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

**FORM 10-KSB**

| x | **ANNUAL REPORT UNDER SECTION 13 0R 15(d) OF THE****SECURITIES EXCHANGE ACT OF 1934** |
|---|---------------------------------------------------------------------------------------|

**For the fiscal year ended August 31, 2007**

|  ̈ | **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE****SECURITIES EXCHANGE ACT OF 1934** |
|--------|-------------------------------------------------------------------------------------------|

**For the transition period from ________ to __________****Commission file number 000-51718**

**COLORADO GOLDFIELDS INC.**(Name of small business issuer in its charter)

| **                                             Nevada**                           (State or other jurisdiction of                              incorporation or organization) | **     20-0716175**(I.R.S. Employer Identification No.) |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **10920 West Alameda Avenue, Suite 207 Lakewood, CO **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **80226 **                                                             |
|                     (Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (Zip Code)                                                             |

**(303) 984-5324**(Issuer’s telephone number, including area code)

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

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes          ̈               No      x     

Indicateby check mark whether the issuer (1) filed all reports required to befiled by Sections 13 or 15(d) of the Securities Exchange Act of 1934during the past 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subjectto such filing requirements for the past 90 days.

Yes         x               No       ̈     

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Checkif there is no disclosure of delinquent filers in response to Item 405of Regulation S-B contained in this form, and no disclosure will becontained, to the best of registrant’s knowledge, in definitive proxyor information statements incorporated by reference in Part III of thisForm 10-KSB or any amendment to this Form 10-KSB   ̈.

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

Yes          ̈               No      x     

State issuer’s revenues for its most recent fiscal year: $ Nil**.**

Theaggregate market value (at the last trade price of $0.72 per share onDecember 19, 2007) of the Common Stock of Colorado Goldfields Inc. heldby non-affiliates as of December 19, 2007 was approximately$41,287,392. As of December 19, 2007, there were 96,843,600 shares ofCommon Stock outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**:   None.

Transitional Small Business Disclosure Format (check one):    Yes     ̈ Nox.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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|                 |   | **TABLE OF CONTENTS**                                           |   |           |
|----------------------|--------|----------------------------------------------------------------------|--------|----------------|
| **PART I**      |   |                                                                 |   | **PAGE**  |
|                 |
| ITEM 1:         |   | DESCRIPTION OF BUSINESS                                         |   | 4         |
| ITEM 2:         |   | DESCRIPTION OF PROPERTIES                                       |   | 8         |
| ITEM 3:         |   | LEGAL PROCEEDINGS                                               |   | 12        |
| ITEM 4:         |   | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             |   | 12        |
|                 |
| **PART II**     |   |                                                                 |   |           |
|                 |
| ITEM 5:         |   | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS        |   | 12        |
| ITEM 6:         |   | MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION  |   | 14        |
| ITEM 7:         |   | FINANCIAL STATEMENTS                                            |   | 24        |
| ITEM 8:         |   | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING     |   | 24        |
|                 |   | AND FINANCIAL DISCLOSURE                                        |   |           |
| ITEM 8A:        |   | CONTROLS AND PROCEDURES                                         |   | 24        |
|                 |
| **PART III**    |   |                                                                 |   |           |
|                 |
| ITEM 9:         |   | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;   |   | 25        |
|                 |   | COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT               |   |           |
| ITEM 10:        |   | EXECUTIVE AND DIRECTOR COMPENSATION                             |   | 28        |
| ITEM 11:        |   | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND             |   | 29        |
|                 |   | MANAGEMENT AND RELATED STOCKHOLDER MATTERS                      |   |           |
| ITEM 12:        |   | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                  |   | 29        |
| ITEM 13:        |   | EXHIBITS                                                        |   | 31        |
| ITEM 14:        |   | PRINCIPAL ACCOUNTANT FEES AND SERVICES                          |   | 32        |
|                 |
| **SIGNATURES**  |   | 33                                                              |

 

 

 

 

 

 

 

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**ADDITIONAL INFORMATION**

     Descriptionsof agreements or other documents in this report are intended assummaries and are not necessarily complete. Please refer to theagreements or other documents filed or incorporated herein by referenceas exhibits. Please see the exhibit index at the end of this report fora complete list of those exhibits.

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

     Pleasesee the note under “Item 6. Management’s Discussion and Analysis orPlan of Operation,” for a description of special factors potentiallyaffecting forward-looking statements included in this report.

**PART I**

**ITEM 1.**

**DESCRIPTION OF BUSINESS.**

**Background**

     ColoradoGoldfields Inc. (“we,” “us,” or the “Company”) is a mining explorationstage company engaged in the acquisition and exploration of mineralproperties, primarily for gold and other metals. We hold an option toacquire up to an 80% undivided interest in certain properties locatedin San Juan County, Colorado. These properties consist of 44 patentedand 13 unpatented mining claims in the Gold King and Mogul Mineproperties, and a 70% undivided interest in 19 patented mining claimsin the Mayflower Mine. We refer to these claims as the "San JuanProperties" throughout this Report. We are presently in the explorationstage at the San Juan Properties. We have not generated revenue frommining operations.

     Wewere organized under the laws of the State of Nevada on February 11,2004 under the name Garpa Resources Inc. On June 18, 2007, we changedour name to Colorado Goldfields Inc.

     Ourprincipal executive offices are located at 10920 West Alameda Avenue,Suite 207, Lakewood, Colorado, 80226 and our telephone number is (303)984-5324. Our common stock is quoted on the OTC Bulletin Board Systemunder the symbol “CGFI.”

     Inearly 2005, we acquired two mining claims in the Red Lake MiningDistrict, Ontario, Canada from an independent prospector for $10,000.Under the Ontario Mining Act, title to Ontario mining claims can onlybe held by individuals or Canadian corporations. Because of thisregulation, our president at the time held the mining claims in trustfor us. In 2005, we spent approximately $12,500 on a ground magneticsurvey and soil geochemical survey on the claims which identified alinear magnetic low trending across the property. Considering our focuson our option to acquire an interest in the San Juan Properties, weelected not to continue exploration and have abandoned these claims.

**Recent Events**

     InNovember 2007, we entered into private placement subscriptionagreements for 8,758,600 Units with 24 offshore subscribers and fourU.S. subscribers at a price of US$0.375 per unit (US $0.75 per Unitbefore taking into effect our forward stock split of our authorized,issued and outstanding common stock as reported in our Current Reporton Form 8-K filed with the U.S. Securities and Exchange Commission(“SEC”) on November 2, 2007), for an aggregate subscription amount ofapproximately US$3,284,500. Each Unit consisted of one share of commonstock and one common stock purchase warrant, which warrant entitles theholder to purchase one additional share of our common stock at a priceof US$0.50 per share (or US$1.00 pre-split), for a period of two yearsfrom the closing of the private placement. We did not use the servicesof a placement agent although we have agreed to pay a finders’ fees of$250,000 to a European company in connection with their introductionsto offshore subscribers.

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     Pursuantto each subscription agreement executed in connection with the privateplacement, we agreed to, among other things, register for resale all ofthe shares of common stock issued to the subscribers and the commonstock issuable to each subscriber upon due exercise of their respectivewarrants (except that if the SEC limits the number of shares of commonstock that may be registered on a registration statement, then thenumber of shares to be registered shall be reduced accordingly). Underthe agreements, we must file a registration statement registering forresale the shares within 60 calendar days following the closing of theprivate placement. Furthermore, we are to use commercially reasonableefforts to cause such registration statement to become effective within120 calendar days after the closing of the private placement (or, inthe event of a full review of the registration statement by the SEC,180 calendar days after the closing of the private placement). If theregistration statement is not filed on a timely basis or is notdeclared effective by the SEC for any reason on a timely basis, we willbe required to make a payment to the subscribers in an amount equal to2.0% of the purchase price paid for the Units by the subscriber foreach Unit then held by the subscriber, and an additional 2.0% paymenteach 30-day period thereafter until the registration statement is filedor declared effective by the SEC, as the case may be; provided,however, that in no event shall these late registration payments, ifany, exceed in the aggregate 15.0% of the total purchase price paid forall Units sold in the private placement.

     Weissued the Units to non-U.S. persons (as that term is defined inRegulation S of the Securities Act of 1933) without registration inreliance upon the exemptions from registration set forth in RegulationS and/or Section 4(2) of the Securities Act of 1933. We issued theUnits to the U.S. subscribers without registration in reliance upon theexemptions from registration set forth in Rule 506 of Regulation Dand/or Section 4(2) of the Securities Act of 1933.

**Option Agreement Concerning the San Juan Properties**

     EffectiveJune 17, 2007, we entered into an option agreement (“Option Agreement”)with Todd C. Hennis, our President and Chief Executive Officer, and SanJuan Corp., a company controlled by Mr. Hennis (collectively the”Optionors”), whereby we were granted the exclusive right and option toacquire up to an 80% undivided right, title and interest in the SanJuan Properties. The option was amended on November 8, 2007, and iscurrently exercisable as follows:

|           (i)        | anundivided 40% interest in the San Juan Properties will vest when wehave incurred expenditures of not less than $6,000,000 on the San JuanProperties, provided that such expenditures must be incurred withinfive years from the date of the Option Agreement;                                                                                                                                                                                                 |
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|                                                                             |
|           (ii)       | anadditional undivided 20% interest in the San Juan Properties will vestwhen: (a) we have incurred additional expenditures of not less than$3,500,000 on the San Juan Properties, provided that such expendituresmust be incurred within 7.5 years from the date of the OptionAgreement, and (b) we issue, subject to compliance with applicablesecurities laws, 10,000,000 shares of our common stock to theOptionors; and                                     |
|                                                                             |
|           (iii)      | anadditional undivided 20% interest in the San Juan Properties (for anaggregate of 80%) will vest when: (a) we have incurred additionalexpenditures of not less than $3,500,000 on the San Juan Properties,provided that such expenditures must be incurred within 10 years fromthe date of the Option Agreement, and (b) we issue, subject tocompliance with applicable securities laws, an additional 10,000,000shares of our common stock, to the Optionors. |
|                                                                             |

     Pursuantto the Option Agreement, we paid the Optionors a cash payment of$50,000 in August 2007. In addition, in order to keep the option ingood standing, we must make payments to the Optionors as follows:

|           (i)       | cash payment of $100,000 within one year from the date of the Option Agreement;                    |
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|                                                                            |
|           (ii)      | cash payment of an additional $200,000 within two years from the date of the Option Agreement; and |
|                                                                            |

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|           (iii)      | 100troy ounces of gold contained in gold dore, or the cash equivalentthereof, within three years of the date of the Option Agreement, andannually thereafter up to and including the 10th year from the date ofthe Option Agreement. The foregoing payments are, however, contingentupon: (i) our successful acquisition of the Pride of the West Milllocated in Howardsville, Colorado, which acquisition occurred in Juneof this year; and (ii) the Pride of the West Mill actually being inoperation during any part of the year in which payment is due.Currently, the mill is not operational. |
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|                                                                             |

     Pursuantto the Option Agreement, we: (i) were appointed as the initial operatoron the San Juan Properties, with certain rights and obligations asdescribed in the Option Agreement; and (ii) agreed to execute and enterinto an employment agreement with Mr. Hennis, as described below. TheOption Agreement will terminate if we fail to make any of the paymentsrequired to maintain the option in good standing. Notwithstandinganything else in the Option Agreement to the contrary, we may terminatethe Option Agreement within 18 months from the date of the OptionAgreement by providing 10 days written notice to the Optionors.

**Surface Rights Agreement**

     Inconnection with the Option Agreement, we also entered into a SurfaceRights Agreement with the Optionors whereby we were granted aright-of-way to enter upon the San Juan Properties to perform miningexploration activities while the Option Agreement is in good standing.Under the Surface Rights Agreement, we are required to:

- prepare and present to the Optionors a development plan which details the scope and timing of  exploration and mining activities on the San Juan Properties; 
- maintain the roads and power line right-of–ways; 
- construct safety fences and maintain surface facilities on the San Juan Properties; 
- maintain automobile insurance in connection with our vehicles traveling over the San Juan Properties; 
- perform restoration and reclamation on the San Juan Properties upon termination of our operations on  the land, including returning the land to “Range Land” post-mining use standard as that term is used in  the Colorado  Mined Land Reclamation Act ; 
- protect existing water resources, including mitigating or eliminating the impact of our activities on  domestic or stock water wells in the vicinity of the San Juan Properties; 
- properly store and remove hazardous materials; and 
- indemnify the Optionors for losses and liabilities they may incur due to our activities on the San Juan  Properties. 

     Weare also required to pay or reimburse the Optionors for all annualproperty taxes on the San Juan Properties and for any additional taxeswhich may be assessed on the San Juan Properties by reason ofimprovements that we place on the San Juan Properties. The SurfaceRights Agreement terminates upon the earlier of (i) termination of themineral rights on the San Juan Properties; (ii) complete reclamationand restoration of the San Juan Properties; (iii) termination of theOption Agreement prior to our exercising the option; (iv) failure topay the property or other taxes on the San Juan Properties; or (v) June17, 2032.

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**Executive Employment Agreement**

     Inconnection with the Option Agreement, we entered into an ExecutiveEmployment Agreement effective on June 17, 2007 with Mr. Hennis,whereby we employed him as our Chief Executive Officer and President,for a term of 18 months (subject to renewal) in consideration for,among other things: (i) a salary of $8,000 per month for the first sixmonths, to be increased to not less than $8,500 per month thereafter;(ii) an automobile allowance of $350 per month, plus reimbursement formileage at the IRS standard rate; (iii) certain employee benefits,including group health insurance, pension and profit sharing and othersuch benefits that we may elect to provide our other employees fromtime to time; and (iv) the agreement by us to grant a stock option topurchase up to 600,000 shares of our common stock at an exercise priceequal to the fair market value of our shares of common stock as of thedate of grant pursuant to a stock option plan which we intend to adoptin the near future.

     TheExecutive Employment Agreement may be terminated: (i) upon 60 dayswritten notice of termination from either party; (ii) upon theexpiration of the initial 18 month term if the parties do not renew orextend the agreement prior to expiration; or (iii) upon the death ofMr. Hennis. Upon the termination of the Executive Employment Agreement,Mr. Hennis will be entitled to separation pay as follows:

|           (i)        | ifterminated by us, Mr. Hennis shall receive one month of basecompensation for each year of service. Base compensation includessalary in effect at the time of termination, continued participation inour company’s group health insurance plan, continued life insurancecoverage and, at Mr. Hennis’ expense, continued access to certain otherinsurance plans of our company;                                                                                                      |
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|                                                                             |
|           (ii)       | ifMr. Hennis resigns within 90 days following a change of control of ourcompany, Mr. Hennis shall receive one month of base compensation (asdescribed above), and, in addition, any stock options held by Mr.Hennis shall vest immediately, all of Mr. Hennis’ shares of our commonstock, which are not already freely tradeable without restriction,shall be promptly registered with the Securities and ExchangeCommission, and any bonuses remaining unpaid shall be paid immediately; |
|                                                                             |
|           (iii)      | ifterminated upon expiration of the Executive Employment Agreementwithout renewal or extension, Mr. Hennis shall receive one month ofbase compensation (as described above) for each year of service by Mr.Hennis as an employee of our company; and                                                                                                                                                                                                                                           |
|                                                                             |
|           (iv)       | ifMr. Hennis passes away during the term of the Executive EmploymentAgreement, Mr. Hennis’ estate shall receive one month of salary foreach year of service by Mr. Hennis as our employee.                                                                                                                                                                                                                                                                                                |

**Our Business**

     Asan exploration stage mining company, our activities are currentlyfocused on exploration, geological evaluation and feasibility studieson the San Juan Properties for gold and other metals and, wherewarranted, efforts to develop and construct mining and processingfacilities. We may enter into joint ventures, partnerships or otherarrangements to accomplish these activities. Additionally, we acquiredthe Pride of the West Mill located in Howardsville, Colorado in June2007. The mill is currently not operational. We hope to address theissues on the mill in 2008 and bring the mill to operating standards. *SeeItem 2, “Description of Properties,” for additional informationregarding the San Juan Properties and the Pride of the West Mill.*

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**Competitive Business Conditions**

     Wecompete with many companies in the mining business, including larger,more established mining companies with substantial capabilities,personnel and financial resources. There is a limited supply ofdesirable mineral lands available for claim-staking, lease oracquisition in the United States and other areas where we may conductexploration activities. Because we compete with individuals andcompanies that have greater financial resources and larger technicalstaffs we may be at a competitive disadvantage in acquiring desirablemineral properties. From time to time, specific properties or areaswhich would otherwise be attractive to us for exploration oracquisition are unavailable due to their previous acquisition by othercompanies or our lack of financial resources. Competition in the miningindustry is not limited to the acquisition of mineral properties butalso extends to the technical expertise to find, advance, and operatesuch properties; the labor to operate the properties; and the capitalneeded to fund the acquisition and operation of such properties.Competition may result in our company being unable not only to acquiredesired properties, but to recruit or retain qualified employees, toobtain equipment and personnel to assist in our exploration activitiesor to acquire the capital necessary to fund our operation and advanceour properties. Our inability to compete with other companies for theseresources would have a material adverse effect on our results ofoperation and business.

**General Government Regulations**

       Mining in the State of Colorado is subject to federal, state and local law.

     Thedevelopment, operation, closure and reclamation of mining projects inthe United States requires numerous notifications, permits,authorizations and public agency decisions. Compliance withenvironmental and related laws and regulations requires us to obtainpermits issued by regulatory agencies and to file various reports andkeep records of our operations. Certain of these permits requireperiodic renewal or review of their conditions and may be subject to apublic review process during which opposition to our proposedoperations may be encountered. We are currently operating under variouspermits for activities connected to mineral exploration, reclamationand environmental considerations. Unless and until a mineral source isproved, it is unlikely our operations will move beyond the explorationstage. If in the future we decide to proceed beyond exploration, therewill be numerous notifications, permit applications and other decisionsto be addressed at that time. *SeeItem 2, “Description of Properties,” for additional information ongovernment regulation affecting our business including a discussion ofcertain anticipated costs and effects of compliance with environmentallaws*.

