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure or any reportable
events.

      Hawkins Accounting's report on the financial statements for the years
ended December 31, 2002 and 2001, contained a going concern emphasis paragraph,
describing substantial doubt about the Registrant's ability to continue as a
going concern. With the exception of the foregoing, the report of Hawkins
Accounting contained no adverse opinion or disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope or accounting principles.

      The Registrant requested that Hawkins Accounting furnish it with a letter
addressed to the SEC stating whether it agrees with the above statements. A copy
of Hawkins Accounting letter to the SEC, dated May 15, 2003, is filed as Exhibit
16.1 to the Form 8-K filed on May 16, 2003.

      During the two fiscal years through May 9, 2003, the Registrant had not
consulted with Gelfond Hochstadt Pangburn, P.C. regarding either (i) the
application of accounting principles to a specific transaction, either
contemplated or proposed; or the type of audit opinion that might be rendered on
the Registrant's financial statements, and either a written report was provided
to the Registrant or oral advice was provided that Gelfond Hochstadt Pangburn,
P.C. concluded was an important factor considered by the Registrant in reaching
a decision as to the accounting, auditing or financial reporting issue; or (ii)
any matter that was either the subject of a disagreement, as that term is
defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to
Item 304 of Regulation S-K, or a reportable event, as that term is defined in
Item 304(a)(1)(v) of Regulation S-K.

      On October 25, 2004 the Board of Directors of El Capitan Precious Metals,
Inc. (the "Registrant") approved the dismissal of Gelfond Hochstadt Pangburn,
P.C. as the Registrant's independent registered public accounting firm. This
action was approved by our Board of Directors.

      Gelfond Hochstadt Pangburn, P.C.'s report on the Registrant's financial
statements for the period from July 26, 2002 (inception) through September 30,
2003, contained no adverse opinion or disclaimer of opinion, nor was it modified
as to uncertainty, audit scope, or accounting principles, except for an
explanatory paragraph regarding the Registrant's "ability to continue as a going
concern." The Registrant had no disagreements with Gelfond Hochstadt Pangburn,
P.C. in connection with its audit for the most recent fiscal year, and for
interim periods subsequent to September 30, 2003 through the date of dismissal
on October 25, 2004 on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Gelfond Hochstadt
Pangburn, P.C., would have caused it to make reference to the subject matter of
the disagreements in connection with its reports.


                                      -18-
<PAGE>

      The Registrant has made the contents of its Current Report on Form 8-K
filing dated October 28, 2004 available to Gelfond Hochstadt Pangburn, P.C. and
requested it to furnish a letter to the Securities and Exchange Commission as to
whether Gelfond Hochstadt Pangburn, P.C. agrees or disagrees with, or wishes to
clarify Registrant's expression of their views. A copy of Gelfond Hochstadt
Pangburn, P.C.'s letter to the SEC dated October 27, 2004 is included as Exhibit
16.1 to the Form 8-K.

      On October 25, 2004, the Board of Directors of the Registrant approved the
engagement of Hein & Associates LLP ("H&A") as the Registrant's certifying
accountant. Registrant did not consult with H&A prior to its engagement
regarding the application of any accounting principles or any type of audit
opinion that might be rendered by it.

ITEM 8A. CONTROLS AND PROCEDURES

      The Company's Chief Executive Officer and Chief Financial Officer have
evaluated the Registrant's disclosure controls and procedures within 90 days of
the filing date of this annual report. Based upon this evaluation, the Company's
Chief Executive Officer and Chief Financial Officer have concluded that the
Company's disclosure controls and procedures are effective in ensuring that
material information required to be disclosed is included in the reports that it
files with the Securities and Exchange Commission.

      There were no significant changes in the Company's internal controls or,
to the knowledge of the management of the Company, in other factors that could
significantly affect these controls subsequent to the evaluation date.


