##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB/A
 Amendment No. 1
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended August 31, 2007
 o
    
    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.
  Nevada
    
    20-0716175(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)10920 West Alameda Avenue, Suite 207 Lakewood, CO
    
    80226(Address of principal executive offices)
    
    (Zip Code)
 (303) 984-5324
  Common Stock, $0.001 par value
  o þ
  þ o
 o
  o þ
 .
  DOCUMENTS INCORPORATED BY REFERENCE
 o þ




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TABLE OF CONTENTS  PART IITEM 1. DESCRIPTION OF BUSINESSITEM 2. DESCRIPTION OF PROPERTIESITEM 3. LEGAL PROCEEDINGSPART IIITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONSIGNATURESConsent of E.D. Black, P.E.Certification Pursuant to Section 302 for Todd C. HennisCertification Pursuant to Section 302 for C. Stephen GuyerCertification Pursuant to Section 906 for Todd C. Hennis and C. Stephen Guyer    Table of Contents  Explanatory Note
  
    
    Part I  Item 1  Description of Business;
    
    Part I   Item 2  Properties;
    
    Part I   Item 3  Legal Proceedings;
    
    Footnotes #2 and #9 in our Financial Statements; and
    
    We have added a risk factor to Part II  Item 6  Managements Discussion and
Analysis or Plan of Operation.
  
 PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS.
 Background
     Our Business




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See Item 2,
Description of Properties, for additional information regarding the San Juan Properties and the
Pride of the West Mill.
 Recent Events
    Option Agreement Concerning the San Juan Properties
 Item 2. Description of
Properties
 Executive Employment Agreement




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(i)
    
    if terminated by us, Mr. Hennis shall receive one month of base compensation for each
year of service. Base compensation includes salary in effect at the time of termination,
continued participation in our companys group health insurance plan, continued life
insurance coverage and, at Mr. Hennis expense, continued access to certain other insurance
plans of our company;(ii)
    
    if Mr. Hennis resigns within 90 days following a change of control of our company, Mr.
Hennis shall receive one month of base compensation (as described above), and, in addition,
any stock options held by Mr. Hennis shall vest immediately, all of Mr. Hennis shares of
our common stock, which are not already freely tradeable without restriction, shall be
promptly registered with the Securities and Exchange Commission, and any bonuses remaining
unpaid shall be paid immediately;(iii)
    
    if terminated upon expiration of the Executive Employment Agreement without renewal or
extension, Mr. Hennis shall receive one month of base compensation (as described above) for
each year of service by Mr. Hennis as an employee of our company; and(iv)
    
    if Mr. Hennis passes away during the term of the Executive Employment Agreement, Mr.
Hennis estate shall receive one month of salary for each year of service by Mr. Hennis as
our employee.
 Competitive Business Conditions
  General Government Regulations




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See Item 2, Description of Properties, for additional information on government
regulation affecting our business including a discussion of certain anticipated costs and effects
of compliance with environmental laws
 Employees
  
 ITEM 2. DESCRIPTION OF PROPERTIES
 Overview
   Terms of our Option and Related Agreements on the San Juan Properties
  (i)
    
    an undivided 40% interest in the San Juan Properties will vest when we have incurred
expenditures of not less than $6,000,000 on the San Juan Properties, provided that such
expenditures must be incurred within five years from the date of the Option Agreement;(ii)
    
    an additional undivided 20% interest in the San Juan Properties will vest when: (a) we
have incurred additional expenditures of not less than $3,500,000 on the San Juan
Properties, provided that such expenditures must be incurred within 7.5 years from the date
of the Option Agreement, and (b) we issue, subject to compliance with applicable securities
laws, 10,000,000 shares of our common stock to the Optionors; and(iii)
    
    an additional undivided 20% interest in the San Juan Properties (for an aggregate of
80%) will vest when: (a) we have incurred additional expenditures of not less than
$3,500,000 on the San Juan Properties, provided that such expenditures must be incurred
within 10 years from the date of the Option Agreement, and (b) we issue, subject to
compliance with applicable securities laws, an additional 10,000,000 shares of our common
stock, to the Optionors.
  (i)
    
    cash payment of $100,000 within one year from the date of the Option Agreement;(ii)
    
    cash payment of an additional $200,000 within two years from the date of the Option
Agreement; and




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(iii)
    
    100 troy ounces of gold contained in gold dore, or the cash equivalent thereof, within
three years of the date of the Option Agreement, and annually thereafter up to and
including the 10th year from the date of the Option Agreement. The foregoing payments are,
however, contingent upon: (i) our successful acquisition of the Pride of the West Mill
located in Howardsville, Colorado, which acquisition occurred in June of this year; and
(ii) the Pride of the West Mill actually being in operation during any part of the year in
which payment is due. Currently, the mill is not operational.
   