**Employees**

     Asof August 31, 2007, we had two employees, each serving as an executiveofficer. Only Mr. Hennis, our CEO and President, devotes a majority ofhis business time to our affairs. We also engage independentcontractors in connection with the exploration of our mining propertysuch as contractors, drillers and geologists.

**ITEM 2.       DESCRIPTION OF PROPERTIES**

     Asdescribed in Item 1 above, we have entered into an Option Agreement andSurface Rights Agreement with Todd C. Hennis and his company, San JuanCorp., pursuant to which we: (i) have a right to acquire up to anundivided 80% interest in the San Juan Properties if we meet certainpayment and stock issuance thresholds; and (ii) have a right to performexploration and mining activities on the San Juan Properties prior toacquiring an ownership interest therein. In connection with the OptionAgreement transactions, we employed Mr. Hennis as our President andChief Executive Officer.

     TheSan Juan Properties consist of three separate mines encompassing 63patented mining claims and 13 unpatented mining claims. All threemines, each of which is more fully described below, were actively minedduring the early to mid 1900’s, although they have been relativelydormant for the past 15 years. We are presently in the beginningexploration stage for gold and other metals on the San Juan Properties.As a result, we have not commissioned or received a feasibility studywith regard to any of the San Juan Properties.

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     Whileall three mines have been actively mined in the past, because the SECpermits only the disclosure of proven or probable reserves, which inturn, require, among other things, the preparation of a feasibilitystudy demonstrating the economic feasibility of mining and processingthe mineralization, no proven or probable reserves have beenestablished for any of the San Juan Properties.

     TheSan Juan Properties are subject to the following royalties: (i) 3.0%net smelter return royalty on Gold King Mine, (ii) 2.5% net profitsinterest on Gold King Mine,  (iii) 2.0% net smelter return royalty on the Mayflower Group,(iv) 2.5% net profits interest in the Mayflower Group, and (v) a 2% net smelter royalty on the GoldKing Mine. We havesecured an option to purchase the first four of these royalties for $250,000, and we have thepossibility to acquire the last royalty for $50,000. The optionexpires on November 21, 2008. If we acquire an ownership interest inthe San Juan Properties by exercise of our Option Agreement, and we aresuccessful in placing the property into production, we will beobligated to pay the royalty holders the percentages of the productionand net profits disclosed above if we do not exercise our option toextinguish the royalties. Payment of these royalties will reduce ourpotential revenue. Further, as the documentation existing for many ofthese properties dates back to the late 19thcentury, there may be unknown encumbrances, including royalties, on these properties.

**Gold King Mine Property**

     TheGold King Mine property consists of 27 patented mining claims and atotal of 13 unpatented mining claims. Unpatented mining claims SJ-1through SJ-11 were previously located and incorporated into the OptionAgreement. In August, 2007, subsequent to our entering into the OptionAgreement, unpatented mining claims SJ-4, SJ-5, SJ-6, SJ-7, SJ-8 andSJ-11 had amended location certificates filed with the U.S. Bureau ofLand Management by San Juan Corp. In August, 2007, San Juan Corp.located and filed unpatented mining claims SJ-12 and SJ-13 with theU.S. Bureau of Land Management. All 27 patented mining claims and 13unpatented mining claims are governed by the Option Agreement. These 27patented mining claims and 13 unpatented mining claims shall behereinafter referred to as the “Gold King Property.”

     TheGold King Property is located in San Juan County, Colorado. Access tothe site is by county road, which is maintained by San Juan County on aseasonal basis. The Gold King Property is located at elevations fromapproximately 11,000 feet above sea level to 13,000 feet above sealevel, approximately 8 miles from Silverton, Colorado. The mainunderground access to the Gold King Property is the Gold King Mine #7Level, the portal for which is collapsed. The portal site is located inan avalanche prone area. The terrain in mountainous and the majority ofthe property is above treeline.

     History of Operations.The best estimate for historic mine production from the Gold King Mineis 665,500 tons containing 0.471 ozs/ton gold, 2.39 ozs/ton silver,0.71% lead, and 0.52% copper. This historic mine production waspredominantly during the period 1890 to 1920.1

     Inthe period 1984 to 1992, Gold King Mines Corporation (formerly GerberMinerals Corporation) conducted exploration activities at the Gold KingMine including re-opening old workings, extending workings, surfaceexploration mapping and drilling, underground exploration, mapping,sampling and drilling and other activities. Previously publishedreports listed expenditures by Gold King Mines Corporation of $9.7million on the Gold King Mine during this period.2Wehave access to or copies of most of the geological records from thisperiod, and have access to most of the exploration drill core producedduring this period.

________________________1      Source:Page i of the Evaluation Report IV on the Gold King Mines Property, SanJuan County, Colorado by E.D. Black, P.E., MPH Consulting Inc. Denver,Colorado February 15, 1990.2      Source:Page 73 of the Evaluation Report IV on the Gold King Mines Property,San Juan County, Colorado by E.D. Black, P.E., MPH Consulting Inc.Denver, Colorado February 15, 1990.

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     GoldKing Consolidated, Inc. was majority owner of Gold King MinesCorporation. In February 1990 MPH Consulting, Inc. of Denver, Coloradoprepared “Evaluation Report IV on the Gold King Mine Property, San JuanCounty, Silverton, Colorado” for Gold King Consolidated, Inc. In thisreport, MPH Consulting, Inc. estimated gold and silver ore reserves.Approximately 20,000 tons of this material was subsequently mined in1990 by Sunnyside Gold Corp. as part of a joint venture with Gold KingMines Corp. No further mining activity at the Gold King property isknown to have occurred since that date. Based on the reports and datawe have accumulated on the Gold King property, we believe that there issignificant mineralized material in “possible” and “potential” geologiccategories. However, the estimates and other data on the Gold Kingproperty that we possess are historical in nature, and we cannot placeany reliance on these estimates at this time. We intend to perform ourown exploration activities on the property subject to obtainingadequate financing.

     Current and Proposed Exploration Activities.We undertook a limited surface drilling program on the Gold KingProperty in September 2007. Due to bad ground conditions and the onsetof severe winter weather, the drilling program was suspended in October2007 after one hole was drilled on the North Vein. Assay results fromthis hole are pending. We intend to resume this surface drillingprogram in 2008 with a new drilling contractor as soon as weatherconditions, availability of drilling contractor and funding permit.

     Weintend to re-open Gold King #7 Level, rehabilitate the existingworkings, and potentially undertake mitigation activities forunderground water flows as part of a proposed environmentalreconnaissance, subject to reaching an acceptable Administrative Orderon Consent (“A.O.C.”) agreement with U.S. Environmental ProtectionAgency (“EPA”) and availability of funding, personnel and equipment.The Gold King Property is not currently subject to any proposed actionby the EPA. We instead requested the EPA to enter into an A.O.C.regarding the proposed environmental reconnaissance, and the EPA hassubmitted a draft A.O.C. to the Company. We expect to negotiaterevisions to this draft A.O.C. There is no assurance at the presenttime that an A.O.C. acceptable to us can be reached.

     Environmental and Regulatory Issues.The Gold King Property is subject to federal, state and localregulations regarding environmental conditions at the site andactivities at the site.

     InAugust, 2007, we filed a “Notice of Intent to Conduct ProspectingOperations for Hard Rock/Metal Mines” with the State of Colorado,Division of Reclamation, Mining and Safety governing our proposedsurface drilling activities at the Gold King and Mogul Properties. Weposted a bond amount of $10,834 governing the reclamation of theproposed drill sites. 

     TheGold King Property has an active, acid mine drainage occurring from theGold King #7 Level. This mine water flow has substantially increased involume since 2000, and recent flow measurements have shown a largeincrease in flows. This water discharge is believed by our managementto substantially originate from the 2150 vein workings of the SunnysideMine, which is owned by another company, and which vein workings extendinto the Gold King Property. To date, our management has not been ableto prove the origin of this water flow. The environmentalreconnaissance discussed earlier is intended to allow the Company toprevent further potential environmental degradation from a “blow out”of potentially impounded mine waters, and to investigate potentialmitigation or reduction of mine water flows. We have receivedcorrespondence from the State of Colorado Attorney General’s Officestating that the Company is required to obtain a water discharge permitfor the Gold King Mine. We are in negotiations with the State ofColorado Attorney General and also the Water Quality Control Divisionof the Colorado Department of Public Health and Environment to discussthis correspondence.

     Weare in the process of writing a Stormwater Management Plan for the GoldKing #7 Level site, and plan to submit an application for a StormwaterManagement permit once the plan is completed.

     Priorto conducting further underground mine exploration or miningactivities, we will have to apply for and obtain a reclamation permitfrom the State of Colorado Division of Reclamation, Mining and Safety.

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**Mogul Mine Property**

     TheMogul Mine Property consists of 17 patented mining claims which adjointhe Gold King Property. Access to the Mogul Mine Property is bycounty road. The historicmineralization of the Mogul Mine property has primarily been in theMogul Vein, which is commonly held to be an extension of the GeorgeWashington vein of the Sunnyside and Brenneman Mines. Themineralization of the Mogul vein is primarily lead and zinc sulfideminerals, with some copper, silver and gold mineralization.

     TheMogul Mine has seen little production or activity since World War II.Management intends to conduct limited drilling on the Mogul MineProperty in 2008, and we intend to investigate reopening one or moreportals on the Mogul Mine Property to conduct environmental and otherreconnaissance activities.

     TheMogul Mine Property is subject to certain local, state and federalregulations. An acid mine discharge occurs at the Mogul #1 portal,which had previously had a hydraulic bulkhead constructed in it toreduce the mine water flows. An acid water discharge occurs in thevicinity of the Grand Mogul portal, and we may reopen the Grand Mogulportal in the future to attempt to determine the origin of thisdischarge.

**Mayflower Mine Property**

     TheMayflower Mine Property consists of a 70% undivided interest in 19patented mining claims. The property is approximately 3 miles fromSilverton, Colorado. The historic mineralization of the Mayflower Minehas consisted of base metals with some gold and silver contents.Published historic production figures for the Mayflower Mine (alsoknown as the Shenandoah-Dives Mine) for the period 1901-1957 are 4.5million tons containing 520,000 ounces of gold, 12.3 million ounces ofsilver, 18,000 tons of copper, 47,000 tons of lead and 10,000 tons ofzinc.3 Some portion of this production may have originated from adjoining properties.

     Managementintends to conduct a very limited amount of work on the Mayflower MineProperty for the foreseeable future. The Company intends to focus themajority of its activities on the other properties under option to theCompany.

**Pride of the West Mill**

     ThePride of the West Mill is an inactive mining mill located at Howardsville, Colorado in San JuanCounty. The Pride of the West Mill is located on approximately 120acres of patented mining claims on San Juan County Road 2, within a sixair mile radius of the Gold King Property, the Mogul Mine Property andthe Mayflower Mine Property.

     Wepurchased the Pride of the West Mill in June 2007 from Tusco, Inc., anunrelated third party, for a sale price of $900,000 and assumption ofthe Colorado Mined Land Reclamation Permit. We paid $250,000 of thepurchase price in cash, with the remaining $650,000 paid by way of apromissory note to Tusco with interest at 7% per annum. Interest on thenote is payable monthly and the entire amount is due and payable on orbefore June 29, 2009, and is secured by Deeds of Trust and financingstatements on the mill property and equipment.

     Theassumption of the reclamation bond was for $295,800 at that date, andwe have been notified that the bond has been updated to approximately$317,000 by the Colorado Division of Reclamation, Mining and Safety asof November 26, 2007. We anticipate posting the bond in the form ofcertificates of deposit within the next 60 days as part of thesuccession of operator process for the reclamation permit. Based uponan estimate received by the previous owner from a third-party miningconsultant, the total reclamation costs were estimated at approximately$500,000, and our management continues to believe that such estimate isreliable. Thus, we have recorded an estimated asset obligation of$500,000 in connection with our estimated future reclamation costs.

________________________3      Page6 of the SEG Newsletter October 1993 article entitled "Comparison ofGold-Rich and Gold-Poor Quartz-Base Metal Veins, Western San JuanMountains, Colorado: The Mineral Point Area As An Example" by Paul J.Bartos.

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     ThePride of the West Mill consists of a main mill building constructedmostly in the 1970s with equipment for gravity and flotationconcentration of ores, an office/shop building, a laboratory building,a cyanide process plant building, a truck scale building and othersupport buildings. The Pride of the West Mill is currently under aCease and Desist Order from the Colorado Division of Reclamation,Mining and Safety which was issued to a previous operator. The Ceaseand Desist Order prohibits operation of the Pride of the West Milluntil deficiencies in the mill tailing impoundment area, the mill drainwater impoundment area and other deficiencies are corrected. We havemet with personnel from the Colorado Division of Reclamation, Miningand Safety to discuss the correction of these deficiencies. InSeptember-October 2007, we had contractors re-roof a substantialportion of the main mill building at a cost of approximately $90,000,and the company has engaged Vector Engineering , Inc. of Golden,Colorado to design a new tailings impoundment for the Pride of the WestMill and to address claimed deficiencies in the mill drain waterimpoundment. Subject to funding, regulatory and other approvals, andother factors, we are hopeful of addressing the requirements of theCease and Desist Order in 2008. 

     Wehave been approached by potential operators of other mines in thevicinity to potentially process their ores. We will consider processingother potential ores in order to demonstrate the operability of thePride of the West Mill until the Company can generate sufficient oretonnage of its own to operate the mill. There is no assurance thateither of these events will occur.

     TheState of Colorado caused approximately 18,000 tons of mine dumpmaterial to be placed on the raw ore stockpile area of the Pride of theWest Mill under a previous operator. We believe that the Company doesnot have title to this material and that it would not be economical toprocess the material. We are seeking a solution to the disposal of thismaterial, potentially in cooperation with the parties that placed thematerial on the property.

The Pride of the West Mill is subject to certain local, state and federal regulations.

**ITEM 3.          LEGAL PROCEEDINGS**

     Exceptfor the environmental and mining proceedings described in Item 2 above,we are not currently subject to any legal proceedings, and to the bestof our knowledge no such proceeding is threatened the results of whichwould have a material impact on our properties, results of operation orfinancial condition. Nor, to the best of our knowledge, are any of ourofficers or directors involved in any legal proceedings in which we arean adverse party.

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

     Nomeeting of shareholders was held during our fiscal year ended August31, 2007. We intend to hold an annual meeting of shareholders in early2008.

|   **PART II**  |
|--------------------------|

| **ITEM 5.          MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**  |
|----------------------------------------------------------------------------------------------------------------------------------|

**Market Information**

     Our common stock has been quoted on the OTC Bulletin Board since April 6, 2006. Our trading symbol is “CGFI.OB.”

     Thetable below sets forth the high and low sales prices for our commonstock for the periods indicated as reported by the OTCBB. Sales pricesrepresent prices between dealers, do not include retail markups,markdowns or commissions and do not necessarily represent prices atwhich actual transactions were effected.*

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| **Year Ended**            |   |   | **High**  |   |    | **Low**  |
|--------------------------------|--------|--------|----------------|--------|---------|---------------|
|                           |
| **August 31, 2006**       |   |   |           |   |    |          |
| April 11 to May 31, 2006  |   | $      | 4.75      |   | $  | Nil 1    |
| Fourth Quarter            |   |   | 0.32      |   |    | 0.31     |
|                           |
| **August 31, 2007**       |   |   |           |   |    |          |
| First Quarter             |   | $      | 0.31      |   | $  | 0.04     |
| Second Quarter            |   |   | 0.06      |   |    | 0.04     |
| Third Quarter             |   |   | 0.19      |   |    | 0.04     |
| Fourth Quarter            |   |   | 5.01      |   |    | 0.19     |

|      *      | Weeffectuated a 7.9 for one stock split effective June 18, 2007 and a twofor one stock split effective October 29, 2007. The prices set forthabove have been adjusted for these forward stock splits. |
|------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

      (1)   The low price during this period, before being adjusted for the forwardstock splits, was $0.15.

     OnDecember 19, 2007, the last reported sales price of our common stock asreported on the OTCBB was $0.72 per share. As of December 19, 2007,there were 31 holders of record of our common stock.

     Wehave never declared or paid dividends on our common stock. Payment offuture dividends, if any, will be at the discretion of our Board ofDirectors after taking into account various factors, including theterms of any credit arrangements, our financial condition, operatingresults, current and anticipated cash needs and plans for growth. Ourinitial earnings, if any, will likely be retained to finance ourgrowth. At the present time, we are not party to any agreement thatwould limit our ability to pay dividends.

**Securities Authorized for Issuance Under Equity Compensation Plans**

     Wedo not have any equity compensation plans in effect. However, pursuantto his employment agreement, we have agreed to grant our President andChief Executive Officer, Todd C. Hennis, an option to purchase up to600,000 shares of our common stock. We have also verbally agreed togrant our Chief Financial Officer, Gary Schellenberg, an option topurchase up to 500,000 shares. Finally, we have hired an explorationmanager who is scheduled to start work for us in February, 2008 and towhom we have verbally agreed to grant an option to purchase 400,000shares of our common stock, with such option to vest over a three yearperiod. All of the options would be exercisable at a price equal to thefair market value of our stock as of the date of grant. We intend toadopt a formal stock option plan in the near future and grant theseoptions.

**Transfer Agent**

     EmpireStock Transfer is the transfer agent for our common stock. Theiraddress is at 2470 St. Rose Pkwy, Suite 304, Henderson, Nevada 89074,and their telephone number is (702) 818-5898.

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

     Ourfinancial statements included in this report have been preparedassuming that the Company will continue as a going concern. Since ourinception in February 2004, we have not generated revenue and haveincurred net losses. We had a deficit in working capital ofapproximately $556,900 at August 31, 2007, incurred a net loss of$300,200 for the year ended August 31, 2007, and an accumulated deficitduring the exploration stage of $377,600 for the period from February11, 2004 (inception) through August 31, 2007. Accordingly, we have notgenerated cash flow from operations and have primarily relied uponadvances from stockholders, promissory notes and advances fromunrelated parties, and equity financing to fund our operations. Due toour financial uncertainty, our independent auditors included anexplanatory paragraph regarding concerns about our ability to continueas a going concern. As discussed below, we received approximately$3,284,500 from equity financings which we believe should enable us tocommence mining exploration activities on the San Juan Properties andfund our operations through most of the fiscal year ended August 31,2008.