                                      -19-
<PAGE>

PART III

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

      We have adopted a Code of Ethics for our financial management staff. The
Code of Ethics was filed as Exhibit 99.1 to our Annual Report on Form 10-KSB for
the year ended September 30, 2003. A copy of the Code of Ethics will be
provided, without charge, to any person requesting it in writing, addressed to
the attention of the Chief Financial Officer, El Capitan Precious Metals, Inc.,
14301 North 87th Street, Scottsdale, Arizona 85260.

(a) Identification of Directors and Executive Officers

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

<TABLE>
<CAPTION>
NAME                              AGE         POSITION                                      SINCE
----                              ---         --------                                      -----
<S>                                <C>        <C>                                       <C>
Charles C. Mottley                 69         President and Director                      July 2002

James Ricketts                     65         Director and Secretary                      July 2004

Steve Antol                        61         Chief Financial Officer and               November 2004
                                              Treasurer
</TABLE>

      The following is a brief biography of our officers and directors.

      CHARLES C. MOTTLEY. Mr. Mottley has been President and a Director of El
Capitan Precious Metals, Inc. since July 2002. Mr. Mottley also served as
Chairman and Chief Executive Officer of Gold and Minerals Co., Inc., our largest
stockholder, from 1978 until July, 2004, when he resigned those positions. Mr.
Mottley has been employed in the mining industry in various capacities from
equipment sales and services to active mining operations for over 35 years. Mr.
Mottley is the author of five books, is the founder of the Fatherhood Foundation
in Scottsdale, Arizona, and is on the board of directors of Mirror Ministries in
the same community. Mr. Mottley received a Bachelor of Arts Degree from Hampden
Sydney College in 1958.

      STEVE ANTOL. Mr. Antol has been our Chief Financial Officer since November
2004. Mr. Antol has served as Chief Financial Officer of Lou Register Furniture
from 1990 to 1992. From 1987 to 1989, Mr. Antol served as Director of Finance
for F.S. Inc. (dba Audio Express and Country Home Furniture. From 1975 to 1987,
Mr. Antol worked for Giant Industries, Inc., an independent refiner and marketer
of petroleum products, in such capacities as Corporate Controller and Corporate
Treasurer. Mr. Antol received a Bachelor of Arts degree from Michigan State
University in 1968, and became a licensed Certified Public Accountant in 1970.
He no longer practices as a licensed CPA.

      JAMES RICKETS. Mr. Ricketts has been our Secretary and a Director of our
Company since July 2004. Mr. Ricketts has been self-employed in the area of Real
Estate Development since 2000. From 1994 to 2000, he served as the Chief
Executive Officer of Technology Systems International, Inc. From 1983 to 1985,
Mr. Ricketts served as a Director of the Arizona Department of Corrections in
Phoenix, Arizona. From 1979 to 1983, he served as the Executive Director of the
Colorado Department of Corrections in Colorado Springs, Colorado. From 1985 to
the present, Mr. Ricketts has been a Correctional Consultant, providing services
on a consulting basis in the areas of safety and security in the prison system.
Mr. Ricketts received a Ph. D. from the Ohio State University in 1971, and a M.
Ed. from Bowling Green State University in 1963.


                                      -20-
<PAGE>

(b) Significant Employees

      Not applicable.

(c) Family Relationships

      None.

(d) Involvement in Certain Legal Proceedings

      Not applicable.

(e) Audit Committee Financial Expert

      The Company does not currently have a financial expert serving on the
Board of Directors or an audit committee. The Company is actively engaged in a
search for a suitable individual having the necessary attributes of a financial
expert to serve on its Board of Directors or an audit committee.