    
    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.
  Ownership Maintenance Requirements on the San Juan Properties




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Royalty Encumbrances
 th
 The San Juan Properties
  Gold King Mine Property




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History of Operations 1
  
 1
    
    Source: Page i of the Evaluation Report IV on the Gold King Mines Property, San Juan
County, Colorado by E.D. Black, P.E., Denver, Colorado February 15, 1990.




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2
  Current and Proposed Exploration Activities Exploration Costs and Plans
  Environmental and Regulatory Issues
    
 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., Denver,
Colorado February 15, 1990.




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Mogul Mine Property




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Mayflower Mine Property
 3
    Exploration Plans
   
 3
    
    Page 6 of the SEG Newsletter October 1993 article
entitled Comparison of Gold-Rich and Gold-Poor Quartz-Base Metal Veins,
Western San Juan Mountains, Colorado: The Mineral Point Area As An Example by
Paul J. Bartos.




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Estimated Exploration Costs(amounts in thousands)Gold King
    
    
    Mogul
    
    
    MayflowerGeophysics
    
    $
    50
    
    
    $
    100
    
    
    $
    Bonds and Permits
    
    
    300
    
    
    
    100
    
    
    
    20Surface Drilling
    
    
    600
    
    
    
    700
    
    
    
    500Underground Rehabilitation & Development
    
    
    3,500
    
    
    
    1,000
    
    
    
    400Underground Drilling
    
    
    900
    
    
    
    100
    
    
    
    Surface and Power Improvements
    
    
    150
    
    
    
    
    
    
    
    40Consultants and Studies
    
    
    75
    
    
    
    75
    
    
    
    100Other Costs
    
    
    150
    
    
    
    150
    
    
    
    150Total Estimated Costs
    
    $
    5,725
    
    
    $
    2,225
    
    
    $
    1,210
  Item 6. Managements
Discussion and Analysis or Plan of Operation.




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Pride of the West Mill




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Estimated Cost(amounts in thousandsNew Tailings Facility
    
    $
    600Reactivation Costs
    
    
    250Water Improvements
    
    
    100Building Maintenance
    
    
    150Total Estimated Costs
    
    $
    1,100




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ITEM 3. LEGAL PROCEEDINGS
   
 PART II
 
 ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
  We may never find commercially viable gold or other reserves.




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SIGNATURES
  COLORADO GOLDFIELDS, INC./s/ Todd C. HennisDated: February 29, 2008
    
    By: Todd C. Hennis, Presidentand Chief Executive Officer/s/ C. Stephen GuyerDated: February 29, 2008
    
    By: C. Stephen Guyer, Chief Financial Officerand Principal Accounting Officer
  /s/ Todd C. Hennis

Todd C. Hennis
    
    President & Chief Executive Officer
    
    February 29, 2008/s/ Gary Schellenberg

Gary Schellenberg
    
    Vice President & Director
    
    February 29, 2008/s/ Beverly Rich

Beverly Rich
    
    Director
    
    February 29, 2008/s/ Eric Owens

Eric Owens
    
    Director
    
    February 29, 2008




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COLORADO GOLDFIELDS INC.
INDEX TO THE FINANCIAL STATEMENTS
 Report of Independent Registered Public Accounting Firm  GHP Horwath, P.C.
    