     Thefinancial statements do not include any adjustments to reflect thepossible future effects on the recoverability and classification ofassets or the amounts or classification of liabilities that may resultfrom the possible inability of our company to continue as a goingconcern.

**Introduction**

     Thefollowing discussion updates our plan of operation for the foreseeablefuture. The discussion also summarizes the results of our operationsfor the year ended August 31, 2007 and compares those results to theyear ended August 31, 2006.

     Wehold an exclusive right and option to acquire an 80% undivided right,title and interest in certain properties located in San Juan County,Colorado (the “San Juan Properties”). *Pleasesee “Item 2: Description of Properties” for a description of the miningproperties which encompass the San Juan Properties*. The option is currently exercisable as follows:

|           (i)        | anundivided 40% interest in the San Juan Properties will vest when wehave incurred expenditures of not less than $6,000,000 on the San JuanProperties, provided that such expenditures must be incurred withinfive years from the date of the Option Agreement;                                                                                                                                                                                                |
|----------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                             |
|           (ii)       | anadditional undivided 20% interest in the San Juan Properties will vestwhen: (a) we have incurred additional expenditures of not less than$3,500,000 on the San Juan Properties, provided that such expendituresmust be incurred within 7.5 years from the date of the OptionAgreement, and (b) we issue, subject to compliance with applicablesecurities laws, 10,000,000 shares of our common stock to theOptionors; and                                    |
|                                                                             |
|           (iii)      | anadditional undivided 20% interest in the San Juan Properties (for anaggregate of 80%) will vest when: (a) we have incurred additionalexpenditures of not less than $3,500,000 on the San Juan Properties,provided that such expenditures must be incurred within 10 years fromthe date of the Option Agreement, and (b) we issue, subject tocompliance with applicable securities laws, an additional 10,000,000shares of our common stock to the Optionors. |

     Weintend to seek equity and/or debt funding to explore and evaluate theSan Juan Properties. In November 2007, we sold 8,758,600 Units to 24offshore subscribers and four U.S. subscribers at a price of US$0.375per unit (US $0.75 per Unit before taking into effect our forward stocksplit of our authorized, issued and outstanding common stock asreported on our Current Report on Form 8-K filed with the SEC onNovember 2, 2007), for an aggregate subscription amount ofapproximately US $3,284,500. Each Unit consisted of one share of commonstock and one common stock purchase warrant, which warrant entitles theholder to purchase one additional share of our common stock at a priceof US$0.50 per share (or US$1.00 pre-split), for a period of two yearsfrom the closing of the private placement. We did not use the servicesof a placement agent although we have agreed to pay finders’ fees of$250,000 to a European company in connection with their introductionsto offshore subscribers.

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     Wehave used approximately $504,000 of the proceeds to pay outstandingpromissory notes and advances, approximately $125,000 to fundexploration of the San Juan Properties and additional amounts have beenexpended on corporate overhead. We estimate that $1.3 million of theremaining proceeds from the private placement will be used forexpenditures on the San Juan Properties in 2008, with the remainder tofund our corporate overhead. As noted above, expenditures on the SanJuan Properties will be credited to the $6,000,000 earn-in requirementfor the initial undivided 40% ownership interest in the San JuanProperties.

**Plan of Operation**

     Ourplan of operation for fiscal 2008 is to continue seeking funding forour operations and mining exploration program on the San JuanProperties that began in the fall of 2007. Our Option Agreement toacquire an 80% interest in the San Juan Properties requires us toexpend $13 million on the properties, and we currently believe thatexpenditures of that amount may complete exploration of the Gold King mine andrelated feasibility studies, although we cannot give anyassurances that additional funds will not be necessary to complete this work.  Furthermore,significant additional funds will be required to begin production if economically feasiblereserves exist.

     Ourplanned exploration activities may include data review, geologicmapping, resource modeling, geophysical surveys and modeling,re-logging of available drill core and rotary cuttings and rock chipsand soil sampling programs. Geophysical surveys include gravity and IPsurveys. All of these activities are designed to assist us inidentifying additional targets for drilling and increasing ourunderstanding of the San Juan Properties.

**Liquidity and Capital Resources**

     Wewere formed in early 2004 and have primarily had limited activity untilour acquisition of the option to acquire interests in the San JuanProperties. Since we have received no revenue from the production ofgold or other metals, we have relied on funds received in connectionwith our equity and debt financings to finance our ongoing operations.We have experienced net losses since inception.

     Weare dependent on additional financing to continue our exploration andintegration efforts in the future and, if warranted, to develop andcommence mining operations. Our capital requirements for theforeseeable future include continued exploration of the San JuanProperties, payments required to keep the option in good standing andour corporate overhead expenses. Based on our current estimates, weexpect that we will have sufficient cash to continue our explorationprogram, pay option holding costs and pay necessary administrativeexpenses for the remainder of the fiscal year ending August 31, 2008.Beyond that time, we expect that we will require additional funding tocontinue operation. While we have no current plans or arrangements tosatisfy these additional capital requirements, we anticipate that wewill be seeking additional equity financing in the future.

     During the year ended August 31, 2007, our operations were funded by the following:

- On November 1, 2006, we borrowed $5,000 from Renfrew Ventures, Inc. and issued an unsecured,  non-interest bearing demand promissory note in connection with the debt. Payment demand was made  and we repaid the entire debt in June 2007.  
- On January 5, 2007, we borrowed $10,000 from Gary Schellenberg, our Chief Financial Officer and  Vice President. In connection with the debt, we issued an unsecured, non-interest bearing demand  promissory note. Payment demand was made and we repaid the entire debt in July 2007.  
- On May 15, 2007, we borrowed $100,000 from Planet United, Inc., an investment firm, pursuant to a  Bridge Loan Agreement dated April 30, 2007. In connection with the debt, we issued a promissory  note to the lender which required us to pay interest at 12% per annum, payable on a quarterly basis and  all amounts owed under the note were due and payable on November 30, 2007. Using proceeds from  the private placement completed in November 2007, we paid the note in its entirety, including  approximately $6,200 in accrued interest.  
- From July and August 2007, we received approximately $400,000 of non-interest bearing advances  from an unrelated third party. These advances were repaid from the proceeds of our private placement  completed in November 2007. 

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     Asof August 31, 2007, we had approximately $49,000 of current assets,$1.4 million of non-current assets (consisting primarily of ourinactive Pride of the West Mill) $606,000 of current liabilities, and$1.15 million of non-current liabilities. As discussed above, wecompleted an equity private placement in November 2007 which raisedapproximately $3,284,500 in gross proceeds.

     In connection with the acquisition of the Pride of the West Mill, wepaid $250,000 of the $900,000 purchase price in cash, with theremaining $650,000 paid by way of a promissory note to the seller withinterest at 7.0% per annum. Interest on the note is payable monthly andthe entire amount is due and payable on or before June 29, 2009, and issecured by Deed of Trusts and financing statements on the mill propertyand equipment. As noted above, we have currently estimated the entirereclamation costs on the mill property at $500,000. As part of ouragreement with the seller, we have agreed to replace the seller'sreclamation bond with the State of Colorado. We are in the process ofnegotiating, with Colorado authorities, a replacement reclamation bondwhich we will be required to post in order to assure payment ofreclamation requirements. We believe this bond will be in theapproximate amount of $317,000 based on negotiations with Coloradoauthorities.

**Results of Operations**

     Weare presently in the exploration stage of our business and have notearned any revenues to date, and we do not anticipate earning revenuesuntil we acquire and develop mining properties with proven reserves.For the year ended August 31, 2007, we incurred a net loss ofapproximately $300,000 compared to a net loss of approximately $36,000for the year ended August 31, 2006. For all of fiscal year 2006 andmost of fiscal year 2007, our operations were limited. In the last twofiscal quarters of 2007, we began negotiations for and completed (i)the acquisition of the Pride of the West Mill in Howardsville, Coloradoand (ii) the Option Agreement with Todd C. Hennis and his company, SanJuan Corp., with respect to the San Juan Properties and an employmentagreement with Mr. Hennis. The increase in our net loss in fiscal 2007compared to fiscal 2006 was primarily due to expenses incurred inconnection with these negotiations and agreements. In fiscal 2007, weincurred approximately $126,500 of legal and accounting fees comparedto $13,500 of professional fees in fiscal 2006. Also in connection withour increased activities in late fiscal year end 2007, we incurredgeneral and administrative expenses of approximately $63,000 comparedto approximately $1,000 of similar expenses in fiscal 2006. Finally, weincurred approximately $94,000 of mineral property and explorationcosts in fiscal 2007 compared to $12,600 of such costs in fiscal 2006.

**Critical Accounting Policies**

     We have identified the following critical accounting policies which were used in the preparation of our financial statements.

     Exploration and Development Costs:Costs of acquiring mining properties and any exploration anddevelopment costs are expensed as incurred unless proven and probablereserves exist and the property is a commercially minable property.When it has been determined that a mineral property can be economicallydeveloped as a result of established proven and probable reserves, thecosts to develop such property will be capitalized. Costs of abandonedprojects will be charged to operations upon abandonment.

     Long-lived Assets:The Company periodically evaluates the carrying value ofproperty, plant and equipment costs, to determine if these costs are inexcess of their net realizable value and if a permanent impairmentneeds to be recorded. The periodic evaluation of carrying value ofcapitalized costs and any related property, plant and equipment costsare based upon expected future cash flows and/or estimated salvagevalue in accordance with Statement of Financial Accounting Standards(“SFAS”) No. 144, “Accounting for Impairment or Disposal of Long-LivedAssets.”

     Property Retirement Obligation:SFAS 143, “Accounting for Asset Retirement Obligations,” requires thefair value of a liability for an asset retirement obligation to berecognized in the period that it is incurred if a reasonable estimateof fair value can be made. The associated asset retirement costs arecapitalized as part of the carrying amount of the long-lived asset.Accretion expense is recorded in each subsequent period to recognize the changes in the liability resulting from the passage oftime.  Changes resulting from revisions to the original fair value of the liability are recognized as an increase or decrease in thecarrying amount of the liability and the related asset retirement costs capitalized as part of the carrying amount of the relatedlong-lived asset.

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**Recent Pronouncements**

     In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, *“The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”*.This statement permits entities to choose to measure many financialinstruments and certain other items at fair value. Most of theprovisions of SFAS No. 159 apply only to entities that elect the fairvalue option. However, the amendment to SFAS No. 115 *“Accounting for Certain Investments in Debt and Equity Securities”*applies to all entities with available-for-sale and trading securities.SFAS No. 159 is effective as of the beginning of an entity’s firstfiscal year that begins after November 15, 2007. Early adoption ispermitted as of the beginning of a fiscal year that begins on or beforeNovember 15, 2007, provided the entity also elects to apply theprovision of SFAS No. 157, *“Fair Value Measurements”*. The adoption of this statement is not expected to have a material effect on the our financial statements.

     In September 2006, the FASB issued SFAS No. 157, *“Fair Value Measurements”*.The objective of SFAS 157 is to increase consistency and comparabilityin fair value measurements and to expand disclosures about fair valuemeasurements. SFAS 157 defines fair value, establishes a framework formeasuring fair value in generally accepted accounting principles, andexpands disclosures about fair value measurements. SFAS 157 appliesunder other accounting pronouncements that require or permit fair valuemeasurements. The provisions of SFAS No. 157 are effective for fairvalue measurements made in fiscal years beginning after November 15,2007. In November 2007, the FASB announced that it would defer theeffective date of SFAS 157 for one year for all non-financial assetsand liabilities, except for those that are recognized or disclosed atfair value in the financial statements on a recurring basis. Theadoption of this statement is not expected to have a material effect onour future reported financial position or results of operations.

     In June 2006, the FASB issued FASB Interpretation No. 48, *“Accounting for Uncertainty In Income Taxes, an interpretation of FASB Statements No. 109”*.FIN 48 clarifies the accounting for uncertainty in income taxes byprescribing a two-step method of first evaluating whether a taxposition has a more likely than not recognition threshold and second,measuring that tax position to determine the amount of benefit to berecognized in the financial statements. FIN 48 provides guidance on thepresentation of such positions within a classified statement offinancial position as well as on derecognition, interest and penalties,accounting in interim periods, disclosure, and transition. FIN 48 iseffective for fiscal years beginning after December 15, 2006. Theadoption of this statement is not expected to have a material effect onour future reported financial position or results of operations.

**Risk Factors**

     Thisreport, including Management’s Discussion and Analysis or Plan ofOperation, contains forward-looking statements that may be materiallyaffected by several risk factors, including those summarized below:

***Ouronly mining property is an option to acquire various mining claims, thefeasibility of which has not been established as we have not completedexploration or other work necessary to determine if it is commerciallyfeasible to acquire and develop the property.***

     Weare currently a mining exploration stage company. Our only miningassets are an option to acquire up to an 80% interest in certain miningclaims in San Juan County, Colorado. Additionally, in June 2007 weacquired the Pride of the West Mill, which is currently under a ceaseand desist order from the Colorado Division of Reclamation, Mining andSafety which prohibits operation until certain deficiencies arecorrected. *See Item 1 and Item2 of this report for more information regarding our mining assets*.The San Juan Properties subject to the option do not have any proven orprobable reserves. A “reserve,” as defined by the SEC, is that part ofa mineral deposit which could be economically and legally extracted orproduced at the time of the reserve determination. A reserve requires afeasibility study demonstrating with reasonable certainty that thedeposit can be economically extracted and produced. We have not carriedout any feasibility study with regard to the San Juan Properties. As aresult, we currently have no reserves and there are no assurances thatwe will be able to prove that there are reserves on the San JuanProperties.

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***Wewill require significant additional capital to continue our explorationactivities, and, if warranted, to develop mining operations.***

     Underour Option Agreement with Mr. Hennis and San Juan Corp. (the“Optionors”), we are required to expend $6,000,000 on the San JuanProperties in order to earn a 40.0% undivided ownership interest in theSan Juan Properties. Additionally, we can earn two separate 20.0%ownership interests, for a total ownership interest of 80.0%, byexpending $3,500,000 on the San Juan Properties and issuing to theOptionors 10,000,000 shares of our common stock for each 20.0% tranche.In November 2007, we raised approximately $3,284,500 pursuant to aprivate placement of securities. After paying various debts andliabilities, and reserving a portion of the proceeds to fund corporateworking capital, we expect to expend approximately $1.3 million of theproceeds towards our Option Agreement on the San Juan Properties,although this amount is subject to change in management’s discretion.Thus, we will be required to raise significantly more capital in orderto fully exercise the option and develop the San Juan Properties formining production assuming that economically viable reserves exist.There is no assurance that our investments in the Option Agreement willbe financially productive. Our ability to obtain necessary fundingdepends upon a number of factors, including the price of gold and otherbase metals and minerals which we are able to mine, the status of thenational and worldwide economy and the availability of funds in thecapital markets. If we are unable to obtain the required financing forthese or other purposes, our exploration activities would be delayed orindefinitely postponed, we would likely lose our option to acquire anownership interest in the San Juan Properties and this would likely,eventually, lead to failure of our Company. Even if financing isavailable, it may be on terms that are not favorable to us, in whichcase, our ability to become profitable or to continue operating wouldbe adversely affected. If we are unable to raise funds to continue ourexploration and feasibility work on the San Juan Properties, or ifcommercially viable reserves are not present, the market value of oursecurities will likely decline, and our investors may lose some or allof their investment.

***Wehave incurred losses since our inception in 2004 and may never beprofitable which raises doubt about our ability to continue as a goingconcern.***

     Sinceour inception in 2004, we have had nominal operations and incurredoperating losses. As of August 31, 2007, our cumulative deficit sinceinception is approximately $378,000. As we are just beginningexploration activities under our recently acquired option on the SanJuan Properties, we expect to incur additional losses in theforeseeable future, and such losses may be significant. To becomeprofitable, we must be successful in raising capital to continue withour exploration activities and meet the requirements to exercise ouroption on the San Juan Properties, discover economically feasiblemineralization deposits and establish reserves, successfully developthe properties and finally realize adequate prices on our minerals inthe marketplace. It could be years before we receive any revenues fromgold and mineral production, if ever. Thus, we may never be profitable.Even if we do achieve profitability, we may not be able to sustain orincrease profitability on a long-term basis. These circumstances raisesignificant doubt about our ability to continue as a going concern asdescribed in an explanatory paragraph to our independent auditors'report on our audited financial statements for the period ended August31, 2007. If we are unable to continue as a going concern, investorswill likely lose all of their investments in our company.

***Historicalproduction of gold at the San Juan Properties may not be indicative ofthe potential for future development or revenue.***

     Historicalproduction of gold and other metals and minerals from the minesencompassed under our Option Agreement cannot be relied upon as anindication that the San Juan Properties will have commercially feasiblereserves. Investors in our securities should not rely on historicaloperations of the San Juan Properties as an indication that we will beable to place the San Juan Properties into commercial production again.We expect to incur losses unless and until such time as our propertyenters into commercial production and generates sufficient revenue tofund our continuing operations.

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***Fluctuating gold, metal and mineral prices could negatively impact our business plan.***

     Thepotential for profitability of our gold and other metal and mineralmining operations and the value of any mining properties we may acquirewill be directly related to the market price of gold and the metals andminerals that we mine. Historically, gold and other mineral prices havewidely fluctuated, and are influenced by a wide variety of factors,including inflation, currency fluctuations, regional and global demandand political and economic conditions. Fluctuations in the price ofgold and other minerals that we mine may have a significant influenceon the market price of our common stock and a prolonged decline inthese prices will have a negative effect on our results of operationsand financial condition. 