(f) Compliance with Section 16(a) of the Exchange Act

      Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors and persons who beneficially own more than 10% of our
common stock to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission. Executive officers,
directors and greater-than-10% beneficial owners are required by SEC regulations
to furnish us with copies of all Section 16(a) reports they file. Based solely
on a review of the copies of such forms furnished to us during 2004 and written
representations from the executive officers, directors and greater-than-10%
beneficial owners of our common stock, the following table shows the
transactions for 2004 that were not in compliance.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                Required Filing     Actual Filing
Name of Filer:                           Description of Transaction:            Date:               Date:
----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                    <C>                 <C>
Charles C. Mottley                       Initial filing on Form 3               3-29-2003           8-20-2004
                                         -----------------------------------------------------------------------------
                                         Grants of Common Stock - from          9-19-2003 to
                                         9-17-03 to 7-7-04 and                  7-9-2004
                                         Gifts on 9-29-03                       11-14-2003          8-20-2004
                                         -----------------------------------------------------------------------------
                                         Grants of Common Stock on              08-18-2004 and
                                         8-16-04 and 9-13-04                    09-15-2004          Not filed
----------------------------------------------------------------------------------------------------------------------
James Ricketts                           Initial filing on Form 3               8-15-2004           8-23-2004
----------------------------------------------------------------------------------------------------------------------
Gold & Minerals Co Inc.                  Initial filing on Form 3               3-28-2003           8-23-2004
                                         -----------------------------------------------------------------------------
                                         Purchase on 8-19-2003 and              8-21-2003
                                         7-14-2004                              7-16-2004           8-23-2004
----------------------------------------------------------------------------------------------------------------------
Thomas Olson                             Initial filing on Form 3                                   Not filed
                                         -----------------------------------------------------------------------------
                                         Grant of stock in exchange for salary  Various dates       Not filed
----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      -21-
<PAGE>

ITEM 10. Executive Compensation

(a) General

      In March 2003, we executed a two-year employment agreement under which we
issued 600,000 shares of Common Stock, valued at $320,000 at the time, to Mr.
Charles C. Mottley, our President and a member of our Board of Directors, as
incentive compensation for his service. We also agreed to a salary of $20,000
per month, effective January 1, 2003, which, at the Mr. Mottley's option, may be
paid in shares of the Company's Common Stock. If the El Capitan Mine is sold
prior to March 18, 2005, we are also required to issue Mr. Mottley 1,500,000
shares of Common Stock. If such sale is for $150,000,000 or more, we are also
required to grant Mr. Mottley a five-year option to purchase up to 6,000,000
shares of Common Stock at an exercise price of $1.00 per share. At September 30,
2003, the Company had issued 1,057,140 shares of Common Stock in payment of
$160,000 of earned salary.

      For the fiscal year ended September 30, 2004, Mr. Mottley converted the
$20,000 of accrued salary relating to the fiscal year ended September 30, 2003
as well as his total compensation of $240,000 for the fiscal year ended
September 30, 2004 into 1,225,082 shares of the Company's Common Stock.

      Beginning October 1, 2003, Mr. Thomas Olson, our Secretary, received a
management consulting fee of $1,000 per month. Effective January 1, 2003, that
amount was increased to $3,500 per month, which, at the option of Mr. Olson,
could be paid in shares of the Company's Common Stock. Mr. Olson's total
compensation for the fiscal year ended September 30, 2003 was $34,500. Of that
amount, $4,000 was paid in cash during the fiscal year and $30,500 was accrued.
For the fiscal year ended September 30, 2004, Mr. Olson received total
compensation of $35,000 for his services as an officer of the Company as well as
$7,000 in consulting fees for services rendered following his resignation as an
officer. In July and August of 2004, Mr. Olson converted a total of $44,000 of
the amounts owed to him to 100,000 shares of Common Stock of the Company.

      The following table summarizes the compensation paid to our executive
officers for the years ended September 30, 2004 and 2003.

(b) Summary Compensation Table

<TABLE>
<CAPTION>
                                                   Annual Compensation
                                                   -------------------
                                                                                      Long-Term
                                                                                      ---------
                                                                 Other Annual        Compensation         All Other
                                                                 -------------       -------------        ---------
Name and Principal Position      Year    Salary ($)   Bonus($)  Compensation($)     Option/SARs ($)    compensation ($)
---------------------------      ----    ----------   --------  ---------------     ---------------    ----------------
<S>                              <C>       <C>          <C>           <C>                 <C>             <C>
Charles C. Mottley               2004      240,000      -0-           -0-                 -0-                 -0-
   President/Chief Executive
   Officer/Director (1)          2003      180,000      -0-           -0-                 -0-             320,000(2)