    
    F-2Report of Independent Registered Public Accounting Firm  Manning Elliot LLP
    
    
    F-3Balance Sheet
    
    
    F-4Statements of Operations
    
    
    F-5Statements of Stockholders Equity
    
    
    F-6Statements of Cash Flows
    
    
    F-7Notes to Financial Statements
    
    
    F-8




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 F-2




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     /s/ MANNING ELLIOTT LLP
    F-3




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COLORADO GOLDFIELDS INC.
Formerly Garpa Resources, Inc. (An Exploration Stage Company)
Balance Sheet
(Expressed in US Dollars)
 August 31,
    
    
    August 31,2007
    
    
    2006ASSETSCurrent AssetsCash
    
    $
    22,046
    
    
    $
    9,284Restricted cash (Note 3)
    
    
    19,965
    
    
    
    Prepaid expenses
    
    
    6,739
    
    
    
    Total Current Assets
    
    
    48,750
    
    
    
    9,284Non-Current AssetsLand and building (Note 7)
    
    
    1,400,677
    
    
    
    Other
    
    
    14,120
    
    
    
    Total Non-Current Assets
    
    
    1,414,797
    
    
    
    Total Assets
    
    $
    1,463,547
    
    
    $
    9,284LIABILITIES & STOCKHOLDERS DEFICITCurrent LiabilitiesAccounts payable (Note 6)
    
    $
    76,446
    
    
    $
    2,458Accrued liabilities
    
    
    28,426
    
    
    
    5,441Advances payable (Note 4)
    
    
    400,733
    
    
    
    Note payable (Note 4)
    
    
    100,000
    
    
    
    Total Current Liabilities
    
    
    605,605
    
    
    
    7,899Non-Current LiabilitiesLong-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
    
    
    
    7,899Contingencies and Commitments (Notes 4, 6, 7, 9 and 10)Stockholders DeficitCommon stock, 1,185,000,000 shares authorized; $0.001
par value; 88,085,000 shares issued and outstanding
    
    
    56,250
    
    
    
    56,250Donated capital
    
    
    29,250
    
    
    
    22,500Equity (deficit) accumulated during the exploration stage
    
    
    (377,558
    )
    
    
    (77,365
    )Total Stockholders Equity (Deficit)
    
    
    (292,058
    )
    
    
    1,385Total 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)
 AccumulatedfromFebruary 11,2004(Date ofFor the Year
    
    For the Year
    
    Inception)Ended
    
    Ended
    
    to August 31,August 31, 2007
    
    August 31, 2006
    
    2007Revenue
    
    $
    
    
    
    $
    
    
    
    $
    Other (income) expenseOther income
    
    
    (1,048
    )
    
    
    
    
    
    
    (1,048
    )Donated rent (Note 6)
    
    
    2,250
    
    
    
    3,000
    
    
    
    9,750Donated services ( Note 6)
    
    
    4,500
    
    
    
    6,000
    
    
    
    19,500General and administrative
    
    
    62,948
    
    
    
    1,059
    
    
    
    64,448Mineral property and exploration costs
    
    
    93,862
    
    
    
    12,564
    
    
    
    128,952Professional fees
    
    
    126,547
    
    
    
    13,525
    
    
    
    144,822Interest expense
    
    
    11,134
    
    
    
    
    
    
    
    11,134Net 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)
 DeficitAccumulated
    
    TotalDuring the
    
    StockholdersCommon Stock
    
    Donated
    
    Exploration
    
    EquityShares
    
    Amount
    
    Capital
    
    Stage
    
    (Deficit)Balances  February 11, 2004 (Date of
inception)
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $Issuance of common stock for cash
    
    
    39,500,000
    
    
    
    2,500
    
    
    
    
    
    
    
    
    
    
    
    2,500Donated services and rent
    
    
    
    
    
    
    
    
    
    
    4,500
    
    
    
    
    
    
    
    4,500Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,898
    )
    
    
    (5,898
    )Balances  August 31, 2004
    
    
    39,500,000
    
    
    
    2,500
    
    
    
    4,500
    
    
    
    (5,898
    )
    
    
    1,102Issuance of common stock for cash
    
    
    48,585,000
    
    
    
    53,750
    
    
    
    
    
    
    
    
    
    
    
    53,750Donated services and rent
    
    
    
    
    
    
    
    
    
    
    9,000
    
    
    
    
    
    
    
    9,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,319
    )
    
    
    (35,319
    )Balances  August 31, 2005
    
    
    88,085,000
    
    
    
    56,250
    
    
    
    13,500
    
    
    
    (41,217
    )
    
    
    28,533Donated services and rent (Note 6)
    
    
    
    
    
    
    
    
    
    
    9,000
    
    
    
    
    
    
    
    9,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,148
    )
    
    
    (36,148
    )Balances  August 31, 2006
    
    
    88,085,000
    
    
    