***Reclamation obligations on the San Juan Properties and our Mill could require significant additional expenditures.***

     Weare responsible for the reclamation obligations related to anyexploratory and mining activities located on the San Juan Properties.Since we have only begun exploration activities, we cannot estimatethese costs at this time. Pursuant to our purchase contract with theseller of the Pride of the West Mill, we are in the process ofnegotiating a new reclamation bond for the Mill, and the ColoradoDivision of Reclamation, Mining and Safety has indicated that the newbond will be approximately $317,000. We have currently estimated thetotal reclamation costs on the Mill at $500,000 and have recorded aliability in this amount. There is a risk that the Mill reclamationcosts may exceed our current estimate, and such excess could besignificant. The satisfaction of current and future bondingrequirements and reclamation obligations will require a significantamount of capital. There is a risk that we will be unable to fund theseadditional bonding requirements, and further that increases to ourbonding requirements or excessive actual reclamation costs willnegatively affect our financial position and results of operation.

***Title to mineral properties can be uncertain, and we are at risk of loss of ownership of our property.***

     Ourability to explore and mine the optioned properties depends on thevalidity of title to that property. The mineral properties in San JuanCounty subject to our Option Agreement consist of patented andunpatented mining claims. Unpatented mining claims are effectively onlya lease from the federal government to extract minerals; thus anunpatented mining claim is subject to contest by third parties or thefederal government. These uncertainties relate to such things as thesufficiency of mineral discovery, proper posting and marking ofboundaries, failure to meet statutory guidelines, assessment work andpossible conflicts with other claims not determinable from descriptionsof record. Since a substantial portion of all mineral exploration,development and mining in the United States now occurs on unpatentedmining claims, this uncertainty is inherent in the mining industry. Wehave not obtained a title opinion on the San Juan Properties we haveunder option. Thus, there may be challenges to the title to theproperties which, if successful, could impair development and/oroperations.

***Ourongoing operations and past mining activities of others are subject toenvironmental risks, which could expose us to significant liability anddelay, suspension or termination of our operations.***

     Miningexploration and exploitation activities are subject to federal, stateand local laws, regulations and policies, including laws regulating theremoval of natural resources from the ground and the discharge ofmaterials into the environment. These regulations mandate, among otherthings, the maintenance of air and water quality standards and landreclamation. They also set forth limitations on the generation,transportation, storage and disposal of solid and hazardous waste.Exploration and exploitation activities are also subject to federal,state and local laws and regulations which seek to maintain health andsafety standards by regulating the design and use of explorationmethods and equipment.

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     Environmentaland other legal standards imposed by federal, state or localauthorities are constantly evolving, and typically in a manner whichwill require stricter standards and enforcement, and increased finesand penalties for non-compliance. Such changes may prevent us fromconducting planned activities or increase our costs of doing so, whichwould have material adverse effects on our business. Moreover,compliance with such laws may cause substantial delays or requirecapital outlays in excess of those anticipated, thus causing an adverseeffect on us. Additionally, we may be subject to liability forpollution or other environmental damages that we may not be able to orelect not to insure against due to prohibitive premium costs and otherreasons. Unknown environmental hazards may exist on the San JuanProperties which we hold an option on, or we may acquire properties inthe future that have unknown environmental issues caused by previousowners or operators, or that may have occurred naturally.

***The San Juan Properties which we have under option are subject to royalties on production.***

     Themining claims that are subject to our Option Agreement with Todd C.Hennis and San Juan Corp. are subject to the following royalties:(i) 3.0%net smelter return royalty on Gold King Mine, (ii) 2.5% net profitsinterest on Gold King Mine,  (iii) 2.0% net smelter return royalty on the Mayflower Group,(iv) 2.5% net profits interest in the Mayflower Group, and (v) a 2% net smelter royalty on the GoldKing Mine. We havesecured an option to purchase the first four of these royalties for $250,000, and we have thepossibility to acquire the last royalty for $50,000. The option expires on November 21, 2008. If we acquire anownership interest in the San Juan Properties by exercise of our OptionAgreement, and we are successful in placing the property intoproduction, we will be obligated to pay the royalty holders thepercentages of the production and net profits disclosed above if we donot exercise our option to extinguish the royalties. Payment of theseroyalties will reduce our potential revenue. Further, as thedocumentation existing for many of these properties dates back to thelate 19th century, there may be unknown encumbrances, including royalties, on these properties.

***Weather interruptions in the San Juan County, Colorado area may delay or prevent exploration on the San Juan Properties***

     TheSan Juan Properties are located in a mountainous, high alpine region ofthe Colorado Rocky Mountains. The area receives extreme winterconditions which delay or prevent exploration of the properties duringthe winter months.

***Our industry is highly competitive, attractive mineral lands are scarce and we may not be able to obtain quality properties.***

     Wecompete with many companies in the mining industry, including large,established mining companies with capabilities, personnel and financialresources that far exceed our limited resources. In addition, there isa limited supply of desirable mineral lands available forclaim-staking, lease or acquisition in the United States, and otherareas where we may conduct exploration activities. We are at acompetitive disadvantage in acquiring mineral properties, since wecompete with these larger individuals and companies, many of which havegreater financial resources and larger technical staffs. Likewise, ourcompetition extends to locating and employing competent personnel andcontractors to prospect, develop and operate mining properties. Many ofour competitors can offer attractive compensation packages that we maynot be able to meet. Such competition may result in our company beingunable not only to acquire desired properties, but to recruit or retainqualified employees or to acquire the capital necessary to fund ouroperation and advance our properties. Our inability to compete withother companies for these resources would have a material adverseeffect on our results of operation and business.

***We depend on a limited number of personnel and the loss of any of these individuals could adversely affect our business.***

     Ourcompany is completely dependent on two persons, namely Todd C. Hennis,our President and Chief Executive Officer, and our Chief FinancialOfficer, Gary Schellenberg. As of August 31, 2007, Messrs. Hennis andSchellenberg were our only employees, and as such are responsible forall of our operations. The loss of either of these individuals wouldsignificantly and adversely affect our business. In addition, becauseMr. Hennis and his corporation, San Juan Corp., are the current ownersof our primary asset, the Option Agreement concerning the San JuanProperties, the loss of Mr. Hennis’ services and the loss of hisknowledge regarding the optioned properties would be particularlydetrimental to our operations. We have no life insurance on the life ofany officer.

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***Thenature of mineral exploration and production activities involves a highdegree of risk and the possibility of uninsured losses that couldmaterially and adversely affect our operations.***

     Explorationfor minerals is highly speculative and involves greater risk than manyother businesses. Many exploration programs do not result in thediscovery of economically feasible mineralization. Few properties thatare explored are ultimately advanced to the stage of producing mines.We are subject to all of the operating hazards and risks normallyincident to exploring for and developing mineral properties such as,but not limited to:

- economically insufficient mineralized material; 
- fluctuations in production costs that may make mining uneconomical; 
- labor disputes; 
- unanticipated variations in grade and other geologic problems; 
- environmental hazards; 
- water conditions; 
- difficult surface or underground conditions; 
- industrial accidents; personal injury, fire, flooding, cave-ins and landslides; 
- metallurgical and other processing problems; 
- mechanical and equipment performance problems; and 
- decreases in revenues and reserves due to a lower gold and mineral prices. 

     Anyof these risks can materially and adversely affect, among other things,the development of properties, production quantities and rates, costsand expenditures and production commencement dates. We currently haveno insurance to guard against any of these risks. If we determine thatcapitalized costs associated with any of our mineral interests are notlikely to be recovered, we would incur a write-down of our investmentin these interests. All of these factors may result in losses inrelation to amounts spent which are not recoverable.

***Ouroperations are subject to permitting requirements which could requireus to delay, suspend or terminate our operations on our mining property.***

     Ouroperations, including our planned exploration activities on ouroptioned San Juan Properties, require permits from the state andfederal governments. We may be unable to obtain these permits in atimely manner, on reasonable terms or at all. If we cannot obtain ormaintain the necessary permits, or if there is a delay in receivingthese permits, our timetable and business plan for exploration of theSan Juan Properties will be adversely affected.

***We do not insure against all risks to which we may be subject in our planned operations.***

     Whilewe currently maintain insurance to insure against general commercialliability claims, our insurance will not cover all of the potentialrisks associated with our operations. For example, our currentinsurance policy associated with the inactive Pride of the West Mill isonly in force if the mill is vacant and not in operation. We may alsobe unable to obtain insurance to cover other risks at economicallyfeasible premiums or at all. Insurance coverage may not continue to beavailable, or may not be adequate to cover the claims against suchinsurance. In addition, there are some risks which cannot be insuredagainst, such as environmental damage. Losses from these events maycause us to incur significant costs that could materially adverselyaffect our financial condition and our ability to fund activities onour property. A significant loss could force us to reduce or terminateour operations.

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**Risks Associated with Our Common Stock**

***Tradingon the OTC Bulletin Board may be volatile and sporadic, which coulddepress the market price of our common stock and make it difficult forour stockholders to resell their shares.***

     Ourcommon stock is quoted on the OTC Bulletin Board service of theFinancial Industry Regulatory Authority (“FINRA”). Trading in stockquoted on the OTC Bulletin Board is often thin and characterized bywide fluctuations in trading prices due to many factors that may havelittle to do with our operations or business prospects. This volatilitycould depress the market price of our common stock for reasonsunrelated to operating performance. Moreover, the OTC Bulletin Board isnot a stock exchange, and trading of securities on the OTC BulletinBoard is often more sporadic than the trading of securities listed onother stock exchanges such as the NASDAQ Stock Market, New York StockExchange or American Stock Exchange. Accordingly, our shareholders mayhave difficulty reselling any of their shares.

***Ourstock is a penny stock. Trading of our stock may be restricted by theSEC’s penny stock regulations and the FINRA’s sales practicerequirements, which may limit a stockholders ability to buy and sellour stock.***

     Ourstock is a penny stock. The SEC has adopted Rule 15g-9 which generallydefines penny stock to be any equity security that has a market price(as defined) less than $5.00 per share or an exercise price of lessthan $5.00 per share, subject to certain exceptions. Our securities arecovered by the penny stock rules, which impose additional salespractice requirements on broker-dealers who sell to persons other thanestablished customers and accredited investors. The term accreditedinvestor refers generally to institutions with assets in excess of$5,000,000 or individuals with a net worth in excess of $1,000,000 orannual income exceeding $200,000 or $300,000 jointly with their spouse.The penny stock rules require a broker-dealer, prior to a transactionin a penny stock not otherwise exempt from the rules, to deliver astandardized risk disclosure document in a form prepared by the SECwhich provides information about penny stocks and the nature and levelof risks in the penny stock market. The broker-dealer must also providethe customer with current bid and offer quotations for the penny stock,the compensation of the broker-dealer and its salesperson in thetransaction and monthly account statements showing the market value ofeach penny stock held in the customers account. The bid and offerquotations, and the broker-dealer and salesperson compensationinformation, must be given to the customer orally or in writing priorto effecting the transaction and must be given to the customer inwriting before or with the customer’s confirmation. In addition, thepenny stock rules require that prior to a transaction in a penny stocknot otherwise exempt from these rules, the broker-dealer must make aspecial written determination that the penny stock is a suitableinvestment for the purchaser and receive the purchaser’s writtenagreement to the transaction. These disclosure requirements may havethe effect of reducing the level of trading activity in the secondarymarket for the stock that is subject to these penny stock rules.Consequently, these penny stock rules may affect the ability orwillingness of broker-dealers to trade our securities. We believe thatthe penny stock rules discourage broker-dealer and investor interestin, and limit the marketability of, our common stock.

***FINRA sales practice requirements may also limit a stockholders ability to buy and sell our stock.***

     Inaddition to the penny stock rules promulgated by the SEC, which arediscussed in the immediately preceding risk factor, FINRA rules requirethat in recommending an investment to a customer, a broker-dealer musthave reasonable grounds for believing that the investment is suitablefor that customer. Prior to recommending speculative low pricedsecurities to their non-institutional customers, broker-dealers mustmake reasonable efforts to obtain information about the customer’sfinancial status, tax status, investment objectives and otherinformation. Under interpretations of these rules, FINRA believes thatthere is a high probability that speculative low priced securities willnot be suitable for at least some customers. FINRA requirements make itmore difficult for broker-dealers to recommend that their customers buyour common stock, which may limit the ability to buy and sell our stockand have an adverse effect on the market value for our shares.

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***Asmall number of existing shareholders own a significant portion of ourcommon stock, which could limit other shareholders’ ability toinfluence the outcome of any shareholder vote.***

     OurChief Executive Officer beneficially owns approximately 40.8% of ourcommon stock as of December 19, 2007. Under our articles ofincorporation and the laws of the State of Nevada, the vote of amajority of the shares voting at a meeting at which a quorum is presentis generally required to approve most shareholder action. As a result,our CEO will be able to significantly influence the outcome ofshareholder votes for the foreseeable future, including votesconcerning the election of directors, amendments to our articles ofincorporation or proposed mergers or other significant corporatetransactions.

***We have never paid a dividend on our common stock and we do not anticipate paying any in the foreseeable future.***

     Wehave not paid a cash dividend on our common stock to date, and we donot intend to pay cash dividends in the foreseeable future. Our abilityto pay dividends will depend on our ability to successfully develop oneor more properties and generate revenue from operations.Notwithstanding, we will likely elect to retain any earnings, if any,to finance our growth. Future dividends may also be limited by bankloan agreements or other financing instruments that we may enter intoin the future. The declaration and payment of dividends will be at thediscretion of our Board of Directors.

***We have a potential conflict of interest with our President and Chief Executive Officer, Todd C. Hennis.***

     Ourprimary asset is our Option Agreement with Todd C. Hennis and San JuanCorp., a Colorado corporation owned by Mr. Hennis. Under the OptionAgreement we have a right to acquire various ownership interests incertain mining properties located in San Juan County, Colorado, all ofwhich are currently owned by Mr. Hennis or San Juan Corp. In connectionwith the acquisition of the Option Agreement, we hired Mr. Hennis asour President and Chief Executive Officer pursuant to an employmentagreement. *See Item 1, “Description of Business,” for a discussionof the terms of the Option and Employment Agreements*.Because there are continuing obligations under the Option Agreement, adispute may arise between us and Mr. Hennis/San Juan Corp. Under NevadaLaw, this continuing financial transaction with Mr. Hennis is proper solong as the fact of Mr. Hennis’ ongoing financial interest is known toour Board of Directors and our Board ratifies the ongoing transactionin good faith and by a vote sufficient for the purpose without countingthe vote of Mr. Hennis.

***Wehave not voluntarily implemented various corporate governance measures,in the absence of which, shareholders may have more limited protectionsagainst interested director transactions, conflicts of interest andsimilar matters****.*

     Recentfederal legislation, including the Sarbanes-Oxley Act of 2002, hasresulted in the adoption of various corporate governance measuresdesigned to promote the integrity of the corporate management and thesecurities markets. Some of these measures have been adopted inresponse to legal requirements. Others have been adopted by companiesin response to the requirements of national securities exchanges, suchas the NYSE or The NASDAQ Stock Market, on which their securities arelisted. Among the corporate governance measures that are required underthe rules of national securities exchanges and NASDAQ are those thataddress board of directors’ independence, audit committee oversight andthe adoption of a code of ethics. While our Board of Directors hasadopted a Code of Ethics and Business Conduct, we have not yet adoptedany of these corporate governance measures and, since our securitiesare not listed on a national securities exchange or NASDAQ, we are notrequired to do so. It is possible that if we were to adopt some or allof these corporate governance measures, shareholders would benefit fromsomewhat greater assurances that internal corporate decisions werebeing made by disinterested directors and that policies had beenimplemented to define responsible conduct. For example, in the absenceof audit, nominating and compensation committees comprised of at leasta majority of independent directors, decisions concerning matters suchas compensation packages to our senior officers and recommendations fordirector nominees may be made by a majority of directors who have aninterest in the outcome of the matters being decided. Prospectiveinvestors should bear in mind our current lack of corporate governancemeasures in formulating their investment decisions.

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**Forward-Looking Statements**

     Thisreport contains forward-looking statements within the meaning of theUnited States Private Securities Litigation Reform Act of 1995concerning our ability to develop and produce gold or other preciousmetals from our optioned San Juan Properties, future business plans andstrategies, the proposed acquisition of other companies, future revenueand the receipt of working capital and other statements that are nothistorical in nature. In this report, forward-looking statements areoften identified by the words “anticipate,” “plan,” “believe,”“expect,” “estimate,” and the like. These forward-looking statementsreflect our current beliefs, expectations and opinions with respect tofuture events, and involve future risks and uncertainties which couldcause actual results to differ materially from those expressed orimplied.

     Inaddition to the specific factors identified under “Risk Factors” above,other uncertainties that could affect the accuracy of forward-lookingstatements include:

- technological changes in the mining industry; 
- our costs; 
- changes in our business strategy; 
- interpretation of drill hole results and the geology, grade and continuity of mineralization; 
- the uncertainty of reserve estimates and timing of development expenditures; and 
- commodity price fluctuations. 

     Thislist, together with the factors identified above, is not exhaustive ofthe factors that may affect any of the Company’s forward-lookingstatements. You should read this report completely and with theunderstanding that our actual future results may be materiallydifferent from what we expect. These forward-looking statementsrepresent our beliefs, expectations and opinions only as of the date ofthis report. We do not intend to update these forward-lookingstatements except as required by law. We qualify all of ourforward-looking statements by these cautionary statements.

**Prospective investors are urged not to put undue reliance on forward-looking statements.**

**ITEM 7.           FINANCIAL STATEMENTS**

 See Financial Statements beginning on page F-1.

**ITEM8.           CHANGESIN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE**

     Asreported in our Current Report on Form 8-K as filed with the SEC onNovember 13, 2007, and as further supplemented in amendment filed onNovember 27, 2007, we dismissed Manning Elliott LLP, CharteredAccountants, and on November 8, 2007, and we engaged GHP Horwath, P.C.of Denver, Colorado, as our independent registered public accountingfirm.  We had no disagreements with Manning Elliott LLP.

**ITEM 8A.      CONTROLS AND PROCEDURES**

     (a)   We have adopted and maintain disclosure controls and procedures (assuch term is defined in Rules 13a-15(e) and 15d-15(e) under theSecurities Exchange Act of 1934, as amended (the “Exchange Act”)) thatare designed to ensure that information required to be disclosed in ourreports under the Exchange Act, is recorded, processed, summarized andreported within the time periods required under the SEC’s rules andforms and that the information is gathered and communicated to ourmanagement, including our Chief Executive Officer (Principal ExecutiveOfficer) and Chief Financial Officer (Principal Financial Officer), asappropriate, to allow for timely decisions regarding requireddisclosure.