Henry Fong                       2002      10,000       -0-           -0-                 -0-                 -0-
   President/Director (3)

Thomas B. Olson                  2004      35,000       -0-           -0-                 -0-              7,000(5)
   Secretary/Treasurer (4)
                                 2003      34,500       -0-           -0-                 -0-                 -0-

James Rickets                    2004        -0-        -0-           -0-                 -0-                 -0-
   Secretary/Director

Steve Antol                      2004        -0-        -0-           -0-                 -0-                 -0-
   Chief Financial Officer
</TABLE>


                                      -22-
<PAGE>

(1) Mr. Mottley was named the President and Chief Executive Officer of the
Company on March 18, 2003. Prior to the merger of ECPN with DML Services, Inc.,
Mr. Mottley served as President and Director of ECPN from November 1, 2002 until
the merger on March 18, 2003.
(2) Compensation expense for 600,000 shares of Common Stock issued to Mr.
Mottley pursuant to his employment agreement.
(3) Mr. Fong served as President and a Director of ECPN until November 1, 2002.
(4) Mr. Olson was named the Secretary and Treasurer of the Company on March 18,
2003.
(5) Includes consulting fees paid to Mr. Olson for services rendered following
his resignation as Secretary and Treasurer of the Company.

(c) Option/SAR grants table

      Not Applicable.

(d) Aggregated option/SAR exercises and fiscal year-end option table

      Not Applicable.

(e) Long-term incentive plan ("LTIP") awards table

      Not Applicable.

(f) Compensation of directors

      Our directors received no compensation for their services as directors of
the Company during the years ended September 30, 2004 or 2003.

(g) Employment contracts and termination of employment and change-in-control
arrangements

      In March 2003, we executed a two-year employment agreement under which we
issued 600,000 shares of Common Stock to Mr. Charles C. Mottley, our President
and a member of our Board of Directors, as incentive compensation for his
service. We also agreed to a salary of $20,000 per month, effective January 1,
2003, which, at Mr. Mottley's option, may be satisfied in shares of the
Company's Common Stock. In the event the El Capitan Mine is sold prior to March
18, 2005, the agreement requires us to issue 1,500,000 shares of our Common
Stock to Mr. Mottley. If such sale is for $150,000,000 or more, we are also
required to grant Mr. Mottley a five-year option to purchase up to 6,000,000
shares of Common Stock at an exercise price of $1.00 per share.

(h) Report on repricing of options/SARs

      Not Applicable.


                                      -23-
<PAGE>

ITEM 11. Security Ownership of Certain Beneficial Owners and Management

      The following table sets forth as of December 31, 2004, the number and
percentage of the 66,574,953 shares of outstanding Common Stock which, according
to the information supplied to the Company, were beneficially owned by (i) each
person who is currently a director of the Company, (ii) each executive officer,
(iii) all current directors and executive officers of the Company as a group and
(iv) each person who, to the knowledge of the Company, is the beneficial owner
of more than 5% of the outstanding common stock. Except as otherwise indicated,
the persons named in the table have sole voting and dispositive power with
respect to all shares beneficially owned, subject to community property laws
where applicable.

<TABLE>
<CAPTION>
                                                                   Amount and Nature of
                                  Name and Address                      Beneficial          Percent of
  Title of Class                of Beneficial Owner                     Ownership              Class
  --------------                -------------------                     ---------              -----
<S>                       <C>                                          <C>                     <C>
      Common                Gold and Minerals Co., Inc.                36,825,000(1)           55.8%
                                    PO Box 5148
                                 Phoenix, AZ 85261

      Common                     Charles C. Mottley                    1,904,211(2)            2.9%
                          14301 N. 87th Street, Suite 216
                                Scottsdale, AZ 85260

      Common                      Thomas B. Olson                        72,700(3)             0.1%
                               7315 E. Peakview Ave.
                                Englewood, CO 80111

      Common                       James Rickets                             0                  0%
                          14301 N. 87th Street, Suite 216
                                Scottsdale, AZ 85260