    56,250
    
    
    
    22,500
    
    
    
    (77,365
    )
    
    
    1,385Donated services and rent (Note 6)
    
    
    
    
    
    
    
    
    
    
    6,750
    
    
    
    
    
    
    
    6,750Net 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)
 AccumulatedfromFor the Year
    
    For the Year
    
    February 11, 2004Ended
    
    Ended
    
    (Date of InceptionAugust 31, 2007
    
    August 31, 2006
    
    to August 31, 2007Cash 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
    
    
    
    29,250Change 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
    
    
    
    76,446Increase in accrued liabilities
    
    
    22,985
    
    
    
    691
    
    
    
    28,426Increase 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
    
    
    
    
    
    
    
    405,733Repayment of advances
    
    
    (5,000
    )
    
    
    
    
    
    
    (5,000
    )Advances from related party
    
    
    10,000
    
    
    
    52
    
    
    
    10,052Repayment of advances from related party
    
    
    (10,000
    )
    
    
    
    
    
    
    (10,052
    )Proceeds from note payable
    
    
    100,000
    
    
    
    
    
    
    
    100,000Proceeds from issuance of common stock
    
    
    
    
    
    
    
    
    
    
    56,250Net cash provided by financing activities
    
    
    500,733
    
    
    
    52
    
    
    
    556,983Increase
(Decrease) in Cash
    
    
    12,762
    
    
    
    (23,973
    )
    
    
    22,046Cash  Beginning of Period
    
    
    9,284
    
    
    
    33,257
    
    
    
    Cash  End of Period
    
    $
    22,046
    
    
    $
    9,284
    
    
    $
    22,046Supplemental Disclosures:Interest paid
    
    $
    7,583
    
    
    $
    
    
    
    $
    7,583Income taxes paid
    
    $
    
    
    
    $
    
    
    
    $
    Non-cash investing and financing activities:Acquisition of land and building:Cash paid
    
    $
    250,677
    
    
    $
    
    
    
    $
    250,677Mortgage note given to seller
    
    
    650,000
    
    
    
    
    
    
    
    650,000Asset retirement obligation assumed
    
    
    500,000
    
    
    
    
    
    
    
    500,000Assets acquired
    
    $
    1,400,677
    
    
    $
    
    
    
    $
    1,400,677
 F-7




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COLORADO GOLDFIELDS INC.
Formerly Garpa Resources, Inc. (An Exploration Stage Company)
Notes to the Financial Statements  August 31, 2007
 1.
    
    Organization, Nature of Business, Going Concern and Managements PlansOrganization and Nature of Business:The Company was incorporated in the State of Nevada on February 11, 2004, under the name of
Garpa Resources, Inc. On June 18, 2007, the Company changed its name to Colorado Goldfields
Inc. (the Company). The Company is an Exploration Stage Company, as defined by Statement
of Financial Accounting Standard (SFAS) No. 7 Accounting and Reporting for Development
Stage Enterprises. The Companys principal business is the acquisition and exploration of
mineral resources. The Company has not presently determined whether the properties it
intends to acquire contain mineral reserves that are economically recoverable.Going Concern and Managements Plans:The accompanying financial statements have been prepared assuming that the Company will
continue as a going concern. Since its inception in February 2004, the Company has not
generated revenue and has incurred net losses. The Company has a deficit in working capital
of $556,855 at August 31, 2007, incurred a net loss of $300,193 for the year ended August
31, 2007, and a deficit accumulated during the exploration stage of $377,558 for the period
from February 11, 2004 (inception) through August 31, 2007. Accordingly, it has not
generated cash flow from operations and has primarily relied upon advances from
stockholders, promissory notes and advances from unrelated parties, and equity financing to
fund its operations. These conditions raise substantial doubt about the Companys ability to
continue as a going concern. As discussed further in Note 9, on November 20, 2007, the
Company received $3,284,475 from equity financings which management believes will enable the
Company to commence mining exploration activities on properties in San Juan County,
Colorado, and fund its operations through most of the fiscal year ended August 31, 2008.The financial statements do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or the amounts or classification
of liabilities that may result from the possible inability of the Company to continue as a
going concern.
 2.
    