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     Asrequired by SEC Rule 15d-15(b), we carried out an evaluation under thesupervision and with the participation of our management, including theChief Executive Officer and Chief Financial Officer, of theeffectiveness of the design and operation of our disclosure controlsand procedures pursuant to Exchange Act Rule 15d-14 as of the end ofthe period covered by this report. Based on the foregoing evaluation,our Chief Executive Officer and Chief Financial Officer have concludedthat our disclosure controls and procedures are not effective in timelyalerting them to material information required to be included in ourperiodic SEC filings and to ensure that information required to bedisclosed in our periodic SEC filings is accumulated and communicatedto our management, including our Chief Executive Officer and ChiefFinancial Officer, to allow timely decisions regarding requireddisclosure as a result of the deficiency in our internal control overfinancial reporting discussed below.

     Inconnection with their audit of our August 31, 2007, financialstatements, our independent registered public accounting firmidentified and reported to our board of directors a material weaknessin our processes, procedures and controls related to the preparation,analysis and review of financial information. A material weakness is adeficiency, or combination of deficiencies, in internal control overfinancial reporting, such that there is a reasonable possibility that amaterial misstatement of our annual or interim financial statementswill not be prevented or detected on a timely basis. The materialweakness identified was related to a lack of accounting staffresponsible for the authorization, processing, approval and reportingof transactions as well as the overall financial reporting process.This material weakness has caused delays in our financial reportingprocess and threatened our ability to make timely filings under theExchange Act without undue risk of error. Our management agreed withthese findings.

     UntilJune of 2007, our operations were very limited and we have a verylimited number of employees engaged in the authorization, recording,processing and reporting of transactions, as well as the overallfinancial reporting process. This has caused delays in our financialreporting process. We are currently taking certain steps to correctthese deficiencies by hiring experienced personnel and enhancing ourreporting process in future. Enhancing our internal controls to correctthese deficiencies will result in increased costs to us.

     Notwithstandingthis material weakness, we believe that the financial statementsincluded in this report fairly present, in all material respects, ourfinancial position and results of operations as of and for the yearended August 31, 2007 and for the period from February 11, 2004 (dateof inception) through August 31, 2007.

     (b)There have been no changes in the Company’s internal controls overfinancial reporting that have materially affected, or are reasonablylikely to materially affect, the Company’s internal controls overfinancial reporting.

**PART III**

 **ITEM 9.**           **DIRECTORS,EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATEGOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT**

| **Identify Directors and Executive Officers** |
|-----------------------------------------------|

     Thedirectors named below were elected for one-year terms. Officers holdtheir positions at the discretion of the Board of Directors absent anyemployment agreements, none of which currently exist or arecontemplated.

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     Thenames, addresses and ages of each of our directors and executiveofficers and the positions and offices held by them, which directorpositions are for a period of one year, are:

|     **Name and Address**   |       |     **Age**  |       | **First**  **Became**  **Director**  |       |     **Position(s)**  |
|-------------------------------------------|----------------------|----------------------------------|----------------------|-----------------------------------------------------|----------------------|-------------------------------------|
||
||
|                                      |
| Todd C. Hennis                       |                 | 48                          |                 | June 2007                                      |                 | Director, President, CEO       |
| 10920 W. Alameda Ave.                |                 |                             |                 |                                                |                 |                                |
| Suite 207                            |                 |                             |                 |                                                |                 |                                |
| Lakewood, CO 80226                   |                 |                             |                 |                                                |                 |                                |
|                                      |
| Gary Schellenberg                    |                 | 49                          |                 | February 2004                                  |                 | Director, CFO, VP Exploration  |
| 620-650 West Georgia St.             |                 |                             |                 |                                                |                 |                                |
| Vancouver, BC V6B 4N9                |                 |                             |                 |                                                |                 |                                |
|                                      |
| Eric Owens                           |                 | 51                          |                 | July 2007                                      |                 | Director                       |
| 100 Adelaide Street West, Suite 405  |                 |                             |                 |                                                |                 |                                |
| Toronto, Ontario M5H 1S3             |                 |                             |                 |                                                |                 |                                |
|                                      |
| Beverly Rich                         |                 | 56                          |                 | July 2007                                      |                 | Director                       |
| 1553 Greene St.                      |                 |                             |                 |                                                |                 |                                |
| Silverton, CO 81433                  |                 |                             |                 |                                                |                 |                                |

TODDC. HENNIS, President, CEO and Director. Mr. Hennis has 24 yearsexperience in the mining and metals business. He is president and ownerof Salem Minerals, Inc. (1987-present), San Juan Corp. (1997-present),both private mining companies headquartered in Colorado. San Juan Corp.owns the Mogul Mine and the Gold King Mine, consisting of a largenumber of patented mining claims. Mr. Hennis is also owner andpresident of Gladstone Corp. (2003-present), a souvenir company, andThe Gladstone Institute, Inc. (2004-present), an education/miningcompany. Mr. Hennis graduated from Harvard College in 1982 with honorsin economics, with an emphasis on natural resource industries.

GARYSCHELLENBERG, CFO, VP Exploration and Director. Mr. Schellenberg hasbeen a Director since February 11, 2004. Mr. Schellenberg commitsapproximately ten hours per-week of his time to Colorado Goldfield’sbusiness. Mr. Schellenberg is active in three other public companies onthe TSX Venture Exchange in Canada and one private company. The publiccompanies that he is involved in include TNR Gold Corp., where he is aDirector and President, positions he has held since August 1990, andresponsible for overseeing all business operations; Argent Resources,Ltd., where he has been a Director since November 1997; and New WorldResources Corp., where he has served as a Director since March 2003.Mr. Schellenberg is also the Founder, Director and President of CoastMountain Geological Ltd., positions he has held since April 1987, wherehe is responsible for overseeing all business operations. During thelast five years, Mr. Schellenberg was a Director and President ofSecureview Systems, Inc. (formerly International Comstock ExplorationLtd.) from December 1997 to August 2003. At International Comstock, Mr.Schellenberg was responsible for overseeing all business operations.Mr. Schellenberg graduated from the University of British Columbia in1981 with a B.Sc. in geology.

ERICOWENS, Director. Dr. Owens is President, Treasurer and Director ofAlexandria Minerals Corp. He has 23 years experience in the mineralexploration industry in North America, Mexico and Central America.Previously, he held positions with Newmont Mining, BHP Minerals, PhelpsDodge Corp. and Echo Bay Mines. Dr. Owens graduated from the Universityof Western Ontario in 1992 with a Ph.D. in geology and is a licensedProfessional Geologist.

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BEVERLYRICH, Director. Ms. Rich has been the Treasurer for San Juan County,Colorado since 1990. She also serves as the Democratic PartyChairperson for San Juan County, Colorado and is the DemocraticChairperson for the 6thSenatorial District in Colorado. She is also Chairperson for the SanJuan County Historical Society, a board she has sat upon since 1980.She also serves on the board or is a member of the Red Mountain TaskForce, San Juan Regional Planning Commission, Colorado CountyTreasurer’s Association, Colorado Public Trustee’s Association,National Historic Landmarks Stewards Association, ColoradoPreservation, Inc., and the Silverton Chamber of Commerce. Ms. Richgraduated from Fort Lewis College in Durango, Colorado and is aCertified County Treasurer, certified by the Colorado CountyTreasurer’s Association and Colorado State University.

**Significant Employees**

We have no significant employees other than our executive officers.

**Involvement in Certain Legal Proceedings**

|           (1)          | Nobankruptcy petition has been filed by or against any business of whichany director was a general partner or executive officer either at thetime of the bankruptcy or within two years prior to that time.                                                                                                   |
|------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                               |
|           (2)          | Nodirector has been convicted in a criminal proceeding and is not subjectto a pending criminal proceeding (excluding traffic violations andother minor offenses).                                                                                                                                             |
|                                                                               |
|           (3)          | Nodirector has been subject to any order, judgment or decree, notsubsequently reversed, suspended or vacated, or any court of competentjurisdiction, permanently or temporarily enjoining, barring, suspendingor otherwise limiting his involvement in any type of business,securities or banking activities. |
|                                                                               |
|           (4)     | Nodirector has been found by a court of competent jurisdiction (in acivil action), the SEC or the Commodity Futures Trading Commission tohave federal or state securities or commodities law, that has not beenreversed, suspended or vacated.                                                                |

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

     Toour knowledge, during the fiscal year ended August 31, 2007, basedsolely on a review of such materials as are required by the SEC, noofficer, director or beneficial holder of more than ten percent of ourissued and outstanding shares of Common Stock failed to timely filewith the SEC any form or report required to be so filed pursuant toSection 16(a) of the Securities Exchange Act of 1934, except that GarySchellenberg failed to timely file a Form 4 for a sales transactionthat occurred June 14, 2007.

**Code of Ethics**

     ColoradoGoldfields has adopted a code of ethics that applies to all itsexecutive officers and employees, including its CEO. ColoradoGoldfields undertakes to provide any person, upon request, a copy ofits code of ethics free of charge. Such a request may be made bycontacting Mr. Schellenberg at (604) 687-7551.

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**ITEM 10. EXECUTIVE AND DIRECTOR COMPENSATION**

**Summary Compensation Table**

     Thefollowing table summarizes all compensation recorded by us in the mostrecent fiscal year ended August 31, 2007 for our principal executiveofficer and chief financial officer. No officer or employee was paid inexcess of $100,000 during the most recent fiscal year. Such officersare referred to herein as our “Named Executive Officers.”

|   **Name**    **and**  **Principal**    **Position**    |               |           **Year**    |               |          **Salary**  **($)**   |              |           **Bonus**  **($)**   |               |         **Stock**  **Awards**  **($)**   |               |       **Option**   **Awards**   **($)**   |               | **Non-**  **Equity**   **Incentive** **Plan**   **Compen-**  **sation**    |               | **Change in**    **Pension and**    **Nonqualified**   **Deferred** **Compensation**   **Earnings**  **($)**  |               |     **All other**    **Compen-**  **sation**   **($)**  |               |           **Total**  **($)**  |
|-------------------------------------------------------------------------------------------------|--------------------------------------------------|----------------------------------------------------------|--------------------------------------------------|------------------------------------------------------------------------|-------------------------------------------------|------------------------------------------------------------------------|--------------------------------------------------|----------------------------------------------------------------------------------|--------------------------------------------------|---------------------------------------------------------------------------------------------|--------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|----------------------------------------------------------------------------------------------------------------|--------------------------------------------------|------------------------------------------------------------------|
||
||
||
||
||
||
|                                                                                            |
| Todd C.                                                                                    |                                             | 2007                                                |                                             | 16,000                                                            |                                            | Nil                                                               |                                             | Nil                                                                         |                                             | Nil                                                                                    |                                             | Nil                                                                                                                |                                             | Nil                                                                                                                                                                       |                                             | 700                                                                                                       |                                             | 16,700                                                      |
| Hennis,                                                                                    |                                             |                                                     |                                             |                                                                   |                                            |                                                                   |                                             |                                                                             |                                             |                                                                                        |                                             |                                                                                                                    |                                             |                                                                                                                                                                           |                                             |                                                                                                           |                                             |                                                             |
| President,                                                                                 |                                             |                                                     |                                             |                                                                   |                                            |                                                                   |                                             |                                                                             |                                             |                                                                                        |                                             |                                                                                                                    |                                             |                                                                                                                                                                           |                                             |                                                                                                           |                                             |                                                             |
| CEO                                                                                        |                                             |                                                     |                                             |                                                                   |                                            |                                                                   |                                             |                                                                             |                                             |                                                                                        |                                             |                                                                                                                    |                                             |                                                                                                                                                                           |                                             |                                                                                                           |                                             |                                                             |
| Gary                                                                                       |                                             | 2007                                                |                                             | 4,900                                                             |                                            | Nil                                                               |                                             | Nil                                                                         |                                             | Nil                                                                                    |                                             | Nil                                                                                                                |                                             | Nil                                                                                                                                                                       |                                             | Nil                                                                                                       |                                             | 4,900                                                       |
| Schellenberg,                                                                              |                                             | 2006                                                |                                             | Nil                                                               |                                            | Nil                                                               |                                             | Nil                                                                         |                                             | Nil                                                                                    |                                             | Nil                                                                                                                |                                             | Nil                                                                                                                                                                       |                                             | Nil                                                                                                       |                                             | Nil                                                         |
| VP                                                                                         |                                             | 2005                                                |                                             | Nil                                                               |                                            | Nil                                                               |                                             | Nil                                                                         |                                             | Nil                                                                                    |                                             | Nil                                                                                                                |                                             | Nil                                                                                                                                                                       |                                             | Nil                                                                                                       |                                             | Nil                                                         |
| Exploration                                                                                |                                             | 2004                                                |                                             | Nil                                                               |                                            | Nil                                                               |                                             | Nil                                                                         |                                             | Nil                                                                                    |                                             | Nil                                                                                                                |                                             | Nil                                                                                                                                                                       |                                             | Nil                                                                                                       |                                             | Nil                                                         |

     Mr.Schellenberg is employed with us on a part-time basis, and we haveagreed to pay him at a rate of $700/day for his services to ourcompany. We currently do not compensate our directors for theirservices, although we may adopt a compensation package.

**Executive Employment Agreement**

     Weentered into an Executive Employment Agreement effective on June 17,2007 with Mr. Hennis, whereby we employed him as our Chief ExecutiveOfficer and President, for a term of 18 months (subject to renewal) inconsideration for, among other things: (i) a salary of $8,000 per monthfor the first six months, to be increased to not less than $8,500 permonth thereafter; (ii) an automobile allowance of $350 per month, plusreimbursement for mileage at the IRS standard rate; (iii) certainemployee benefits, including group health insurance, pension and profitsharing and other such benefits that we may elect to provide our otheremployees from time to time; and (iv) the agreement by us to grant of astock option to purchase up to 600,000 shares of our common stock at anexercise price equal to the fair market value of our shares of commonstock as of the date of grant pursuant to a stock option plan which weintend to adopt in the near future. *See Item 1, “Description of Business,” for additional information regarding Mr. Hennis’ Employment Agreement.*

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**ITEM11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS**

**Equity Compensation Plans**

     Wedo not have any equity compensation plans in effect. However, pursuantto his employment agreement, we have agreed to grant our President andChief Executive Officer, Todd C. Hennis, an option to purchase up to600,000 shares of our common stock. We have also verbally agreed togrant our Chief Financial Officer, Gary Schellenberg, an option topurchase up to 500,000 shares. Finally, we have hired an explorationmanager who is scheduled to start work for us in February, 2008 and towhom we have verbally agreed to grant an option to purchase 400,000shares of our common stock, with such option to vest over a three yearperiod. All of the options would be exercisable at a price equal to thefair market value of our stock as of the date of grant. We intend toadopt a formal stock option plan in the near future and grant theseoptions.

**Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

     Thefollowing table sets forth certain information concerning the number ofshares of our common stock owned beneficially as of December 1, 2007.As of December 1, 2007, there were 1,185,000,000 shares of our commonstock authorized and 88,085,000 shares outstanding.

SECURITY OWNERSHIP OF MANAGEMENT

| **Title of Class**  |   | **Name and Address of**  |   | **Amount and Nature of**  |   |   | **Percentage of Common** |   |
|--------------------------|--------|-------------------------------|--------|---------------------------|--------|--------|--------------------------|--------|
|                     |   | **Beneficial Owner**     |   | **Beneficial Ownership**  |   |   | **Stock**                |   |
| Common Stock        |   | Todd C. Hennis           |   | 39,500,000(1)   |        |   | 40.8%               |   |

(1)All shares are owned directly. The indicated person does not have theright to acquire any shares, within sixty days, from options, warrants,rights, conversion privileges or similar obligations.

**ITEM 12.           CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

**Related Party Transactions**

     OnJanuary 5, 2007, we borrowed $10,000 from Gary Schellenberg, our ChiefFinancial Officer and Vice President. In connection with the debt, weissued an unsecured, non-interest bearing demand promissory note.Payment demand was made and we repaid the entire debt in July 2007.

     OnJune 17, 2007, pursuant to a written agreement of that day, Mr. Hennisand San Juan Corp. (the Optionors), which is wholly-owned by Mr.Hennis, entered into an Option Agreement whereby Mr. Hennis and SanJuan granted us an exclusive option to acquire up to an undivided 80%mineral interest in and to certain mining properties and claims locatedin San Juan County, Colorado that they own. In connection with theOption Agreement, we also entered into a Surface Rights Agreement withthe Optionors whereby we were granted a right-of-way to enter upon theSan Juan Properties to perform mining exploration activities while theOption Agreement is in good standing. Under the Surface RightsAgreement, among other things, we are required to perform restorationand reclamation on the San Juan Properties, reimburse the Optionors forall property taxes on the San Juan Properties and indemnify theOptionors for losses they may incur due to our activities.

     OnJune 17, 2007, in connection with the Option Agreement, we entered intoan Executive Employment Agreement with Mr. Hennis whereby Mr. Hennisbecame our President and CEO and a member of our Board of Directors.Further, on June 14, 2007, Mr. Hennis purchased 2,500,000 shares(39,500,00 shares post-splits) of our common stock from GarySchellenberg, representing 44.8% of the outstanding common stock of theCompany at the time of this related transaction. *See Item 1, “Description of Business,” for a discussion of the terms of the Option, Surface Rights and Employment Agreements*.

29

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     Duringthe year ended August 31, 2007, we recognized a total of $4,500 (2006 -$6,000) for donated services at $500 per month and $2,250 (2006 -$3,000) for donated rent at $250 per month provided by GarySchellenberg, our CFO and director.

     Duringthe year ended August 31, 2007, we incurred $6,377 to affiliatedcompanies, which are owned by Mr. Hennis for legal fees and mineral andexploration costs.