      Common                        Steve Antol                              0                  0%
                          14301 N. 87th Street, Suite 216
                                Scottsdale, AZ 85260

      Common                     Larry L. Lozensky                     37,812,571(1)           56.6%
                                    PO Box 5148
                                 Phoenix, AZ 85261

      Common                       Wayne W. Mills                      3,678,261(4)            5.5%
                               1615 Northridge Drive
                                 Wayzata, MN 55391

      Common            All Officers and Directors as a Group          1,904,211(2)            2.9%
                                      (3 Persons)
</TABLE>

(1)   Mr. Lozensky, one of our consultants, is the President and Chief Executive
      Officer of Gold and Minerals Co., Inc. The amount of shares beneficially
      owned by Mr. Lozensky as stated in the above chart includes the shares
      held by Gold and Minerals Co., Inc. and members of Mr. Lozensky's
      household. Mr. Lozensky's shares are not included within the Gold and
      Minerals Co., Inc. amount in the above chart.

(2)   This total does not include 1,500,000 shares of Common Stock to be issued
      to Mr. Mottley if the El Capitan Mine is sold by the Company prior to
      March 18, 2005, or a five-year option to purchase up to 6,000,000 shares
      of Common Stock at an exercise price of $1.00 per share should the sale of
      the El Capitan Mine be for $150,000,000 or more. Mr. Mottley also holds
      approximately 17% of the total common stock issued and outstanding of Gold
      and Minerals Co., Inc., our majority shareholder.


                                      -24-
<PAGE>

(3)   Mr. Olson resigned as Secretary and Treasurer of the Company in July 2004.

(4)   Includes 325,000 shares issuable upon exercise of a warrant held by Blake
      Advisors, LLC, a limited liability company of which Mr. Mills is sole
      manager.

ITEM 12.  Certain Relationships and Related Transactions

      In September 2002, we borrowed $120,000 from a stockholder and issued
unsecured notes. In April 2003, we borrowed an additional $38,000 from this
stockholder and issued unsecured notes. The notes bore interest at 8% and were
due on demand. On July 14, 2004, all principal and interest due on the note
totaling $179,087.34 was converted into 1,343,154 shares of Common Stock at
$0.133 per share, the closing price of our Common Stock on that date.

      In March 2003, the Company advanced $12,500 to an affiliate in which a
former officer of the Company is also an officer, in exchange for two unsecured,
8% promissory notes, which are due on demand. At September 30, 2003, the Company
recorded a valuation allowance of $12,500 against this receivable due to the
uncertainty of collection of the note.

      In March 2003, we executed a two-year employment agreement under which we
issued 600,000 shares of Common Stock, valued at $320,000 at the time, to Mr.
Charles C. Mottley, our President and a member of our Board of Directors, as
incentive compensation for his service. We also agreed to a salary of $20,000
per month, effective January 1, 2003, which, at the Mr. Mottley's option, may be
paid in shares of the Company's Common Stock. The agreement requires us to issue
to Mr. Mottley 1,500,000 shares of our Common Stock if the El Capitan Mine is
sold on or before March 18, 2005, and also to grant Mr. Mottley a five-year
option to purchase up to 6,000,000 shares of Common Stock at an exercise price
of $1.00 per share if such sale is for $150,000,000 or more. At September 30,
2003, the Company had issued 152,380 shares of Common Stock in payment of
$160,000 of accrued salary. For the fiscal year ended September 30, 2004, Mr.
Mottley converted the $20,000 of accrued salary relating to the fiscal year
ended September 30, 2003 as well as his total compensation of $240,000 for the
fiscal year ended September 30, 2004 into 734,606 shares of the Company's Common
Stock.

      During the fiscal year ended September 30, 2003, Mr. Mottley loaned us a
total of $13,500, of which $3,500 was repaid prior to the fiscal year end. The
remaining balance of $10,000 was due on demand with an interest rate of 8% per
annum. During the fiscal year ended September 30, 2004, Mr. Mottley loaned us an
additional $13,400 on the same terms. As of September 30, 2004, the aggregate
amount payable to Mr. Mottley pursuant to these obligations was $8,576.