    Summary of Significant Account Policies
 a)
    
    Basis of PresentationThese financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States of America and are
expressed in US dollars. The Companys fiscal year-end is August 31.b)
    
    Use of EstimatesThe preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
 F-8




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2.
    
    Summary of Significant Account Policies (continued)
 c)
    
    Basic and Diluted Net Loss Per ShareThe Company computes net loss per share in accordance with SFAS No. 128, Earnings
per Share. SFAS No. 128 requires presentation of both basic and diluted earnings
per share (EPS) on the face of the statement of operations. Basic EPS is computed by
dividing net loss available to common stockholders (numerator) by the weighted
average number of shares outstanding (denominator) during the period. Diluted EPS
gives effect to all potential dilutive common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from the
exercise of stock options or warrants. Diluted EPS excludes all dilutive potential
            shares if their effect is anti- dilutive. The Company did not have any dilutive
securities outstanding for the years ended August 31, 2007 and 2006.d)
    
    Comprehensive Income (Loss)SFAS No. 130, Reporting Comprehensive Income,establishes standards for reporting
and display of comprehensive income (loss), its components, and accumulated
balances. For the periods presented there were no differences between net loss and
comprehensive loss.e)
    
    Cash and Cash EquivalentsThe Company considers all highly liquid instruments with maturity of three months or
less at the time of issuance to be cash equivalents.f)
    
    Mineral Property and Exploration CostsThe Company has been in the exploration stage since its formation on February 11,
2004, and has not yet realized any revenues from its planned operations.  It is
primarily engaged in the acquisition and exploration of mining properties.Costs incurred before mineralization is classified as proven and probable reserves
are expensed and classified as Mineral property and exploration costs.
Capitalization of mine development project costs, that meet the definition of an
asset, begins once mineralization is classified as proven and probable reserves.When it has been determined that a mineral property can be economically developed as
a result of establishing proven and probable reserves, the costs incurred to acquire
and develop such property are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve. If
mineral properties are subsequently abandoned or impaired, any capitalized costs
will be charged to operations.g)
    
    Long-Lived AssetsIn 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
recoverability when events or changes in circumstances indicate that their carrying
amount may not be recoverable. Circumstances which could trigger a review include,
but are not limited to: significant decreases in the market price of the asset;
significant adverse changes in the business climate or legal factors; accumulation
of costs significantly in excess of the amount originally expected for the
acquisition or construction of the asset; current period cash flow or operating
losses combined with a history of losses or a forecast of continuing losses
associated with the use of the asset; and current expectation that the asset will
more likely than not be sold or disposed significantly before the end of its
estimated useful life.
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2.
    
    Summary of Significant Account Policies (continued)
 Recoverability is assessed based on the carrying amount of the asset and its fair
value which is generally determined based on the sum of the undiscounted cash flows
expected to result from the use and the eventual disposal of the asset, as well as
specific appraisal in certain instances. An impairment loss is recognized when the
carrying amount is not recoverable and exceeds fair value. Management believes no
impairment exists as of August 31, 2007.h)
    
    Financial InstrumentsThe fair values of financial instruments, which include cash, restricted cash,
accounts payable, advances and a note payable were estimated to approximately their
carrying value due to the immediate or short-term maturity of these financial
instruments. The fair value of amounts due to related parties is not practicable to
estimate due to the related party nature of the underlying transactions.i)
    
    Income TaxesPotential benefits of income tax losses are not recognized until realization is more
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 asset benefits for
net operating losses carried forward. The potential benefit of net operating losses
have not been recognized in the financial statements because the Company cannot be
assured it is more likely than not it will utilize the net operating losses in
future years.j)
    
    Foreign Currency TranslationThe Companys functional and reporting currency is the United States dollar.
Monetary assets and liabilities denominated in foreign currencies are translated in
accordance with SFAS No. 52 Foreign Currency Translation, using the exchange rate
prevailing at the balance sheet date. Gains and losses arising on settlement of
foreign currency transactions or balances are included in the determination of
income. Foreign currency transactions have in the past been primarily undertaken in
Canadian dollars. The effects of foreign currency translation and transactions is
not material.k)
    
    Property Retirement ObligationSFAS 143, Accounting for Asset Retirement Obligations, requires the fair value of
a liability for an asset retirement obligation to be recognized in the period that
it is incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized 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 of time. Changes
resulting from revisions to the original fair value of the liability are recognized
as an increase or decrease in the carrying amount of the liability and the related
asset retirement costs capitalized as part of the carrying amount of the related
long-lived asset.l)
    