**Director Independence**

     Ourcommon stock is listed on the OTC Bulletin Board inter-dealer quotationsystem, which does not have director independence requirements. Forpurposes of determining director independence, we have applied thedefinition set forth in NASDAQ Rule 4200(a)(15). The followingdirectors are considered “independent” as defined under Rule4200(a)(15): Eric Owens and Beverly Rich.

**Board Meetings**

     Duringmost of the fiscal year ended August 31, 2007, we had one director,Gary Schellenberg, due to the fact that our company had limitedoperations and our efforts centered towards searching for suitablemining properties. Thus, no formal Board meetings were held during thefiscal year ended August 31, 2007, and Board actions were taken bywritten consent. As we added Mr. Hennis to the Board in June of 2007,and recently added two independent Board members, Owens and Rich. Weanticipate more formal Board meetings for fiscal year 2008.

**Audit, Compensation and Nominating Committees**

     Asnoted above, our common stock is listed on the OTC Bulletin Board,which does not require companies to maintain audit, compensation ornominating committees. Until recently, we have had limited operationsand were managed by a sole director who also acted as our soleemployee. Considering the foregoing and the fact that we are an earlystage exploration company, we do not maintain standing audit,compensation or nominating committees. The functions typicallyassociated with these committees are performed by the entire Board ofDirectors. With the recent addition of Hennis and two independent Boardmembers, Owens and Rich, the Company intends to form formal committeesduring fiscal year 2008.

     Althoughthere is no formal process in place regarding the consideration of anydirector candidates recommended by security holders, our Board ofDirectors will consider a director candidate proposed by a shareholder.A candidate must be highly qualified in terms of business experienceand be both willing and expressly interested in serving on the Board. Ashareholder wishing to propose a candidate for the Board’sconsideration should forward the candidate’s name and information aboutthe candidate’s qualifications to Colorado Goldfields Inc., Board ofDirectors, 10920 West Alameda Avenue, Suite 207, Lakewood, Colorado80226, Attn.: Todd C. Hennis, CEO. Submissions must include sufficientbiographical information concerning the recommended individual,including age, employment history for at least the past five yearsindicating employer’s names and description of the employer’s business,educational background and any other biographical information thatwould assist the Board in determining the qualifications of theindividual. The Board will consider recommendations received by a datenot later than 120 calendar days before the date our proxy statementwas released to shareholders in connection with the prior year’s annualmeeting for nomination at that annual meeting. The Board will considernominations received beyond that date at the annual meeting subsequentto the next annual meeting.

     TheBoard evaluates nominees for directors recommended by shareholders inthe same manner in which it evaluates other nominees for directors.Minimum qualifications include the factors discussed above.

**Shareholder Communications**

     Wedo not have a formal shareholder communications process. Shareholdersare welcome to communicate with the Company by forwardingcorrespondence to Colorado Goldfields Inc., Board of Directors**,**10920 West Alameda Avenue, Suite 207 Lakewood, Colorado 80226, Attn.: Todd C. Hennis, CEO and Director.

30

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**ITEM 13.           EXHIBITS**

The following exhibits are filed with or incorporated by referenced in this report:

**EXHIBITS TO FORM 10-KSB**

| **Exhibit**  |                  |
|-------------------|-----------------------|
| **Number**   | **Description**  |

| 3.1       | Articles of Incorporation1                                                                                                                            |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2       | By-Laws1                                                                                                                                              |
| 10.1      | Property Agreement between Jaroslav Rusa and Garpa Resources, Inc., dated March 7, 20051                                                              |
| 10.2      | Trust Agreement between Garpa Resources, Inc., and Gary Schellenberg, dated March 7, 20051                                                            |
| 10.3      | OptionAgreement, Gold King, Mayflower and Mogul Properties, between San JuanCorp., Todd C. Hennis, and Garpa Resources, Inc., dated June 17, 20073    |
| 10.4      | Executive Employment Agreement between Garpa Resources, Inc. and Todd C. Hennis, dated June 17, 20074                                                 |
| 10.5      | Purchase and Sale Agreement between Tusco Incorporated and Garpa Resources, Inc. dated June 13, 20075                                                 |
| 10.6      | Amendmentto Option Agreement between San Juan Corp., Todd C. Hennis, andColorado Goldfields, Inc. (fka Garpa Resources, Inc.), dated November8, 20078 |
| 10.7      | Form of Private Placement Subscription Agreement (Offshore Subscribers)9                                                                              |
| 10.8      | Form of Private Placement Subscription Agreement (U.S. Subscribers)10                                                                                 |
| 14        | Financial Code of Ethics1                                                                                                                             |
| 16.1      | Letter on change in certifying accountant from Manning Elliot LLP, dated November 26, 200712                                                          |
| 31.1      | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Todd C. Hennis*                                                           |
| 31.2      | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Gary Schellenberg.*                                                       |
| 32        | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Todd C. Hennis and Gary Schellenberg*                                     |
| 35        | Articles of Merger between Colorado Goldfields, Inc. (surviving entity) and Garpa Resources, Inc., effective June 18, 20072                           |
| 99        | Certificate of Change Pursuant to NRS 78.209, effective June 18, 20072                                                                                |
| 99.1      | News Release, “Colorado Goldfields Inc. Announces Private Placement,” dated August 24, 20076                                                |
| 99.2      | Certificate of Change Pursuant to NRS 78.209, effective October 29, 20077                                                                             |
| 99.3      | News Release “Colorado Goldfields Inc. Closes $3,284,475 Private Placement,” dated November 20, 200711                                      |

| (1)                      |  Filedwith Registration Statement of Form SB-2, filed on November 21, 2005(Registration Statement No. 333-129841) and incorporated herein byreference. |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)       | Filed with Form 8-K dated June 20, 2007, and incorporated herein by reference.                                                                              |
| (3)       | Filed as Exhibit 10.1 to Form 8-K dated June 26, 2007, and incorporated herein by reference.                                                                |
| (4)       | Filed as Exhibit 10.2 to Form 8-K dated June 26, 2007, and incorporated herein by reference.                                                                |
| (5)       | Filed as Exhibit 10.1 to Form 8-K/A dated June 28, 2007, and incorporated herein by reference.                                                              |
| (6)       | Filed with Form 8-K dated August 30, 2007, and incorporated herein by reference.                                                                            |
| (7)       | Filed as Exhibit 99.1 to Form 8-K dated November 2, 2007, and incorporated herein by reference.                                                             |
| (8)       | Filed as Exhibit 10.1 to Form 8-K dated November 13, 2007, and incorporated herein by reference.                                                            |
| (9)       | Filed as Exhibit 10.1 to Form 8-K dated November 15, 2007, and incorporated herein by reference.                                                            |
| (10)      | Filed as Exhibit 10.2 to Form 8-K dated November 15, 2007, and incorporated herein by reference.                                                            |
| (11)      | Filed as Exhibit 99.1 to Form 8-K dated November 21, 2007, and incorporated herein by reference.                                                            |
| (12)      | Filed with Form 8-K/A dated November 27, 2007, and incorporated herein by reference.                                                                        |

* Filed herewith.

31

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**ITEM 14.           PRINCIPAL ACCOUNTANT FEES AND SERVICES**

**Audit Fees and Related Fees**

     Theaggregate fees billed and expected to be billed for each of the lasttwo fiscal years for professional services rendered by our independentregistered accounting firm for our audit of annual financial statementsand for review of financial statements included in our QuarterlyReports on Form 10-QSB or services that are normally provided by theaccountant in connection with statutory and regulatory filings orengagements for those fiscal years was:

 2007 - $18,000 – GHP Horwath, P.C.2007 - $10,551 - Manning Elliot - Chartered Accountants2006 - $8,570 - Manning Elliot - Chartered Accountants

**Audit-Related Fees**

     Therewere no fees for the years ended August 31, 2007 and 2006, forassurance and related services by our independent registered accountingfirm that were reasonably related to audit or review of our financialstatements not reported under “Audit Fees” listed above.

**Tax Fees**

     Therewere no fees billed in each of the last two fiscal years forprofessional services rendered by our independent registered accountingfirm for tax compliance, tax advice and tax planning.

**All Other Fees**

     Therewere no other fees billed in each of the last two fiscal years forother products and services provided by our independent registeredaccounting firm.

**Audit Committee’s Pre-Approval Policies and Procedures**

     Asdiscussed in Item 12 of this Report, we do not maintain an auditcommittee. Audit Committee functions are performed by the entire Boardof Directors and all accounting related activities are approved priorto the performance of any services by our independent registeredaccounting firm.

32

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**SIGNATURES**

     Inaccordance with Section 13 or 15(d) of the Exchange Act of 1934, theCompany caused this Report to be signed on its behalf by theundersigned, thereunto duly authorized.

|                           |   | COLORADO GOLDFIELDS INC.                         |
|--------------------------------|--------|-------------------------------------------------------|
|                           |
|                           |   | /s/ Todd C. Hennis                               |
| Dated: December 26, 2007  |   | By: Todd C. Hennis, President                    |
|                           |   | and Chief Executive Officer                      |
|                           |
|                           |
|                           |   | /s/ Gary Schellenberg                            |
| Dated: December 26, 2007  |   | By: Gary Schellenberg, Chief Financial Officer,  |
|                           |   | Principal Accounting Officer and Vice President  |

     Inacrdance with the Exchange Act, this Report has been signed below bythe following persons on behalf of the Company and in the capacitiesand on the dates indicated.

   /s/ Todd C. Hennis  President & Chief Executive Officer Dated: December 26, 2007 Todd C. Hennis      /s/ Gary Schellenberg  Vice President, Chief Financial Officer & Director Dated: December 26, 2007 Gary Schellenberg   /s/ Beverly Rich  DirectorDated: December 26, 2007 Beverly Rich  /s/ Eric Owens DirectorDated: December 26, 2007 Eric Owens 

33

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| **COLORADO GOLDFIELDS INC.**                                                              |
|-------------------------------------------------------------------------------------------|
| **INDEX TO THE FINANCIAL STATEMENTS**                                                     |
|                                                                                           |
|                                                                                           |
|                                                                                           |  |  |
|                                                                                           |  |  |
| Report of Independent Registered Public Accounting Firm – GHP Horwath, P.C.    |   | F-2 |
| Report of Independent Registered Public Accounting Firm – Manning Elliott LLP  |   | F-3 |
| Balance Sheets                                                                       |   | F-4 |
| Statements of Operations                                                                  |   | F-5  |
| Statements of Stockholders’ Equity (Deficit)                                    |   | F-6  |
| Statements of Cash Flows                                                                  |   | F-7  |
| Notes to Financial Statements                                                        |   | F-8  |

 

 

 

 

 

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Board of Directors and StockholdersColorado Goldfields Inc.

Wehave audited the accompanying balance sheet of Colorado Goldfields Inc.(an Exploration Stage Company) as of August 31, 2007, and the relatedstatements of operations, cash flows and stockholders’ deficit for theyear ended August 31, 2007, and for the period from February 11, 2004(inception) through August 31, 2007. These financial statements are theresponsibility of the Company's management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

Weconducted our audits in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.

Inour opinion, the financial statements referred to above present fairly,in all material respects, the financial position of Colorado GoldfieldsInc. as of August 31, 2007, and the results of its operations and cashflows for the year ended August 31, 2007, and for the period fromFebruary 11, 2004 (inception) through August 31, 2007, in conformitywith accounting principles generally accepted in the United States ofAmerica.

Theaccompanying financial statements have been prepared assuming that theCompany will continue as a going concern. As discussed in Note 1 to thefinancial statements, the Company incurred a net loss of $300,193 forthe year ended August 31, 2007, and a deficit accumulated during theexploration stage of $377,558 for the period from February 11, 2004(inception) through August 31, 2007. The Company also has a limitedhistory and no revenue producing operations. These conditions raisesubstantial doubt about the Company's ability to continue as a goingconcern. Management's plans with regard to these matters are alsodescribed in Note 1. The financial statements do not include anyadjustments that might result from the outcome of this uncertainty.

/s/ GHP HORWATH, P.C.Denver, ColoradoDecember 21, 2007

F-2

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and Stockholders of

Colorado Goldfields Inc. (formerly Garpa Resources Inc.) (An Exploration Stage Company)

Wehave audited the balance sheet of Colorado Goldfields Inc. (formerlyGarpa Resources Inc.)(An Exploration Stage Company) as of August 31,2006 and the related statements of operations, cash flows andstockholders’ equity for the year then ended and accumulated fromFebruary 11, 2004 (Date of Inception) to August 31, 2006. Thesefinancial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

Weconducted our audits in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.

Inour opinion, the financial statements referred to above present fairly,in all material respects, the financial position of Colorado GoldfieldsInc. (formerly Garpa Resources Inc.) (An Exploration Stage Company) asof August 31, 2006, and the results of its operations and its cashflows for the year then ended and accumulated from February 11, 2004(Date of Inception) to August 31, 2006, in conformity with accountingprinciples generally accepted in the United States.

Theaccompanying financial statements have been prepared assuming theCompany will continue as a going concern. As discussed in Note 1 to thefinancial statements, the Company has not generated any revenues andhas incurred losses from operations since inception. These factorsraise substantial doubt about the Company’s ability to continue as agoing concern. Management’s plans in regard to these matters are alsodiscussed in Note 1. The financial statements do not include anyadjustments that might result from the outcome of this uncertainty.

/s/ MANNING ELLIOTT LLP

CHARTERED ACCOUNTANTSVancouver, CanadaNovember 16, 2006

F-3

----

| **COLORADO GOLDFIELDS INC.**                                                   |   |                 |
|----------------------------------------------------------------------------------------------------|--------|-----------------|
| **Formerly Garpa Resources, Inc.  (An Exploration Stage Company)**        |   |                 |
| **Balance Sheets**                                                             |   |                 |
| **(Expressed in US Dollars)**                                                  |   |                 |
|                                                                                               |   |                 |
|                                                                                               |   | August 31, 2007 |   | August 31, 2006 |  |
| **ASSETS**                                                                                    |   |            |   |   |  |
| Current Assets                                                                                |   |            |   |   |  |
|      Cash                                                            | $      | 22,046          |  $ |  9,284 |  |
|      Restricted cash (Note 3)                                        |   | 19,965          |   |  - |  |
|      Prepaid expenses                                                |   | 6,739           |   |  - |  |
|      Total Current Assets                                            |   | 48,750          |   |  9,284 |  |
|                                                                                               |   |                 |
| Non-Current Assets                                                                            |   |            |   |   |  |
|      Land and building (Note 7)                                      |   | 1,400,677       |   |  - |  |
|      Other                                                           |   | 14,120          |   |  - |  |
|      Total Non-Current Assets                                        |   | 1,414,797       |   | - |  |
| Total Assets                                                                                  | $      | 1,463,547       |  $ |  9,284 |  |
|                                                                                               |   |                 |
| **LIABILITIES & STOCKHOLDERS' DEFICIT**                                                   |   |            |   |   |  |
|                                                                                               |   |                 |
| Current Liabilities                                                                           |   |            |   |   |  |
|      Accounts payable (Note 6)                                       | $      | 76,446          |  $ |  2,458 |  |
|      Accrued liabilities                                             |   | 28,426          |   |  5,441 |  |
|      Advances payable (Note 4)                                       |   | 400,733         |   |  - |  |
|      Note payable (Note 4)                                           |   | 100,000         |   |  - |  |
|      Total Current Liabilities                                       |   | 605,605         |   |  7,899 |  |
|                                                                                               |   |                 |
| Non-Current Liabilities                                                                       |   |            |   |   |  |
|      Long-term debt (Note 7)                                         |   | 650,000         |   |  - |  |
|      Asset retirement obligation (Note 7)                            |   | 500,000         |   |  - |  |
|      Total Non-Current Liabilities                                   |   | 1,150,000       |   |  - |  |
| Total Liabilities                                                                             |   | 1,755,605       |   |  7,899 |  |
|                                                                                               |   |                 |
| Contingencies and Commitments (Notes 4, 6, 7, 9 and 10)                                  |   |            |   |   |  |
|                                                                                               |   |                 |
| Stockholders' Deficit                                                                         |   |            |   |   |  |
| Common stock, 1,185,000,000 shares authorized; $0.001                                         |   |            |   |   |  |
| par value; 88,085,000 shares issued and outstanding                                           |   | 56,250          |   |  56,250 |  |
| Donated capital                                                                               |   | 29,250          |   |  22,500 |  |
| Equity (deficit) accumulated during the exploration stage                                     |   | (377,558        | )  |  (77,365 | )  |
| Total Stockholders' Equity (Deficit)                                                          |   | (292,058        | )  |  1,385 |  |
| Total Liabilities and Stockholders' Equity (Deficit)                                               | $      | 1,463,547       | $ | 9,284 |  |

F-4

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**COLORADO GOLDFIELDS INC.****Formerly Garpa Resources, Inc. (An Exploration Stage Company)****Statements of Operations****(Expressed in US Dollars)**

|                                                             |   |    |                             |    |   |    |                                         |    |   |    | Accumulated from   February 11, 2004   (Date of Inception)   to August 31, 2007   |
|------------------------------------------------------------------|--------|---------|----------------------------------|---------|--------|---------|----------------------------------------------|---------|--------|---------|-------------------------------------------------------------------------------------------------------|
|                                                             |   |    | For the YearEndedAugust 31, 2007 |    |   |    | For the YearEndedAugust 31, 2006   |    |   |    |
|                                                             |   |    |                             |    |   |    |                                         |    |
|                                                             |   |    |                             |    |        |    |                                         |    |
|                                                             |
| Revenue                                                     |   | $  | -                                |    |   | $  | -                                            |    |   | $  | -                                                                                                     |
|                                                             |
| Other (income) expense                                      |   |    |                             |    |   |    |                                         |    |   |    |                                                                                                  |
|      Other income                            |   |    | (1,048                           | )  |   |    | -                                            |    |   |    | (1,048)                                                                                               |
|      Donated rent (Note 6)                   |   |    | 2,250                            |    |   |    | 3,000                                        |    |   |    | 9,750                                                                                            |
|      Donated services ( Note 6)              |   |    | 4,500                            |    |   |    | 6,000                                        |    |   |    | 19,500                                                                                           |
|      General and administrative              |   |    | 62,948                           |    |   |    | 1,059                                        |    |   |    | 64,448                                                                                           |
|      Mineral property and exploration costs  |   |    | 93,862                           |    |   |    | 12,564                                       |    |   |    | 128,952                                                                                          |
|      Professional fees                       |   |    | 126,547                          |    |   |    | 13,525                                       |    |   |    | 144,822                                                                                          |
|      Interest expense                        |   |    | 11,134                           |    |   |    | -                                            |    |   |    | 11,134                                                                                           |
|      Net Loss                                |   | $  | (300,193                         | )  |   | $  | (36,148                                      | )  |   | $  | (377,558)                                                                                             |
|      Net Loss Per Share - Basic and Diluted  |   |    | *                                |    |   |    | *                                            |    |   |    |                                                                                                  |
|      Weighted Average Shares Outstanding     |   |    | 88,085,000                       |    |   |    | 88,085,000                                   |    |   |    |                                                                                                  |
|                                                             |
| *Amount is less than $(0.01) per share.                     |   |    |                             |    |   |    |                                         |    |   |    |                                                                                                  |