      Beginning October 1, 2003, Mr. Thomas Olson, our Secretary, received a
management consulting fee of $1,000 per month. Effective January 1, 2003, that
amount was increased to $3,500 per month, which, at the option of Mr. Olson,
could be paid in shares of the Company's Common Stock. Mr. Olson's total
compensation for the fiscal year ended September 30, 2003 was $34,500. Of that
amount, $4,000 was paid in cash during the fiscal year and $30,500 was accrued.
For the fiscal year ended September 30, 2004, Mr. Olson received total
compensation of $35,000 for his services as an officer of the Company as well as
$7,000 in consulting fees for services rendered following his resignation as an
officer. In July and August of 2004, Mr. Olson converted a total of $44,000 of
the amounts owed to him to 100,000 shares of Common Stock of the Company.


                                      -25-
<PAGE>

      In July 2003, the Mr. Olson loaned the Company $1,000 in return of an
unsecured promissory note bearing interest at 8% per annum. This note was repaid
in July 2003.

      In August of 2003, we acquired from our largest stockholder, Gold and
Minerals Company, Inc., certain mining claims granted by the United States
Bureau of Land Management, a building and related personal property together
known as the COD Mine located near Kingman, Arizona. Consideration for this
purchase consisted of 3,600,000 shares of our Common Stock, which had a market
value of $1,440,000 on the closing date. Because the COD Mine was acquired from
our controlling stockholder in exchange for our common stock, the transaction
was accounted for as a non-monetary exchange and the COD Mine was recorded at no
value on our financial statements.

      On September 10, 2003, we entered into a management consulting agreement
with Mr. Larry Lozensky, the President of Gold and Minerals, pursuant to which
Mr. Lozensky agreed to continue to manage and operate the COD Mine until
December 31, 2004 in exchange for a management consulting fee of $20,000 per
month and the issuance to Mr. Lozensky of 600,000 shares of our Common Stock.
Under the management consulting agreement, we obtained the right to pay the
management consulting fee to Mr. Lozensky in the form of our Common Stock. The
agreement also called for the issuance to Mr. Lozensky of 1,500,000 shares of
Common Stock and the grant of an option to purchase up to 6,000,000 shares of
Common Stock if the El Capitan Mine was sold by December 31, 2004 and certain
conditions were met. As of December 31, 2004, the Mine has not been sold and the
contingencies have expired.

      In July 2004, we acquired from Gold and Minerals the Weaver Mine near
Congress, Arizona. Consideration for this purchase was 3,000,000 shares of our
Common Stock, which had a market value of $400,000 on the closing date. Because
the Weaver Mine was acquired from our controlling stockholder in exchange for
our Common Stock and the controlling shareholder's basis in the mine was zero,
the transaction was accounted for as a non-monetary exchange and the Weaver Mine
was recorded at no value on our financial statements. As a result of this
transaction, Gold and Minerals now holds 36,825,000 shares of our Common Stock,
which represents approximately 55.8% of our currently outstanding shares.

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

Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended September 30, 2004.

Exhibits

3.1   Articles of Incorporation, as amended.

3.2   Bylaws (incorporated hereby reference to Exhibit 3 to the Company's
      Registration Statement on Form SB-2 filed on 2/27/2001)

4.1   Form of Warrant issued to Blake Advisors, LLC and it's nominees


                                      -26-
<PAGE>

4.2   Form of Warrant issued in Offering dated November 5, 2004

10.1  Asset Purchase Agreement dated as of October 18, 2002 by and between the
      Company and Gold Minerals, Inc. and El Capitan, Ltd.

10.2  Employment Agreement with Charles C. Mottley dated March 19, 2003
      (replaces document attached as Exhibit 4.1 to the Company's Form S-8 filed
      on 9/15/2003, as such document was incorrect in certain respects).

10.3  Consulting Agreement with Larry Lozensky (incorporated herein by reference
      to Exhibit 4.2 to the Company's Form S-8 filed on 9/15/2003.)