    Recent Accounting PronouncementsIn 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 financial instruments and certain other items at fair
value. Most of the provisions of SFAS No. 159 apply only to entities that elect the
fair value 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 first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the beginning of a
fiscal year that begins on or before November 15, 2007, provided the entity also
elects to apply the provision of SFAS No. 157, Fair Value Measurements. The
adoption of this statement is not expected to have a
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material effect on the Companys financial statements.
 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 comparability in fair value
measurements and to expand disclosures about fair value measurements. SFAS 157
defines fair value, establishes a framework for measuring fair value in generally
accepted accounting principles, and expands disclosures about fair value
measurements. SFAS 157 applies under other accounting pronouncements that require or
permit fair value measurements. In November 2007, the FASB announced that it would
defer the effective date of SFAS 157 for one year for all non-financial assets and
liabilities, except for those that are recognized or disclosed at fair value in the
financial statements on a recurring basis. The provisions of SFAS No. 157 are
effective for fair value measurements made in fiscal years beginning after November
15, 2007. The adoption of this statement is not expected to have a material effect
on the Companys 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 by prescribing a two-step
method of first evaluating whether a tax position has a more likely than not
recognition threshold and second, measuring that tax position to determine the
amount of benefit to be recognized in the financial statements. FIN 48 provides
guidance on the presentation of such positions within a classified statement of
financial position as well as on derecognition, interest and penalties, accounting
in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The adoption of this statement is not expected to
have a material effect on the Companys future reported financial position or
results of operations.
 3.
    
    Restricted CashDuring the year ended August 31, 2007, the Company prepaid $19,965 of outstanding fees and
disbursements with respect to the promissory note as disclosed in Note 4. This amount, which
was held in escrow by the Companys legal representative, was ultimately used to repay the
aforementioned promissory note in November 2007.4.
    
    Note and Advances PayableOn May 15, 2007, the Company issued a promissory note to an unrelated third party in
exchange for cash proceeds of $100,000. Under the terms of the promissory note, interest is
accrued at 12% per annum and is payable quarterly on March 31, June 30, September 30, and
December 31 of each year. The promissory note is secured by property and equipment and is
due on November 30, 2007. The promissory note, including all principal 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 unrelated third
party. The advances were repaid in November 2007. The note and advances payable were repaid
from the proceeds of the private placement described in Note 9.5.
    
    Common StockOn June 18, 2007, the Company effected a 7.9 for 1 forward stock split of the authorized,
issued and outstanding stock. As a result, the authorized share capital increased from
75,000,000 shares of common stock with a par value of $0.001 to 592,500,000 shares of common
stock with a par value of $0.001. The issued and outstanding common shares increased from
5,575,000 shares to 44,042,500 shares. All share amounts have been retroactively adjusted
for all periods presented. Refer to Note 9.6.
    
    Related Party Transactions
 a)
    
    During the 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
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$250 per month provided by an officer and director of the Company.
 6.
    
    Related Party Transactions (continued)
 b)
    
    On January 5, 2007, the Company issued a demand promissory note in
exchange for cash proceeds of $10,000 to an officer and director of the Company.
The note was unsecured, non-interest bearing, due on demand, and repaid in July
2007.c)
    
    On June 17, 2007, the Company entered into an executive employment
agreement with Mr. Todd C. Hennis (Hennis), whereby the Company agreed to employ
Hennis as Chief Executive Officer and President for the 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 be increased to not less than $8,500 per month thereafter;
(2) monthly automobile allowance of $350 per month, plus reimbursement for mileage
at the IRS standard rate; (3) certain employee benefits, including group health
insurance, pension and profit sharing and other benefits elected; (4) and the
agreement by the Company to grant a stock option to purchase up to 600,000 shares
of common stock at an exercise price equal to the fair market value of the common
            shares as of the date of grant pursuant to a stock option plan. The Company has not
yet obtained the necessary approvals to grant the options as outlined under the
agreement.d)
    