 

 

 

 

 

 

 

 

F-5

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**COLORADO GOLDFIELDS INC.****Formerly Garpa Resources, Inc. (An Exploration Stage Company)****Statements of Stockholders Equity (Deficit)****From February 11, 2004 (Date at Inception) to August 31, 2007****(Expressed in US Dollars)**

|                                                   |           |        |     |     |     |                   |     |           |           |           |       |       |           |           | DeficitAccumulatedDuring theExplorationStage |           |           |           |     TotalStockholders'Equity(Deficit)  |           |
|----------------------------------------------------------------------------|------------------------------------|------------------|---------------|---------------|---------------|-----------------------------|---------------|------------------------------------|------------------------------------|------------------------------------|----------------------|----------------------|------------------------------------|------------------------------------|----------------------------------------------|------------------------------------|------------------------------------|------------------------------------|-------------------------------------------------------|------------------------------------|
||
| Common Stock                                                          |
|   Shares                                                         |                          |        |     |          |          | Donated  Capital  |
| Amount                                                                |
| Balances - February 11, 2004 (Date of                                 |                               |             |          |          |          |                        |          |                               |                               |                               |                 |                 |                               |                               |                                         |                               |                               |                               |                                                  |                               |
| inception)                                                            |                               | -           |          |          |          | $                           | -        |                               |                               |                               | $                    | -               |                               | $                                  | -                                            |                               |                               | $                                  |                                                  |                               |
|          Issuance of common stock for cash   |                               | 39,500,000  |          |          |          |                        | 2,500    |                               |                               |                               |                 | -               |                               |                               | -                                            |                               |                               |                               | 2,500                                                 |                               |
|          Donated services and rent           |                               | -           |          |          |          |                        | -        |                               |                               |                               |                 | 4,500           |                               |                               | -                                            |                               |                               |                               | 4,500                                                 |                               |
|          Net loss                            |                               | -           |          |          |          |                        | -        |                               |                               |                               |                 | -               |                               |                               | (5,898                                       | )                             |                               |                               | (5,898                                                | )                             |
|                                                                       |
| Balances – August 31, 2004                                      |                               | 39,500,000  |          |          |          |                        | 2,500    |                               |                               |                               |                 | 4,500           |                               |                               | (5,898                                       | )                             |                               |                               | 1,102                                                 |                               |
|          Issuance of common stock for cash   |                               | 48,585,000  |          |          |          |                        | 53,750   |                               |                               |                               |                 | -               |                               |                               | -                                            |                               |                               |                               | 53,750                                                |                               |
|          Donated services and rent           |                               | -           |          |          |          |                        | -        |                               |                               |                               |                 | 9,000           |                               |                               | -                                            |                               |                               |                               | 9,000                                                 |                               |
|          Net loss                            |                               | -           |          |          |          |                        | -        |                               |                               |                               |                 | -               |                               |                               | (35,319                                      | )                             |                               |                               | (35,319                                               | )                             |
|                                                                       |
| Balances – August 31, 2005                                      |                               | 88,085,000  |          |          |          |                        | 56,250   |                               |                               |                               |                 | 13,500          |                               |                               | (41,217                                      | )                             |                               |                               | 28,533                                                |                               |
|          Donated services and rent (Note 6)  |                               | -           |          |          |          |                        | -        |                               |                               |                               |                 | 9,000           |                               |                               | -                                            |                               |                               |                               | 9,000                                                 |                               |
|          Net loss                            |                               | -           |          |          |          |                        | -        |                               |                               |                               |                 | -               |                               |                               | (36,148                                      | )                             |                               |                               | (36,148                                               | )                             |
|                                                                       |
| Balances – August 31, 2006                                      |                               | 88,085,000  |          |          |          |                        | 56,250   |                               |                               |                               |                 | 22,500          |                               |                               | (77,365                                      | )                             |                               |                               | 1,385                                                 |                               |
|          Donated services and rent (Note 6)  |                               | -           |          |          |          |                        | -        |                               |                               |                               |                 | 6,750           |                               |                               | -                                            |                               |                               |                               | 6,750                                                 |                               |
|          Net loss                            |                               | -           |          |          |          |                        | -        |                               |                               |                               |                 | -               |                               |                               | (300,193                                     | )                             |                               |                               | (300,193                                              | )                             |
|                                                                       |
| Balances – August 31, 2007                                      |                               | 88,085,000  |          |          |          | $                           | 56,250   |                               |                               |                               | $                    | 29,250          |                               | $                                  | (377,558                                     | )                             |                               | $                                  | (292,058                                              | )                             |

 

 

 

 

F-6

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**COLORADO GOLDFIELDS INC.****Formerly Garpa Resources, Inc. (An Exploration Stage Company)****Statements of Cash Flows (Expressed in US Dollars)**

|                                                                                   |         |     |   For the Year  Ended August 31, 2007   |         |         |    |    |         |         |         | Accumulated fromFebruary 11, 2004(Date of Inception)to August 31, 2007 |         |
|-------------------------------------------------------------------------------------------------------|-----------------------------|---------------|-----------------------------------------------------------------------|-----------------------------|-----------------------------|---------|---------|-----------------------------|-----------------------------|-----------------------------|------------------------------------------------------------------------|-----------------------------|
| For the Year                                                                                          |
|   Ended                                                                                          |
| August 31, 2006                                                                                       |
|                                                                                                  |
| Cash Flows From in Operating Activities:                                                         |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|      Net loss                                                                     |                        | $        | (300,193                                                              | )                      |                        | $  | (36,148 | )                      |                        | $                      | (377,558                                                               | )                      |
|      Adjustments to reconcile net loss to cash used in                            |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|      operating activities:                                                        |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|           Donated services and rent                 |                        |          | 6,750                                                                 |                        |                        |    | 9,000   |                        |                        |                        | 29,250                                                                 |                        |
|                                                                                                  |
|      Change in operating assets and liabilities:                                  |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|           Increase in restricted cash               |                        |          | (19,965                                                               | )                      |                        |    | -       |                        |                        |                        | (19,965                                                                | )                      |
|           Increase in prepaid expenses              |                        |          | (6,739                                                                | )                      |                        |    | -       |                        |                        |                        | (6,739                                                                 | )                      |
|           Increase in accounts payable              |                        |          | 73,988                                                                |                        |                        |    | 2,432   |                        |                        |                        | 76,446                                                                 |                        |
|           Increase in accrued liabilities           |                        |          | 22,985                                                                |                        |                        |    | 691     |                        |                        |                        | 28,426                                                                 |                        |
|           Increase in other assets                  |                        |          | (14,120                                                               | )                      |                        |    | -       |                        |                        |                        | (14,120                                                                | )                      |
| Net cash used in operating activities                                                            |                        |          | (237,294                                                              | )                      |                        |    | (24,025 | )                      |                        |                        | (284,260                                                               | )                      |
| Cash Flows From Investing Activities:                                                            |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|           Acquisition of land and building          |                        |          | (250,677                                                              | )                      |                        |    | -       |                        |                        |                        | (250,677                                                               | )                      |
|                                                                                                  |
| Net cash used in investing activities                                                            |                        |          | (250,677                                                              | )                      |                        |    | -       |                        |                        |                        | (250,677                                                               | )                      |
|                                                                                                  |
| Cash Flows From Financing Activities:                                                            |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|           Advances received                         |                        |          | 405,733                                                               |                        |                        |    | -       |                        |                        |                        | 405,733                                                                |                        |
|           Repayment of advances                     |                        |          | (5,000                                                                | )                      |                        |    |    |                        |                        |                        | (5,000                                                                 | )                      |
|           Advances from related party               |                        |          | 10,000                                                                |                        |                        |    | 52      |                        |                        |                        | 10,052                                                                 |                        |
|           Repayment of advances from related party  |                        |          | (10,000                                                               | )                      |                        |    |    |                        |                        |                        | (10,052                                                                | )                      |
|           Proceeds fromnote payable                 |                        |          | 100,000                                                               |                        |                        |    | -       |                        |                        |                        | 100,000                                                                |                        |
|           Proceeds from issuance of common stock    |                        |          | -                                                                     |                        |                        |    | -       |                        |                        |                        | 56,250                                                                 |                        |
|                                                                                                  |
| Net cash provided by financing activities                                                        |                        |          | 500,733                                                               |                        |                        |    | 52      |                        |                        |                        | 556,983                                                                |                        |
| Increase (Decrease) in Cash                                                                      |                        |          | 12,762                                                                |                        |                        |    | (23,973 | )                      |                        |                        | 22,046                                                                 |                        |
| Cash - Beginning of Period                                                                       |                        |          | 9,284                                                                 |                        |                        |    | 33,257  |                        |                        |                        | -                                                                      |                        |
|                                                                                                  |
| Cash - End of Period                                                                             |                        | $        | 22,046                                                                |                        |                        | $  | 9,284   |                        |                        | $                      | 22,046                                                                 |                        |
|                                                                                                  |
| Supplemental Disclosures:                                                                        |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|              Interest paid                                    |                        | $        | 7,583                                                                 |                        |                        | $  | -       |                        |                        | $                      | 7,583                                                                  |                        |
|              Income taxes paid                                |                        | $        | -                                                                     |                        |                        | $  | -       |                        |                        | $                      | -                                                                      |                        |
|      Non-cash investing and financing activities:                                 |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|      Acquisition of land and building:                                            |                        |          |                                                                  |                        |                        |    |    |                        |                        |                        |                                                                   |                        |
|           Cash paid                                      |                        | $        | 250,677                                                               |                        |                        | $  | -       |                        |                        | $                      | 250,677                                                                |                        |
|           Mortgage note given to seller             |                        |          | 650,000                                                               |                        |                        |    | -       |                        |                        |                        | 650,000                                                                |                        |
|           Asset retirement obligation assumed       |                        |          | 500,000                                                               |                        |                        |    | -       |                        |                        |                        | 500,000                                                                |                        |
| Assets acquired                                                                                  |                        | $        | 1,400,677                                                             |                        |                        | $  | -       |                        |                        | $                      | 1,400,677                                                              |                        |

F-7

----

**COLORADO GOLDFIELDS INC.****Formerly Garpa Resources, Inc. (An Exploration Stage Company) Notes to the Financial Statements**

| **1.**      | **Organization, Nature of Business, Going Concern and Management’s Plans**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |
|                       | Organization and Nature of Business:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                       |
|                       | TheCompany was incorporated in the State of Nevada on February 11, 2004,under the name of Garpa Resources, Inc. On June 18, 2007, the Companychanged its name to Colorado Goldfields Inc. (the “Company”). TheCompany is an Exploration Stage Company, as defined by Statement ofFinancial Accounting Standard (“SFAS”) No. 7*“Accounting and Reporting for Development Stage Enterprises”*.The Company’s principal business is the acquisition and exploration ofmineral resources. The Company has not presently determined whether theproperties it intends to acquire contain mineral reserves that areeconomically recoverable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                       |
|                       | Going Concern and Management’s Plans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                       |
|                       | Theaccompanying financial statements have been prepared assuming that theCompany will continue as a going concern. Since its inception inFebruary 2004, the Company has not generated revenue and has incurrednet losses. The Company has a deficit in working capital of $556,855 atAugust 31, 2007, incurred a net loss of $300,193 for the year endedAugust 31, 2007, and a deficit accumulated during the explorationstage of $377,558 for the period from February 11, 2004 (inception)through August 31, 2007. Accordingly, it has not generated cash flowfrom operations and has primarily relied upon advances fromstockholders, promissory notes and advances from unrelated parties, andequity financing to fund its operations. These conditionsraise substantial doubt about the Company’s ability to continue asa going concern. As discussed further in Note 9, on November 20, 2007,the Company received $3,284,475 from equity financings which managementbelieves will enable the Company to commence mining explorationactivities on properties in San Juan County, Colorado, and fund itsoperations through most of the fiscal year ended August 31, 2008. |
|                       |
|                       | Thefinancial statements do not include any adjustments to reflect thepossible future effects on the recoverability and classification ofassets or the amounts or classification of liabilities that may resultfrom the possible inability of the Company to continue as a goingconcern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                       |
| **2.**      | **Summary of Significant Account Policies**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                       |
|                       | a)      Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                       |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Thesefinancial statements and related notes are presented in accordance withaccounting principles generally accepted in the United States ofAmerica and are expressed in US dollars. The Company’s fiscal year-endis August 31. |
|                       |
|                       | b)      Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                       |
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Thepreparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the financial statements and thereported amounts of revenues and expenses during the reporting periods.Actual results could differ from those estimates. |
|                       |

F-8

----

| **2.  **    | **Summary of Significant Account Policies (continued)** |
|--------------------------------------|---------------------------------------------------------|
|                                 |
|                                 | c)                                       | Basic and Diluted Net Loss Per Share |
|                                 |
|                                 |                                                    | TheCompany computes net loss per share in accordance with SFAS No. 128,“Earnings per Share”. SFAS No. 128 requires presentation of both basicand diluted earnings per share (EPS) on the face of the statement ofoperations. Basic EPS is computed by dividing net loss available tocommon stockholders (numerator) by the weighted average number ofshares outstanding (denominator) during the period. Diluted EPS giveseffect to all potential dilutive common shares outstanding during theperiod using the treasury stock method and convertible preferred stockusing the if-converted method. In computing diluted EPS, the averagestock price for the period is used in determining the number of sharesassumed to be purchased from the exercise of stock options or warrants.Diluted EPS excludes all dilutive potential shares if their effect isanti- dilutive. The Company did not have any dilutive securitiesoutstanding for the years ended August 31, 2007 and 2006. |
|                                 |
|                                 | d)                                       | Comprehensive Income (Loss) |
|                                 |
|                                 |                                                    | SFAS No. 130, “*Reporting Comprehensive Income”,*establishesstandards for reporting and display of comprehensive income (loss), itscomponents, and accumulated balances. For the periods presented therewere no differences between net loss and comprehensive loss. |
|                                 |
|                                 | e)                                       | Cash and Cash Equivalents |
|                                 |
|                                 |                                                    | TheCompany considers all highly liquid instruments with maturity of threemonths or less at the time of issuance to be cash equivalents. |
|                                 |
|                                 | f)                                       | Mineral Property and Exploration Costs |
|                                 |
|                                 |                                                    | TheCompany has been in the exploration stage since its formation onFebruary 11, 2004, and has not yet realized any revenues from itsplanned operations. It is primarily engaged in the acquisition andexploration of mining properties. Mineral property acquisition andexploration costs are expensed as incurred. When it has been determinedthat a mineral property can be economically developed as a result ofestablishing proven and probable reserves, the costs incurred todevelop such property are capitalized. Such costs will be amortizedusing the units-of- production method over the estimated life of theprobable reserve. If mineral properties are subsequently abandoned orimpaired, any capitalized costs will be charged to operations. |
|                                 |
|                                 | g)                                       | Long-Lived Assets |
|                                 |
|                                 |                                                    | In accordance with SFAS No. 144,*“Accounting for the Impairment or Disposal of Long-Lived Assets”*,the Company tests long-lived assets or asset groups for recoverabilitywhen events or changes in circumstances indicate that their carryingamount may not be recoverable. Circumstances which could trigger areview include, but are not limited to: significant decreases in themarket price of the asset; significant adverse changes in the businessclimate or legal factors; accumulation of costs significantly in excessof the amount originally expected for the acquisition or constructionof the asset; current period cash flow or operating losses combinedwith a history of losses or a forecast of continuing losses associatedwith the use of the asset; and current expectation that the asset willmore likely than not be sold or disposed significantly before the endof its estimated useful life. |
|                                 |
|                                 |                                                    | Recoverabilityis assessed based on the carrying amount of the asset and its fairvalue which is generally determined based on the sum of theundiscounted cash flows expected to result from the use and theeventual disposal of the asset, as well as specific appraisal incertain instances. An impairment loss is recognized when the carryingamount is not recoverable and exceeds fair value. Management believesno impairment exists as of August 31, 2007. |
|                                 |

F-9

----

| **2.     ** | **Summary of Significant Account Policies (continued)** |
|----------------------------|---------------------------------------------------------|
| ** **                 |
|                       | h)                                       | Financial Instruments |
|                       |
|                       |                                                    | Thefair values of financial instruments, which include cash, restrictedcash, accounts payable, advances and a note payable were estimated toapproximately their carrying value due to the immediate or short-termmaturity of these financial instruments. The fair value of amounts dueto related parties is not practicable to estimate due to the relatedparty nature of the underlying transactions. |
|                       |
|                       | i)                                       | Income Taxes |
|                       |
|                       |                                                    | Potentialbenefits of income tax losses are not recognized until realization ismore likely than not. The Company has adopted SFAS No. 109 *“Accounting for Income Taxes”.*Pursuant to SFAS No. 109, the Company is required to compute tax assetbenefits for net operating losses carried forward. The potentialbenefit of net operating losses have not been recognized in thefinancial statements because the Company cannot be assured it is morelikely than not it will utilize the net operating losses in futureyears. |
|                       |
|                       | j)                                       | Foreign Currency Translation |
|                       |
|                       |                                                    | TheCompany’s functional and reporting currency is the United Statesdollar. Monetary assets and liabilities denominated in foreigncurrencies are translated in accordance with SFAS No. 52 *“Foreign Currency Translation”*,using the exchange rate prevailing at the balance sheet date. Gains andlosses arising on settlement of foreign currency transactions orbalances are included in the determination of income. Foreign currencytransactions have in the past been primarily undertaken in Canadiandollars. The effects of foreign currency translation and transactionsis not material. |
|                       |
|                       | k)                                       | Property Retirement Obligation |
|                       |
|                       |                                                    | SFAS143, “Accounting for Asset Retirement Obligations,” requires the fairvalue of a liability for an asset retirement obligation to berecognized in the period that it is incurred if a reasonable estimateof fair value can be made. The associated asset retirement costs arecapitalized as part of the carrying amount of the long-lived asset.Accretion expense is recorded in each subsequent period to recognize the changes in the liability resulting from the passage oftime.  Changes resulting from revisions to the original fair value of the liability are recognized as an increase or decrease in thecarrying amount of the liability and the related asset retirement costs capitalized as part of the carrying amount of the relatedlong-lived asset. |
|                       |
|                       | l)                                       | Recent Accounting Pronouncements |
|                       |
|                       |                                                    | In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, *“The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”*.This statement permits entities to choose to measure many financialinstruments and certain other items at fair value. Most of theprovisions of SFAS No. 159 apply only to entities that elect the fairvalue option. However, the amendment to SFAS No. 115 *“Accounting for Certain Investments in Debt and Equity Securities”*appliesto all entities with available-for-sale and trading securities. SFASNo. 159 is effective as of the beginning of an entity’s first fiscalyear that begins after November 15, 2007. Early adoption is permittedas of the beginning of a fiscal year that begins on or before November15, 2007, provided the entity also elects to apply the provision ofSFAS No. 157, *“Fair Value Measurements”*. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.   |
|                       |
|                       |

F-10

----

**2. Summary of Significant Account Policies (continued)**

In September 2006, the FASB issued SFAS No. 157,*“Fair Value Measurements”*.The objective of SFAS 157 is to increase consistency and comparabilityin fair value measurements and to expand disclosures about fair valuemeasurements. SFAS 157 defines fair value, establishes a framework formeasuring fair value in generally accepted accounting principles, andexpands disclosures about fair value measurements. SFAS 157 appliesunder other accounting pronouncements that require or permit fair valuemeasurements. In November 2007, the FASB announced that it would deferthe effective date of SFAS 157 for one year for all non-financialassets and liabilities, except for those that are recognized ordisclosed at fair value in the financial statements on a recurringbasis. The provisions of SFAS No. 157 are effective for fair valuemeasurements made in fiscal years beginning after November 15, 2007.The adoption of this statement is not expected to have a materialeffect on the Company’s future reported financial position or resultsof operations.