10.4  Agreement with Robert L. Langguth dated July 26, 2004.

10.5  Exclusive Agency Agreement with Asia Finance Company LLC dated November 4,
      2004.

10.6  Agreement for Consulting Services dated May 11, 2004 by and between the
      Company and U.S. Canadian Minerals, Inc.

10.7  Asset Purchase Agreement dated as of July 14, 2004 by Gold and Minerals
      Co., Inc., Larry Lozensky, the Company and Charles C. Mottley.

10.8  Joint Venture Agreement dated May 11, 2004 by and between U.S. Canadian
      Minerals, Inc. and the Company.

10.9  Asset Purchase Agreement dated as of August 25, 2003 by and between Gold
      and Minerals Co., Inc., Charles Mottley and Larry Lozensky and the
      Company.

99.1  El Capitan Precious Metals, Inc. Code of Ethics for Senior Financial
      Management (incorporated herein by reference to Exhibit 99.1 to the
      Company's Form 10-KSB for the fiscal year ended 9/30/03 and filed on
      2/13/04)

31.1 - Certification of Charles C. Mottley pursuant to Section 302 of the
       Sarbanes-Oxley Act of 2002

32.1 - Certification of Charles C. Mottley pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002

31.2 - Certification of Steve Antol pursuant to Section 302 of the
       Sarbanes-Oxley Act of 2002

32.2 - Certification of Steve Antol pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002


                                      -27-
<PAGE>

ITEM 14.  Principal Accountant Fees and Services

      The following table summarizes the aggregate fees billed by Gelfond
Hochstadt Pangburn, P.C. to the Company for the fiscal years ended September 30,
2004 and 2003:

                                                     Year Ended September 30
                                                     2004                2003
                                                     ----                ----
                    Audit Fees (1)                 $ 40,753            $ 24,085
                    Audit-Related Fees             $      0            $      0
                    Tax Fees (2)                   $  1,603            $  1,430
                                                   --------            --------
                    Total                          $ 42,356            $ 25,515
                                                   ========            ========

----------
(1)   Fees for audit services billed in fiscal years 2004 and 2003 consisted of
      (i) audit of the Company's annual financial statements; (ii) reviews of
      the Company's quarterly financial statements; (iii) consents and other
      services related to SEC matters; and (iv) consultations on financial
      accounting and reporting matters arising during the course of the audits
      and reviews.

(2)   Fees for tax services billed in fiscal years 2004 and 2003 consisted of
      tax compliance.

      As explained more fully in Item 8. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure above, on October 25, 2004,
our board of directors approved the dismissal of Gelfond Hochstadt Pangburn,
P.C. and approved the engagement of Hein & Associates LLP as our certifying
accountant for the fiscal year ended September 30, 2004. The following table
summarizes the aggregate fees billed to the Company by Hein & Associates LLP in
fiscal year 2005 related to the audit of the Company for the fiscal year ended
September 30, 2004:

                                                            Year Ended
                                                        September 30, 2004
                                                        ------------------
                    Audit Fees                               $ 19,000
                    Audit-Related Fees                       $      0
                    Tax Fees                                 $      0
                                                             --------
                    Total                                    $ 19,000
                                                             ========


                                      -28-
<PAGE>

                                   SIGNATURES

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


                                         EL CAPITAN PRECIOUS METALS, INC.
                                         (Registrant)


Date: January 20, 2005                  By: /s/ Charles Mottley
                                            ------------------------------------
                                            Charles Mottley, President & Chief
                                            Executive Officer


Date: January 20, 2005                  By: /s/ Steve Antol
                                            ------------------------------------
                                            Steve Antol, Chief Financial Officer

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


Date: January 20, 2005                   /s/ Charles Mottley
                                         ---------------------------------------
                                         Charles Mottley, President, Chief
                                         Executive Officer & Director


Date: January 20, 2005                   /s/ James Ricketts
                                         ---------------------------------------
                                         James Ricketts, Director


                                      -29-