    The Company has also verbally agreed to grant our CFO, Gary
Schellenberg, an option to purchase up to 500,000 shares. In addition, the Company
has hired an exploration manager who is scheduled to start work in February, 2008
and to whom the Company verbally agreed to grant an option to purchase 400,000
shares of common stock, with such option to vest over a three year period. All of
the options would be exercisable at a price equal to the fair market value as of
the date of grant.e)
    
    On June 17, 2007, the former President of the Company entered into a
stock purchase agreement (the Agreement) with Hennis, whereby the former
President of the Company agreed to sell, and Hennis agreed to purchase, 2,500,000
(19,750,000 after the 7.9 for 1 forward split described in Note 5 and 39,500,000
shares after the 2 for 1 forward split described in Note 9) common shares of the
Company for the consideration of $2,500. The transaction resulted in a change of
control in the Company.f)
    
    Accounts payable at August 31, 2007, include $6,377 due to affiliated
companies for legal fees and mineral property and exploration costs.
 7.
    
    Mineral Properties
 a)
    
    The Company entered into an agreement dated March 7, 2005, to acquire a
100% interest in two Red Lake Mining Division Mining Claims located South of Otter
Lake, Ontario, Canada, in consideration for $10,000. The claims were registered in
the name of the former President of the Company, who executed a trust agreement
whereby the former President agreed to hold the claims in trust on behalf of the
Company. During the year ended August 31, 2007, the Company incurred $2,097 of
mineral exploration costs in relation to the mining claims before abandoning them
by August 31, 2007.b)
    
    On June 29, 2007, the Company acquired the Pride of the West Mill (the
Mill), an inactive mining mill, located in Howardsville, Colorado for
consideration of $900,677 plus the assumption of an estimated asset retirement
obligation of $500,000 for a total cost of $1,400,677. The Company paid the seller
cash of $250,677 and the remaining $650,000 was paid through a mortgage with the
seller which is secured by the Mill bearing interest at 7% per year with interest
only payable monthly for two years, with all unpaid principal due June 29, 2009.
Through August 31, 2007, there were no significant changes to the retirement
obligation and accretion expense was not significant.
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Mineral Properties (continued)
 In connection with the acquisition of the Mill, the Company is further obligated to replace
a bond that the seller has on deposit with the Colorado Division of Reclamation, Mining, and
Safety. In December 2007 or early January 2008, the Company is planning to replace the bond
for approximately $317,000.c)
    
    On June 17, 2007, the Company entered into an option agreement, amended November 8,
2007, among the Company as optionee, Hennis and San Juan Corp., a company controlled by
Hennis, as optionors, whereby the Company was granted the exclusive right and option to
acquire an 80% undivided right, title and interest in certain properties located in San
Juan County, Colorado, which option is to be exercised by the Company in stages as follows:
 (i)
    
    an undivided 40% interest in the properties is to vest upon the Company
incurring expenditures of not less than $6,000,000 on the properties within five
years from the date of the option agreement;(ii)
    
    an additional 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 the option agreement, and (b) the
issuance by the Company, subject to compliance with applicable securities laws, of
10,000,000 shares (adjusted for stock splits) of the Companys common stock; and(iii)
    
    an additional 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 the option agreement, and (b)
the issuance by the Company, subject to compliance 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:
 (iv)
    
    a cash payment of $50,000 within 30 days from the date of the option
agreement (which was paid by the Company in August, 2007 and recorded as expense);(v)
    
    a cash payment of $100,000 within one year from the date of the option
agreement;(vi)
    
    a cash payment of $200,000 within two years from the date of the option
agreement; and(vii)
    
    100 troy ounces of gold contained in gold ore, or the cash equivalent
thereof, within three years of the date of the option agreement, and annually
thereafter up to and including the 10thyear from the date of the option
agreement, which payments shall only be made if the Company successfully operates
the Mill during any part of the year in which payment is due. The Mill is currently
non-operational.
 Pursuant to the option agreement, the Company: (i) has been appointed as the initial
operator on the properties, with certain rights and obligations as described in the option
agreement; and (ii) has executed and entered into an employment agreement with Mr. Hennis,
as described in Note 6(c):The option agreement: (i) will terminate in the event the Company fails to make any of the
payments required to maintain the option in good standing; and (ii) notwithstanding anything
else in the option agreement, may be terminated by the Company within 18 months from date of
the option agreement by providing 10 days written notice to the optionors.
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Income Taxes
  Net operating losses
    