In June 2006, the FASB issued FASB Interpretation No. 48,*“Accounting for Uncertainty In Income Taxes, an interpretation of FASB Statements No. 109”*.FIN 48 clarifies the accounting for uncertainty in income taxes byprescribing a two-step method of first evaluating whether a taxposition has a more likely than not recognition threshold and second,measuring that tax position to determine the amount of benefit to berecognized in the financial statements. FIN 48 provides guidance on thepresentation of such positions within a classified statement offinancial position as well as on derecognition, interest and penalties,accounting in interim periods, disclosure, and transition. FIN 48 iseffective for fiscal years beginning after December 15, 2006. Theadoption of this statement is not expected to have a material effect onthe Company’s future reported financial position or results ofoperations.

| **3.**      | **Restricted Cash**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |
|                       | Duringthe year ended August 31, 2007, the Company prepaid $19,965 ofoutstanding fees and disbursements with respect to the promissory noteas disclosed in Note 4. This amount, which was held in escrow by theCompany’s legal representative, was ultimately used to repay theaforementioned promissory note in November 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                       |
| **4.**      | **Note and Advances Payable**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                       |
|                       | OnMay 15, 2007, the Company issued a promissory note to an unrelatedthird party in exchange for cash proceeds of $100,000. Under the termsof the promissory note, interest is accrued at 12% per annum and ispayable quarterly on March 31, June 30, September 30, and December 31of each year. The promissory note is secured by property and equipmentand is due on November 30, 2007. The promissory note, including allprincipal and interest totaling $106,267 was repaid in November 2007.In addition, through August 2007, the Company received a total of$400,733 in unsecured non-interest bearing advances from an unrelatedthird party. The advances were repaid in November 2007. The note andadvances payable were repaid from the proceeds of the private placementdescribed in Note 9. |
|                       |
| **5.**      | **Common Stock**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                       |
|                       | OnJune 18, 2007, the Company effected a 7.9 for 1 forward stock split ofthe authorized, issued and outstanding stock. As a result, theauthorized share capital increased from 75,000,000 shares of commonstock with a par value of $0.001 to 592,500,000 shares of common stockwith a par value of $0.001. The issued and outstanding common sharesincreased from 5,575,000 shares to 44,042,500 shares. All share amountshave been retroactively adjusted for all periods presented. Refer toNote 9.                                                                                                                                                                                                                                                                                                 |
|                       |

F-11

----

| **6.**      | **Related Party Transactions** |
|----------------------------|--------------------------------|
|                       |
|                       | a)              | Duringthe year ended August 31, 2007, the Company recognized a total of$4,500 (2006 - $6,000) for donated services at $500 per month and$2,250 (2006 - $3,000) for donated rent at $250 per month provided byan officer and director of the Company. |
|                       |
|                       | b)              | OnJanuary 5, 2007, the Company issued a demand promissory note inexchange for cash proceeds of $10,000 to an officer and director of theCompany. The note was unsecured, non-interest bearing, due on demand,and repaid in July 2007. |
|                       |
|                       | c)              | OnJune 17, 2007, the Company entered into an executive employmentagreement with Mr. Todd C. Hennis (“Hennis”), whereby the Companyagreed to employ Hennis as Chief Executive Officer and President forthe term of 18 months ending December 17, 2008, in consideration for:(1) monthly salary of $8,000 per month for the first six months, to beincreased to not less than $8,500 per month thereafter; (2) monthlyautomobile allowance of $350 per month, plus reimbursement for mileageat the IRS standard rate; (3) certain employee benefits, includinggroup health insurance, pension and profit sharing and other benefitselected; (4) and the agreement by the Company to grant a stock optionto purchase up to 600,000 shares of common stock at an exercise priceequal to the fair market value of the common shares as of the date ofgrant pursuant to a stock option plan. TheCompany has not yet obtained the necessary approvals to grant theoptions as outlined under the agreement. |
|                       |
|                       | d)              | TheCompany has also verbally agreed to grant our CFO, Gary Schellenberg,an option to purchase up to 500,000 shares.  In addition, theCompany has hired an exploration manager who is scheduled to start workin February, 2008 and to whom the Company verbally agreed to grant anoption to purchase 400,000 shares of common stock, with such option tovest over a three year period. All of the options would be exercisableat a price equal to the fair market value as of the date of grant. |
|                       |
|                       | e)              | OnJune 17, 2007, the former President of the Company entered into a stockpurchase agreement (the “Agreement”) with Hennis, whereby the formerPresident of the Company agreed to sell, and Hennisagreed to purchase, 2,500,000 (19,750,000 after the 7.9 for 1 forwardsplit described in Note 5 and 39,500,000 shares after the 2 for 1forward split described in Note 9) common shares of the Company for theconsideration of $2,500. The transaction resulted in a change ofcontrol in the Company.  |
|                       |
|                       | f)                             | Accountspayable at August 31, 2007, include $6,377 due to affiliated companiesfor legal fees and mineral property and exploration costs. |

| **7.**      | **Mineral Properties** |
|----------------------------|------------------------|
|                       |
|                       | a)      | TheCompany entered into an agreement dated March 7, 2005, to acquire a100% interest in two Red Lake Mining Division Mining Claims locatedSouth of Otter Lake, Ontario, Canada, in consideration for $10,000. Theclaims were registered in the name of the former President of theCompany, who executed a trust agreement whereby the former Presidentagreed to hold the claims in trust on behalf of the Company. During theyear ended August 31, 2007, the Company incurred $2,097 of mineralexploration costs in relation to the mining claims before abandoningthem by August 31, 2007. |
|                       |
|                       | b)      | OnJune 29, 2007, the Company acquired the Pride of the West Mill (the“Mill”), an inactive mining mill, located in Howardsville, Colorado for consideration of $900,677plus the assumption of an estimated asset retirement obligation of$500,000 for a total cost of $1,400,677. The Company paid the sellercash of $250,677 and the remaining $650,000 was paid through a mortgagewith the seller which is secured by the Mill bearing interest at 7% peryear with interest only payable monthly for two years, with all unpaidprincipal due June 29, 2009. Through August 31, 2007, there were no significant changes to the retirement obligation andaccretion expense was not significant. |
|                       |

F-12

----

**7.    Mineral Properties (continued)**

Inconnection with the acquisition of the Mill, the Company is furtherobligated to replace a bond that the seller has on deposit with theColorado Division of Reclamation, Mining, and Safety. In December 2007or early January 2008, the Company is planning to replace the bond forapproximately $317,000.

| c)      | OnJune 17, 2007, the Company entered into an option agreement, amendedNovember 8, 2007, among the Company as optionee, Hennis and San JuanCorp., a company controlled by Hennis, as optionors, whereby theCompany was granted the exclusive right and option to acquire an 80%undivided right, title and interest in certain properties located inSan Juan County, Colorado, which option is to be exercised by theCompany in stages as follows: |
|------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                   |
|                   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                               | anundivided 40% interest in the properties is to vest upon the Companyincurring expenditures of not less than $6,000,000 on the propertieswithin five years from the date of the option agreement; |
|                   |
|                   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                              | anadditional undivided 20% interest in the properties is to vest upon:(a) the Company incurring additional expenditures of not less than$3,500,000 on the properties within 7.5 years from the date of theoption agreement, and (b) the issuance by the Company, subject tocompliance with applicable securities laws, of 10,000,000 shares(adjusted for stock splits) of the Company’s common stock; and |
|                   |
|                   | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                             | anadditional undivided 20% interest in the properties is to vest upon:(a) the Company incurring additional expenditures of not less than$3,500,000 on the properties within 10 years from the date of theoption agreement, and (b) the issuance by the Company, subject tocompliance with applicable securities laws, of 10,000,000 shares(adjusted for stock splits) of the Company’s common stock. |
|                   |
|                   | In addition, in order to keep the option in good standing, the Company must make payments to the optionors as follows:                                                                                                                                                                                                                                                                                                                           |
|                   |
|                   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                               | acash payment of $50,000 within 30 days from the date of the optionagreement (which was paid by the Company in August, 2007 and recordedas expense); |
|                   |
|                   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                              | a cash payment of $100,000 within one year from the date of the option agreement; |
|                   |
|                   | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                             | a cash payment of $200,000 within two years from the date of the option agreement; and |
|                   |
|                   | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                              | 100troy ounces of gold contained in gold ore, or the cash equivalentthereof, within three years of the date of the option agreement, andannually thereafter up to and including the 10th yearfrom the date of the option agreement, which payments shall only bemade if the Company successfully operates the Mill during any part ofthe year in which payment is due. The Mill is currently non-operational. |

Pursuantto the option agreement, the Company: (i) has been appointed as theinitial operator on the properties, with certain rights and obligationsas described in the option agreement; and (ii) has executed and enteredinto an employment agreement with Mr. Hennis, as described in Note 6(c):

Theoption agreement: (i) will terminate in the event the Company fails tomake any of the payments required to maintain the option in goodstanding; and (ii) notwithstanding anything else in the optionagreement, may be terminated by the Company within 18 months from dateof the option agreement by providing 10 days’ written notice to theoptionors.

F-13

----

**8.    Income Taxes**

The components of the Company’s deferred tax asset as of August 31, 2007, is as follows:

| Net operating losses    |   $ | 377,558  |    |
|------------------------------|----------|----------|---------|
| Statutory tax rate      |     | 35       | %  |
| Deferred tax asset      |     | 132,145  |    |
| Valuation allowance     |     | (132,145 | )  |
| Net deferred tax asset  |   $ |  -  |    |

Asdescribed in Note 6, on June 17, 2007, a change in control occurredwhich may substantially limit utilization of net operating lossesincurred prior to that date. The net operating loss aboveexpires through August 31, 2028.

Deferredincome tax reflects the net tax effects of temporary differencesbetween the carrying amounts of assets and liabilities for financialreporting purposes and the amounts used for income tax purposes. TheCompany provided a valuation allowance of 100% of its deferred taxasset due to the uncertainty of generating future profits that wouldallow for the realization of such deferred tax assets.

**9.    Subsequent Events**

OnOctober 29, 2007, the Company split its stock on a 2 for 1 basis. As aresult, the Company’s authorized capital increased from 592,500,000shares of common stock with a par value of $0.001 per share to1,185,000,000 shares of common stock with a par value of $0.001 pershare. All share and per share information included in the accompanyingfinancial statements for all periods presented have been adjusted toretroactively reflect the stock split.

OnNovember 20, 2007, the Company issued a total of 8,758,600 post-splitcommon shares at a price of US $0.375 per post-split common share undera private placement for cash proceeds of $3,284,475. Each common sharewas issued with one non-transferable share purchase warrant. Eachwarrant entitles the holder thereof to purchase an additional commonshare at a price of $0.50 per post-split share until the close ofbusiness on November 14, 2009.  The Company agreed to pay afinders’ fee of $250,000 to an unrelated third party in connection withthis private placement. The private placement provides for certainregistration rights whereby the Company could incur penalties if aregistration statement is not filed or declared effective by the SEC ona timely basis pursuant to the registration rights agreement. Under theagreement, the penalties are not to exceed 15% of the purchase price.

Aportion of the proceeds have been used to pay down certain loans andadvances payable. Management expects the balance of the proceeds willbe used for exploration and development of the Company’s San JuanCounty, Colorado mining properties, working capital and generalcorporate purposes, and the acquisition of additional mineralproperties.

**10.    Litigation**

TheCompany is involved in various clams and legal actions arising in theordinary course of business. Although unable to estimate minimum costs,if any, in the opinion of management, the ultimate disposition of thesematters will likely not have a material adverse impact eitherindividually or in the aggregate on future results of operations,financial position or cash flows of the Company.

F-14

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**EXHIBITS TO FORM 10-KSB**

| **Exhibit**  |                  |
|-------------------|-----------------------|
| **Number**   | **Description**  |

| 3.1       | Articles of Incorporation1                                                                                                                            |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2       | By-Laws1                                                                                                                                              |
| 10.1      | Property Agreement between Jaroslav Rusa and Garpa Resources, Inc., dated March 7, 20051                                                              |
| 10.2      | Trust Agreement between Garpa Resources, Inc., and Gary Schellenberg, dated March 7, 20051                                                            |
| 10.3      | OptionAgreement, Gold King, Mayflower and Mogul Properties, between San JuanCorp., Todd C. Hennis, and Garpa Resources, Inc., dated June 17, 20073    |
| 10.4      | Executive Employment Agreement between Garpa Resources, Inc. and Todd C. Hennis, dated June 17, 20074                                                 |
| 10.5      | Purchase and Sale Agreement between Tusco Incorporated and Garpa Resources, Inc. dated June 13, 20075                                                 |
| 10.6      | Amendmentto Option Agreement between San Juan Corp., Todd C. Hennis, andColorado Goldfields, Inc. (fka Garpa Resources, Inc.), dated November8, 20078 |
| 10.7      | Form of Private Placement Subscription Agreement (Offshore Subscribers)9                                                                              |
| 10.8      | Form of Private Placement Subscription Agreement (U.S. Subscribers)10                                                                                 |
| 14        | Financial Code of Ethics1                                                                                                                             |
| 16.1      | Letter on change in certifying accountant from Manning Elliot LLP, dated November 26, 200712                                                          |
| 31.1      | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Todd C. Hennis*                                                           |
| 31.2      | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Gary Schellenberg.*                                                       |
| 32        | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Todd C. Hennis and Gary Schellenberg*                                     |
| 35        | Articles of Merger between Colorado Goldfields, Inc. (surviving entity) and Garpa Resources, Inc., effective June 18, 20072                           |
| 99        | Certificate of Change Pursuant to NRS 78.209, effective June 18, 20072                                                                                |
| 99.1      | News Release, “Colorado Goldfields Inc. Announces Private Placement,” dated August 24, 20076                                                |
| 99.2      | Certificate of Change Pursuant to NRS 78.209, effective October 29, 20077                                                                             |
| 99.3      | News Release “Colorado Goldfields Inc. Closes $3,284,475 Private Placement,” dated November 20, 200711                                      |

| (1)                      |  Filedwith Registration Statement of Form SB-2, filed on November 21, 2005(Registration Statement No. 333-129841) and incorporated herein byreference. |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)       | Filed with Form 8-K dated June 20, 2007, and incorporated herein by reference.                                                                              |
| (3)       | Filed as Exhibit 10.1 to Form 8-K dated June 26, 2007, and incorporated herein by reference.                                                                |
| (4)       | Filed as Exhibit 10.2 to Form 8-K dated June 26, 2007, and incorporated herein by reference.                                                                |
| (5)       | Filed as Exhibit 10.1 to Form 8-K/A dated June 28, 2007, and incorporated herein by reference.                                                              |
| (6)       | Filed with Form 8-K dated August 30, 2007, and incorporated herein by reference.                                                                            |
| (7)       | Filed as Exhibit 99.1 to Form 8-K dated November 2, 2007, and incorporated herein by reference.                                                             |
| (8)       | Filed as Exhibit 10.1 to Form 8-K dated November 13, 2007, and incorporated herein by reference.                                                            |
| (9)       | Filed as Exhibit 10.1 to Form 8-K dated November 15, 2007, and incorporated herein by reference.                                                            |
| (10)      | Filed as Exhibit 10.2 to Form 8-K dated November 15, 2007, and incorporated herein by reference.                                                            |
| (11)      | Filed as Exhibit 99.1 to Form 8-K dated November 21, 2007, and incorporated herein by reference.                                                            |
| (12)      | Filed with Form 8-K/A dated November 27, 2007, and incorporated herein by reference.                                                                        |

* Filed herewith.

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