    $
    377,558Statutory tax rate
    
    
    35
    %Deferred tax asset
    
    
    132,145Valuation allowance
    
    
    (132,145
    )Net deferred tax asset
    
    $
    
 As described in Note 6, on June 17, 2007, a change in control occurred which may
substantially limit utilization of net operating losses incurred prior to that date. The net
operating loss above expires through August 31, 2028.Deferred income tax reflects the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The Company provided a valuation allowance of 100% of its
deferred tax asset due to the uncertainty of generating future profits that would allow for
the realization of such deferred tax assets.
 Subsequent Events
 On October 29, 2007, the Company split its stock on a 2 for 1 basis. As a result, the
Companys authorized capital increased from 592,500,000 shares of common stock with a par
value of $0.001 per share to 1,185,000,000 shares of common stock with a par value of $0.001
per share. All share and per share information included in the accompanying financial
statements for all periods presented have been adjusted to retroactively reflect the stock
split.On November 20, 2007, the Company issued a total of 8,758,600 post-split common shares at a
price of US$0.375 per post-split common share under a private placement for gross proceeds
of $3,284,475 (net proceeds of $2,999,016). Each common share was issued with one
non-transferable share purchase warrant. Each warrant entitles the holder thereof to
purchase an additional common share at a price of $0.50 per post-split share until the close
of business on November 14, 2009. As of November 30, 2007 private placement proceeds of
$831,225 from signed subscription agreements for 2,216,600 shares of common shares had not
been received and were recorded as of November 30, 2007, as stock subscription receivables.
The stock subscription receivables were collected on December 4, 2007.The private placement provides for certain registration rights whereby the Company could
incur penalties if a registration statement is not filed or declared effective by the SEC on
a timely basis pursuant to the registration rights agreements. Under the agreements, the
Company must file a registration statement registering for resale the shares within 60
calendar days following the closing of the private placement, which occurred on November 14,
2007. Furthermore, the Company is to use commercially reasonable efforts to cause such
registration statement to become effective within 120 calendar days after the closing of the
private placement (or, in the event of a full review of the registration statement by the
SEC, 180 calendar days after the closing of the private placement). If the registration
statement is not filed on a timely basis or is not declared effective by the SEC for any
reason on a timely basis, the Company will be required to make a payment to the subscribers
in an amount equal to 2.0% of the purchase price paid for the Units by the subscriber for
each Unit then held by the subscriber, and an additional 2.0% payment each 30-day period
thereafter until the registration statement is filed or declared effective by the SEC, as
the case may be; provided, however, that in no event shall these late registration payments,
if any, exceed in the aggregate 15.0% of the total purchase price paid for all Units sold in
the private placement. Thus, the maximum monetary penalty that the Company could incur
under the penalty provision of the registration rights agreement is $492,671. Under the
registration rights agreements, the requirement to keep a registration statement current and
effective is suspended upon the earlier of (i) the first anniversary of the closing date,
(i) the date that each investor is able to sell the shares without limitation under SEC Rule
144,
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or (iii) at such time that shares purchased by the investors have been sold.
 The Company timely filed a registration statement to register the shares sold in the private
placement, and such registration statement was chosen for full review by the SEC.
Additionally, due to recent changes to SEC Rule 144, the investors will be able to sell all
shares they purchased in the private placement upon the six month anniversary of the closing
date. Thus, the Company has not recorded a liability in connection with the penalty
provisions of the registration rights agreements because it believes that it is not probable
that an event can occur which will trigger a penalty payment under the agreements.A portion of the proceeds have been used to pay down certain loans and advances payable.
Management expects the balance of the proceeds will be used for exploration and development
of the Companys San Juan County, Colorado mining properties, working capital and general
corporate purposes, and the acquisition of additional mineral properties.
 Litigation
 The Company is involved in various clams and legal actions arising in the ordinary course of
business. Although unable to estimate minimum costs, if any, in the opinion of management,
the ultimate disposition of these matters will likely not have a material adverse impact
either individually or in the aggregate on future results of operations, financial position
or cash flows of the Company.
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EXHIBITS TO FORM 10-KSB
 ExhibitNumber
    
    Description23.1
    
    Consent of E. D. Black, P.E.31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Todd C. Hennis31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for C. Stephen Guyer.32
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Todd C. Hennis
and C. Stephen Guyer.